Master Pavement Line Corp Protests Bid Rejection by DOT

Master Pavement Line Corporation, a disadvantaged small business in Puerto Rico protested the rejection of its bid as nonresponsive by the Department of Transportation, Federal Highway Administration (FHWA), for repair services. The protester argued the FHWA improperly rejected its bid due to its absence of an active System for Award Management (SAM) registration at the time of the bid’s submission. The protest was heard by the Government Accountability Office (GAO).

Background

The solicitation was in July 2020 for a small business set-aside contract for the repair of guardrails, and other safety repairs in Puerto Rico. The solicitation was for a fixed-price contract award to the lowest-priced bidder whose bid conformed to the solicitation requirements. As amended by the Federal Acquisition Regulation (FAR), bidders were required to be registered in SAM at the time an offer or quotation is submitted, and continue to be registered until time of award, during performance, and through final payment of a contract. The FHWA found Master Pavement was not registered in SAM when it submitted its bid. The record indicated the protester submitted its SAM registration for processing on August 20, 2020. On September 1, 2020, the protester was notified it was not considered for the award due to its failure to be registered under SAM. Master Pavement requested reconsideration of the agency’s decision to reject its bid, providing that its SAM registration be completed prior to the award. It reactivated its registration, but the agency denied the protester’s request for reconsideration. Master Pavement filed a protest.

Analysis

Master Pavement asserted the contracting officer unreasonably rejected its bid for it failing to have an active SAM registration at the time of the bid. It argued the invitation for bids (IFB) contained a false and misleading instruction in its checklist. It stated that bidders were required to be actively listed on the SAM prior to contract award. Master Pavement argued this induced it to submit a bid without reviewing FARs incorporated by reference into the Solicitation “seeking hidden defects therein.” It also argued that its failure to possess an active SAM registration should have been waived by the agency as a minor informality .

The agency argued it reasonably determined the protester’s bid was nonresponsive, and ineligible for the award because FAR 52.204-7 required Master Pavement have an active registration. It also disputed the protester’s argument it could have waived this defect and allowed the protester to correct the issue. GAO agreed the solicitation was ambiguous. Because this inconsistency was no challenged prior to bid opening, it could not dispute the agency’s adoption of a contrary reading of the solicitation.

GAO found the agency acted improperly when it rejected Master Pavement’s bid because it was not registered in SAM at the time of the bid submission. According to FAR 14.405, informalities or irregularities can be corrected or waived without being prejudicial to bidders. Contracting officers are required to give bidders the opportunity to cure or waive a deficiency. The agency argued this provision did not apply. It stated the SAM registration requirement was material and failure to comply would render a bid nonresponsive. It considered this requirement material because bidders were required to comply with the annual contractor representations and certifications requirement. GAO disagreed. It stated representations and certifications were not material terms by virtue of their incorporation in the awarded contract. It noted FAR 14.405 defines a defect as immaterial when it has little impact on “price, quantity, quality, or delivery.” It rejected the agency’s contention that FAR 14.405 do not allow a bidder to cure an immaterial defect. GAO held that required representations can be cured or waived then they are not material to the bid.

Conclusion

The protester submitted the bid with the lowest price and has made corrections as to the agency’s reason for rejecting its bid. GAO sustained the protest. It recommended FHWA consider Master Pavement’s bid for the contract award. For help on protesting agency contract award decisions, contact Whitcomb Selinsky PC.