B-162612, OCT. 11, 1967

B-162612, OCT. 11, 1967

BIDS - AMENDMENT, ETC., ACKNOWLEDGEMENTS DECISION TO SECRETARY OF THE ARMY AS TO WHETHER A CONTRACTING OFFICER MAY WAIVE A LOW BIDDER'S FAILURE TO ACKNOWLEDGE AN AMENDMENT TO AN INVITATION FOR DREDGING SECTIONS OF THE ARKANSAS RIVER, ARKANSAS. A LOW BIDDER WHO FAILED TO ACKNOWLEDGE AN AMENDMENT TO A DREDGING INVITATION THAT REQUIRED REMOVAL OF A SUNKEN RIVERBOAT MAY NOT HAVE SUCH FAILURE WAIVED EVEN THOUGH ESTIMATED EFFECT OF AMENDMENT ON BID PRICE IS TRIVIAL SINCE REQUIREMENTS FOR REMOVAL OF RIVERBOAT HAD EFFECT ON BOTH QUALITY OF CHANNEL TO BE DREDGED AND QUALITY OF WORK. TO PERMIT BIDDER TO PERFORM IN ACCORDANCE WITH AMENDMENT OR TO PERMIT PRICE ADJUSTMENT WOULD JUSTIFY AWARD AND THEREFORE BID MAY NOT BE CONSIDERED FOR AWARD. ALTHOUGH REJECTION OF ALL BIDS AND RESOLICITATION IS MATTER FOR CONTRACTING OFFICERS SUCH COURSE OF ACTION WOULD BE IN INTEREST OF GOVT. SINCE THERE IS STRONG PROBABILITY THAT WORK CAN BE PERFORMED AT SUBSTANTIALLY LESS THAN SECOND LOW BID.

TO MR. SECRETARY:

REFERENCE IS MADE TO A LETTER DATED OCTOBER 3, 1967 (ENGGC-C), FROM THE ACTING GENERAL COUNSEL, OFFICE OF THE CHIEF OF ENGINEERS, REQUESTING OUR DECISION AS TO WHETHER THE CONTRACTING OFFICER MAY WAIVE THE LOW BIDDER'S FAILURE TO ACKNOWLEDGE RECEIPT OF AMENDMENT NO. 5 TO INVITATION FOR BIDS (IFB) DACW03-68-B-0013, AND AWARD A CONTRACT TO THE LOW BIDDER.

THE INVITATION REQUESTED BIDS FOR "NAVIGATION CHANNEL DREDGING - POOL 7, ARKANSAS RIVER, ARKANSAS.' THE WORK CONSISTS OF DREDGING TWO SEPARATE SECTIONS TOTALING APPROXIMATELY NINE MILES OF THE ARKANSAS RIVER TO PROVIDE ADEQUATE DEPTH AND WIDTH FOR A NAVIGATION CHANNEL IN VARIOUS COUNTIES. THE LOWEST BID WAS RECEIVED FROM THE T.L. JAMES AND COMPANY, INC. (TLJCO), IN THE AMOUNT OF $1,573,131. THE NEXT LOW BID WAS IN THE AMOUNT OF $1,828,590, OR $255,459, HIGHER THAN THE LOWEST BID.

AMENDMENT NO. 5, ISSUED AS ADDENDUM TO THE ORIGINAL IFB, MADE CERTAIN MINOR ELEVATION CHANGES IN THE BASELINE DATA SCHEDULE WHICH WOULD NOT AFFECT THE BID PRICE. IT ALSO REQUIRED THAT "THE REMAINS OF AN OLD SUNKEN RIVERBOAT WHICH SHOW AT THE GROUND SURFACE WITHIN THE LIMITS OF THE REQUIRED CHANNEL DREDGING AT APPROXIMATE RANGE 7-10 SHALL BE REMOVED.' THE LOW BIDDER STATES THAT IT FAILED TO ACKNOWLEDGE THE ADDENDUM BECAUSE IT WAS UNAWARE OF ITS EXISTENCE AND HAS REQUESTED THAT IT BE ALLOWED TO CORRECT THE DEFICIENCY AND INCREASE ITS PRICE ACCORDINGLY.

THE CONTRACTING OFFICER HAS REPORTED THAT AFTER THE BID OPENING A REVIEW OF THE GOVERNMENT ESTIMATE WAS MADE TO DETERMINE WHETHER ANY CHANGE HAD BEEN MADE THEREIN DUE TO THE ISSUANCE OF AMENDMENT NO. 5. THE INDIVIDUAL WHO HAD PREPARED THE GOVERNMENT ESTIMATE ADVISED THAT HE HAD MADE NO CHANGE IN THE ESTIMATE BECAUSE THE EFFECT OF THE AMENDMENT WAS INSIGNIFICANT. HE STATED THAT THE COST OF REMOVAL OF THE WRECK WOULD HAVE TO BE REFLECTED IN THE UNIT PRICE FOR BID ITEM NO. 1, DREDGING, AND THAT DIVIDING THE ESTIMATED QUANTITY OF 10,110,000 CUBIC YARDS OF DREDGING INTO THE SMALL REMOVAL COST INVOLVED WOULD REQUIRE CARRYING THE EFFECT ON THE UNIT PRICE TO FIVE DECIMALS OR TO THOUSANDTHS OF ONE CENT. THE DIRECT COST OF REMOVING THE REMAINS OF THE RIVERBOAT WAS ESTIMATED AT $560, WHICH IS .0355978 PERCENT OF THE LOW BID PRICE.

