Government Contracts Legal Blog

Compliance With Material Requirements

Posted by Dan McAuliffe on Dec 21, 2014 6:58:16 PM
Dan McAuliffe
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An example of failing to meet material requirements caused a winning bid to lose?

The General Accountability Office (“GAO”) decided recently that too much of a good thing can be a bad thing. On August 13, the GAO denied Valley Quarries, Inc.’s bid protest after the Federal Highway Administration (“FHWA”) terminated Valley Quarries’ bid as nonresponsive, and chose Rogele, Inc. instead. The invitation for bids (“IFB”) called for the winning contractor to reconstruct pavement and sidewalks, install street lights, and perform other construction services in Gettysburg, PA., the city most well-known for Lincoln’s Gettysburg Address.

The Invitation for Bids

The IFB required work on two schedules: Schedule A made up the heart of the contract and called for work on one street in Gettysburg; Schedule B constituted optional work and required work on another street. The winning contractor would only work on Schedule B if the FHWA later determined it had sufficient funds to pay for the optional work. The IFB required that bidders complete performance within 245 calendar days after winning the bid. The IFB further stated that it would award the contract to the responsive bidder with the lowest price.

The Bids: Comparing Apples to Oranges

Valley Quarries’ bid stated that it would complete Schedule A in 245 days and Schedule B in 35 days for a total of 280 days, which it inserted on the total calendar days line. Rogele did not include the additional Schedule B days and subsequent costs in its final estimate. Even still, Valley Quarries’ bid was $93,869 less than Rogele’s bid. Had Valley Quarries eliminated its 35-day Schedule B estimate from its bid (like Rogele), Valley Quarries’ bid would have been $170,869 less than Rogele’s bid. Valley Quarries stated that it included the 280 total calendar days in order to inform the FHWA how long until Valley Quarries could complete both Schedule A and B, if the FHWA ultimately awarded them together.

The FHWA rejected Valley Quarries’ bid. The FHWA stated that Valley Quarries bid did not conform to the IFB’s requirements since Valley Quarries indicated it would require more than 245 calendar (Valley Quarries indicated 280 days) to complete performance.

The GAO Review

The GAO agreed with the FHWA. Under GAO precedent, the bid must clearly comply with all of the solicitation’s material requirements when the bids are opened. Here, the GAO found that Valley Quarries did not comply with  material requirements (the IFB’s performance schedule requirement) since Valley Quarries indicated that performance would require more than 245 days.

The GAO further found that, even though Valley Quarries also indicated it would complete Schedule A in 245 days, this indication made the bid, at best, ambiguous (since the FHWA could not clearly determine whether Valley Quarries would complete performance in 245 or 280 days from just the bid itself). Under GAO precedent, an ambiguous bid does not “clearly comply” with the bid’s material requirements. In denying Valley Quarries’ protest, the GAO noted that Valley Quarries would have been better off providing no estimate of the days to complete Schedule B or even no estimate of the total days to complete performance (since the FHWA would have presumed only 245 days).

Avoid Losing When You Should Win

As Valley Quarries demonstrated, the cold rules of law will not bend for even the best of intentions. Thus, it is imperative that prospective government contractors follow every detail of the material requirements when they submit their bid. If your business is involved in government contracting and procurement, the attorneys at Whitcomb Law, P.C. can help protect it and avoid similar slips.

Topics: Government Contracting

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