BNUMBER: B-271072
DATE: June 12, 1996
TITLE: Innovative Refrigeration Concepts
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Matter of:Innovative Refrigeration Concepts
File: B-271072
Date:June 12, 1996
Sam Zalman Gdanski, Esq., for the protester.
David H. Brujes, Esq., Department of the Treasury, for the agency.
Charles W. Morrow, Esq., and James A. Spangenberg, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Agency improperly rejected low bid for 600-ton chillers as
nonresponsive for failing to acknowledge an amendment that corrected
an obvious error in the entry water temperature parameter under which
the chillers would be operated; the amendment was not material because
it did not affect the protester's obligation to supply 600-ton
chillers in accordance with the solicitation's requirements.
DECISION
Innovative Refrigeration Concepts (IRC) protests the rejection of its
bid as nonresponsive under invitation for bids (IFB) No. FTC-96-11,
issued by the Department of the Treasury, Federal Law Enforcement
Training Center (FLETC), Glynco, Georgia, for two 600-ton chillers.
The agency rejected the bid because IRC failed to acknowledge
amendment Nos. 0002 and 0003. IRC contends that the amendments were
not material.
We sustain the protest.
The IFB schedule required a bid for two 600-ton chillers and one
1,300-ton cooling tower.[1] Amendment No. 0001 was issued to
incorporate certain drawings and technical specifications omitted from
the original IFB package. Among other things, the information sheet
in the amendment included operating parameters for the evaporators on
the 600-ton chillers. The stated operating parameters were entry
water temperature of 57 degrees Fahrenheit (F), leaving water
temperature of 42 degrees F, and flow rate of 1,150 gallons per minute
(GPM). Amendment No. 0002 was subsequently issued, and contained the
following question and answer:
"QUESTION: Chiller capacity - The flow rate and water
temperature difference for the evaporator do not equate to the
scheduled tonnage (600T).
"ANSWER: The entering water temperature as shown on the chart in
Amendment 0001 was incorrect. The correct chiller entering water
temperature should be 54.5 [degrees] F instead of 57 [degrees]
F."
Six bids were received by bid opening on December 20. IRC submitted
the low bid at $185,976 for the two 600-ton chillers. While IRC's bid
acknowledged amendment No. 1, it failed to acknowledge amendment Nos.
0002 and 0003.[2] FLETC rejected IRC's bid as nonresponsive on the
basis that amendment No. 0002 was material in light of the change in
the entry water temperature parameter.[3] FLETC made award to the
next low bidder, Carrier Corporation, at $186,646 on February 9, 1996.
IRC protested on that same date. The agency determined that the need
for the chillers was urgent and authorized contract performance,
notwithstanding the protest. We have been advised that the chillers
have been delivered.
A bidder's failure to acknowledge a material amendment to an IFB
renders the bid nonresponsive, since absent such an acknowledgment the
government's acceptance of the bid would not legally obligate the
bidder to meet the government's needs as identified in the amendment.
Central Atlantic Contractors, Inc., B-243663, Aug. 14, 1991, 91-2 CPD para.
146. On the other hand, a bidders failure to acknowledge an amendment
that is not material is waivable as a minor informality. Federal
Acquisition Regulation (FAR) sec. 14.405. An amendment is material only
if it would have more than a trivial impact on price, quantity,
quality, or delivery of the item bid upon, or the relative standing of
the bidders. Id.; FAR sec. 14.405(d)(2). An amendment is not material,
however, where it does not impose any legal obligations on the bidder
different from those imposed by the original solicitation or previous
and acknowledged amendments. Angus Fire Armour Corp., B-237211.2,
Jan. 18, 1990, 90-1 CPD para. 68. No precise rule exist to determine
whether a change is more than negligible, but an amendment that merely
clarifies an existing requirement is not material and the failure to
acknowledge it may be waived. Id.
Here, the agency asserts that amendment No. 0002 was material because
it corrected a mistake in one of the operating parameters, entry water
temperature, that rendered the specifications in the IFB, as amended
by amendment No. 0001, impossible to meet. The agency explains that
it would take a 718-ton chiller to cool water in accordance with the
parameters stated in amendment No. 0001,[4] and has provided the
formula and mathematical calculations, in which each of the parameters
as well as the chiller capacity are factors, to support its position
in this regard.
