BNUMBER: B-275882.2
DATE: April 10, 1997
TITLE: Matter of:Executive Conference Center, Inc.
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Matter of:Executive Conference Center, Inc. d\b\a Holiday Inn-Atlanta
Central
File: B-275882.2
Date:April 10, 1997
Alan Rousseau, Specialized Contract Services, Inc., for the protester.
Phillip E. Johnson, Federal Contract Specialists, Inc., for Ashok
Kumar d/b/a Hotel Castlegate Howard Johnson Midtown, an intervenor.
Col. Nicholas P. Retson, Capt. Philip T. McCaffrey, and Timothy G.
Goblirsch, Esq., Department of the Army, for the agency.
Adam Vodraska, Esq., and James A. Spangenberg, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
An amendment to the statement of work in a solicitation which
specifies the food transportation equipment the contractor is to use
to transport meals to a military entrance processing station is
material where it imposes additional obligations on the contractor to
protect the food from contamination which were not required in the
invitation for bids as issued or already imposed by applicable state
and local food safety regulations.
DECISION
Executive Conference Center, Inc. d/b/a Holiday Inn-Atlanta Central
protests the Department of the Army's decision to terminate its award
of contract No. DABT23-97-D-0016, and the Army's proposed award of the
contract to Ashok Kumar d/b/a Hotel Castlegate Howard Johnson Midtown,
under invitation for bids (IFB) No. DABT23-97-B-0013 to provide lunch
(noon) meals for armed forces applicants at the Military Entrance
Processing Station (MEPS) in Atlanta, Georgia.
We sustain the protest.[1]
The IFB was issued November 20, 1996, by the Fort Knox Directorate of
Contracting. Facsimile bids were not authorized by the IFB. The IFB
contemplated the award of a firm, fixed-price requirements contract
for a base year (January 1, 1997, through December 31, 1997) and 4
option years.
The IFB's statement of work (SOW) specified that the contractor shall
provide meals consisting of submarine sandwiches with potato chips and
a beverage to the MEPS, which has a government-furnished dining and
serving area. The SOW specified that the sandwiches could be on
either white or whole wheat submarine-style bread, with a choice of
sliced ham (baked or boiled), turkey, or roast beef, a choice of
sliced swiss, provolone, or american cheese, and served with fresh
sliced tomatoes and fresh shredded lettuce. Besides canned soft
drinks, the contractor is to provide ice water, iced tea (10 oz. cup),
and whole milk (half pint) upon request. The contractor will also
provide disposable plates, knives, forks, spoons, cups, etc. with the
meals as well as various condiments, including catsup, mustard,
mayonnaise, pickles, relish, onions, salt and pepper, and oil and
vinegar.
The IFB informed bidders that no food preparation facility was
available at the MEPS and that the contractor's food preparation
facility must be within 18 miles of the MEPS in order to be considered
for award. The bid schedule requested unit and extended prices based
on an estimated quantity of 13,450 meals for the base period and each
option year, with award to be made based on the aggregate amount. The
contractor is to perform the contract in accordance with written
delivery orders to be issued by the contracting activity. The IFB
scheduled bid opening for 11:00 a.m. on December 20, 1996, and
required bidders to return an original signed copy of the completed
bid.
On December 10, 1996, the Army issued Amendment 0001, the only
amendment to the IFB. The amendment was issued on Standard Form (SF)
30 and a continuation sheet, and indicated that the hour and date
specified in the IFB for bid opening had not been extended. The
amendment deleted paragraphs of the SOW requiring medical examinations
for food handlers and paragraphs relating to the dining and serving
areas. The amendment also added the following new paragraphs to the
SOW:
"5.1.1.7.5 FOOD TRANSPORTATION EQUIPMENT. In those cases where
the contract calls for the preparation of food at the
contractor's facility and the serving of food at the MEPS site,
the following equipment shall be used when transporting food.
"5.1.1.7.5.1 Insulated and hermetically sealed food containers
shall be used to transport hot food items and perishable food
items.
"5.1.1.7.5.2 All other food items shall be transported in closed
containers to protect food from contamination.
