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.