ARMED SERVICES PROCUREMENT REGULATION 2-405, RELATIVE TO MINOR INFORMALITIES OR IRREGULARITIES IN BIDS, READS IN PART, AS FOLLOWS:

"2-405 MINOR INFORMALITIES OR IRREGULARITIES IN BIDS. A MINOR INFORMALITY OR IRREGULARITY IS ONE WHICH IS MERELY A MATTER OF FORM OR IS SOME IMMATERIAL VARIATION FROM THE EXACT REQUIREMENTS OF THE INVITATION FOR BIDS, HAVING NO EFFECT OR MERELY A TRIVIAL OR NEGLIGIBLE EFFECT ON PRICE, AND NO EFFECT ON QUALITY, QUANTITY, OR DELIVERY OF THE SUPPLIES OR PERFORMANCE OF THE SERVICES BEING PROCURED, AND THE CORRECTION OR WAIVER OF WHICH WOULD NOT AFFECT THE RELATIVE STANDING OF, OR BE OTHERWISE PREJUDICIAL TO, BIDDERS. THE CONTRACTING OFFICER SHALL EITHER GIVE TO THE BIDDER AN OPPORTUNITY TO CURE ANY DEFICIENCY RESULTING FROM A MINOR INFORMALITY OR IRREGULARITY IN A BID, OR, WAIVE ANY SUCH DEFICIENCY WHERE IT IS TO THE ADVANTAGE OF THE GOVERNMENT. EXAMPLES OF MINOR INFORMALITIES OR IRREGULARITIES INCLUDE:

* * * * * ** "/IV) FAILURE OF A BIDDER TO ACKNOWLEDGE RECEIPT OF AN AMENDMENT TO AN INVITATION FOR BIDS, BUT ONLY IF--

** * * * * * "/B) THE AMENDMENT CLEARLY WOULD HAVE NO EFFECT OR MERELY A TRIVIAL OR NEGLIGIBLE EFFECT ON PRICE, AND NO EFFECT ON QUALITY, QUANTITY, DELIVERY, OR THE RELATIVE STANDING OF BIDDERS, SUCH AS AN AMENDMENT CORRECTING A TYPOGRAPHICAL MISTAKE IN THE NAME OF THE GOVERNMENT PURCHASING ACTIVITY; "

WE ARE REQUIRED TO OBSERVE THAT THE AMENDMENT REQUIRING THE REMOVAL OF THE SUNKEN RIVERBOAT OBVIOUSLY HAS A MATERIAL AND SUBSTANTIAL EFFECT ON BOTH THE QUALITY OF THE CHANNEL TO BE DREDGED AND THE QUANTITY OF WORK INVOLVED, EVEN IF THE ESTIMATED EFFECT OF THE AMENDMENT ON THE BID PRICE BE CONSIDERED TRIVIAL.

SINCE THE LOW BIDDER WAS COMPLETELY UNAWARE OF THE AMENDMENT, ACCEPTANCE OF ITS BID AS SUBMITTED WOULD NOT OBLIGATE IT TO FURNISH THE CHANNEL REQUIRED BY THE GOVERNMENT AND BID ON BY OTHER BIDDERS, AND A CONTRACT CREATED BY SUCH ACCEPTANCE WOULD NOT BE THE CONTRACT OFFERED TO OTHER BIDDERS WHO RECEIVED AND ACKNOWLEDGED THE AMENDMENT. NEITHER TLJCO'S OFFER TO PERFORM IN ACCORDANCE WITH THE AMENDMENT, MADE AFTER BID OPENING, NOR THE CONTRACTING OFFICER'S ESTIMATE OF A REASONABLE PRICE ADJUSTMENT WOULD JUSTIFY AWARD TO TLJCO OF A CONTRACT INCLUDING THE ADDITIONAL WORK NOT CONTEMPLATED BY ITS BID, AT AN ADDITIONAL PRICE WHICH NECESSARILY WOULD HAVE TO BE NEGOTIATED. SEE B 141299, DECEMBER 14, 1959, AND B- 155543, DECEMBER 1, 1964.

FOR THE FOREGOING REASONS WE MUST CONCLUDE THAT THE TLJCO BID MAY NOT BE CONSIDERED RESPONSIVE TO THE INVITATION, AND THEREFORE MAY NOT BE CONSIDERED FOR AWARD.

WHILE IT IS PRIMARILY THE RESPONSIBILITY OF THE PROCUREMENT OFFICIALS OF YOUR DEPARTMENT TO DETERMINE WHETHER TO REJECT ALL BIDS AND RESOLICIT BIDS FOR THE WORK AS RECOMMENDED BY THE CONTRACTING OFFICER, WE AGREE THAT SUCH A COURSE OF ACTION WOULD APPEAR TO BE IN THE INTEREST OF THE GOVERNMENT, SINCE THE CONTRACTING OFFICER IS ON NOTICE OF AT LEAST A STRONG PROBABILITY THAT THE WORK CAN BE PERFORMED AT AN AMOUNT SUBSTANTIALLY LESS THAN THE SECOND LOW BID.

THE FILE FORWARDED WITH THE ASSISTANT GENERAL COUNSEL'S LETTER IS RETURNED.