BNUMBER: B-277739
DATE: October 16, 1997
TITLE: Bug Control Unlimited, Inc., B-277739, October 16, 1997
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Matter of:Bug Control Unlimited, Inc.
File: B-277739
Date:October 16, 1997
Robert M. Tata, Esq., Hunton & Williams, for the protester.
George N. Brezna, Esq., Christopher M. Bellomy, Esq., and Patrick J.
Coll, Esq., Department of the Navy, for the agency.
Henry J. Gorczycki, Esq., and James A. Spangenberg, Esq., Office of
the General Counsel, GAO, participated in the preparation of the
decision.
DIGEST
A bid is nonresponsive where it fails to acknowledge an amendment
including a wage determination that established minimum wages for
service employees pursuant to the Service Contract Act of 1965 and
where the bidder is not otherwise bound to pay its employees wages at
least at the level of those established by the wage determination.
DECISION
Bug Control Unlimited, Inc. protests the award of a contract under
invitation for bids (IFB) No. N00187-96-B-9529, issued by the
Department of the Navy, Navy Public Works Center, for annual pest
control services at the Naval Amphibious Base Little Creek, Norfolk,
Virginia. Bug Control alleges that the Navy improperly rejected Bug
Control's low bid as nonresponsive.
We deny the protest.
The IFB, issued on February 5, 1997, contemplated the award of a
combination firm, fixed-price and indefinite quantity contract. The
IFB incorporated by reference the contract clause at Federal
Acquisition Regulation (FAR) sec. 52.222-41, "Service Contract Act of
1965, as Amended," which states:
(c) Compensation. (1) Each service employee employed in the
performance of this contract . . . shall be paid not less than
the minimum monetary wages and shall be furnished fringe benefits
in accordance with the wages and fringe benefits determined by
the Secretary of Labor, . . . as specified in any wage
determination attached to this contract.
The IFB at Section J, List of Documents, Exhibits, and Other
Attachments, identified the following attachment number and title:
J-1-1Wage Determination No. _____ (Rev _) (Service Contract Act)
Attachment J-1-1 was a blank page with the heading "Wage Determination
- Service Contract Act."
On February 14, the Navy received a letter from a prospective bidder
inquiring about the wage determination. Upon reviewing the IFB, the
Navy determined that the IFB did not contain any wage determination.
On February 19, the Navy issued amendment No. 0001, which attached
wage determination No. 94-2543 (Revision 12)[1] to the IFB. The Navy
sent the amendment to all of the companies on the bidders' list,
including Bug Control.[2]
At bid opening on March 7, the Navy received and opened nine bids.
Bug Control's bid of $120,539 was the low bid; however, it was the
only bid that did not acknowledge amendment 0001. The agency
determined that, since the amendment incorporated the wage
determination into the IFB, the amendment was material. The agency
thus rejected Bug Control's bid as nonresponsive for failing to
acknowledge a material amendment.
In response to the Navy's letter notifying Bug Control of the
rejection of its bid, Bug Control acknowledged the amendment and
protested the rejection of its bid to the Navy. On July 31, the Navy
denied the agency-level protest and awarded a contract to the third
lowest bidder, Angel Systems, Inc., for $229,647.[3] This protest
followed.
Bug Control alleges that the amendment was not material because the
IFB, as originally issued, had essentially incorporated by reference
the current applicable wage determination. Bug Control alternatively
claims that it was otherwise bound by its bid to pay wages in excess
of the minimum wages stated in the wage determination. We disagree.
A bidder's failure to acknowledge an IFB amendment establishing or
increasing minimum wage rates for a contract cannot be cured after bid
opening, except where a collective bargaining agreement binds the
bidder to pay wages not less than those prescribed by the Secretary of
Labor. Western Helicopters, Inc., B-243445, Apr. 3, 1991, 91-1 CPD para.
345 at 1; Air Photo Surveys, Inc., B-228024, Nov. 3, 1987, 87-2 CPD para.
