FAR 14.405:  Minor informalities or irregularities in bids

Comptroller General - Key Excerpts

JOCH argues that Trevino’s bid should have been rejected as nonresponsive, since it did not state the dollar value for item 2/alternate 1 or item 3/alternate 2. Protest at 8. In this regard, the protester asserts that without “the Contracting Officer’s calculations, Trevino’s bid was nonresponsive and did not conform to the solicitation by failing to use the correct bid schedule, and failing to calculate its own total amounts for the alternate bids.” Comments and Supp. Protest at 3.

The agency responds that Trevino’s bid was responsive and provided all of the necessary information to determine Trevino’s intended bid. AR at 4. Further, the agency asserts that Trevino’s failure to include total bid amounts for bid items No. two and three was waivable under Federal Acquisition Regulation (FAR) § 14.405, regarding minor informalities or irregularities in bids. AR at 6-8.

The test for responsiveness is whether a bid offers to perform the exact thing called for in an IFB, so that acceptance of the bid will bind a bidder to perform in accordance with all of the terms and conditions of a solicitation without exception. Randy Sabala; John Button, B-251221, B-251222, Nov. 24, 1992, 92-2 CPD ¶ 379 at 2. Minor informalities and irregularities in bids may be waived. FAR § 14.405. A minor informality or irregularity is one that is “merely a matter of form and not of substance,” and “[i]t 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.” Id. When a bid contains such a minor informality or irregularity, the FAR requires that the contracting officer “either shall give the 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.” Id.

Here, we find that Trevino’s bid was responsive to the solicitation, and that the submission of prices for the work to be deleted rather than prices for the work remaining after the deletion was a waivable minor informality. While Trevino did not follow the exact instructions of the IFB, it nevertheless provided prices for the work to be deleted in the bid schedule for each alternate deductive bid item; thus, the amount of Trevino’s bid for the remaining work could be ascertained by simply deducting the dollar amount for the deleted work from the corresponding base bid. Further, Trevino’s intentions were evident on the face of the bid, and the contract specialist did not need to alter Trevino’s bid or take into account information not included on the face of Trevino’s bid schedule. In these circumstances, we find that the agency properly concluded that Trevino’s bid was responsive and properly waived Trevino’s failure to calculate the total bid amounts for items No. 2 and 3 as a minor informality. See De Ralco, Inc., B-281042, Dec. 7, 1998, 98-2 CPD ¶ 138 at 3‑4 (where awardee entered price for work to be deleted rather than price of work remaining, agency properly considered this to be a waiveable informality in accordance with FAR § 14.405).  (JOCH Construction Company B-410980, B-410980.2: Apr 7, 2015)  (pdf)

There is no dispute that W.B. failed to submit a price for line item 0036 of the IFB's bid schedule. Line item 0036 requested a unit and extended price to "remove between 21 to 50 Trees (24 inches but < [less than] 36 inches)." IFB at 8. The estimated quantity for this line item was 40 trees. Id. This item was part of a series of tree removal line items (0021-0038), which were described in the IFB as follows:

These Bid items consist of removal and disposal of various size tress within the calipers indicated. Removal and off site disposal of each tree, stump, all roots larger than 4 inches in diameter, and backfilling of any holes are all included in this item as incidental to this work. Payment will be by each tree within the caliper range indicated.

IFB § 01 02 00, Description of Bid Items and Drawing Details, at 4.

While W.B.'s bid omitted the price for line item 0036, it provided prices for all other of the tree removal line items as follows:

For 10 trees or less:

Line Item Size of tree Estimated Quantity Unit Price Extended Price
0021 6 inches 10 $165 $1,650
0022 6 to <12 10 $185.90 $1,859
0023 12 to <24 10 $330 $3,300
0024 24 to <36 10 $715 $7,150

For 11 to 20 trees:

Line Item Size of tree Estimated Quantity Unit Price Extended Price
0027 6 inches 40 $165 $6,600
0028 6 to <12 40 $165 $6,600
0029 12 to <24 40 $198 $7,920
0030 24 to <36 40 $275 $11,000

For 21 to 50 trees:

Line Item Size of tree Estimated Quantity Unit Price Extended Price
0033 6 inches 40 $110 $4,400
0034 6 to <12 40 $132 $5,280
0035 12 to <24 40 $165 $6,600
0036 24 to <36 40

AR, Tab 4, W.B. Bid, at 7-8.

