B-172755, MAY 14, 1971

B-172755, MAY 14, 1971

BID PROTEST - BID RESPONSIVENESS DECISION DENYING PROTEST BY SECOND LOW BIDDER AGAINST PROPOSED AWARD OF CONTRACT TO LOW BIDDER, JAMES L. FERRY & SON, UNDER AN IFB ISSUED BY THE CORPS OF ENGINEERS, SACRAMENTO DISTRICT. ALTHOUGH LOW BIDDER FAILED TO ACKNOWLEDGE RECEIPT OF AN AMENDMENT WHICH DELETED THE PROVISIONS OF THE DAVIS-BACON ACT FROM THE INVITATION, THE ONLY EFFECT OF THE AMENDMENT WAS TO REDUCE THE COST OF PERFORMANCE AND THEREFORE FAILURE TO ACKNOWLEDGE SHOULD BE WAIVED AS A MINOR INFORMALITY. ALSO, THE INSERTION OF THE WORDS "ENCLOSED IS BID GUARANTEE, CONSISTING OF BID BOND IN THE AMOUNT OF 20%" CLEARLY INDICATES OFFEROR'S INTENTION AND A BINDING CONTRACT EXISTS.

TO CARL J. WOODS:

YOUR PROTEST AGAINST ACCEPTANCE OF THE LOW BID OF JAMES L. FERRY & SON UNDER INVITATION FOR BIDS NO. DACW05-71-B-0068, ISSUED BY THE CORPS OF ENGINEERS, SACRAMENTO DISTRICT, HAS BEEN REFERRED TO OUR OFFICE BY THE OFFICE OF THE CHIEF OF ENGINEERS AS REQUESTED.

THE SUBJECT INVITATION WAS ISSUED ON JANUARY 27, 1971, WITH BID OPENING SCHEDULED ON FEBRUARY 25, 1971. ON FEBRUARY 24, 1971, TELEGRAPHIC AMENDMENT NO. 1 WAS ISSUED EXTENDING THE BID OPENING UNTIL MARCH 11, 1971, IN RECOGNITION OF PRESIDENTIAL PROCLAMATION 4031, DATED FEBRUARY 23, 1971, WHICH SUSPENDED THE PROVISIONS OF THE DAVIS-BACON ACT, 40 U.S.C. 276A, AS TO ALL CONTRACTS ENTERED INTO ON OR SUBSEQUENT TO THE DATE THEREOF. MARCH 3, 1971, AMENDMENT NO. 2 WAS ISSUED, DELETING THE DAVIS-BACON ACT PROVISIONS OF THE INVITATION. THE INVITATION PROVIDED THAT THE FAILURE TO ACKNOWLEDGE ALL AMENDMENTS MAY CAUSE REJECTION OF THE BID.

BIDS WERE OPENED ON MARCH 11, 1971, AT 2:00 P.M., AND FERRY WAS THE LOW BIDDER AT $87,625. YOUR BID OF $94,942 WAS SECOND LOW. FERRY'S BID FAILED TO ACKNOWLEDGE RECEIPT OF AMENDMENT NO. 2. AFTER BIDS WERE OPENED ON MARCH 11, 1971, FERRY DELIVERED AN ACKNOWLEDGMENT OF THE RECEIPT OF AMENDMENT NO. 2. NO AWARD HAS BEEN MADE.

IT IS YOUR CONTENTION THAT THE FAILURE OF FERRY'S BID TO INCLUDE ACKNOWLEDGMENT OF THE RECEIPT OF AMENDMENT NO. 2 RENDERS IT NONRESPONSIVE AND REQUIRES REJECTION. THE CONTENTION HAS BEEN MADE THAT FERRY'S BID IS NONRESPONSIVE FOR THE ADDITIONAL REASON THAT THE ACCOMPANYING BID BOND DID NOT STATE THE PENAL SUM OF THE BOND AS PROVIDED FOR THEREIN.

