Interstate Construction, Inc., B-281465, February 10, 1999

B-281465 Feb 10, 1999 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights DIGEST Bid imposing condition on performance is nonresponsive where it modifies material terms of the solicitation. Interstate contends that Kinley's bid is nonresponsive. All "major work items" listed in the IFB (including all of the basic and option items in the pricing schedule) were to be included in a total lump-sum price for evaluation and award purposes. Twelve bids were received by bid opening. Tanks will be cleaned and gas free by government before commencement of work.". The firm concluded that "there is not a specified condition for the tanks to be clean and gas free.". Kinley notified the contracting officer that the firm was withdrawing the qualification in its bid. There are no liabilities put forth on the government or prejudice against other bidders.". View Decision Matter of: Interstate Construction, Inc. File: B-281465 Date: February 10, 1999 DIGEST Attorneys DECISION Interstate Construction, Inc. protests the award of a contract to Kinley Construction Company under invitation for bids (IFB) No. DACA05-98-B-0026, issued by the Department of the Army, Corps of Engineers, Sacramento District, for the repair and upgrade of the jet fuel hydrant system and bulk fuel storage area at Beale Air Force Base, California. Interstate contends that Kinley's bid is nonresponsive, since it included a material condition on performance of the contract which may not be waived by the agency to make Kinley's bid responsive. We sustain the protest. The IFB, issued on August 12, 1998 and amended four times prior to the September 18 bid opening, sought bids for the repair and upgrade of the fuel hydrant system and fillstand. The solicitation's pricing schedule sought prices for seven basic items (Nos. 0001-0007) relating to repairs/upgrades at the Pumphouse No. 1 site, and two option items (Nos. 0008 and 0009) relating to repairs/upgrades at the bulk fuel storage area. IFB at 00010-5. Item No. 0009, relevant here and discussed more fully below, involves lowering the high-level shut-off valves on three bulk fuel storage tanks. Id. All "major work items" listed in the IFB (including all of the basic and option items in the pricing schedule) were to be included in a total lump-sum price for evaluation and award purposes. Id. at 00010-5, 01025-1, 00100-13, and 00100-14. Twelve bids were received by bid opening. Kinley submitted the apparent low bid (at $1,591,566) and Interstate submitted the apparent second low bid (at $1,649,867). The Kinley bid included the following statement, identified as a bid "qualification": "Bid Item #9--Tanks will be cleaned and gas free by government before commencement of work." By letter of September 23, the contracting officer rejected the Kinley bid as nonresponsive under Federal Acquisition Regulation (FAR) Sec. 14.404-2(d), which provides that "[a] bid shall be rejected when the bidder imposes conditions that would modify requirements of the invitation or limit the bidder's liability to the Government, since to allow the bidder to impose such conditions would be prejudicial to other bidders." In response to this rejection notice, Kinley submitted a letter of protest to the contracting officer stating that the IFB required award to be made to Kinley as the low bidder. Kinley also contended that the agency could waive the firm's bid qualification regarding item No. 0009 as a minor informality or irregularity in the bid, since, upon a subsequent review of the IFB by Kinley, particularly, IFB Drawing No. CC4, the firm concluded that "there is not a specified condition for the tanks to be clean and gas free." Letter from Kinley to Contracting Officer (Sept. 23, 1998). By letter of September 25, Kinley notified the contracting officer that the firm was withdrawing the qualification in its bid; specifically, Kinley stated that "[b]y withdrawal of our qualification statement, there are no liabilities put forth on the government or prejudice against other bidders." Upon advice from agency technical personnel and legal counsel, on October 7, the contracting officer concluded that Kinley could be asked to delete the objectionable qualification from its bid, since the condition was one of form and not of substance. See FAR Sec. 14.405. Specifically, the contracting officer found that the qualification did not render the bid nonresponsive since neither of the tasks listed in the qualification to Kinley's bid--"cleaning" the tanks and making them "gas free"--was required to perform the work called for under the line item at issue. Consequently, on October 8, Kinley withdrew its agency-level protest. The agency awarded a contract under the IFB to Kinley on November 4. Interstate filed its protest of the award with our Office on November 5.