B-161337, MAY 17, 1967

B-161337, MAY 17, 1967

TO KENNEDY ELECTRIC COMPANY INC.:

REFERENCE IS MADE TO YOUR LETTER OF APRIL 20, 1967, PROTESTING AGAINST THE REJECTION OF YOUR LOW BID AND AWARD TO THE SECOND LOW BIDDER UNDER INVITATION FOR BIDS (IFB) NO. L-7999 WHICH WAS ISSUED MARCH 13, 1967, BY THE LANGLEY RESEARCH CENTER, NATIONAL AERONAUTICS AND SPACE ADMINISTRATION. YOUR BID WAS REJECTED BECAUSE YOU FAILED TO ACKNOWLEDGE RECEIPT OF AMENDMENT NO. 2 TO THE IFB. IN THIS REGARD, YOU ALLEGE THAT YOUR FAILURE TO ACKNOWLEDGE RECEIPT OF THE AMENDMENT NO. 2 WAS INADVERTENT AND THAT THAT AMENDMENT DOES NOT CONSTITUTE AN INCREASE IN COST OR CONTRACT PRICE BUT ONLY DESCRIBES IN OTHER WORDS ITEMS ALREADY CLEARLY INDICATED AND SPECIFIED IN THE BIDDING DOCUMENTS AND AS SUCH IS REDUNDANT.

THE IFB IN QUESTION WAS A TOTAL SMALL BUSINESS SET-ASIDE FOR CONSTRUCTION AT THE CENTER OF A POWER DISTRIBUTION CENTER INCLUDING A 500 KVA UNIT SUBSTATION, CONCRETE PAD WITH FENCE, UNDERGROWN DUCT, AND FEEDER CABLES, IN ACCORDANCE WITH NASA SPECIFICATION NO. L-7999 DATED MARCH 13, 1967. THE IFB PROVIDED FOR OPENING OF BIDS APRIL 12, 1967. AMENDMENTS NO. 1 AND NO. 2 TO THE IFB WERE ISSUED ON MARCH 20 AND APRIL 3, RESPECTIVELY. AMENDMENT NO. 2 READS, IN PART, AS FOLLOWS:

"1. THE FOLLOWING CHANGES ARE HEREBY MADE IN THE SUBJECT SPECIFICATIONS:

(A) ON PAGE 5-5, PARAGRAPH 5-04 (E) (1), AT THE END OF THE PARAGRAPH, ADD THE FOLLOWING:

THE OUTGOING SWITCHGEAR SHALL HAVE AN AISLE APPROXIMATELY 38-INCHES WIDE AND ACCESSIBLE FROM ANY OF THE FRONT DOORS TO FACILITATE INSPECTING AND TESTING OF THE CIRCUIT BREAKERS AND ASSOCIATED EQUIPMENT WHILE PROTECTED FROM THE WEATHER.

"/B) ON PAGE 5-6, PARAGRAPH 5-04 (E) (13) SHALL BE CHANGED TO READ:

"/13) EACH UNIT SHALL BE PROVIDED WITH A HOIST TO BE USED AS A LIFTING AND LOWERING DEVICE IN THE REMOVAL AND REPLACEMENT OF ALL CIRCUIT BREAKERS. THE HOIST SHALL BE PROVIDED WITH A REMOVABLE CRANK WHICH ALLOWS THE OPERATOR TO ACTUATE THE HOISTING MECHANISM WHILE STANDING ON THE FLOOR OF THE SWITCHGEAR ROOM IN FRONT OF THE GEAR. THE CRANK SHALL CONTROL THE ACTION OF THE HOISTING MECHANISM AND MUST BE TURNED TO RAISE OR TO LOWER THE LOAD. THE WEIGHT OF THE LOAD SHALL NOT INITIATE ACTION IN THE MECHANISM AND ALLOW THE LOAD TO DROP IF THE CRANK IS LEFT UNATTENDED OR REMOVED. IN THIS CONNECTION PARAGRAPHS 5 04 (E) (1) AND 5-04 (E) (13) OF THE SPECIFICATION READ, RESPECTIVELY, AS FOLLOWS:

(E) OUTGOING SECTION:

(1) THE SECONDARY SWITCHGEAR SHALL HAVE A WEATHERPROOF HOUSING AND BE A FREE-STANDING ASSEMBLY, WITH CONSTRUCTION DETAILS AS NOTED IN GENERAL REQUIREMENTS.

