Who is a “Non-Responsible” Bidder? Who is a “Non-Responsive” Bidder?

A disappointed government contractor lost its bid protest, and the Court of Federal Claims explained the law on responsibility and responsiveness in offers to requests for proposals (“RFP”). The case is Nilson Van & Storage, Inc. v. United States, 2011 U.S. Claims LEXIS 1710.

Nilson Van & Storage, Inc. (“Nilson Van”) lost a government contract for the preparation, shipment, and storage of property belonging to Army personnel, to Ken Krause Company.  Nilson Van complained that Ken Krause was “non-responsible” because it didn’t have the proper licenses and certifications, or the proper storage facilities, at the time of bidding.  It also claimed that Ken Krause’s offer was “non-responsive” to the solicitation because the RFP required proper registration with certain government contractor databases, which Ken Krause didn’t have.

The Court explained the meaning and application of “non-responsibility” and “non-responsiveness.”

“Non-responsibility” is determined based on whether an offeror can actually fulfill the contract – for example, does the company have the necessary facilities or ability to obtain them?

“Non-responsiveness” is determined based on an offer’s contents at bid opening.  To be considered “responsive” a bid must comply in all material respects with the invitation for bids.  The key is “material.”  Minor defects can be overlooked. The determination of whether a defect in a bid is material is up to the agency.  Also, a contracting officer can waive or permit a party to cure minor irregularities.

Applying the law in this case as to “responsibility,” the Court ruled that the permit problem was a non-issue.  The actual work was unlikely to involve interstate transport, necessitating the missing permit at issue.  Also, the solicitation and FAR, when read together, did not require Ken Krause to have necessary permits at the time of bidding, but rather at the time of performance.  (This begs the question – doesn’t this leave the government in a bind if they award a contract to a company who is ultimately unable to get the proper permit?  Why shouldn’t a company who already has its permits enjoy this as a competitive advantage?)  The Court said that the storage facilities problem was a non-issue because Ken Krause, who had put the wrong facilities on its offer, ultimately gave the agency the correct facilities during the evaluation state of the bids.  (This is a good example of an offeror saving his bid by paying attention to details and speaking up even after submitting an offer).

Applying the law in this case as to “responsiveness,” the court similarly ruled that while Ken Krause was not listed in the Central Contractor Registration database (“CCR”) at the time of the bid, they were so listed at the time of the award, and this was sufficient.  (Again, this highlights the need for a company to be on the ball and not be shy about correcting its offers even after the offer is submitted).  Implicit in this decision, although not stated, was the determination that the contracting officer effectively permitted the Ken Krause to “cure.”

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Dave Albo – Attorney are government contract lawyers and procurement law attorneys.