B-175740, JUL 5, 1972

B-175740, JUL 5, 1972

BID PROTEST - NONRESPONSIVENESS - FAILURE TO SUBMIT REVISED BID SCHEDULE DECISION DENYING THE PROTEST OF EUGENE LUHR & CO. AGAINST AWARD OF A CONTRACT TO WILLIAM CLAIRMONT INC. AND OIL FIELD SERVICE CO., INC., UNDER AN IFB ISSUED BY THE BUREAU OF RECLAMATION. THE EFFECT OF LUHR'S FAILURE TO SUBMIT THE MOST CURRENTLY REVISED SCHEDULE WAS THAT IT WAS NOT BOUND TO PERFORM TWO ITEMS OF WORK FOR WHICH UNIT PRICES WERE REQUIRED. SINCE GAO HAS CONSISTENTLY HELD THAT MISTAKE- IN-BID PROCEDURES MAY NOT BE USED TO RENDER RESPONSIVE A BID WHICH IS OTHERWISE NONRESPONSIVE, THE PROTEST MUST BE DENIED.

TO MR. SECRETARY:

BY LETTER DATED MAY 31, 1972, THE DIRECTOR OF SURVEY AND REVIEW FORWARDED TO OUR OFFICE THE REPORT OF THE ACTING DIRECTOR OF DESIGN AND CONSTRUCTION, BUREAU OF RECLAMATION, ON THE PROTEST OF EUGENE LUHR & CO. AGAINST ANY AWARD OF A CONTRACT TO WILLIAM CLAIRMONT INC. AND OIL FIELD SERVICE CO., INC., A JOINT VENTURE (HEREINAFTER REFERRED TO AS CLAIRMONT), UNDER INVITATION FOR BIDS FOR SPECIFICATIONS NO. DC-6937.

THE SPECIFICATIONS COVER CONSTRUCTION OF REACH 2 OF THE MCCLUSKY CANAL, GARRISON UNIT, PICK-SLOAN MISSOURI BASIN PROGRAM, NORTH DAKOTA. THE SPECIFICATIONS AS ISSUED REQUESTED BIDS FOR NUMEROUS ITEMS OF WORK OR MATERIAL NECESSARY TO COMPLETE THE PROJECT. WITH THE EXCEPTION OF ONE ITEM (WHICH REQUESTED A LUMP-SUM BID), THE BIDDING SCHEDULE IDENTIFIED ESTIMATED QUANTITIES OF EACH ITEM AND, IN SOME CASES, THE ITEM WAS DIVIDED INTO SUBITEMS ON THE BASIS OF ESTIMATED QUANTITY RANGES. BIDDERS WERE REQUIRED TO INSERT A "UNIT PRICE" AND AN "AMOUNT," THE LATTER TO REFLECT THE UNIT PRICE ENTERED MULTIPLIED BY THE APPLICABLE ESTIMATED QUANTITY. BIDDERS WERE ALSO ASKED TO ENTER A "TOTAL" FOR THE BIDDING SCHEDULE.

THE FIRST PARAGRAPH OF THE BIDDING SCHEDULE STATED THAT "BIDS WILL BE CONSIDERED ON THE *** SCHEDULE, BUT NO BID WILL BE CONSIDERED FOR ONLY A PART OF THE SCHEDULE." THE INSTRUCTIONS TO BIDDERS (STANDARD FORM 22), WHICH BIDDERS WERE ADVISED TO READ BY THE BID FORM (STANDARD FORM 21, DECEMBER 1965), CONTAINED THE FOLLOWING PERTINENT INFORMATION:

"5. PREPARATION OF BIDS. ***

"(B) THE BID FORM MAY PROVIDE FOR SUBMISSION OF A PRICE OR PRICES FOR ONE OR MORE ITEMS, WHICH MAY BE LUMP SUM BIDS, ALTERNATE PRICES, SCHEDULED ITEMS RESULTING IN A BID ON A UNIT OF CONSTRUCTION OR A COMBINATION THEREOF, ETC. WHERE THE BID FORM EXPLICITLY REQUIRES THAT THE BIDDER BID ON ALL ITEMS, FAILURE TO DO SO WILL DISQUALIFY THE BID. WHEN SUBMISSION OF A PRICE ON ALL ITEMS IS NOT REQUIRED, BIDDERS SHOULD INSERT THE WORDS 'NO BID' IN THE SPACE PROVIDED FOR ANY ITEM ON WHICH NO PRICE IS SUBMITTED.

"10. AWARD OF CONTRACT. ***

"(C) THE GOVERNMENT MAY ACCEPT ANY ITEM OR COMBINATION OF ITEMS OF A BID, UNLESS PRECLUDED BY THE INVITATION FOR BIDS OR THE BIDDER INCLUDES IN HIS BID A RESTRICTIVE LIMITATION."

