BNUMBER: B-274634
DATE: December 19, 1996
TITLE: Doty Bros. Equipment Company
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Matter of:Doty Bros. Equipment Company
File: B-274634
Date:December 19, 1996
B. C. Brown for the protester.
Christopher M. Bellomy, Esq., Department of the Navy, for the agency.
Robert Arsenoff, Esq., and Paul I. Lieberman, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Agency improperly rejected low offer for failure to acknowledge a
solicitation amendment where the agency has not identified how the
amendment, which eased performance requirements, reflected a
minimum need and thus how the amendment was material.
DECISION
Doty Bros. Equipment Company protests the rejection of its low offer
under request for proposals (RFP) No. N68711-96-R-2220, issued by the
Department of the Navy for the construction of a replacement jet fuel
pipeline in Los Angeles County, California. The protester asserts
that the contracting officer improperly rejected Doty Bros.' low
offer for failing to acknowledge an immaterial solicitation amendment.
We sustain the protest.
The RFP, which was issued on August 8, 1996, and closed on August 20,
contemplated a contract for a construction project to replace a jet
fuel pipeline including excavation, construction of a new line and
removal of the old line, and backfilling the excavated areas.
Competition was limited to four offerors based on the agency's
determination that an unusual and compelling urgency required such a
restriction. Offerors were to submit a firm, fixed price for the
project and provide a completed set of standard representations and
certifications. The RFP advised that the agency intended to make
award to the responsible offeror whose conforming offer was most
advantageous to the government considering price and other factors
specified in the solicitation without conducting discussions; no
"other factors" were specified elsewhere in the solicitation, hence
the agency awarded on the basis of low price.
On August 15, amendment No. 0001 was issued which modified the
specification with respect to backfilling the excavation; the closing
date was not extended by the amendment and the changes set forth in
the amendment were described as "technical."
Three offers were received as follows:
Doty Bros. $778,019
ARB, Inc. $998,395
Offeror A $1,283,084
Doty Bros. was the only offeror that failed to acknowledge receipt of
Amendment No. 0001 and, accordingly, on August 28, the agency wrote to
the firm as follows, rejecting its offer and advising it of the award
to ARB[1]:
"This is to advise you that your offer does not conform
to the
subject solicitation due to a failure to [a]cknowledge
Amendment
0001 which has a significant impact on the work to be
performed."
Upon receipt of the letter, Doty Bros. contacted the agency on
September 11 and asserted that its failure to acknowledge amendment
No. 0001 should have been viewed as a minor informality or
irregularity, suggesting that the agency should have called for
clarification. According to Doty Bros., the agency representative
explained that, given the contracting office's work load, there was
often not time to make confirming telephone calls and, further, that
the failure to acknowledge the amendment could not be viewed as a
minor informality which could be waived or cured later without
entering into discussions with all offerors--something the RFP did not
contemplate. This protest to our Office followed on September 13,
with Doty Bros. reiterating the argument it had presented to the
agency on September 11. In response, the agency has basically
reiterated the position it communicated to Doty Bros. 2 days before
the protest was filed.
Prior to the issuance of the amendment in dispute, the RFP required
that the excavated pipeline trench be backfilled to grade entirely
with a mixture of cement, aggregate and water of a specified density
known as "three-sack" slurry based on the amount of cement necessary
to make a defined amount of the slurry mixture.[2] The amendment
changed the requirement to a less expensive, thinner slurry, known as
"one-sack"; it further provided for filling the trench with slurry
only to a depth of 3 feet below grade and completing the backfill to
the existing grade with the compacted earth available from the
excavated jobsite.
The agency concedes that the amendment has virtually no effect on the
price of the project. Nonetheless, the agency maintains that the
amendment is material simply because it changes the manner in which
backfilling is to be accomplished which, in and of itself, according
to the agency, creates a "significant" impact on the quality of the
work to be performed.
Doty Bros. maintains that the amendment is not material because it
basically constitutes a relaxation of the original backfilling
requirements, permitting the use of a smaller quantity of a thinner,
less expensive slurry together with available excavated earth (which
is less expensive than slurry) to top off the backfill. As a result,
the protester maintains that its "technical" failure to acknowledge
the amendment could have been, and should have been, the subject of a
unilateral clarification falling short of triggering any requirement
for discussions with all three offerors. We agree.
For negotiated procurements, FAR sec. 15.607 requires contracting
officers to examine proposals for "minor informalities" and
"irregularities" and specifically cross-references FAR sec. 14.405
(applicable to sealed bid procurements) for a definition of the same.
Further, FAR sec. 15.607 provides that unilateral communications with an
offeror to resolve such minor informalities and irregularities are
"clarifications" and not "discussions" triggering the need to conduct
discussions with all competitive range offerors. FAR sec. 14.405 (as
read in the context of this negotiated procurement) provides as
follows:
"A minor informality or irregularity . . . pertains to some
immaterial defect in [an offer] or variation of [an offer] from
the exact requirements of the [solicitation] that can be
corrected or waived. . . . The defect or variation is immaterial
when the effect on . . . quality . . . is negligible when
contrasted with the total . . . scope of supplies or services
being acquired. The contracting officer either shall give the
[offeror] an opportunity to cure any deficiency resulting from a
minor informality or irregularity in [an offer] or waive the
deficiency, whichever is to the advantage of the Government.
