B-137319, FEBRUARY 5, 1959, 38 COMP. GEN. 532

B-137319: Feb 5, 1959

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THE BID BOND REQUIREMENT IS A MATERIAL PART OF THE INVITATION WHICH CANNOT BE WAIVED BY CONTRACTING OFFICERS AND NONCOMPLIANCE WITH THE BID BOND PROVISION WILL REQUIRE REJECTION OF THE BID AS NONRESPONSIVE. IF THE FAILURE WAS DUE TO INADVERTENCE OR OTHER EXCUSABLE CAUSE NOT RELATED TO THE BIDDER'S FINANCIAL ABILITY TO SECURE THE BOND. WILL NO LONGER BE FOLLOWED AND. NONCOMPLIANCE WITH A BID BOND PROVISION WILL REQUIRE REJECTION OF THE BID AS NONRESPONSIVE. 7 COMP. ALTHOUGH THE SUBMISSION OF A BID BOND TWENTY-EIGHT MINUTES AFTER THE TIME SCHEDULED FOR BID OPENING WILL HEREAFTER REQUIRE REJECTION OF THE BID AS NONRESPONSIVE IN THE SAME MANNER AS A LATE BID. WHICH PERMITTED CONTRACTING OFFICERS TO WAIVE NONCOMPLIANCE WITH THE BID BOND REQUIREMENT IF THE FAILURE WAS DUE TO AN INADVERTENCE OR OTHER EXCUSABLE CAUSE NOT RELATED TO THE BIDDER'S FINANCIAL ABILITY TO SECURE THE BOND.

B-137319, FEBRUARY 5, 1959, 38 COMP. GEN. 532

CONTRACTS - BID BOND REQUIREMENT - NONCOMPLIANCE NECESSITATING REJECTION UNDER INVITATIONS FOR BIDS WHICH REQUIRE BIDDERS TO SUBMIT BID BONDS PRIOR TO BID OPENING, THE BID BOND REQUIREMENT IS A MATERIAL PART OF THE INVITATION WHICH CANNOT BE WAIVED BY CONTRACTING OFFICERS AND NONCOMPLIANCE WITH THE BID BOND PROVISION WILL REQUIRE REJECTION OF THE BID AS NONRESPONSIVE. THE RULE UNDER WHICH THE FAILURE OF BIDDERS TO SUBMIT BID BONDS WHEN REQUIRED BY THE INVITATION COULD BE WAIVED BY CONTRACTING OFFICERS, IF THE FAILURE WAS DUE TO INADVERTENCE OR OTHER EXCUSABLE CAUSE NOT RELATED TO THE BIDDER'S FINANCIAL ABILITY TO SECURE THE BOND, WILL NO LONGER BE FOLLOWED AND, HEREAFTER, NONCOMPLIANCE WITH A BID BOND PROVISION WILL REQUIRE REJECTION OF THE BID AS NONRESPONSIVE. 7 COMP. GEN. 568; 14 ID. 305; ID. 559; 16 ID. 493; ID. 809; 26 ID. 49; 31 ID. 20; 36 ID. 599; 37 ID. 293 AND 38 ID. 376, AND NUMEROUS UNPUBLISHED DECISIONS, OVERRULED. ALTHOUGH THE SUBMISSION OF A BID BOND TWENTY-EIGHT MINUTES AFTER THE TIME SCHEDULED FOR BID OPENING WILL HEREAFTER REQUIRE REJECTION OF THE BID AS NONRESPONSIVE IN THE SAME MANNER AS A LATE BID, THE FORMER RULE, WHICH PERMITTED CONTRACTING OFFICERS TO WAIVE NONCOMPLIANCE WITH THE BID BOND REQUIREMENT IF THE FAILURE WAS DUE TO AN INADVERTENCE OR OTHER EXCUSABLE CAUSE NOT RELATED TO THE BIDDER'S FINANCIAL ABILITY TO SECURE THE BOND, WILL BE FOLLOWED TO PERMIT CONSIDERATION OF THE BID.

TO THE HEADS OF DEPARTMENTS, INDEPENDENT ESTABLISHMENTS, AGENCIES, AND OTHERS CONCERNED, FEBRUARY 5, 1959:

THE FOLLOWING DECISION TO THE SECRETARY OF THE ARMY REPRESENTS AN IMPORTANT DEPARTURE FROM THE RULE PREVIOUSLY FOLLOWED WITH RESPECT TO WAIVER OF A BIDDER'S FAILURE TO SUBMIT A BID BOND ON TIME.

