BNUMBER:  B-272875
DATE:  October 29, 1996
TITLE:  Hall/McCabe Realty, Inc.

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Matter of:Hall/McCabe Realty, Inc.

File:     B-272875

Date:October 29, 1996

Judith K. McCabe for the protester.
W. Graham Moses, Esq., Department of Housing and Urban Development, 
for the agency.
John Van Schaik, Esq., and Michael R. Golden, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Where solicitation required bidders to submit price spreadsheet 
covering all of the work to be performed under fixed-price contract, 
but the spreadsheet was not listed on the bid schedule and was to have 
no effect upon contract award, a failure to submit the spreadsheet 
with the bid does not render the bid nonresponsive.

DECISION

Hall/McCabe Realty, Inc. protests the award of a contract to Gulf 
Coast Brokers/ERTI under invitation for bids (IFB) No. 003-96-063, 
issued by the Department of Housing and Urban Development (HUD) for 
real estate asset manager (REAM) services.

We deny the protest.

The IFB contemplated award of a fixed-priced contract for management 
and related services for single family properties owned or in the 
possession of HUD in the Pensacola, Florida area for 1 year with 2 
option years.  The IFB at section B.3.A., required bidders to insert a 
fee for the base year and for each of the option years for each 
HUD-owned property assigned to the contract.  Under sections B.3.B and 
B.3.C, bidders were required to insert a per month, per property price 
for custodial duties and a per lot price for work required on vacant 
lots.  The IFB stated that the sum of those five prices would be used 
to determine the low bidder under the IFB.

Section L-8 of the IFB, "Pricing Information," included a pricing 
spreadsheet calling for bidders to set forth their costs for the base 
and each option year for numerous items, including direct labor, 
fringe benefits, and other costs such as initial inspections, initial 
cleanups, securing properties, defective paint inspections and 
reports, initial and routine ground maintenance, photographs, 
subcontracting, administrative costs, rent collection, tenant 
complaint investigations, and eviction actions.  Concerning this 
information, section L-8 stated:

     "The following is provided to help the bidder consider in pricing 
     items that the government will expect the eventual contractor to 
     pay for out of his/her management price per property.  This 
     pricing spread sheet must be returned with and equal the bid 
     prices provided in section B.3.A."

Bids were submitted by the protester and Gulf Coast.  Gulf Coast's 
bid, as submitted, did not include the section L-8 price spreadsheet.  
Since Gulf Coast's bid included the prices in section B, the agency 
reports that the contracting officer decided that the absence of the 
spreadsheet was a minor, waivable informality in accordance with 
Federal Acquisition Regulation (FAR)  sec.  14.405.[1] 

Based on the section B prices, Gulf Coast's bid was the apparent low 
bid.  However, because that bid was approximately 61 percent below 
Hall/McCabe's bid, the agency requested that Gulf Coast verify its 
bid.  As part of the verification, the agency requested that Gulf 
Coast submit the section L-8 price spreadsheet as a means of ensuring 
there was no error in the firm's price and that the firm understood 
the requirements of the contract.  Based on the verification, the 
contracting officer determined Gulf Coast's bid was not mistaken and 
not so low as to prevent satisfactory performance.  After a 
determination that Gulf Coast was responsible, the contract was 
awarded to that firm as the low, responsive and responsible bidder.

Hall/McCabe first argues that Gulf Coast's bid should have been 
rejected as nonresponsive.  Hall/McCabe notes that the IFB required 
bidders to submit the completed spreadsheet with their bids and 
maintains that the spreadsheet was a material part of the bid since 
the purpose of that information was to confirm to the government that 
the bidder understood the costs of complying with the contract.  The 
protester also argues that the spreadsheet was a material part of the 
bid because the IFB stated that award would be made to the "low, 
responsive, responsible bidder whose bid, conforming to the 
solicitation, will be most advantageous to the Government considering 
only price."  According to Hall/McCabe, since Gulf Coast's bid did not 
include the spreadsheet, it did not conform to the solicitation and 
therefore was not responsive.  Hall/McCabe also argues that the agency 
improperly permitted Gulf Coast to make its nonresponsive bid 
responsive by allowing the firm to submit the spreadsheet after bid 
opening in violation of the FAR, which only permits correction of bids 
that are responsive as submitted.

A bid, to be responsive, must constitute an unequivocal offer to 
provide the exact items or services called for in the IFB, so that 
government acceptance of the bid will legally bind the bidder to 
perform the contract in accordance with all the material terms and 
conditions.  See Delco Indus. Textile Corp., B-223968, Oct. 29, 1986, 
86-2 CPD  para.  490.  As a general rule, a bid must be rejected as 
nonresponsive if, as submitted, it does not include a price for every 
item requested by the IFB.  This rule reflects the legal principle 
that a bidder who has failed to submit a price for an item generally 
cannot be said to be obligated to furnish the item.  D.H. Kim Enters., 
Inc., B-261423, Sept. 21, 1995, 95-2 CPD  para.  145.  A bid also should be 
rejected as nonresponsive where prices required on a solicitation's 
bid schedule are missing and are determinative of which bid was low, 
or where the missing prices are necessary to calculate payments to the 
contractor.  See, e.g., Allbrite Office Cleaning, Inc., B-257188, June 
10, 1994, 94-1 CPD  para.  363, GTA Containers, Inc., B-249327, Nov. 3, 
1992, 92-2 CPD  para.  321; Lioncrest, Ltd., Inc., B-221026, Feb. 6, 1986, 
86-1 CPD  para.  139.

