BNUMBER:  B-278107 
DATE:  December 29, 1997
TITLE: American Material Handling, Inc., B-278107, December 29, 1997
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Matter of:American Material Handling, Inc.

File:     B-278107

Date:December 29, 1997

A. Sid Goss for the protester.
Major Sandra J. Fortson, Department of the Army, for the agency.
Robert Arsenoff, Esq., and Paul Lieberman, Esq., Office of the General 
Counsel, GAO, participated in the preparation of the decision.

DIGEST

Bid in which protester's required descriptive literature reserved the 
right to make specification changes without notice was properly 
rejected as nonresponsive.

DECISION

American Material Handling, Inc. (AMH) protests the rejection of its 
bid as nonresponsive under invitation for bids (IFB) No. 
DAHC76-97B-0005, issued by the Department of the Army for two 
15,000-pound forklifts for Fort Richardson, Alaska.

We deny the protest.

BACKGROUND

The IFB was issued on July 18, 1997, and bid opening was on August 25.  
Note 2 of the price schedule required bidders to submit descriptive 
material with their bids to show that the items offered met the 
specifications listed in attachment 1 to the IFB.  Note 2 also 
referred bidders to the "Descriptive Literature" clause (Federal 
Acquisition Regulation (FAR)  sec.  52.214-21)) set forth in full text in 
the IFB.  Subsection (c) of that clause states:  "The failure of 
descriptive literature to show that the product offered conforms to 
the requirements of this solicitation will require rejection of the 
bid."

All eight bids received were rejected as nonresponsive because the 
accompanying descriptive literature failed to demonstrate compliance 
with the IFB specifications. AMH's bid was rejected as nonresponsive 
for a number of reasons including the repeated statement in its 
descriptive literature that "all specifications are subject to change 
without notice."  (Emphasis in original.)

Amendment 0003 was issued on September 10, canceling the IFB and 
converting the acquisition to one using negotiated procedures; in 
addition, and in view of funding restraints for Fiscal Year 1997, the 
requirement for forklifts was reduced from two to one with an option 
to purchase an additional forklift if sufficient funds were available.

Subsequently, the agency determined that its specifications were 
defective and, accordingly, on September 12, canceled the negotiated 
solicitation entirely prior to the receipt of proposals.  On September 
17, a request for quotations (RFQ) was issued with revised 
specifications and a September 22 due date.  The RFQ sought quotations 
for one 15,000-pound forklift and an optional 10,000-pound forklift.  
AMH, among other firms, submitted a quotation.  This protest was filed 
on September 19, and the agency informs us that the selection process 
under the RFQ is being held in abeyance pending our decision.

PROTEST AND ANALYSIS

As indicated above, AMH's bid was rejected as nonresponsive because 
the agency determined that the descriptive literature describing the 
forklifts the protester proposed to supply did not demonstrate 
compliance with the specifications set forth in the IFB.  AMH 
principally[1] challenges this determination, and the consequent 
cancellation of the IFB, and asserts that its bid was responsive 
because, notwithstanding the problems the agency discovered in its 
descriptive literature, the bid otherwise contained assurances that 
the firm was offering forklifts meeting "required specifications."  
AMH also maintains that any discrepancies in its descriptive 
literature could have easily been resolved by the agency contacting 
the firm to correct what the protester describes as minor 
informalities.

As a general rule, where descriptive literature solicited and 
submitted for evaluation purposes contains a reservation of a right to 
change the specifications, the bid is nonresponsive.  Erincraft, Inc., 
B-235829, Oct. 10, 1989, 89-2 CPD  para.  332 at 2.  The principal exception 
to the general rule is where it is clear from the face of the bid that 
the legend was not intended to reserve a right to change the offered 
product. Id.  Blanket statements of specification compliance do not 
establish conformance with the specifications and thus do not serve to 
supersede the reservation of rights legend.  See Electrophysics Corp., 
B-258674, Feb. 13, 1995, 95-1 CPD  para.  63 at 3.  

Since there is no indication in AMH's bid that the legend reserving 
the right to change specifications without notice did not apply to the 
bid, the bid was properly rejected as nonresponsive.  Erincraft, Inc., 
supra, at 2.  Because this  reservation to make specification changes 
without notice obviously has a potentially substantive effect on the 
quality of the items to be provided, it cannot be waived or corrected 
as a minor informality under FAR  sec.  14.405, which is explicitly limited 
to matters of form or to immaterial bid defects or variations which 
have a negligible effect on price, quantity, quality, or delivery.  
Finally, because the bid was properly rejected and there is no showing 
that all of the other bids were not also properly rejected, it follows 
that the agency properly canceled the IFB for lack of receipt of a 
responsive bid.  Federal Acquisition Regulation  sec.  14.404-1(c)(8). 

The protest is denied.

Comptroller General
of the United States 

1. AMH also suggests that the cancellation of the negotiated 
procurement was improper.  Since no offers were received in the 2 days 
in which the negotiated procurement was in existence, we fail to 
perceive how any potential offeror was prejudiced by the cancellation 
and resolicitation.  AMH also intimates that the RFQ specifications 
may not be adequate if the forklifts are to be used to load military 
cargo aircraft; however, as the record demonstrates, the equipment is 
not to be used for this purpose.