437 at 1-2. This is so because the wage rates prescribed by the
Secretary of Labor are mandated by statute to be included in the
contract, and if an agency were to give the bidder the opportunity to
acknowledge after bid opening an amendment specifying such wage rates,
the bidder could decide to render itself ineligible for award by
choosing not to cure the defect. Western Helicopters, Inc., supra, at
1; Air Photo Surveys, Inc., supra, at 2. Since such post-bid opening
control by a bidder over the acceptability of its bid compromises the
integrity of the competitive procurement system, the bid must be
rejected as nonresponsive unless the bidder is already obligated to
pay wages not less than those prescribed. Western Helicopters, Inc.,
supra, at 1-2; Air Photo Surveys, Inc., supra, at 2.[4]
It is irrelevant whether Bug Control may have known of and intended to
comply with the wage determination where, as here, the bid documents
do not evidence its intent to be so bound. Johnson Moving & Storage
Co., B-221826, Mar. 19, 1986, 86-1 CPD para. 273 at 3. Prior to amendment
0001, the IFB did not contain the wage determination. Neither the
Service Contract Act clause at FAR sec. 52.222-41, nor the uncompleted
reference to a wage determination at section J of the IFB incorporated
the applicable minimum service employee wages determined by the
Secretary of Labor. Under the terms of the clause, the minimum wages
determined by the Secretary of Labor are enforceable against the
contractor only if the applicable wage determination is attached, FAR sec.
52.222-41(c)(1) (otherwise, pursuant to FAR sec. 52.222-41(e), the
minimum wage is that set by the Fair Labor Standards Act of 1938).[5]
Thus, absent acknowledgment of amendment 0001, the bid documents only
evidence Bug Control's obligation to pay its employees the federal
minimum wage, which is less than the wage determination minimum rate
of $9.81 (the sum of $8.25 per hour for wages and $1.56 per hour for
the cost of fringe benefits) for pest controller, the class of service
employee applicable to this contract. See Johnson Moving & Storage
Co., supra, at 3.
Also, contrary to the protester's assertion, the Service Contract
Act's requirement for inclusion of the wage determination in the IFB
does not incorporate the applicable wage determination into the IFB by
operation of the "Christian doctrine." See G.I. Christian & Assocs.
v. United States, 312 F.2d 418, 424-427 (Ct. Cl.), cert. denied, 375
U.S. 954 (1963). Operation of the Christian doctrine is limited to
the incorporation of mandatory contract clauses into otherwise validly
awarded government contracts; it does not extend to incorporating
inadvertently omitted mandatory provisions into an IFB for purposes of
interpreting the IFB or curing a defective bid. See American Imaging
Servs., Inc.--Recon., B-250861.2, Jan. 5, 1993, 93-1 CPD para. 13 at 2;
Parsons Precision Prods., Inc., B-249940, Dec. 22, 1992, 92-2 CPD para.
431 at 6. Since Bug Control seeks incorporation of the wage
determination into the IFB to render its bid responsive, the Christian
doctrine is not applicable. See Parsons Precision Prods., Inc.,
supra.
Bug Control also alleges that its bid otherwise obligates it to pay
wages in excess of the applicable minimum wage and benefits in the
wage determination. This allegation is based on Bug Control's bid
price for labor on contract line item number (CLIN) 0002AL of $10 per
hour, which is greater than the wage determination minimum rate of
$9.81 for pest controller.
This contention has no merit. Although the price bid for CLIN 0002AL
is greater than the minimum wage rate, the bid price for CLIN 0002AL
does not reflect the bidder's obligation to pay its employees' wages
at any particular level. Rather, the CLIN price is the unit price for
labor under the indefinite quantity portion of the contract which the
Navy would pay the contractor. The IFB specifically states at section
B.3 that the unit price bid for this CLIN would include all of the
contractor's direct and indirect costs "associated with performing one
standard hour of work." The CLIN price thus does not identify the
specific wages which the bidder will be obligated to pay its employees
under the contract; quite to the contrary, such a CLIN price for labor
can be less than the applicable rates in an attached wage
determination and the bid may still obligate the bidder to pay its
employees the applicable minimum wage rates if the bidder has
committed itself in its bid to do so. See Stanley Aviation, Inc.,
B-256650, July 14, 1994, 94-2 CPD para. 23 at 4-5 (proposed hourly rates
below those specified in a wage determination do not take exception to
the wage determination, but rather indicate a below-cost bid, which is
acceptable as long as the bid does not take exception to the wage
determination).[6]
Since Bug Control's bid did not acknowledge the applicable minimum
wage rates specified in amendment 0001, nor obligate Bug Control to
pay wages at least equal to those wage rates, and since a collective
bargaining agreement does not otherwise create such an obligation, Bug
Control's failure to acknowledge amendment 0001 is a material bid
defect which may not be cured after bid opening. Therefore, Bug
Control's bid is nonresponsive for failing to acknowledge the
amendment. See Western Helicopters, Inc., supra; Air Photo Surveys,
Inc., supra.