IN ADDITION, THE BID FORM (STANDARD FORM 21) STATES THAT:

"IN COMPLIANCE WITH THE ABOVE-DATED INVITATION FOR BIDS, THE UNDERSIGNED HEREBY PROPOSES TO PERFORM ALL WORK FOR

SPECIFICATIONS NO. * DC-6937

IN STRICT ACCORDANCE WITH THE GENERAL PROVISIONS (STANDARD FORM 23 A), LABOR STANDARDS PROVISIONS APPLICABLE TO CONTRACTS IN EXCESS OF $2,000 (STANDARD FORM 19-A), SPECIFICATIONS, SCHEDULES, DRAWINGS, AND CONDITIONS, FOR THE AMOUNTS) STATED IN THE ACCOMPANYING BIDDING SCHEDULES)."

THE SPECIFICATIONS WERE AMENDED BY FIVE SUPPLEMENTAL NOTICES. SUPPLEMENTAL NOTICE NO. 3 DELETED THE ORIGINAL BIDDING SCHEDULE AND SUBSTITUTED A REVISED SCHEDULE. FOR OUR PURPOSES, WE NEED ONLY NOTE THAT THE REVISED SCHEDULE MIRRORS THE ORIGINAL SCHEDULE INSOFAR AS THE PRICING FORMAT AND INSTRUCTIONS ARE CONCERNED. SUPPLEMENTAL NOTICE NO. 4 ALSO REVISED THE BIDDING SCHEDULE. SPECIFICALLY, IT DELETED PAGE "C" OF THE BIDDING SCHEDULE (WHICH COVERED ITEMS 24 THROUGH 40) AND SUBSTITUTED A REVISED PAGE WHICH, AMONG OTHER THINGS, ADDED TWO NEW ITEMS, 35A AND 35B.

EIGHT BIDS WERE RECEIVED BY APRIL 6, 1972, THE BID OPENING DATE. LUHR'S BID WAS IN THE EVALUATED TOTAL AMOUNT OF $4,186,364.20, WHILE CLAIRMONT'S BID WAS IN THE EVALUATED TOTAL AMOUNT OF $4,623,583.65. THE OTHER BIDS RANGED FROM $4.64 MILLION TO $5.48 MILLION. THE GOVERNMENT ESTIMATE FOR THE WORK IS $5.36 MILLION.

UPON AN EXAMINATION OF THE LUHR BID, IT WAS DISCOVERED THAT THE FIRM HAD SUBMITTED THE BIDDING SCHEDULE AS REVISED BY SUPPLEMENTAL NOTICE NO. 3, AND NOT THE SCHEDULE AS ULTIMATELY REVISED BY SUPPLEMENTAL NOTICE NO. 4. LUHR, HOWEVER, ACKNOWLEDGED RECEIPT OF ALL FIVE MODIFICATIONS IN THE APPROPRIATE PLACE ON THE BID FORM. FURTHER, THE "TOTAL" ENTERED BY LUHR EQUALS THE EXTENDED UNIT PRICES OF ALL SCHEDULE ITEMS BID ON.

THE RELEVANT NET EFFECT OF LUHR'S FAILURE TO INCLUDE WITH ITS BID THE REVISION TO PAGE "C" OF THE SCHEDULE EFFECTED BY THE FOURTH MODIFICATION IS THAT NO UNIT PRICE WAS ENTERED FOR THE ESTIMATED QUANTITIES OF ITEMS 35A AND 35B. THESE ITEMS COVER THE FURNISHING AND LAYING OF TWO SIZES OF CORRUGATED METAL PIPE. THE GOVERNMENT ESTIMATE FOR THE ITEMS IS $5,980. THE BIDS ON THE ITEMS RANGE FROM $6,320 TO $9,990.

CLAIRMONT PROTESTED AGAINST ACCEPTANCE OF LUHR'S BID ON THE GROUND THAT IT WAS INCOMPLETE. ON APRIL 19, 1972, THE CONTRACTING OFFICER CONCLUDED THAT LUHR'S BID WAS NONRESPONSIVE IN RELIANCE ON B-151332, JUNE 27, 1963, AND 50 COMP. GEN. 852 (1971) AND, THEREFORE, RECOMMENDED AWARD TO CLAIRMONT. LUHR'S PROTEST FOLLOWED.

