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."