Bug Control finally contends that the additional cost to the
government of making award to any bidder other than Bug Control is so
significant that the agency is obligated to accept Bug Control's bid.
This is not a basis for sustaining the protest. It is well
established that the maintenance of the integrity of the competitive
bidding system is more in the government's best interest than any
pecuniary advantage to be gained in a particular case by accepting a
nonresponsive bid. Kurtz Constr. Co., B-245914, Oct. 29, 1991, 91-2
CPD para. 401 at 2.
The protest is denied.
Comptroller General
of the United States
1. The Department of Labor issued Revision 13 to this wage
determination on February 3, 1997. This revision did not change the
wage rate or fringe benefits for pest controller, the class of service
employee applicable to this contract. The Navy states that it
received this revision on March 27. To the extent Bug Control alleges
that the procurement must be recompeted using the latest revised wage
determination, the protest lacks merit. The applicable regulations
anticipate such circumstances and prescribe either that the revision
will not be effective, FAR sec. 22.1012-2(b), or that the revision will
be incorporated into an already-awarded contract, FAR sec. 22.1012-4.
Moreover, the inclusion of Revision 12 rather than Revision 13 is
immaterial in this case since the wage determination rates applicable
to this IFB did not change.
2. Bug Control states that it has no record of receiving the
amendment. A bidder bears the risk of not receiving IFB amendments
unless it is shown that the contracting agency made a deliberate
effort to exclude the company from competing. Fourth Corner Forestry,
Inc., B-226438, Apr. 27, 1987, 87-1 CPD para. 439 at 2. The agency report
evidences that the amendment was mailed to Bug Control at the same
time it was mailed to the other bidders. Bug Control's comments did
not take exception to this evidence. Thus, to the extent Bug Control
protested the distribution of the amendment, it has abandoned that
protest basis. See Akal Sec., Inc., B-261996, Nov. 16, 1995, 96-1 CPD para.
33 at 5 n.5.
3. The Navy rejected the second lowest bidder as nonresponsible.
4. Bug Control requests application of a legal standard briefly used
by our Office beginning with our decision, United States Dep't of the
Interior--Request for Advance Decision, et al., 64 Comp. Gen. 189
(1985), 85-1 CPD para. 34, which found that a bidder could cure, as a
minor informality after bid opening, a defect occasioned by the
bidder's failure to acknowledge an amendment incorporating a revised
Davis-Bacon Act wage determination where the amendment's effect on bid
price was de minimis. We overruled that decision and abandoned
application of that standard the next year in ABC Paving Co., 66 Comp.
Gen. 47, 49-50 (1986), 86-2 CPD para. 436 at 4-5, finding that even if
such an amendment's effect on bid price was de minimis, the
significant legal requirements for the benefit of covered employees
imposed by the revised wage determination could not be waived;
therefore, providing a bidder with the opportunity to acknowledge the
amendment after bid opening would give the bidder post-bid opening
control over the acceptability of its bid and thus compromise the
integrity of the competitive procurement system.
5. Although the Service Contract Act requires every contract to
contain a provision specifying the minimum service employee wages as
determined by the Secretary of Labor, 41 U.S.C. sec. 351(a)(1) (1994),
the Act, absent insertion in the contract of a provision specifying
such wage rates, does not put into force any specific wage rates other
than the federal minimum wage set by the Fair Labor Standards Act.
See 41 U.S.C. sec. 351(b)(1). The minimum wage under the Fair Labor
Standards Act is $5.15 per hour as of September 1, 1997. 29 U.S.C.A. sec.
206(a)(1) (West Supp. 1997).
6. Moreover, as indicated, CLIN 0002AL is only applicable to
indefinite quantity work. Therefore, even if the CLIN price could be
construed as evidence obligating the bidder to pay minimum wage rates
in performing the indefinite quantity work to which it applies, it is
not applicable to the fixed-price work which accounts for the majority
of work to be performed under the contract.