THE CONTRACTING OFFICER'S RECOMMENDATION IS CONCURRED IN BY BOTH THE ACTING DIRECTOR OF DESIGN AND CONSTRUCTION AND THE DIRECTOR OF SURVEY AND REVIEW. UPON CONSIDERATION OF THE RECORD AND THE SUBMISSIONS OF COUNSEL FOR CLAIRMONT AND LUHR, VOM BAUR, COBURN, SIMMONS & TURTLE AND KING & KING, RESPECTIVELY, WE MUST ALSO CONCLUDE THAT THE REJECTION OF LUHR'S BID IS PROPER.

AS THE ACTING DIRECTOR NOTES, OUR DECISION B-151332, JUNE 27, 1963, IS DIRECTLY ON POINT. THAT CASE ALSO INVOLVED A BUREAU OF RECLAMATION SOLICITATION WHICH (WITH ONE EXCEPTION WHICH WILL BE DISCUSSED BELOW) CONTAINED PROVISIONS IDENTICAL TO THOSE OF THE PRESENT INVITATION. UNDER THE INVITATION, A BIDDER HAD THE OPTION TO PRICE CERTAIN OF THE ITEMS ON A LUMP-SUM BASIS; OTHERS REQUIRED THE INSERTION OF UNIT PRICES. AFTER BID OPENING, IT WAS DISCOVERED THAT THE LOW BIDDER HAD OMITTED A UNIT PRICE FOR ONE OF THE ITEMS. THE BIDDER THEN SUBMITTED INFORMATION TO THE CONTRACTING OFFICER INDICATING THE BREAKDOWN BY ITEMS OF ITS LUMP-SUM PRICING RESPONSES AND A UNIT PRICE OF $0.80 OR EXTENDED TOTAL OF $312 FOR THE ITEM IN QUESTION. AN EXAMINATION OF THE INFORMATION SATISFIED THE CONTRACTING OFFICER THAT THE UNIT PRICE FOR THE ITEM HAD BEEN INCLUDED IN THE BIDDER'S LUMP-SUM PRICE AND THAT IT HAD ACTUALLY INTENDED TO BID $312 FOR THE ITEM. AWARD WAS THEN MADE TO THE LOW BIDDER. RESPONDING TO THE UNTIMELY PROTEST OF THE SECOND LOW BIDDER, WE MADE THE FOLLOWING PERTINENT OBSERVATIONS:

"*** PAGE A OF THE SPECIFICATION STATES IN PART:

"'BIDS WILL BE CONSIDERED ON THE FOLLOWING SCHEDULE, BUT NO BID WILL BE CONSIDERED FOR ONLY A PART OF THE SCHEDULE.'

FURTHER, IT IS NOTED THAT STANDARD FORM 22, WHICH THE BID FORM ADMONISHES EACH BIDDER TO READ, PROVIDES IN PART AT PARAGRAPH 5(B) AS FOLLOWS:

"'*** WHERE THE BID FORM EXPLICITLY REQUIRES THAT THE BIDDER BID ON ALL ITEMS, FAILURE TO DO SO WILL DISQUALIFY THE BID. ***'

"*** (THE MISTAKE IN BID) PROCEDURE MAY PROPERLY BE EMPLOYED ONLY WITH RESPECT TO BIDS WHICH IN THE FORM SUBMITTED ARE RESPONSIVE; A BID WHICH IS ON ITS FACE UNRESPONSIVE FOR FAILURE TO INCLUDE A BID ON EVERY ITEM AS REQUIRED BY THE TERMS OF THE INVITATION MAY NOT BE CORRECTED AFTER BID OPENING TO RENDER IT RESPONSIVE. B-148701, JUNE 27, 1962; SEE ALSO 38 COMP. GEN. 819. THE ONLY EXCEPTION TO THIS RULE APPLIES WHERE THE BID ITSELF AS SUBMITTED INDICATES NOT ONLY THE PROBABILITY OF ERROR BUT ALSO THE EXACT NATURE OF THE ERROR AND THE AMOUNT INTENDED. B-137971, DECEMBER 9, 1958. WE DO NOT BELIEVE THE EXCEPTION IS APPLICABLE TO THE INSTANT SITUATION.

"IN SUMMARY, WHERE THE OMISSION OF A PRICE FOR AN ITEM IS PRECLUDED BY THE TERMS OF THE INVITATION, SUCH AN OMISSION, EXCEPT AS PROVIDED UNDER THE FOREGOING EXCEPTION, RENDERS THE BID UNRESPONSIVE AND IT MAY NOT BE CONSIDERED FOR CORRECTION EITHER BY OUR OFFICE OR THE CONTRACTING AGENCY."