Examples of minor informalities or irregularities include failure
of [an offeror] to . . . [a]cknowledge receipt of an amendment to
[a solicitation], but only if . . . [t]he amendment . . . has
either no effect or merely a negligible effect on . . . quality .
. . of the item [offered]." (Emphasis added.)
As stated above, the agency has asserted that, solely because the
amendment changes how performance is to occur, it is material and,
therefore, a failure to acknowledge the amendment cannot legally be
waived or corrected without holding discussions with all competitive
range offerors.
There is no precise rule for determining whether a change in
requirements is more than negligible, Innovation Refrigeration
Concepts, B-271072, June 12, 1996, 96-1 CPD para. 277; rather, that
determination is based on the facts of each case. Day and Night
Janitorial and Maid and Other Servs., Inc., B-240881, Jan. 2, 1991,
91-1 CPD para. 1. The mere fact that requirements have been changed by an
amendment does not render the amendment material and does not,
therefore, provide a basis for rejecting a bid that does not
acknowledge the amendment. See L & R Rail Serv.,
B-256341, June 10, 1994, 94-1 CPD para. 356 (protest sustained where
agency did not provide support for its assertion that a change in
requirements was material); Titan Mountain States Constr. Corp.,
B-183680, June 27, 1975, 75-1 CPD para. 393. In other words, in cases
where price is not meaningfully affected by an amendment, for the
amendment to be material something about the change must reflect a
legitimate minimum need of the agency such that its requirements will
not be met if the contractor performs to the unamended specifications.
In such circumstances, where neither the text of an amendment nor the
agency's explanation of the need for an amendment indicates what
factors inherent in the changed method of performance are necessary or
significant to meet the needs of the agency, the amendment cannot be
viewed as material. Day and Night Janitorial and Maid and Other
Servs., Inc., supra.
Here, there is nothing in the record indicating what minimum need of
the agency is reflected in the unacknowledged amendment. Neither the
text of the amendment nor the agency's bare assertion that the changed
method of performance significantly impacts quality addresses
why--aesthetically, structurally or otherwise--the use of less strong
and cheaper backfilling materials in lieu of those originally
specified in the solicitation is required to meet a legitimate minimum
need of the agency. That being so, we must conclude that the
amendment was not material and that the contracting officer therefore
was obligated to either waive Doty Bros.' failure to acknowledge the
amendment or permit the firm an opportunity to cure it. FAR sec. 15.607.
Since the contracting officer instead rejected the offer, we sustain
the protest.
Because the protest was not filed within 10 days after award, no
statutory stay was in effect and performance has continued to date.
In response to our inquiry, the agency reports that approximately 40
percent of the project is complete including excavation and
installation of the new pipeline, with removal of the old pipeline and
restoration to grade remaining to be performed. Under these
circumstances it is impractical to recommend contract termination; we
do, however, recommend that Doty Bros. be reimbursed for its proposal
preparation costs and its reasonable costs of filing and pursuing this
protest. Bid Protest Regulations, section 21.8(d)(1) and (2), 61 Fed.
Reg. 39039, 39046 (1996) (to be codified at 4 C.F.R. sec. 21.8(d)(1) and
(2)). The protester should submit its certified claim for costs to
the contracting agency within 60 days of receiving this decision.
Section 21.8(f)(1), 61 Fed. Reg. supra (to be codified at 4 C.F.R. sec.
21.8(f)(1)).
The protest is sustained.
Comptroller General
of the United States
1. The agency also states that it rejected Doty Bros.' offer for
failure to submit a completed set of standard representations and
certifications. The protester states that it submitted a set to the
agency with the rest of its offer. Assuming that the offer package
which the agency received did not contain the representations and
certifications, the agency's position that it could not have permitted
Doty Bros. to correct this deficiency without being required to
conduct discussions with all offerors is without merit. We have
recognized that, even under sealed bid procurements, the failure of a
bidder to complete standard representations and certifications is a
minor irregularity which does not render its bid nonresponsive and the
requisite information may be furnished after bid opening. Jettison
Contractors, Inc., B-242792, June 5, 1991, 91-1 CPD para. 532. It follows
then that correction of any failure by Doty Bros. to supply the
representations and certifications with its offer would not trigger a
requirement to conduct discussions with all offerors. (Federal
Acquisition Regulation (FAR) sec. 15.607(a) (FAC 90-31) provides that
communications with offerors to correct minor irregularities are
clarifications, not discussions, within the meaning of FAR sec. 15.610.)
While the set of missing representations and certifications here also
includes a certificate of procurement integrity, that certificate may
be obtained at any time prior to award without triggering the
requirement to hold discussions with all offerors. Worldwide Servs.,
Inc./Perry Management Corp., a Joint Venture, B-261113, Aug. 18, 1995,
95-2 CPD para. 73.
2. Some cuts could be filled with earth and compacted by rolling or
tamping to a given degree of compaction as spelled out in the
specification.