TITLE:  Jackson Enterprises, B-286688, February 5, 2001
BNUMBER:  B-286688
DATE:  February 5, 2001
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Jackson Enterprises, B-286688, February 5, 2001

Decision

Matter of: Jackson Enterprises

File: B-286688

Date: February 5, 2001

Henry Wall, Esq., Bruner, Powell, Robbins, Wall & Mullins, for the
protester.

Lt. Col. Richard B. O'Keeffe, Jr., and Joseph M. Zima, Esq., Department of
the Army, for the agency.

Jennifer D. Westfall-McGrail, Esq., and Christine S. Melody, Esq., Office of
the General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Agency improperly rejected bid for failure to acknowledge amendment where
amendment does not contain material information and does not alter bidders'
legal obligations.

DECISION

Jackson Enterprises protests the rejection of its bid as nonresponsive under
invitation for bids (IFB) No. DAKF40-00-B-0008, issued by the Department of
the Army for the cleaning of grit chambers, [1] oil/water
separators/interceptors, and holding tanks at various locations throughout
Fort Bragg and Pope Air Force Base, North Carolina. Jackson's bid was
rejected as nonresponsive because it did not contain an acknowledgment of
amendment No. 0004, which the agency considered material. The protester
contends that the amendment was not in fact material, and that its failure
to acknowledge it should therefore have been waived as a minor informality.

We sustain the protest.

The IFB, which was issued on May 15, 2000, contemplated the award of a
requirements contract for a 12-month base period and four 12-month option
periods. The IFB requested unit prices (the unit being defined as a
"cleaning") for estimated quantities of cleanings for various size tanks.
For example, item No. 0007 sought a unit price for an estimated 36 cleanings
of 12 tanks of 50-285 gallon capacity, while item No. 0010 sought a unit
price for an estimated 12 cleanings of 4 tanks of 2,500-5,000 gallon
capacity. An exhibit to the IFB furnished more detailed information as to
the location of the various tanks, their types (e.g., grit chamber,
oil/water separator), their specific capacities, and the number of cleanings
per year that each would require.

The IFB was amended four times after issuance. Amendment Nos. 0001 and 0002
answered questions posed by various prospective bidders and set dates for
site visits, while amendment No. 0003 extended the bid opening date
indefinitely. Amendment No. 0004 set the bid opening date as July 7 and
answered additional bidder questions.

Six bids were received and opened on July 7. Gilesair was the low bidder;
Jackson and Consultants Ltd. were second and third low, respectively. The
contracting officer rejected Gilesair's bid because the bidder had failed to
extend its bid acceptance period. She then considered Jackson's bid and
determined that it should also be rejected because the bidder had failed to
acknowledge amendment No. 0004. [2] On October 17, the contracting officer
awarded a contract to Consultants as the lowest responsive, responsible
bidder.

Jackson contends that the agency should have waived its failure to
acknowledge amendment No. 0004 because the information contained in the
amendment had no material impact on the price, quality, or competitive
status of the various bidders. The agency disputes the protester's position,
arguing that the amendment did contain material information and that
Jackson's failure to acknowledge it thus could not be waived.

A bidder's failure to acknowledge a material amendment to an IFB renders the
bid nonresponsive, since absent such an acknowledgment the government's
acceptance of the bid would not legally obligate the bidder to meet the
government's needs as identified in the amendment. Federal Constr., Inc.,
B-279638, B-279638.2, July 2, 1998, 98-2 CPD para. 5 at 2. An amendment is
material, however, only if it would have more than a trivial impact on the
price, quantity, quality, delivery, or the relative standing of the bidders.
Federal Acquisition Regulation (FAR) sect. 14.405(d)(2); Kalex Constr. & Dev.,
Inc., B-278076.2, Jan. 20, 1998, 98-1 CPD para. 25 at 2. An amendment is not
material where it does not impose any legal obligations on the bidder
different from those imposed by the original solicitation; that is, for
example, where it merely clarifies an existing requirement or is a matter of
form. Kalex Constr. & Dev., Inc., supra. A bidder's failure to acknowledge
an amendment that is not material is waivable as a minor informality. FAR sect.
14.405; Overstreet Elec. Co., Inc., B-283830, B-283830.2, Dec. 30, 1999,
2000 CPD para. 8 at 7.