In this case, by the express terms of the IFB, the pricing spreadsheet 
was to serve none of these purposes; indeed, the spreadsheet was to 
have no effect on the award or performance of the contract.  The 
solicitation advised that the low bidder was to be determined based on 
the sum of the five prices inserted by the bidders in section B of 
their bids.  The spreadsheet prices also were to have no effect on 
payments under the contract; the IFB directed that payments also were 
to be based on the section B prices.  The spreadsheet was requested 
solely "to help the bidder consider in pricing items that the 
Government will expect the eventual contractor to pay for out of 
his/her management price per property" and, by its own terms, was to 
have no bearing on any legal commitment of the bidder.  In other 
words, bid prices for the five line items in the section B schedule 
legally obligated the bidder to perform all of the work required under 
the contract, including the options and the work on vacant lots and 
the custodial work--a bid's failure to contain the spreadsheet does 
not mean, as the protester contends, that such a bid fails to provide 
an unequivocal offer to provide the required work.  See D.H. Kim 
Enters., Inc., supra.  Accordingly, since Gulf Coast's deviation from 
the exact requirements of the IFB did not have a material effect on 
its legal obligations, there is no basis for viewing Gulf Coast's bid 
as nonresponsive and the deviation could be waived as a minor 
informality.[2]   See Fire Sec. Sys., Inc., B-259076, Mar. 2, 1995, 
95-1 CPD  para.  124.

Hall/McCabe also argues that Gulf Coast's price is so low that the 
government should have questioned whether that firm has the ability to 
meet the requirements of the contract.  This allegation does not 
present a valid basis for protest.  A bidder or offeror, in its 
business judgment, properly may decide to submit a price that is 
extremely low.  Diemaster Tool, Inc., B-238877, Apr. 5, 1990, 90-1 CPD  para.  
375.  An agency's decision that the contractor can perform the 
contract at the offered price is an affirmative determination of 
responsibility which we will not review absent a showing of possible 
fraud or bad faith on the part of procurement officials, or that 
definitive responsibility criteria in the solicitation may have been 
misapplied.  4 C.F.R.  sec.  21.5(c) (1996); JWK Int'l Corp., B-237527, 
Feb. 21, 1990, 90-1 CPD  para.  198.  There has been no such showing here.

Finally, Hall/McCabe notes that at a pre-bid conference, an agency 
representative stated that the number of properties in inventory 
listed in the IFB had changed.  The protester complains that it asked 
for but was refused a copy of the minutes to the conference and that 
no amendment was issued concerning the change in the inventory.  HUD 
reports that at the pre-bid conference, a representative of 
Hall/McCabe, the incumbent, informed the agency that the IFB should 
have stated that there were 17 properties in the inventory, instead of 
25.  While the agency concedes that it should have prepared and 
distributed minutes of the pre-bid conference to all prospective 
bidders, the agency argues that the change was not so significant as 
to prejudice any bidders.

We agree.  As the incumbent, Hall/McCabe knew the number of properties 
in the inventory so we do not see how it was prejudiced by the 
agency's failure to formally announce the change in the number of 
properties listed in the IFB.  To the extent that Hall/McCabe argues 
that Gulf Coast's price was skewed by its belief that there were more 
properties in inventory than was actually the case, as the agency 
points out, the number of properties in the inventory will change over 
the course of the contract and the IFB informed bidders that the 
listed current inventory did not represent a projection of the 
required services.  Moreover, in addition to the current inventory 
total, the IFB listed the number of properties acquired over the past 
year, the number of properties closed over the past year, the number 
of vacant lots acquired over the past year, and other information 
about the incumbent contract; the protester does not argue that any of 
this information was in error.  Under the circumstances, we do not see 
how the disparity in the inventory number in the IFB could have had 
any significant impact on the bids.

The protest is denied

Comptroller General 
of the United States

1. FAR  sec.  14.405 defines a minor informality or irregularity as:

            "[O]ne that is merely a matter of form and not of 
            substance . . . some immaterial defect in a bid or 
            variation of a bid from the exact requirements of the 
            invitation that can be corrected or waived without being 
            prejudicial to other bidders."
 
2. Although Hall/McCabe argues that the spreadsheet is a matter of 
responsiveness because it can be used to determine whether a bid is 
unbalanced, the agency's concern with respect to unbalancing under 
this solicitation related to unbalancing between the required items in 
section B of the schedule.  As the IFB stated, "bids reflecting 
unbalanced pricing for items in B.2 can be rejected as 
non-responsive."  Moreover, as explained above, the absence of the 
spreadsheet had no impact on the responsiveness of the bid because it 
was to have no bearing on the legal commitment of the bidder and was 
to play no role in determining the low bid or in calculating payments 
under the contract.