HERETOFORE IT HAS BEEN HELD THAT A REQUIREMENT IN AN INVITATION TO SUBMIT A BID BOND WITH A BID MAY AND SHOULD BE WAIVED IF THE FAILURE TO COMPLY IS DUE TO INADVERTENCE OR OTHER EXCUSABLE CAUSE NOT RELATED TO THE BIDDER'S FINANCIAL ABILITY TO SECURE THE BOND. THIS RULE WILL NO LONGER BE FOLLOWED.

TO THE SECRETARY OF THE ARMY, FEBRUARY 5, 1959:

WE REFER TO A LETTER OF OCTOBER 28, 1958, FROM THE ASSISTANT SECRETARY OF THE ARMY ( LOGISTICS) IN REPLY TO OUR LETTER OF SEPTEMBER 16, REQUESTING A REPORT ON THE PROTEST BY THE RA-1JEF MANUFACTURING COMPANY AGAINST THE REJECTION OF ITS BID SUBMITTED PURSUANT TO INVITATION NO. QM/CTM/-36-243- 59-91.

THE INVITATION ISSUED ON AUGUST 7, 1958, SOLICITED BIDS FOR A CONTRACT ON A QUANTITY OF COVERALLS TO BE AWARDED TO THE LOW RESPONSIVE BIDDER. ADDITIONAL QUANTITY WAS RESERVED FOR AWARD TO SMALL BUSINESS. PREREQUISITE FOR CONSIDERATION FOR AWARD ON THE SET-ASIDE PORTION WAS THE SUBMISSION OF A RESPONSIVE BID ON THE UNRESERVED QUANTITY.

THE INVITATION CONTAINED THE FOLLOWING REQUIREMENT WITH RESPECT TO THE SUBMISSION OF A BID BOND:

EACH BIDDER MUST SUBMIT WITH ITS BID A BOND, IN DUPLICATE, ON STANDARD FORM 24, PROPERLY EXECUTED BY ITSELF AND AN ACCEPTABLE CORPORATE SURETY OR ACCEPTABLE INDIVIDUAL SURETIES, OBLIGATING THE BIDDER IN A PENAL SUM EQUAL TO 20 PERCENT OF THE TOTAL AMOUNT OF ITS BID, (A) NOT TO WITHDRAW ITS BID WITHIN THE OPTION TIME IT HAS ALLOWED IN THE SAID BID OR ANY EXTENSIONS THEREOF GRANTED BY IT TO THE GOVERNMENT, (B) TO ACCEPT A NOTICE OF AWARD MAILED OR OTHERWISE FURNISHED TO IT BY THE GOVERNMENT WITHIN THE SPECIFIED OPTION TIME OR ANY EXTENSION THEREOF AS CONSTITUTING THE EXECUTION OF A VALID AND BINDING CONTRACT BETWEEN ITSELF AND THE GOVERNMENT, AND (C) TO FURNISH TO THE GOVERNMENT A PROPERLY EXECUTED PERFORMANCE BOND AS REQUIRED IN THIS INVITATION FOR BIDS WITHIN 10 DAYS AFTER RECEIPT BY THE SUCCESSFUL BIDDER OF THE GOVERNMENT FORMAL CONTRACTUAL DOCUMENT. BID BONDS WHICH ARE NOT RECEIVED PRIOR TO TIME OF BID OPENING OR CONTAINED IN AN ENVELOPE POSTMARKED PRIOR TO DATE AND HOUR OF BID OPENING WILL NOT BE ACCEPTED AND THE BID WILL BE REJECTED AS NON-RESPONSIVE.

IN ADDITION, PARAGRAPH 8 OF THE " CAUTION NOTICE TO BIDDER" PROVIDED WITH RESPECT TO THE NECESSITY FOR THE SUBMISSION OF A BID BOND:

BID BONDS WHICH ARE NOT RECEIVED PRIOR TO TIME OF BID OPENING OR CONTAINED IN AN ENVELOPE POSTMARKED PRIOR TO DATE AND HOUR OF BID OPENING WILL NOT BE ACCEPTED AND THE BID WILL BE REJECTED AS NON RESPONSIVE.

