Check Your Bids Twice -- Agencies May Not Be Able to Overlook Your Mistakes
February 27, 2014
By: Eric Whytsell
The bid preparation process can be hectic, but contractors must take the time to carefully check their bids to ensure they are not found nonresponsive. Some mistakes cannot be waived by the evaluating agency. The GAO’s decision in C&D Construction, Inc., B-408930.2 (Comp. Gen. Feb. 14, 2014) is a case in point.
This protest involved a waiver by the U.S. Army Corps of Engineers (Corps) of a bidder’s failure to submit a bid for option work by incorrectly labeling both pages of the bid schedule as applying to the base requirement and omitting any reference to the option requirement. The invitation for bids (IFB) for repairs to Canaveral Lock required fender replacement for both the west and the east walls. The bid schedule consisted of two pages, one containing 14 line items for the base requirement labeled “West Approach Wall Repair” and another with 13 line items for the option requirement labeled as “East Approach Wall Repair.” Several of the line items on each page referred to accompanying notes. Significantly, the notes made clear that bidders were to supply all new fender material for the base (west wall) work but reuse and reinstall part of the existing fender material – using new material for the remainder – on the option (east wall) work.
Upon opening the bid from the awardee, RUSH Construction, Inc. (RUSH), the Corps discovered that, despite listing a separate set of correct line item descriptions, the second page of RUSH’s submitted bid schedule misnumbered the line items, referenced the wrong note, and – despite a subtotal referencing “Option A” -- was incorrectly labeled “West Approach Wall Repair.” The contracting officer (CO) prepared a memorandum for the record concerning RUSH’s bid schedule, noting that “[t]he line item numbering for the option incorrectly included 0001 [base] vs. 0002 [option] for all line items [base and option]” but concluding that “the title, quantities and all material aspects of the bid schedule was [sic] correct.” The memo also stated that RUSH had acknowledged all amendments and its “bid was consistent with the IFB in all material respects.” The memorandum failed to identify the other discrepancies: that both pages referred to the west wall (and neither to the east) and that the line item for fender installation on both pages required the installation of all new material (and neither called for reuse and reinstallation of any material).
Concluding that RUSH’s bid schedule contained a minor informality that did not affect price, quantity or quality and could, therefore, be waived, the CO allowed RUSH to submit a corrected bid schedule that labeled the second page as relating to the East Approach Wall Repair and included the right line item numbering and the note requiring reuse and reinstallation of fender material.
Upon award to RUSH, C&D protested, arguing that RUSH’s bid should have been rejected as nonresponsive. The GAO agreed, holding that RUSH’s bid schedule differed materially from the IFB and, as a result, the agency could not waive the discrepancies. The GAO explained that bids failing to include a price for every item required by the IFB generally must be rejected as nonresponsive. This is true where, as here, the missing prices relate to optional contract line items. The rule may be understood as reflecting the legal principle that a bider who fails to submit a price for an item generally cannot be said to be bound to deliver that item. “Therefore, where a page in a bidder’s schedule does not clearly indicate that the prices apply to an option that the IFB requires to be priced, the bid is ambiguous and thus, nonresponsive.”
According to the GAO, the discrepancies here were more than mere informalities. Because both pages indentified the scope of work being bid as relating to the west wall, neither identified any prices for east wall work, and the second page failed to reference the note requiring reuse and reinstallation of material, RUSH had not, at the time of bid opening, made a firm commitment to perform the east wall scope of work at specific line item prices. Under these circumstances, the CO improperly allowed RUSH to correct its nonresponsive bid. The GAO recommended that the Corps revoke the waiver of discrepancies in RUSH’s bid, reject the bid as nonresponsive, terminate the contract for convenience, and award the contract to the next lowest-priced responsive responsible bidder.
Obviously, none of this would have happened had RUSH caught the problem before submitting the bid schedule. Taking time to carefully review your bid package against the IFB requirements will help you avoid disappointment down the road.
Eric Whytsell is the attorney responsible for the content of this article.
© Jackson Kelly PLLC 2014