B-125045, JUL. 30, 1970

B-125045, JUL. 30, 1970

BIDS -- BID BOND -- DEFICIENCY -- RESPONSIVENESS DECISION TO CONTRACTING OFFICER, DEPT. OF INTERIOR HOLDING THAT THE BID OF WILLAMETTE-WESTERN CORPORATION SHOULD NOT BE REJECTED BECAUSE OF INADVERTED OMISSION OF THE PENAL SUM OF BID BOND FOR CONTRACT FOR AUBURN- FORESTHILL BRIDGE SUPERSTRUCTURE, AUBURN-FOLSOM SOUTH UNIT CENTRAL VALLEY PROJECT. LOW BIDDER WHO INADVERTANTLY OMITTED THE PENAL SUM FROM BID BOND, BUT WHO INDICATED ON THE REVERSE SIDE OF BID THAT BOND IN AMOUNT OF 20 PER CENT ACCOMPANIED BID MAY HAVE BOND AND BID CONSIDERED AS ESTABLISHING LIABILITY OF SURETY IN CASE OF DEFAULT AND THEREFORE SUCH BID NEED NOT BE REJECTED FOR OMISSION IN BID BOND.

TO MR. ARTHUR:

REFERENCE IS MADE TO YOUR LETTER OF JULY 10, 1970, WITH ENCLOSURES, REQUESTING AN ADVANCE DECISION AS TO THE RESPONSIVENESS OF THE BID OF WILLAMETTE-WESTERN CORPORATION, SUBMITTED PURSUANT TO SPECIFICATIONS NO. DC-6834, AUBURN-FORESTHILL BRIDGE SUPERSTRUCTURE, AUBURN-FOLSOM SOUTH UNIT -CENTRAL VALLEY PROJECT.

SIX BIDS WERE RECEIVED AND OPENED ON JULY 7, 1970. WILLAMETTE WESTERN (W -W) SUBMITTED THE LOW EVALUATED BID IN THE AMOUNT OF $9,271,515.58. THE SECOND LOW EVALUATED BID IN THE AMOUNT OF $9,691,767 WAS SUBMITTED BY BETHLEHEM STEEL CORPORATION.

AS REQUIRED BY THE INVITATION, W-W'S BID WAS ACCOMPANIED BY A BID BOND ON STANDARD FORM 24. THE BID BOND APPEARS COMPLETE AND SATISFACTORY, EXCEPT FOR OMISSION OF THE PENAL SUM OF THE BOND. HOWEVER, ON THE REVERSE SIDE OF THE BID FORM, STANDARD FORM 21, INFORMATION WAS TYPED IN THE SPACES PROVIDED THEREFOR THAT, ENCLOSED IS BID GUARANTEE CONSISTING OF BIDDERS BOND IN THE AMOUNT OF 20%." BY AN AFFADIVIT DATED JULY 8, 1970, W-W AND ITS SURETY HAVE STATED, IN EFFECT, THAT OMISSION OF THE 20 PERCENT FIGURE ON THE BID BOND RESULTED FROM INADVERTENCE AND IT WAS THEIR INTENTION TO FURNISH A BID BOND IN THIS AMOUNT AS REQUIRED BY THE INVITATION AND AS STATED ON THE REVERSE SIDE OF SF 21.

IN AN EARLIER CASE, INVOLVING ALMOST IDENTICAL FACTS, WE CONCLUDED THAT THE BOND READ IN CONJUNCTION WITH THE BID TO WHICH IT WAS ATTACHED WAS SUFFICIENT TO BIND THE SURETY IN CASE OF DEFAULT BY THE BIDDER AND, THEREFORE, THE BID WAS NOT RENDERED NONRESPONSIVE BY THE OMISSION. COMP. GEN. 314 (1960). IN THAT CASE WE STATED THE FOLLOWING:

"IN 8 AMER. JUR., BONDS, SECTION 37, DEALING WITH THE CONSTRUCTION AND OPERATION OF INSTRUMENTS UNDER SEAL, IT IS STATED THAT IN CONSTRUING SUCH INSTRUMENTS, ALTHOUGH THE COURTS GENERALLY ADHERE CLOSELY TO THE LETTER, THE PREVAILING RULE ALLOWS A COURT TO PLACE ITSELF IN THE POSITION OF THE CONTRACTING PARTIES AND TO CONSIDER, IN VIEW OF ALL THE FACTS AND CIRCUMSTANCES SURROUNDING THE EXECUTION OF THE INSTRUMENT, WHAT THE PARTIES INTENDED, CITING THE CASES OF WESTERVELT V MOHRENSTECHER, 76 F. 118; PLANTERS AND MERCHANTS BANK V HILL, 18 AMER. DEC. 39; FIRST NATIONAL BANK V GERKE, 13 A. 358; AND SNOW V DUXSTAD, 147 P. 174. IN ADDITION, THERE IS SUBSTANTIAL AUTHORITY IN SUPPORT OF THE VIEW THAT THE GOVERNMENT AS OBLIGEE IN THE BOND HAS IMPLIED AUTHORITY TO FILL IN THE BLANK, ALTHOUGH THE DECISIONS ARE IN CONFLICT. SEE ANNOTATION AT 37 A.L.R. 1395.

"IN THE CIRCUMSTANCES HERE PRESENTED WE BELIEVE THAT THE INTENTION OF THE PARTIES RESPECTING THE OBLIGATION OF THE SURETY IS SO CLEAR THAT A BINDING CONTRACT EXISTS. THE EVIDENCE, INCLUDING THE STATEMENT IN THE BID THAT A BID BOND IN THE AMOUNT OF FIVE PERCENT OF THE BID WAS BEING SUBMITTED THEREWITH, AND THE FURTHER STATEMENT BY THE SURETY IN ITS LETTER OF NOVEMBER 3, 1960, THAT IT WAS ITS INTENTION TO BE OBLIGATED IN THE INDICATED AMOUNT OF FIVE PERCENT OF THE BID, CLEARLY SHOWS THE INTENTIONS OF THE PARTIES IN THE MATTER."

WE BELIEVE THE SAME RATIONALE IS APPLICABLE IN THE INSTANT CASE. IN VIEW THEREOF, THE WILLAMETTE-WESTERN BID NEED NOT BE REJECTED AS NONRESPONSIVE BECAUSE OF THE OMISSION IN THE BID BOND.

WE HAVE FURNISHED A COPY OF OUR DECISION TO THE COMMISSIONER OF THE BUREAU OF RECLAMATION AS REQUESTED. THE FILE ENCLOSED WITH YOUR LETTER IS RETURNED.