"/13) EACH UNIT SHALL BE PROVIDED WITH A HOIST TO BE USED AS A LIFTING AND LOWERING DEVICE IN THE REMOVAL AND REPLACEMENT OF ALL CIRCUIT BREAKERS. THE HOIST SHALL BE CAPABLE OF SMOOTHLY RAISING OR LOWERING THE LOAD AND SHALL HOLD THE LOAD AT ANY LOCATION IF THE HOIST OPERATING LEVER, CHAIN, ETC., IS RELEASED. ADDITIONALLY, AMENDMENT NO. 2 SPECIFICALLY PROVIDED THAT:

FAILURE OF YOUR ACKNOWLEDGEMENT TO BE RECEIVED AT THE ISSUING OFFICE PRIOR TO THE HOUR AND DATE SPECIFIED MAY RESULT IN REJECTION OF YOUR OFFER.'

THE ADMINISTRATIVE OFFICE REPORTS THAT TWELVE BIDS WERE RECEIVED AT BID OPENING ON APRIL 12, 1967, RANGING IN PRICE FROM $22,940 TO $35,900. KENNEDY ELECTRIC WAS LOW BIDDER WITH A BID OF $22,940 AND OCEAN ELECTRIC COMPANY WAS SECOND LOW WITH A BID OF $22,999. HOWEVER, KENNEDY ELECTRIC UNLIKE ALL THE OTHER BIDDERS FAILED TO ACKNOWLEDGE RECEIPT OF AMENDMENT NO. 2.

ATTACHED TO THE REPORT IS A MEMORANDUM DATED APRIL 14, 1967, FROM THE TECHNICAL PROJECT ENGINEER WHICH STATES THAT AMENDMENT NO. 2 DEFINITIZED THE TYPE OF BREAKER LIFTING DEVICE AND OUTDOOR ENCLOSURE TO BE FURNISHED WITH THE SWITCHGEAR TO BE PROVIDED UNDER THE SPECIFICATIONS; THAT UNDER THE ORIGINAL SPECIFICATIONS THE BIDDER HAD THE OPTION OF PROVIDING EITHER OF TWO TYPES OF OUTDOOR ENCLOSURES FOR METAL-CLAD SWITCHGEAR; THAT ONE TYPE PROVIDES A MAINTENANCE AND OPERATING AISLE AND THE OTHER TYPE DOES NOT; THAT AMENDMENT NO. 2 REQUIRES THE OUTDOOR ENCLOSURE WITH AN AISLE SPACE; AND THAT IN HIS OPINION THE AISLE SPACE REQUIREMENT WOULD INCREASE THE COST OF PERFORMANCE.

THE CONTRACTING OFFICER REPORTS THAT AN INFORMAL TECHNICAL ESTIMATE OF THE ADDITIONAL COST REQUIRED FOR COMPLIANCE WITH AMENDMENT NO. 2 IS APPROXIMATELY $500. HE THUS DETERMINED THAT THE CHANGES MADE BY AMENDMENT NO. 2 WOULD HAVE A MATERIAL EFFECT ON THE PRICE OF THE PROCUREMENT AND REJECTED THE BID OF KENNEDY ELECTRIC AS BEING NONRESPONSIVE. ON APRIL 18, 1967, AWARD WAS MADE TO THE OCEAN ELECTRIC CORPORATION OF NORFOLK, VIRGINIA, FOR $22,999. ALL UNSUCCESSFUL BIDDERS WERE NOTIFIED BY LETTER OF THAT DATE THAT THEIR BIDS WERE NOT ACCEPTED. ON APRIL 20, 1967, KENNEDY ELECTRIC FIRST MADE THE PROTEST UNDER CONSIDERATION HERE. PURSUANT THERETO ON APRIL 21, 1967, OCEAN ELECTRIC WAS NOTIFIED TO SUSPEND ACTIVITIES UNDER THE CONTRACT PENDING THE GENERAL ACCOUNTING OFFICE DECISION ON THE MATTER.