The agency rejected W.B.'s bid as nonresponsive in part because it failed to provide a price for line item 0036, and thus, the bid did not obligate W.B. to provide this item. The agency stated that this omission affected the price and the bidder's overall obligations under the contract and could not be waived as a minor informality. AR, Tab 9, Agency Letter Rejecting W.B.'s Bid (Sept. 26, 2011). The protester asserts that this omission was immaterial and was required to be waived as a minor informality. We find that the agency unreasonably determined that that W.B.'s bid was nonresponsive. We also find that W.B.'s omission of line item 0036 could properly be waived as a minor informality.

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 accordance with the material terms and conditions of the solicitation. Custom Envtl. Serv., Inc., B-234774, May 24, 1989, 89-1 CPD ¶ 501 at 3. Because the failure to include a price for an item evidences a bidder's intent not to be bound to perform the item, as a general rule, a bid must be rejected as non-responsive if the bid, as submitted, does not include a price for every item requested by the IFB. Spectrum Leasing Corp., B-216615, Feb. 19, 1985, 85-1 CPD ¶ 211 at 3.

However, where the omission pertains to some immaterial defect in or variation of a bid from the exact requirements of the IFB, it can be corrected or waived where it is not prejudicial to other bidders. FAR § 14.405. A defect or variation is immaterial if the effect on price, quantity, quality, or delivery is negligible when contrasted with the total cost or scope of the services being acquired. Id. Thus, a contracting agency may waive the failure to bid on an item as a minor informality if the item for which the price is omitted is divisible from the solicitation's overall requirements, de minimis as to total cost, and would not affect the competitive standing of the bidders. Giberson Plumbing & Excavating, Inc., B-245798, Dec. 27, 1991, 91-2 CPD ¶ 589 at 2-3; TECOM, Inc., B-236929.2, May 11, 1990, 90-1 CPD ¶ 463 at 3-4; Custom Envtl. Serv., Inc., supra at 3-4; Leslie & Elliott Co., B-216676, Feb. 19, 1985, 85-1 CPD ¶ 212 at 3.

We first note that line item 0036 is divisible from the overall ID/IQ contract requirement because the work to be accomplished under the ID/IQ contract will be ordered through the issuance of individual task orders. Because the agency was not obligated to order any of indefinite-quantity work, this line item cannot be reasonably said to be an essential or integral part of the overall contract. See TECOM, Inc., supra; cf. HH&K Builders, B-232140, Oct. 20, 1988, 88-2 CPD ¶ 379 at 3. (omission of a price for a material requirement, which is not divisible from the remainder of the solicitation, cannot be waived as minor informality.)

Moreover, the price for line item 0036 is de minimis as to the total cost and would not affect the competitive standing of the bidders. In this regard, the estimate in the revised IGE for line item 0036 was $187 per tree with an extended price of $7,480. AR, Tab 8, Revised IGE, at 2. This amount represents less than .07 percent of the IGE for the total contract cost of $10,304,987.10.

In addition, it is evident from W.B.'s bid pricing W.B. priced its tree removal services in an economy of scale fashion, that is, its unit prices per tree were lower as the total quantities of trees became higher. Thus, it would be logical to assume that W.B.'s bid for the removal of 21 to 50 trees would be lower than its bid for 11 to 20 trees. However, even assuming that W.B. would have priced line item 0036 at the same price as for removal of 11 to 20 of the same-sized trees (line item 0030), that is, $275, the maximum total price for this line item would be $11,000, which is .12 percent of W.B.'s overall bid price of $8,984,611.70.