IN REPLY, COUNSEL FOR LUHR URGES THAT NOTWITHSTANDING THE FAILURE TO PRICE THESE ITEMS 35A AND 35B, LUHR IS NEVERTHELESS BOUND "TO PERFORM ALL WORK FOR SPECIFICATIONS NO. DC-6937," REFERRING TO A PORTION OF THE BID FORM (STANDARD FORM 21), QUOTED SUPRA. HOWEVER, WE MUST AGREE WITH CLAIRMONT'S COUNSEL'S VIEW THAT THIS ARGUMENT IS PREMISED ON AN INCOMPLETE READING OF THE FORM. THE FORM LANGUAGE FURTHER PROVIDES THAT THE BIDDER AGREES TO PERFORM ALL WORK "FOR THE AMOUNTS) STATED IN THE ACCOMPANYING BIDDING SCHEDULES)." IN ADDITION, THE PROPOSED CONTRACT IS CLEARLY A UNIT PRICE CONTRACT. SEE PARAGRAPH 16 OF THE SPECIFICATIONS. READ IN CONTEXT, WE WOULD, THEREFORE, HAVE TO AGREE THAT LUHR WOULD BE BOUND TO PERFORM THE WORK COVERED BY ITEMS 35A AND 35B ONLY TO THE EXTENT THAT AN APPROPRIATE PRICING RESPONSE IS MADE IN REPLY TO THE BIDDING SCHEDULE. 50 COMP. GEN. 852, 854 (1971). INDEED, THIS IS THE ONLY INTERPRETATION CONSISTENT WITH THE CAUTIONARY LANGUAGE OF THE BIDDING SCHEDULE AND STANDARD FORM 22, QUOTED SUPRA. MOREOVER, WE CANNOT SAY THAT LUHR'S ACKNOWLEDGMENT OF SUPPLEMENTAL NOTICE NO. 4 REFLECTS, IN EFFECT, AN INTENT TO FURNISH ITEMS 35A AND 35B AT NO COST. THE NOTICE IS NOT SELF-EXECUTING SINCE BY ITS TERMS IT REQUIRES THE BIDDER TO FILL IN ALL THE BLANKS ON THE REVISED PAGE "C" OF THE BIDDING SCHEDULE AND TO RETURN IT WITH THE BID. SEE 51 COMP. GEN. (B-174298, MARCH 2, 1972).

COUNSEL FOR LUHR PLACES EMPHASIS ON THE FACT THAT THIS INVITATION UNLIKE THE ONE CONSIDERED IN B-151332, JUNE 27, 1963, CONTAINS A PROVISION ENTITLED "MISTAKE IN BIDS" (BUREAU OF RECLAMATION FORM 7 1746). THIS PROVISION PROVIDES THAT A BIDDER WAIVES, WITHIN CERTAIN MONETARY LIMITS, ANY ALLEGED MISTAKE OR MISTAKES. RECOGNIZING THAT LUHR'S FAILURE TO RETURN SUPPLEMENTAL NOTICE NO. 4 WAS AN INADVERTENT ERROR, COUNSEL URGES THAT LUHR HAS NO OPTION BY REASON OF ITS FAILURE TO PRICE ITEMS 35A AND 35B SINCE UNDER THE MISTAKE IN BID PROVISION IT WOULD BE REQUIRED TO WAIVE ANY CLAIM OF THE MAGNITUDE INVOLVED IN FURNISHING ITEMS 35A AND 35B.

IN OUR VIEW, THE WAIVER PROVISIONS MAY NOT BE RELIED ON TO SUPPORT THE POSITION ADVANCED. THE FACT THAT A MISTAKE IN BID HAS BEEN IDENTIFIED DOES NOT FORECLOSE FURTHER INQUIRY. THE QUESTION OF THE IMPACT OF THE MISTAKE ON THE BIDDER'S LEGAL OBLIGATION TO PROVIDE THE GOODS OR SERVICES REQUIRED BY THE PARTICULAR INVITATION REMAINS. IT HAS BEEN OUR CONSISTENT POSITION THAT THE MISTAKE IN BID PROCEDURES MAY NOT BE UTILIZED TO RENDER RESPONSIVE A BID WHICH IS OTHERWISE NONRESPONSIVE. 51 COMP. GEN. (B- 173129, DECEMBER 6, 1971). THIS PROHIBITION IS REFLECTED IN SECTION 1- 2.406-3(A) OF THE FEDERAL PROCUREMENT REGULATIONS AND THE BUREAU'S WAIVER PROVISION MUST BE VIEWED IN LIGHT OF THIS STRICTURE.

CONSEQUENTLY, WE MUST CONCLUDE THAT THE FAILURE TO PRICE ITEMS 35A AND 35B WAS A MATERIAL DEVIATION RENDERING LUHR'S BID NONRESPONSIVE.