As a preliminary observation, the agency submits that any amendment
responding to potential bidders' questions regarding the terms of a
solicitation should be presumed to be material because "[m]ost probably the
firms asking these questions needed the answers in order to develop bids
that protect their business interests and profit margins." Agency Report at
10. We do not agree that all responses to bidder questions may be presumed
to be material. For example, the fact that a particular bidder finds a
solicitation provision to be ambiguous and thus questions it does not
automatically lead to the conclusion that the provision was indeed
ambiguous; it may simply mean that the bidder has not read the solicitation
sufficiently thoroughly. See, e.g., Kalex Constr. & Dev., Inc., supra, at 3.

Turning then to the individual questions and answers, Question and Answer 1
were as follows:

Question 1: How is inspection to be handled under this contract? Will the
contractor have to wait for a quality control person to look at each unit?

Answer 1: The method of inspection is 100 percent. The contractor [does not]
have to wait for the [contracting officer's representative (COR)] to inspect
each unit. The contractor's quality control should inspect prior to the
Government's quality assurance inspection.

The agency argues that its response to Question 1 was material because it
"expand[ed] or clarifie[d] the Army's rights with regard to inspections of
completed work under the contract." Agency Report at 11. According to the
agency, Answer 1 imposed two requirements not contained in the original IFB:
that the contractor's quality control section inspect completed work before
Army quality assurance inspection and that 100 percent of the work be
inspected by the agency. The agency maintains that Jackson's failure to
acknowledge amendment No. 0004 "would render doubtful the Army's ability to
insist, without granting an equitable adjustment, on pre-inspection by the
contractor's [quality control] personnel, and on 100% [quality assurance]
inspection." Id.

The IFB, as originally issued, contained two provisions bearing on quality
control inspections: sect. 1.5 Quality Control, which provided that:

[t]he contractor shall establish and maintain a complete Quality Control
Plan to ensure the requirements of the contract are provided as specified. .
. .

sect. 1.14 Inspections, which provided that:

[a]ll deficiencies or omissions in the work inspected shall be corrected by
the Contractor within (1) work day after the deficiency or omission is noted
by the COR.

We do not think that Answer 1 imposed any additional legal obligations on
the contractor. The statement in Answer 1 that the government would perform
a "100 percent inspection" does not change or add to the contractor's basic
responsibility to perform the work in accordance with the contract
requirements. On the contrary, the right to inspect the work is implicit in
the government's right to insist that the contractor perform as specified in
the contract and, as provided in sect. 1.14, to remedy any defects in its work.
With respect to "pre-inspection" by the contractor, Answer 1 states that the
contractor "should" inspect its work prior to inspection by the government.
Given the use of the word "should," this statement does not clearly impose a
requirement that the contractor inspect all of its work before the
government inspection; rather, it simply suggests that the contractor do so.
In any event, even if the statement is interpreted to mean that the agency
expected the contractor to perform its own inspection prior to the
government inspection, we fail to see why any such requirement is material;
as with the government inspection, it has no effect on the contractor's
underlying obligation to perform in accordance with the contract
requirements, or on the government's right to insist that the contractor
perform conforming work.

Next, the agency argues that its response to Question 2 was material because
it corrected a potential misunderstanding. Question and Answer 2 provided as
follows:

Question 2: Would the government provide the contractor a staging area for
parking equipment and possibly an office trailer?

Answer 2: No, the Government will not provide a staging area.

While the Army concedes that the IFB did not provide for a
government-furnished staging area, it contends that bidders may have been
under the misapprehension that one was to be furnished because, during the
site visits, the incumbent contractor informed other prospective bidders
that his company had a staging area on the installation. [3] We do not think
that the information furnished by Answer 2 was material given that it merely
confirmed the only reasonable reading of the IFB, i.e., that the government
did not intend to furnish a staging area.

Third, the Army argues that the answers to questions 6-8 were material
because they increased the number of tanks and the number of cleanings. [4]
Questions and Answers 6-8 provided as follows:

Question 6: Line Item 0008 states there are 25 tanks while Exhibit 1 lists
27 tanks.

Answer 6: The description of CLIN 0008 and all option year CLINs is hereby
changed to read "TANK 300-900 GALLON CAPACITY, (27 TANKS)."

Question 7: Line Item 0009 states there are 38 tanks while Exhibit 1 lists
35 tanks.

Answer 7: The description of CLIN 0009 and all option year CLINs is hereby
changed to read "TANK 1,000-2,000 GALLON CAPACITY,
(35 TANKS)."

Question 8: Line Item 0020 states there is 1 tank and a Quantity of 186
while Exhibit 1 lists 27 tanks with 198 cleanings.

Answer 8: The description of CLIN 0020 and all option year CLINs is hereby
changed to read "TANK 50-275 GALLON CAPACITY,
(27 TANKS)." The quantity is change[d] to read 198.

