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In Court: A Problem of Deviation
Posted By admin On June 5, 2013 @ 1:57 pm In Business,Columns,In Court,In the Magazine | No Comments
To be awarded a public contract, a contractor’s bid must be responsive to the material requirements of the invitation for bids (IFB). Minor deviations may be waived, though material deviations may not. The failure to properly complete a bid form is a material deviation justifying rejection of a bid as non-responsive. Similarly, the failure to acknowledge amendments to an IFB, or submit a complete and unqualified bid form is non-responsive. Nonetheless, minor informalities (of form and not substance) that can be corrected without prejudice to other bidders are waivable at the owner’s discretion. The key test is whether the bidder can be held to perform after taking into consideration all bid deviations so there would not be a competitive advantage over other bidders.
In the Matter of Massillon Construction and Supply, Inc. (March 28, 2013), B-407931, the Comptroller General (CG) denied the protest of road contractor, Massillon (MCSI), finding its bid was non-responsive because it failed to submit a separate price for optional work as required by the IFB.
The Federal Highway Administration (FHWA) solicited bids to rehabilitate approximately 6 miles of Newfound Gap Road in the Great Smoky Mountains National Park, Tennessee, divided into three schedules of work: Schedule “A,” from Tennessee milepost (TMP) 6.3 to TMP 9.4, including full-depth pavement reconstruction; Schedule “B” (Option 1), including the same improvements from TMP 9.4 to TMP 12.4; and Schedule “C” (Option 2), including resurfacing from TMP 6.3 to TMP 12.4.
Bidders were required to submit prices for each contract line item. Prior to bid opening, FHWA amended the IFB to add a third option (Schedule “D”) for intelligent compaction (IC), coring and coordination with respect to a portion of the Schedule “A” work. In addition, the amendment included a new pricing page requiring entry of a lump sum price for Schedule “D,” and a new summary page that added a line for a Schedule “D” price and required its inclusion in the sum total of all schedules.
MCSI received most of the amendment. However, its fax did not print out five pages including the instruction pages and the replacement bid schedule pages. Instead of completing the replacement bid schedule pages, MCSI annotated a line item for contractor testing under Schedules “A” and “B” with the words “(Amendment 001),” and entered overall line item prices of $150,000 and $65,000, respectively. MCSI’s total bid price of $13,629,519 was the lowest received by bid opening. However, its bid was rejected as non-responsive because it did not include prices for Schedule “D” work.
MCSI filed a protest with FHWA asserting its bid was responsive because it acknowledged the amendment. MCSI argued its $150,000 price for the Schedule “A” testing line item included $50,000 for the Schedule “D” work, and argued FHWA could waive the omission of a specific Schedule “D” price as a minor informality. MCSI submitted a revised bid schedule including corrected pricing for the Schedule “A” testing ($100,000) and Schedule “A” total ($6,409,015.50), separate pricing for the Schedule “D” testing ($50,000) and a revised bid summary page reflecting these changes. MCSI’s bid total of $13,629,519 for all work remained unchanged. FHWA denied its protest and MCSI protested to the CG.
The CG reviewed the law that holds that in order to be responsive, a bid must constitute an unequivocal offer to perform the exact thing called for in the solicitation, such that acceptance of the bid will bind the contractor in accord with the material terms and conditions of the solicitation. The CG found that although MCSI acknowledged the amendment regarding Schedule “D,” the mere acknowledgment without a price is insufficient to constitute a bid since doubt exists as to the amount of the bid and the bidder’s obligation to perform the increased work. The CG also found that MCSI’s explanation that its price was included in a different line item was inadequate since nothing established the price for Schedule “D.” The CG stated that MCSI’s non-responsive bid could not be made responsive by explanations after bid opening, since doing so would effectively allow the bidder to elect whether to accept or reject the additional work.
MCSI argued its omitted price for Schedule “D” was a waivable minor informality. The CG reviewed the law that holds a failure to bid on a line item can be waived if the item for which the price is omitted is divisible from the IFB’s overall requirements, de minimis as to total cost, and would not affect the competitive standing of the bidders. The CG found that one of the prerequisites for waiver was not met because the Schedule “D” work was not divisible. Although priced as an option, FHWA considered the Schedule “D” intelligent compaction work to be an essential part of the contract, intended to accelerate project delivery and improve pavement performance, and which would be ordered as soon as funding became available.
MCSI asserted that FHWA could easily contract for the Schedule “D” intelligent compaction testing with the paving subcontractor used by MCSI (and other bidders). However, the government was not required to do so. Therefore, the CG concluded the Schedule “D” work was not divisible from the other parts of the contract, so that MCSI’s failure to include a price for Schedule “D” could not be waived. As a result, MCSI’s bid protest was denied.
Attorney Brian Morrow is a partner in Newmeyer & Dillion LLP and a licensed civil engineer specializing in construction law, incl. road and heavy construction. email@example.com
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