"5.1.1.7.5.3 Enclosed and clean vehicles shall be used for the
transportation of food.
"5.1.1.7.5.4 Vehicles used to transport food shall meet all
Federal, State and local health, safety, licensing and insurance
requirements."
The pre-printed language on the amendment form required that offerors
acknowledge receipt of the amendment prior to the hour and date
specified in the solicitation by one of the following methods: (a) by
completing and signing the form and returning a copy of the amendment;
(b) by acknowledging receipt on each copy of the offer submitted; or
(c) by separate letter or telegram which includes a reference to the
solicitation and amendment numbers. The form warned bidders that
"FAILURE OF YOUR ACKNOWLEDGMENT TO BE RECEIVED AT THE PLACE DESIGNATED
FOR THE RECEIPT OF OFFERS PRIOR TO THE HOUR AND DATE SPECIFIED MAY
RESULT IN REJECTION OF YOUR OFFER."
On December 17, Howard Johnson's agent asked the contracting officer
whether any amendments had been issued and was told that an amendment
had been mailed to the firms, including the agent, on the bidders'
list. Since Howard Johnson's agent had not yet received the
amendment, the agent arranged for overnight delivery of another copy
of the amendment which arrived the following day. The agent then
transmitted Howard Johnson's acknowledgment of the amendment--a
completed and signed copy of the SF 30--by facsimile to the
contracting office prior to bid opening. On the facsimile
transmission cover sheet to the contracting office, Howard Johnson's
agent explained that the acknowledgment was being transmitted by
facsimile because Howard Johnson's bid had already been mailed and the
amendment "may be a material modification."
At the December 20 bid opening, Howard Johnson was the low bidder at
$356,425 ($71,285 per year based on $5.30 per meal). The bid opening
officer noted on the abstract of offers that Howard Johnson had
acknowledged the amendment by facsimile. Holiday Inn was the second
low bidder at $359,787.50 ($71,957.50 per year based on $5.35 per
meal), and had acknowledged the amendment by returning a completed and
signed original copy of the amendment with its bid. Both Howard
Johnson and Holiday Inn indicated in their bids that their respective
food preparation facilities were located within 18 miles of the MEPS,
as required.
Because Howard Johnson had acknowledged the amendment via facsimile
transmission, which was not an authorized means of acknowledgment
under the IFB, the contracting officer concluded that the facsimile
transmission did not constitute acknowledgment of the amendment. The
contracting officer rejected Howard Johnson's bid as nonresponsive on
December 31, and made award to Holiday Inn. Howard Johnson protested
to our Office on January 3, 1997, contending that the amendment was
not material since it did not have an impact on the bidders' prices
and, even if the amendment was material, its acknowledgment of the
amendment by facsimile transmission was proper under the
circumstances.[2]
In considering Howard Johnson's protest, the contracting officer
concluded that the amendment was not material. First, the contracting
officer noted that the amendment relaxed the SOW requirement for
medical examinations for food handlers and deleted certain SOW
paragraphs relating to the dining and serving areas as irrelevant
because the government is furnishing the dining facility and the
contractor is merely providing submarine sandwiches, chips, and
beverages, as described above.
Regarding paragraph 5.1.1.7.5.1 added by the amendment, which requires
that insulated and hermetically sealed food containers be used to
transport hot food items and perishable food items, the contracting
officer discovered, after Howard Johnson's protest was filed, that the
applicable state and local food safety regulations, Ga. Comp. R. &
Regs. r. 290-5-14-.03(1)(c)(1996); Fulton County Code sec. 30-2-2-5(1)(A)
(1991), prohibit the use of food in hermetically sealed containers[3]
that were not prepared in a food processing establishment.[4] The
contracting officer thus viewed the specification requirement as
unenforceable and determined that the other requirements of the
paragraph 5.1.1.7.5.1 were not material because the SOW does not call
for the serving of hot foods, and because the contractor is already
required by the state and local food safety regulations to ensure the
safety of perishable food items.
