BNUMBER:  B-277143.2 
DATE:  February 13, 1998
TITLE: Navistar Marine Instrument Corporation, B-277143.2, February
13, 1998
**********************************************************************

Matter of:Navistar Marine Instrument Corporation

File:     B-277143.2

Date:February 13, 1998

Sam Z. Gdanski, Esq., for the protester.
Gary Van Osten, Esq., Department of the Navy, for the agency.
John L. Formica, Esq., and James A. Spangenberg, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Agency properly rejected low offer for failure to acknowledge a 
solicitation amendment where the amendment changed the legal 
relationship of the parties with regard to the contractor's 
obligations and the government's rights pertaining to the submission 
and approval of a first article test plan; there is no evidence that 
agency did not comply with applicable regulations regarding the 
distribution of amendments.

DECISION

Navistar Marine Instrument Corporation protests the rejection of its 
proposal for failing to acknowledge an amendment, and the award of a 
contract to Atlas Instrument Company, under request for proposals 
(RFP) No. N00104-97-R-ND97, issued by the Department of the Navy, for 
azimuth circles.  

We deny the protest.  

The RFP provided for the award of a firm, fixed-price contract to the 
offeror submitting the proposal most advantageous to the government, 
price and other factors considered.  The RFP referenced detailed 
specifications for the items, and stated that first article tests 
would be required for any contractor unless the contractor could show 
evidence of prior approval.

Three amendments to the RFP were issued.  Amendments Nos. 1 and 2, 
issued May 8, and June 9, 1997, respectively, only extended the 
proposal due dates.  Amendment No. 3, issued on June 16, added three 
clauses to the RFP, one of which concerned the obligations of the 
contractor relative to the first article test procedures.

The Navy received proposals from Navistar, Atlas, and three other 
offerors.  Two offerors, including Navistar, which submitted the 
lowest-priced proposal of $33,992, failed to return or otherwise 
acknowledge amendment No. 3.[1]  The agency subsequently rejected 
Navistar's proposal for failing to acknowledge this amendment, and 
after determining that Atlas's proposal represented the best value and 
that Atlas was responsible, made award to that firm at its proposed 
price of $44,800.  This protest followed.

Navistar contends that its failure to acknowledge amendment No. 3 to 
the solicitation should be waived as a minor informality because the 
obligations set forth in the amendment were already included elsewhere 
in the solicitation.  In support of this assertion, Navistar points 
out that the solicitation as issued required that the contractor 
perform production lot and first article testing, and required agency 
approval of the contractor's first article test procedures.  

There is no precise rule for determining whether a change in 
requirements evidenced by an amendment is more than negligible, such 
that the failure to acknowledge the amendment renders the proposal 
unacceptable; rather, that determination is based on the facts of each 
case.  Doty Bros. Equip. Co., B-274634, Dec. 19, 1996, 96-2 CPD  para.  234 
at 4.  Generally, an amendment that imposes a legal obligation upon an 
offeror different from those imposed by the original solicitation is 
material, whereas an amendment that merely clarifies an existing 
requirement is not.  See id.; Innovation Refrigeration Concepts, 
B-271072, June 12, 1996, 96-1 CPD  para.  277 at 2; Favino Mechanical 
Constr., Ltd., B-237511, Feb. 9, 1990, 90-1 CPD  para.  174 at 2.     

Navistar is correct that the clause set forth in amendment No. 3 
required, as did the solicitation as issued, that the successful 
contractor submit a first article test plan or procedure to the agency 
for approval prior to the production of the items.  However, the 
clause set forth in amendment No. 3, unlike the original solicitation, 
added that if the plan or procedure is not approved by the agency, 
"the contractor may be required at the option of the Government to 
submit a revised plan or procedure for evaluation" at no additional 
cost to the government, and that the agency may "require an equitable 
adjustment of the contract price for any extension of the [contract's] 
delivery schedule necessitated by resubmission of the plan or 
procedure."  The clause further informed offerors that "the 
acquisition of materials or components for, or the commencement of 
production of the contract items (including first article samples) 
shall be at the sole risk of the contractor, and costs incurred on 
account thereof shall not be allocable to this contract . . . for the 
purpose of termination settlement if this contract is terminated for 
the convenience of the government."  The clause added that the 
contractor's failure to submit the plan or procedure within the time 
specified by the contract, or to submit an acceptable plan, may result 
in the termination of the contract for default.  Because, as 
indicated, the clause changed in a material way the legal relationship 
of the parties with regard to the contractor's obligations and the 
government's rights pertaining to the submission and approval of a 
first article test plan, amendment No. 3 incorporating the clause into 
the RFP was material.[2]  See Favino Mechanical Constr., Ltd., supra.