The agency has furnished us with no explanation as to why, given that prices
were requested on a per cleaning basis, an increase in the number of tanks
to be cleaned under a particular line item would have any impact on a
bidder's pricing for that line item. For example, line item 0008, both
before and after issuance of amendment
No. 0004, requested a price per cleaning for an estimated 84 cleanings of
300-900 gallon capacity tanks; the only thing that Answer 6 did was clarify
that the number of tanks among which these cleanings were to be apportioned
was 27, rather than 25. We see no reason to assume that such a change would
have had a material impact on bidders' pricing, particularly given that
Exhibit 1 had already identified for bidders the size and location of the
individual tanks to be serviced under the line item.

Regarding the separate question of whether the increase in quantity under
line item 0020 from 186 to 198 cleanings (provided for in Answer 8) would
have had a material impact on either price or the contractor's performance
obligations, the protester maintains as a general matter that unless the
quantity varies to such an extent that an additional crew or overtime is
required, the variation will have no impact on its unit pricing; with regard
to the specific change here, the protester asserts that the increase of 12
cleanings was de minimis. We find this argument persuasive, particularly in
view of the agency's failure to offer any basis to conclude that the change,
which on its face is relatively small, [5] would have a material effect on
the calculation of bid prices. Further, given that the IFB did not contain a
clause limiting the contractor's obligation to furnish a quantity in excess
of the estimated line item amount (see 3W American Enters., Inc.,
B-274410.2, Dec. 27, 1996, 96-2 CPD para. 242) or a clause providing for an
equitable adjustment in the event that the actual number of cleanings varied
from the estimated number (see J. Caldarera & Co., Inc., B-276201, May 21,
1997, 97-1 CPD para. 192; Harvey Honore Constr. Co., Inc., B-262071.2, Jan. 31,
1996, 96-1 CPD para. 30), we see no basis to conclude that the failure to
acknowledge amendment No. 4 would have had an impact on Jackson's legal
obligation to furnish all cleanings ordered under line item 0020 at the unit
price set forth in its bid.

Finally, the Army contends that Question and Answer 9 were material in that
they set the cleaning schedule for the entire contract period. Question and
Answer 9 provided as follows:

Question 9: Scheduling for this contract will have to correspond with
cleaning times from the present contract. The number of cleanings, as
scheduled, will [a]ffect projected cash flow under the new contract. Could
we bidders be given a copy of present scheduling?

Answer 9: The cleaning schedule for FY99 is attached to this amendment and
has been incorporated as Technical Exhibit 2.

The agency contends that the answer "essentially agrees with the premise of
the question (i.e., that cleaning under the new contract is controlled by
the cleaning dates on the prior contract)." Agency Report at 13.

We disagree. Although the agency furnished the cleaning schedule for fiscal
year 1999 in response to this question, it in no way indicated that it
agreed with the premise of the questioner that scheduling under the contract
to be awarded would need to correspond with scheduling under the existing
contract. Thus, because we do not agree that Question and Answer 9 bound the
contractor to a particular performance schedule, we do not think that it
materially affected bidders' legal obligations.

Because we find that none of the answers set forth in amendment No. 004
contained material information, Jackson's failure to acknowledge the
amendment should have been waived. We recommend that if Jackson is
determined to be otherwise eligible for award, the agency terminate the
award to Consultants and make award to Jackson. We also recommend that the
agency reimburse the protester for its costs
of filing and pursuing the protest, including attorneys' fees. Bid Protest
Regulations,
4 C.F.R. sect. 21.8(d)(1)(2000). In accordance with section 21.8 of our
Regulations, Jackson's certified claim for such costs, detailing the time
expended and the costs incurred, must be submitted directly to the agency
within 60 days after receipt of the decision.

The protest is sustained.

Anthony H. Gamboa

Acting General Counsel

Notes

1. A grit chamber is an apparatus designed to remove grit from liquids,
typically petrochemicals or wastewater.

2. Jackson also failed to acknowledge amendment No. 0003, but the agency
concedes that it was immaterial.

3. The agency notes that the information furnished by the incumbent was
misleading in that its staging area had been provided by another contractor,
not the Army.

4. We do not discuss Questions and Answers 3-5 in this decision because the
agency has not argued that they contained material information.

5. As noted above, Answer 8 added a total of 12 cleanings to the estimate
for this line item. The bid abstract shows that the range of bids per
cleaning for this line item was $41.50 to $300; the protester's unit price
was $290.