The contracting officer also determined that the requirements of
paragraph 5.1.1.7.5.2, that all other food items be transported in
closed containers to protect food from contamination, and paragraph
5.1.1.7.5.3, that enclosed and clean vehicles be used for the
transportation of food, were not material because the contractor is
obligated by the state and local food safety regulations to protect
food from contamination and spoilage during transportation, such as by
wrapping or packaging the food, and thus these paragraphs added by the
amendment do not impose any additional obligation on the contractor.
Since the contracting officer determined that the amendment was not
material, the contracting officer decided to waive Howard Johnson's
failure to properly acknowledge the amendment as a minor informality
pursuant to Federal Acquisition Regulation (FAR) sec. 14.405(d)(2), which
provides that a bidder's failure to acknowledge receipt of an
amendment to an invitation for bids shall be waived if the amendment
involves only a matter of form or has either no effect or merely a
negligible effect on price, quantity, quality, or delivery of the item
bid upon.
On February 3, the contracting officer informed Howard Johnson's agent
that it would "set aside" the award of the contract to Holiday Inn
effective February 9 and award the contract to Howard Johnson
effective February 10. As a result, on February 4, Howard Johnson
withdrew its protest.
On February 6, Holiday Inn filed its protest in our Office, contending
that because the IFB did not permit acknowledgment of the amendment by
facsimile and because the amendment was material, Howard Johnson's bid
was properly rejected in the first place and the contract award should
be reinstated to Holiday Inn.
A bid which does not include an acknowledgment of a material amendment
to an IFB must be rejected as nonresponsive because, absent such an
acknowledgment, the bid does not obligate the bidder to comply with
the terms of the amendment. Eagle Constr. Servs., Inc., B-257841,
Nov. 10, 1994, 94-2 CPD para. 181 at 2-3. An amendment is material where
it imposes legal obligations on a prospective bidder that were not
contained in the original solicitation, G. R. Sponaugle & Sons, Inc.,
B-257784, Nov. 7, 1994, 94-2 CPD para. 178 at 2, or if it would have more
than a negligible impact on price, quantity, quality, or delivery of
the item bid upon, or the relative standing of the bidders. See FAR sec.
14.405(d)(2); L & R Rail Serv., B-256341, June 10, 1994, 94-1 CPD para.
356 at 4. A bidder's failure to acknowledge receipt of an amendment
that is material is not waivable as a minor informality. Specialty
Contractors, Inc., B-258451, Jan. 24, 1995, 95-1 CPD para. 38 at 2. No
precise rule exists to determine whether a change required by an
amendment is more than negligible; rather, that determination is based
on the facts of each case. Coopers Constr., Inc., B-260364;
B-260364.2, May 30, 1995, 95-1 CPD para. 268 at 3.
We think the amendment is material because it imposed new obligations
on the contractor that did not exist in the IFB as issued, such as
transporting the food in closed containers, as required by paragraph
5.1.1.7.5.2 of the amendment, and in an enclosed vehicle, as required
by paragraph 5.1.1.7.5.3. While, as asserted by the Army, the
contractor is obligated by the state and local food safety regulations
to protect transported food from contamination, the contractor is not
already so obligated by the state and local food safety regulations to
transport food items in closed containers. Rather, the state and
local regulations permit the contractor to instead completely wrap or
package food that is being transported as an alternative to using
covered containers. Ga. Comp. R. & Regs. r. 290-5-14-.03(6)(a)
(1996); Fulton County Code sec. 30-2-2-5(3)(N) (1991).[5] Further, the
Army has not pointed to any applicable law or regulation that already
obligates a contractor that is a "Food Service Establishment" to
transport the food in an enclosed vehicle. As these additional
obligations were of obvious importance to the Army at the time the
amendment was issued in establishing what the Army thought should be
the minimum standards for food transportation and the acceptable
methods of such transportation by the contractor, standards that are
stricter than the contractor was already obligated to provide to
protect the food from contamination, the amendment was material.[6]
See Anacomp, Inc., B-256788, July 27, 1994, 94-2 CPD para. 44 at 3.