Navistar also contends that its proposal was improperly rejected for 
failing to acknowledge amendment No. 3 to the solicitation because it 
never received a copy of the amendment.  

The Competition in Contracting Act of 1984, 10 U.S.C.  sec.  2304(a)(1)(A) 
(1994), requires contracting agencies to obtain full and open 
competition through the use of competitive procedures, the dual 
purpose of which is to ensure that a procurement is open to all 
responsible sources and to provide the government with fair and 
reasonable prices.  Western Roofing Serv., 70 Comp. Gen. 323, 325 
(1991), 91-1 CPD  para.  242 at 3.  In pursuit of these goals, it is a 
contracting agency's affirmative obligation to use reasonable methods 
as required by the Federal Acquisition Regulations (FAR) for the 
dissemination of solicitation documents, including amendments, to 
prospective contractors.  FAR  sec.  14.203-1, 14.205, 14.208, 15.403, 
15.606(b) (June 1997); Western Roofing Serv., supra.  As a general 
rule, a prospective contractor bears the risk of not receiving a 
solicitation amendment.  Data Express, B-234468, May 25, 1989, 89-1 
CPD  para.  507 at 2.  Consequently, a prospective contractor's nonreceipt 
or late receipt of a solicitation amendment, and subsequent 
elimination as a source from the competition, will not justify 
overturning a contract award, or if an award has not been made, 
justify the disruption of the procurement, absent evidence that the 
agency failed to comply with the applicable regulations governing the 
distribution of amendments.  Western Roofing Serv., supra; see The 
Ensign-Bickford Co., B-275423, Feb. 20, 1997, 97-1 CPD  para.  93 at 2; 
Irwin-Jurkewiecz Corp., B-249037, Oct. 20, 1992, 92-2 CPD  para.  257 at 3.  

The agency explains that it maintains a database from which it 
generated the mailing labels used in distributing the solicitation and 
its amendments.  In response to the protest, the agency has furnished 
a print-out from this database which includes the correct address for 
Navistar.  The agency states that with regard to amendment No. 3, the 
cognizant agency buyer had mailing labels printed from the database 
for each firm listed on the mailing list for this solicitation, which 
included Navistar, and "placed the mailing labels along with amendment 
No. 3 into window envelopes, and had the envelopes hand-carried to the 
. . . mailroom for mailing."  We find no evidence that the agency's 
distribution process was deficient or that it was not followed, and we 
therefore presume that the agency in fact sent the amendment to the 
protester.  Irwin-Jurkewiecz Corp., supra, at 3-4.  Although the 
protester has argued that it did not actually receive the amendment, 
the risk of nonreceipt, under the circumstances, rests with the 
offeror.  Id. at 3.

Navistar contends that the award to Atlas was improper because, 
according to Navistar, "they do not have the capabilities to perform 
on this contract" and certain personnel are "gone from the company."  
A determination that a bidder or offeror is capable of performing a 
contract is based, in large measure, on subjective judgments which 
generally are not readily susceptible to reasoned review.  Thus, an 
agency's affirmative determination of a contractor's responsibility 
will not be reviewed by our Office absent a showing of possible bad 
faith on the part of procurement officials, or that definitive 
responsibility criteria in the solicitation may not have been met.  
Bid Protest Regulations, 4 C.F.R.  sec.  21.5(c) (1997); King-Fisher Co., 
B-236687.2, Feb. 12, 1990, 90-1 CPD  para.  177 at 2.  Neither exception 
applies here. 
   
Navistar states that one of its representatives "spoke to a company 
known as Atlas Instruments, who are using a nonconforming adhesive."  
Atlas's proposal does not take exception to any of the specifications 
set forth in the RFP, and it is therefore committed to complying with 
all of the RFP's requirements.  Laser Diode, Inc., B-249990, Dec. 29, 
1992, 93-1 CPD  para.  18 at 5.  Whether Atlas actually performs the 
contract in accordance with the specifications is a matter of contract 
administration, which is not for review by our Office.  Id.  
    
The protest is denied.

Comptroller General 
of the United States

1. Contrary to the protester's assertion, Atlas's proposal 
acknowledged amendment No. 3.

2. Although the protester asserts that the amendment was not material 
because the amendment does not designate that it had to be signed, the 
amendment specifically required that offerors acknowledge it (one way 
that amendments can be acknowledged is by signing them).  Thus, the 
failure to designate that the amendment had to be signed does not 
relieve Navistar from acknowledging the amendment.  Air Photo Survey, 
Inc., B-228024, Nov. 3, 1987, 87-2 CPD  para.  437 at 2; Air Servs. Co., 
B-204532, Sept. 22, 1981, 81-2 CPD  para.  240.