In the latest Weekly Wright Report:
- Don’t Touch That! – read now
Don’t Touch That!
I am sure we can all remember our moms telling us “Don’t touch that!” when were kids, and we no doubt said the same thing when we became parents to our kids. Well, the phrase applies to bidding on government contracts, too. Specifically, don’t touch the terms of the IFB in your bid or your bid might be deemed nonresponsive. In the bid protest of Matter of: American Mine Services, LLC, File: B-420138 (December 3, 2021), American Mine Services, LLC (“AMS”) failed to heed this age-old advice, to its own detriment.
In this case, the United States Army Corps of Engineers (“USACE”) rejected AMS’ bid as nonresponsive because AMS included in its bid language imposing conditions that limited the rights of the government under a standard Federal Acquisition Regulation clause incorporated by reference into the solicitation. When the bids were opened, AMS was the apparent low bidder. AMS protested the USACE decision. AMS included the following provision under the “Clarification and Exceptions” section of its bid:
For purposes of this bid, COVID-19 is considered a Force-Majeure Event along with any other similar disease, epidemic, or pandemic event. If any of the aforementioned events occur and affect the project, AMS reserves its rights for additional time.
In rejecting the AMS bid, the USACE explained that, pursuant to section 14.404-2(d) of the FAR, AMS’s inclusion of the provision rendered AMS’s bid nonresponsive as failing to conform to the essential requirements of the solicitation. The agency asserted that the provision was a material difference in the terms and conditions set forth in the solicitation, and, thus the provision could not be waived. Upon receiving notice of its bid rejection, AMS requested an opportunity to discuss the rejection of its bid and offered to remove the language. The USACE, however, responded that it could not allow AMS to amend its bid because it would be unfair to other bidders.
In the protest, AMS contended that the rejection of its bid was unreasonable because its bid simply addresses the impact to a project from COVID-19 or other similar disease or epidemic event. AMS argued that FAR clause 52.249-10, which the IFB incorporates by reference, also addresses these consequences. As such, AMS asserted that the added provision merely confirmed a protection offered to all bidders under that FAR clause, i.e., protecting a contractor’s ability to continue working on a project after a delay caused by “the force-majeure events of [the] COVID-19 pandemic.” AMS also contended that any variations between the FAR clause and its added provision were not material because the added language did not affect price, quantity, quality, or delivery.
The GAO noted that as a general matter, a responsive bid is one that, if accepted by the government as submitted, will obligate the contractor to perform “the exact thing called for in the solicitation.” A low bidder may be requested to delete objectionable conditions from a bid provided the conditions do not go to the substance, as distinguished from the form, of the bid, or work an injustice on other bidders. A condition goes to the substance of a bid where it affects price, quantity, quality, or delivery of the items offered. Under section 14.405 of the FAR, a contracting officer “shall give the [low] bidder an opportunity to cure any deficiency resulting from a minor informality or irregularity in a bid or waive the deficiency, whichever is to the advantage of the Government.” The FAR explains: A minor informality or irregularity is one that is merely a matter of form and not of substance. It also pertains to some immaterial defect in a bid or variation of a bid from the exact requirements of the invitation that can be corrected or waived without being prejudicial to other bidders. The defect or variation is immaterial when the effect on price, quantity, quality, or delivery is negligible when contrasted with the total cost or scope of the supplies or services being acquired.
The GAO reiterated the law that if, in its bid, a bidder attempts to impose conditions that would modify material requirements of the IFB, limit its liability to the government, or limits the rights of the government under any contract clause, then the bid must be rejected. The GAO held that the USACE reasonably rejected AMS’s bid because it imposed conditions that would limit the rights of the Government under a contract clause. FAR clause 52.249-10, provides that the Contractor’s right to proceed shall not be terminated nor the Contractor charged with damages under this clause, if – (1) The delay in completing the work arises from unforeseeable causes beyond the control and without the fault or negligence of the Contractor. Examples of such causes include– * * * * * (vi) Epidemics, (vii) Quarantine restrictions[.] Under that FAR clause, a contractor is required to notify the contracting officer in writing, within 10 days from the beginning of any delay, the causes of the delay. Thereafter the contracting officer ascertains the facts and the extent of the delay and may extend the time for completing the work, “[i]f, in the judgment of the [c]ontracting [o]fficer, the findings . . . warrant such action[.]”
The GAO believed that AMS’s added provision materially modified the terms of FAR clause 52.249-10 because the provision unilaterally declared, without qualification, that “COVID-19 . . . along with any other similar disease, epidemic, or pandemic event” is a “force-majeure event,” i.e., an uncontrollable and unexpected event that prevents the contractor from performing the contract. The AMS provision provides that if an event covered by the provision “occur[s] and affect[s] the project, AMS reserves its rights for additional time.” The GAO stated that the language of the provision inserted by AMS appears to remove the responsibility and discretion from the contracting officer to determine whether such causes are excusable delays. Accordingly, the protest was denied.
If you have any questions regarding bidding on government contract, please contact any member of our Government Contract Practice Group.
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