Since Howard Johnson did not acknowledge the amendment, Howard
Johnson's bid does not represent a clear commitment by that firm to
transport food items in accordance with the material SOW requirements
added by the amendment, and, accordingly, the Army should not have
waived Howard Johnson's failure to acknowledge the amendment as a
minor informality but should have rejected the firm's bid as
nonresponsive.
Ordinarily, we would recommend that award be made to Holiday Inn as
the low responsive bidder. However, it appears from the Army's
eventual acceptance of Howard Johnson's bid that the additional
obligations imposed by the amendment may overstate the needs of the
government, and that the contractor's compliance with existing state
and local food safety regulations may be sufficient for meeting the
agency's needs. In addition, it is also apparent that the IFB, as
amended by the addition of paragraph 5.1.1.7.5.1, is defective in
requiring the contractor to use hermetically sealed containers which
the contractor is prohibited from doing by state and local food safety
regulations.[7]
Accordingly, we recommend that the Army cancel the IFB and resolicit
on the basis of a statement of work which accurately reflects the
Army's needs. Bid Protest Regulations, 4 C.F.R. sec. 21.8(a); see West
Alabama Remodeling, Inc., B-220574, Dec. 26, 1985, 85-2 CPD para. 718 at
2-3, aff'd B-220574.2, Feb. 7, 1986, 86-1 CPD para. 141 at 2. We also
recommend that Holiday Inn be reimbursed the costs of filing and
pursuing the protest, including reasonable attorneys' fees. Bid
Protest Regulations, 4 C.F.R. sec. 21.8(d)(1). Holiday Inn's claim for
such costs, detailing the time expended and costs incurred, should be
submitted directly to the agency within 60 days after receipt of this
decision. Bid Protest Regulations, 4 C.F.R. sec. 21.8(f)(1).
The protest is sustained.
Comptroller General
of the United States
1. This decision is made under our express option procedures, Bid
Protest Regulations, 4 C.F.R. sec. 21.10 (1997).
2. Howard Johnson argues that it properly acknowledged Amendment 0001
by facsimile because it essentially complied with the pre-printed
acknowledgment instructions on the SF 30 by completing and signing the
form and "returning" a copy of the amendment before the hour and date
specified for bid opening. However, we have consistently recognized
that where, as here, the IFB did not authorize the submission of
facsimile bids or the acknowledgement of amendments by facsimile, a
facsimile transmission does not constitute acknowledgment of the
amendment. The Hackney Group, B-261241, Sept. 5, 1995, 95-2 CPD para. 100
at 4; Recreonics Corp., B-246339, Mar. 2, 1992, 92-1 CPD para. 249 at 3,
recon. denied, B-246339.2, July 15, 1992, 92-2 CPD para. 23.
3. The state regulation defines a "Hermetically Sealed Container" as
"a container designed and intended to be secure against the entry of
microorganisms and to maintain the commercial sterility of its content
after processing." Ga. Comp. R. & Regs. r. 290-5-14-.01(o) (1996).
4. It does not appear that either bidder qualifies as a
"Food-Processing Establishment," which is defined as "a commercial
establishment in which food is manufactured or packaged for human
consumption," but are rather considered "Food Service Establishments,"
which prepare and serve meals, including sandwiches. Ga. Comp. R. &
Regs. r. 290-5-14-.01(l) and (m) (1996).
5. The state regulation provides that "[d]uring transportation, food
and food utensils shall be kept in covered containers or completely
wrapped or packaged so as to be protected from contamination and
spoilage." (Emphasis added.) The local regulation uses almost
identical language.
6. For example, without acknowledging the amendment and thus being
obligated to transport the food in closed containers and in an
enclosed and clean vehicle, the contractor could instead load wrapped
or packaged food in the open back of a pick-up truck for
transportation to the MEPS. It is apparent that the requirements
added to the SOW by the amendment specifying closed containers and
enclosed vehicles could have had a more than negligible impact on
price under this very close price competition.
7. Holiday Inn states that it "bought insulated, and hermetically
sealed food containers, sleeved containers, and other equipment in
order to be in compliance with the requirements of the amendment."