THE GENERAL RULE TO THE EFFECT THAT THE FAILURE TO ACKNOWLEDGE AN AMENDMENT WHICH AFFECTS PRICE REQUIRES REJECTION OF THE BID AS NONRESPONSIVE IS NOT FOR APPLICATION WHERE, AS HERE, THE ONLY MATERIAL EFFECT OF THE AMENDMENT IS TO REDUCE THE COST OF PERFORMANCE. SEE B 171499, MARCH 23, 1971; B-167073, JULY 15, 1969. THIS IS SO BECAUSE, AS WE SAID IN 41 COMP. GEN. 550, 553 (1962), " *** IF WE ASSUME THAT THE LOW BIDDER'S FAILURE TO ACKNOWLEDGE THE ADDENDUM WAS DUE TO IGNORANCE OF ITS EXISTENCE, THEN HIS BID PRICE WOULD NOT REFLECT THE LESSENED REQUIREMENTS OF THE SPECIFICATIONS AND, THEREFORE, HIS FAILURE TO ACKNOWLEDGE WOULD ONLY BE PREJUDICIAL TO HIS COMPETITIVE POSITION AND EVEN POSSIBLY BENEFICIAL TO THE POSITION OF THE OTHER BIDDERS." FURTHER, IN B-159412, JULY 26, 1966, WE HELD THAT " *** WHERE THE UNACKNOWLEDGED AMENDMENT MERELY EFFECTS A DECREASE IN THE COST OF PERFORMANCE FAILURE TO ACKNOWLEDGE IT SHOULD BE WAIVED AS A MINOR INFORMALITY,*** ". SEE ARMED SERVICES PROCUREMENT REGULATION 2-405. MOREOVER, IN A SITUATION WHERE THE BIDDER FAILS TO ACKNOWLEDGE AN AMENDMENT HAVING THE EFFECT OF DECREASING THE COST OF PERFORMANCE, THE BIDDER DOES NOT HAVE THE OPTION OF REMAINING SILENT AND NOT RECEIVING THE AWARD, SINCE THE GOVERNMENT, PURSUANT TO ASPR 2-405, MAY WAIVE THE FAILURE TO ACKNOWLEDGE THE AMENDMENT AND MAKE AWARD ON THE BASIS OF THE BID AS SUBMITTED. B-165150, SEPTEMBER 16, 1968. THEREFORE, FERRY'S BID SHOULD NOT BE REJECTED FOR FAILURE TO ACKNOWLEDGE RECEIPT OF AMENDMENT NO. 2.

WITH REGARD TO THE CONTENTION CONCERNING THE DEFICIENCY OF THE BID BOND, WE NOTE THAT ON THE REVERSE SIDE OF STANDARD FORM 21, BID FORM (CONSTRUCTION CONTRACT), FERRY INSERTED IN WRITING IN THE SPACES PROVIDED THEREFOR THAT, "ENCLOSED IS BID GUARANTEE, CONSISTING OF BID BOND IN THE AMOUNT OF 20%." IN ADDITION, BY LETTER DATED MARCH 12, 1971, THE SURETY CONFIRMED ITS INTENTION TO BE BOUND ON THE BOND. THESE CIRCUMSTANCES ARE IDENTICAL TO THOSE CONSIDERED IN OUR DECISION REPORTED AT 40 COMP. GEN. 314, 316 (1960), WHEREIN WE DETERMINED THE BOND VALID AND STATED:

"IN THE CIRCUMSTANCES HERE PRESENTED WE BELIEVE THAT THE INTENTION OF THE PARTIES RESPECTING THE OBLIGATION OF THE SURETY IS SO CLEAR THAT A BINDING CONTRACT EXISTS. THE EVIDENCE, INCLUDING THE STATEMENT IN THE BID THAT A BID BOND IN THE AMOUNT OF FIVE PERCENT OF THE BID WAS BEING SUBMITTED THEREWITH, AND THE FURTHER STATEMENT BY THE SURETY IN ITS LETTER OF NOVEMBER 3, 1960, THAT IT WAS ITS INTENTION TO BE OBLIGATED IN THE INDICATED AMOUNT OF FIVE PERCENT OF THE BID, CLEARLY SHOWS THE INTENTIONS OF THE PARTIES IN THE MATTER." SEE, ALSO, B-125045, JULY 30, 1970.

ACCORDINGLY, WE CONCLUDE THAT NEITHER OF THE CONTENTIONS RAISED JUSTIFY THE REJECTION OF THE JAMES L. FERRY & SON BID AS NONRESPONSIVE.