IT IS WELL ESTABLISHED THAT THE FAILURE OF THE BIDDER TO ACKNOWLEDGE RECEIPT OF AN AMENDMENT TO AN IFB, WHICH AMENDMENT AFFECTS THE PRICE, QUALITY OR QUANTITY OF A PROCUREMENT, PRIOR TO BID OPENING RENDERS THE BID NONRESPONSIVE. 37 COMP. GEN. 785. A BID SUBMITTED IN RESPONSE TO AN IFB IS AN OFFER; THE AWARD IS AN ACCEPTANCE WHICH AFFECTS A BINDING AGREEMENT BETWEEN THE BIDDER AND THE GOVERNMENT. WHERE AN AMENDMENT AFFECTING PRICE, QUALITY OR QUANTITY IS NOT ACKNOWLEDGED BY THE BIDDER PRIOR TO BID OPENING, HIS OFFER IS FOR SOMETHING OTHER THAN THE PERFORMANCE SOLICITED BY THE TERMS OF THE IFB, INCLUDING ANY AMENDMENTS. TO PERMIT HIM TO PERFORM IN ACCORDANCE WITH THE IFB WITHOUT ACKNOWLEDGING AN AMENDMENT WOULD BE CONTRARY TO THE STATUTES GOVERNING ADVERTISED PROCUREMENTS AND TO PERMIT HIM TO AMEND HIS BID AFTER OPENING TO CONFORM TO THE SPECIFICATION AS MODIFIED BY THE AMENDMENT WOULD ALSO CONTRAVENE THE COMPETITIVE BIDDING STATUTES. SEE 42 COMP. GEN. 490 AND THE AUTHORITIES CITED THEREIN.

THE DETERMINATION OF THE CONTRACTING OFFICER THAT THE CHANGES MADE BY AMENDMENT NO. 2 WOULD HAVE A MATERIAL EFFECT ON THE PRICE OF THE PROCUREMENT APPEARS TO HAVE BEEN BASED ON THE ADVICE OF QUALIFIED AND COMPETENT TECHNICAL PERSONNEL, INCLUDING THE TECHNICAL PROJECT ENGINEER WHOSE MEMORANDUM WAS DISCUSSED EARLIER. UNDER SUCH CIRCUMSTANCES AND SINCE THE DETERMINATION DOES NOT APPEAR TO HAVE BEEN ARBITRARY, OR CAPRICIOUS, OR WITHOUT SUBSTANTIAL BASIS, WE WILL NOT ATTEMPT TO SUBSTITUTE OUR JUDGMENT FOR THAT OF THE PROCURING ACTIVITY. 17 COMP. GEN. 554; 19 ID. 587; 35 ID. 174.

IT MAY BE ADDED THAT OUR READING OF THE ORIGINAL, UNMODIFIED SPECIFICATIONS INDICATES THAT IT WOULD BE QUITE POSSIBLE FOR INSTALLATION OF THE SWITCHGEAR TO BE IN COMPLETE CONFORMITY THEREWITH WITHOUT SATISFYING THE ADDITIONAL REQUIREMENTS SPECIFIED IN AMENDMENT NO. 2, AND THAT IN EVENT OF AWARD OF A CONTRACT TO YOU, YOU WOULD THEREFORE BE IN A POSITION TO DEMAND ADDITIONAL COMPENSATION IF YOU WERE REQUIRED TO MEET THESE ADDITIONAL REQUIREMENTS. ON THIS BASIS WE WOULD IN ANY EVENT BE INCLINED TO REACH THE SAME CONCLUSION AS THE CONTRACTING OFFICER.