Considering that the price of line item 0036 in comparison to the overall contract cost is much less than 1 percent, W.B.'s omission of the line item pricing for item 0036 is clearly de minimis as to the total cost. Furthermore, the competitive standing of the bidders would also not be affected because Tanner's total price is $306,408.80 greater than W.B.'s.

Accordingly, the agency's rejection of W.B.'s bid as nonresponsive, because it did not include a price for line item 0036, was improper.  (W.B. Construction and Sons, Inc., B-405818; B-405818.2, January 4, 2012)  (pdf)

Cedar Electric protested to the agency, and following the VA’s denial of the protest, protested to our Office. Cedar Electric primarily argues that Amendment 8 is a material amendment that cannot be waived, and that Seawolf’s bid should have been rejected. In particular, Cedar Electric contends that the Schedule for Finishes constitutes a significant design change that imposes new legal obligations and increases the cost of performance. The agency responds that Amendment 8 is not material because the Schedule for Finishes was referenced in Amendment 5, which Seawolf acknowledged. In the alternative, the agency argues that the price impact of Amendment 8 is not significant in relation to the value of the total project and therefore is not material.

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. 65 at 2. An amendment is material if it would have more than a negligible impact on price, quantity, quality, or delivery. FAR sect. 14.405(d)(2). Moreover, our Office has held that an amendment is not material where it does not impose any legal obligations on the bidder different from those imposed by the original solicitation--for example, where it merely clarifies an existing requirement or is a matter of form--or has a negligible impact on the relative standing of the bidders. Kalex Constr. & Dev., Inc., B-278076.2, Jan. 20, 1998, 98‑1 CPD para. 25 at 2. 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. No precise rule exists to determine whether a change required by an amendment is more than negligible; that determination is based on the facts of each case. K Services, B-238744, June 13, 1990, 90-1 CPD para. 556 at 2, citing DeRalco, Inc., B‑233996, Mar. 29, 1989, 89-1 CPD para. 327.

We find that Amendment 8 is not a material amendment because the inclusion of the Schedule for Finishes in Amendment 8 does not constitute a change in the legal obligations of the bidders to meet the government’s requirements. The references to the Schedule for Finishes in Amendment 5 put bidders on notice that the Schedule for Finishes existed as a contract requirement which they were obligated to fulfill. The Schedule for Finishes was included in the list of attachments to Amendment 5, even through the agency neglected to provide the actual schedule at that time. Amendment 5 required the contractor to submit for approval all samples required by the Schedule for Finishes in quadruplicate. Moreover, several of the specifications attached to Amendment 5 specifically stated that “color, pattern, and texture” performance requirements were specified in the Schedule for Finishes. All of these references, combined, clearly indicate that Amendment 5 created a legal obligation for contractors to perform in accordance with the Schedule for Finishes, even though the schedule was not attached to the amendment. See B‑173563, Nov. 12, 1971, 51 Comp. Gen. 293 (1971). Because Amendment 8 was not a material amendment, VA acted appropriately in waiving Seawolf’s failure to acknowledge the amendment.  (Cedar Electric, Inc., B-402284.2, March 19, 2010) (pdf)

Conduit’s failure to calculate its overtime rates correctly constituted a minor informality. Overtime rates were not included in the calculation of the bid prices for purposes of determining the low bidder, so it is not clear--and the protester has not explained--how any other bidder could have been prejudiced by Conduit’s miscalculation. Second, nothing in Conduit’s miscalculation alters the obligation established in its bid to perform the exact thing called for under the IFB; Conduit is legally obligated to perform the contract, including overtime, in exact accordance with the terms of the solicitation.  Third, the record shows that Conduit’s bid will result in the lowest price to the government even given the miscalculation. In this regard, the difference between Conduit’s bid (as recalculated by the agency to account for the change in the wage rate determination) and ALC’s bid is $7,217,450. The error in Conduit’s calculation of its overtime rates amounts to $1.86 per hour of overtime ($1.87 in the case of one line item). AR, exh. 10, Letter from Conduit to Agency, June 6, 2006, attach. 1. Applying this hourly difference, even if every estimated hour under the IFB for SCA employees were priced as an overtime hour (a virtual impossibility, since overtime is defined in the IFB as work in excess of 40 hours per week), the additional cost of Conduit’s performance would be less than the difference between the two bids. We conclude that Conduit’s miscalculation was a waivable minor informality that did not affect the responsiveness of the bid. (AllWorld Language Consultants, Inc., B-298831, December 14, 2006) (pdf)