The protester argues that the IFB unambiguously required 600-ton
chillers, as stated on the IFB schedule completed by IRC, and that
while it was apparent that one of the parameters in amendment No. 1
was in error, it was otherwise clear that the IFB required 600-ton
chillers and that the operating parameters specified were not
material. IRC explains in this regard that the specified chiller
capacity is "a single, vital engineering parameter, which summarizes
the size, flow, operation temperatures, etc. of the [chiller]." The
protester also notes that the fact that the agency was also soliciting
bids for a 1,300-ton cooling tower demonstrated that 600-ton chillers
were required, inasmuch as a 1,300-ton tower could not accommodate two
700-ton chillers.
Based on our review of the record,[5] we find that the amendment
correcting the entry water temperature parameter was not material and
that there was no reasonable doubt that IRC's bid commited that firm
to supply 600-ton chillers that would comply with the IFB
requirements. First, we note that the operating parameters for the
600-ton chillers are within the control of the agency; the agency
determines the temperature level at which the water enters the
chillers and the flow rate, and thereby decides the desired leaving
water temperature from the chiller. As noted, there is an algebraic
formula, which was used by the FLETC engineer and is commonly known in
the industry, in which each of the parameters and the chiller tonnage
are variables, to determine the operating parameters and/or chiller
size (tonnage). As in any algebraic formula, it can be used to
determine the value of an unknown or erroneous variable where the
other variables are predetermined or known. In this case, any bidder
offering to supply 600-ton chillers could and should have readily
discerned that one of the operating parameters was in error since
these parameters cannot be satisfied by a 600-ton chiller. The record
shows (and the agency concedes) that 600-ton chillers that otherwise
satisfy the IFB requirements are designed to accommodate variations of
the operating parameters specified; for example, the flow rate could
be lowered to allow the chiller to process 57 degree F water to 42
degree F water or, as here, the entry temperature of the water could
be lowered. Moreover, the agency does not dispute that the
requirement for a 1,300-ton cooling tower indicates that 600-ton
chillers, rather than 718-ton units, were required. Finally, the bid
schedule completed by IRC clearly stated that 600-ton chillers were
required; under the Order of Precedence--Sealed Bidding clause set
forth at Federal Acquisition Regulation sec. 52.214-29 and incorporated
in the IFB, any inconsistency in the IFB would be resolved by giving
precedence to the schedule (excluding the specifications) over the
specifications.
As noted by the agency, we have observed that an agency should not be
required to enter into a contract that presents the potential of
litigation stemming from ambiguity in the original documents, that an
agency with actual knowledge of such ambiguities should try to resolve
them in an amendment, and that such amendments are generally material.
See Air Quality Experts, Inc., B-256444, June 15, 1994, 94-1 CPD para.
374; Moon Constr. Co., B-228378, Dec. 17, 1987, 87-2 CPD para. 605.
However, for the reasons set out above, we think there is no
reasonable possibility that a bidder would not be bound to supply
600-ton chillers or could decline to perform the contract because the
specified operating parameters that contained an obvious error could
not be met with a 600-ton chiller. Thus, amendment No. 0002 was not
material; it merely corrected one clearly erroneous operating
parameter (not within the control of the contractor) of the clearly
required 600-ton chillers. Therefore, the failure to IRC to
acknowledge the amendment was not a proper basis for rejecting IRC's
bid as nonresponsive. See Franklin Envtl. Servs., Inc., B-240589,
Dec. 4, 1990, 90-2 CPD para. 454.
Since the chillers have been delivered, we cannot recommend corrective
action. We recommend that IRC be reimbursed its costs of bid
preparation, and of filing and pursuing the protest, including
reasonable attorneys' fees. 4 C.F.R. sec. 21.8 (d)(1996). The protester
must file its certified claim for cost with the contracting agency 90
days after receipt of our decision. 4 C.F.R. sec. 21.8(f)(1).
The protest is sustained.
Comptroller General
of the United States
1. The agency did not award the item for the 1,300-ton cooling tower.
2. IRC failed to timely acknowledge amendment Nos. 0002 and 0003
because its agent delivered them to the wrong address.
3. There is no contention, nor do we have any basis to find, that
amendment No. 0003, or any other parts of amendment No. 0002, are
material.
4. The agency reports that chillers larger than 600 tons would not fit
in the limited physical space available.
5. This information includes that gathered during a telephonic
hearing.