The solicitation called for sealed bids offering to purchase various species of government-owned timber. Minimum acceptable rates were set forth for each species. For white oak sawtimber, the minimum acceptable rate was set at $33.22 per unit with an estimated quantity of 71 ccf (hundred cubic feet). Bids were opened on September 12, 2006, and Squires was the high bidder with an overall bid of $184,051.68. Winslow-Bateman Forestry was the second high bidder at $123,968.31. The agency noted, however, that Squires had bid only $26.09 per unit for the white oak sawtimber portion of the sale. Since this bid was below the minimum acceptable rate, the contracting officer rejected Squires’ bid as nonresponsive and made award to Winslow-Bateman. Squires claims that it intended to bid the required minimum for all species, and that its bid on the white oak sawtimber was the result of an arithmetic error in calculating its price which it should be permitted to correct.

Although, as a general rule, a bid must be rejected as nonresponsive where it does not strictly conform to the solicitation’s terms and conditions, this rule does not apply to deviations which are immaterial or matters of form rather than substance. We have held that where the discrepancy between the minimum advertised rate for a particular species of timber and the rate actually bid is clearly “negligible,” the discrepancy may be viewed as a minor informality and the pricing defect may be corrected. Building By Thrift, Inc., B-215036, June 28, 1984, 84-1 CPD para. 691; W-1 Forest Prods., Inc., B-204168.2, Feb. 17, 1982, 82-1 CPD para. 138. In this case, we conclude that the discrepancy between Squires’ bid of $26.09 per unit of white oak sawtimber and the specified minimum of $33.22 per unit (a difference of $7.13 per unit) is negligible. Squires’ bid would have been $506.23[1] higher (for a total bid of $184,557.91) had Squires bid the minimum rate for white oak--a discrepancy resulting in a 0.275 percent increase in Squires’ total bid. Moreover, since Squires was the high bidder by more than $60,000, and the $506.23 adjustment to Squires’ bid is an upward adjustment, making Squires’ price even more favorable to the government, there is no possibility that any other bidder would be prejudiced or that the integrity of the procurement process would be undermined by adjusting Squires’ bid. Accordingly, we conclude that Squires’ bid is responsive, that the $506.23 pricing defect can be corrected as a minor informality, and that Squires should therefore receive the award if otherwise eligible.  (Squires Timber Company, B-298859, December 1, 2006) (pdf)

Additionally, while the bid evidences that Thompson at some point changed its prices to $8.01 and $7.01 without initialing the changes, our Office has consistently held that a bidder's failure to initial changes is a matter of form that may be waived by the agency as a minor informality, where, as here, there is no doubt as to intended bid. Stone Forest Indus., Inc., B-246123, Feb. 7, 1992, 92-1 CPD P: 161 at 1-2; Jordan Contracting Co.; Griffin Constr. Co., Inc., B-186836, Sept. 16, 1976, 76&#8209;2 CPD P: 250 at 2.  (Delta Timber Company, B-290710, September 6, 2002) (pdf)

Comptroller General - Listing of Decisions

For the Government For the Protester
JOCH Construction Company B-410980, B-410980.2: Apr 7, 2015  (pdf) W.B. Construction and Sons, Inc., B-405818; B-405818.2, January 4, 2012  (pdf)
Cedar Electric, Inc., B-402284.2, March 19, 2010 (pdf) Squires Timber Company, B-298859, December 1, 2006 (pdf)
AllWorld Language Consultants, Inc., B-298831, December 14, 2006 (pdf)  
Delta Timber Company, B-290710, September 6, 2002 (pdf)  


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