BIDS WERE OPENED AS SCHEDULED AT 2:00 P.M., AUGUST 28, 1958. THE BID OF THE RA-1JEF COMPANY WAS RECEIVED ON TIME IN THE USUAL MANNER BUT THE REQUIRED BID BOND WAS NOT SUBMITTED UNTIL APPROXIMATELY 28 MINUTES AFTER THE SCHEDULED TIME FOR BID OPENING. THEREFORE, AND IN VIEW OF THE CLEAR LANGUAGE OF THE INVITATION, THE BID WAS REJECTED AS NONRESPONSIVE. RA- 1JEF, THROUGH ITS ATTORNEY, HAS PROTESTED THE DETERMINATION ON THE GROUNDS THAT THE LATE SUBMISSION OF A BID BOND IS AN INFORMALITY WHICH SHOULD BE WAIVED.

THE PURPOSE OF STATUTES REQUIRING THE AWARD OF CONTRACTS TO THE LOWEST RESPONSIBLE BIDDER AFTER ADVERTISING IS TO GIVE ALL PERSONS EQUAL RIGHT TO COMPETE FOR GOVERNMENT CONTRACTS, TO PREVENT UNJUST FAVORITISM, COLLUSION, OR FRAUD IN AWARDING GOVERNMENT CONTRACTS, AND TO SECURE FOR THE GOVERNMENT THE BENEFITS WHICH FLOW FROM FREE AND UNRESTRICTED COMPETITION. SEE UNITED STATES V. BROOKRIDGE FARM, 111 F.2D 461. IT HAS LONG BEEN REGARDED AS WITHIN THE PROVINCE OF THE ADMINISTRATIVE OFFICERS OF THE GOVERNMENT TO DRAFT SPECIFICATIONS TO REFLECT THE NEEDS OF THE GOVERNMENT AND TO DETERMINE FACTUALLY WHETHER THOSE NEEDS WILL BE MET BY THE ARTICLES OFFERED. 17 COMP. GEN. 554. THE TERM "SPECIFICATIONS" IS HERE USED IN A BROAD SENSE TO EMBRACE NOT ONLY THE END PRODUCT BUT IN ADDITION ANY REQUIREMENT IMPOSED UPON THE BIDDER TO BECOME ELIGIBLE FOR AWARD AND, HAVING RECEIVED THE AWARD, TO OBTAIN AN ACQUITTANCE UNDER THE TERMS OF THE CONTRACT. CONSISTENT WITH THE FOREGOING GENERAL PRINCIPLES, WE HAVE TAKEN THE POSITION THAT THE CONTRACTING OFFICER MAY, BY THE TERMS OF THE INVITATION, IMPOSE ANY REQUIREMENT REASONABLY RELATED TO THE PURPOSES OF THE PROCUREMENT, PROVIDED THE REQUIREMENT AND THE CONSEQUENCES OF THE FAILURE TO CONFORM THERETO ARE CLEARLY SET OUT IN THE INVITATION FOR BIDS. SEE IN THIS CONNECTION 36 COMP. GEN. 376 WITH REGARD TO DESCRIPTIVE LITERATURE AND 37 COMP. GEN. 845 AS APPLIED TO SAMPLES.

PRIOR TO THE DECISIONS CITED ABOVE IT HAD BEEN HELD THAT, IN MOST CASES, FAILURE TO MEET A REQUIREMENT IN AN INVITATION FOR SUBMISSION WITH THE BID OF DESCRIPTIVE LITERATURE OR SAMPLES COULD AND SHOULD BE WAIVED. SEE 17 COMP. GEN. 940; B-125148, NOVEMBER 23, 1955. NORMALLY THE LOW BIDDER WHO HAD FAILED TO MEET THE REQUIREMENT WAS PERMITTED TO REMEDY THE DEFECT AFTER BIDS WERE OPENED. UNDER THIS EARLIER PROCEDURE A BIDDER COULD IGNORE THE REQUIREMENT IN SUBMITTING HIS BID AND LATER, HAVING REVIEWED HIS BID IN THE LIGHT OF PRICES SUBMITTED BY HIS COMPETITORS, COULD (1) IF HE DEEMED IT TO HIS ADVANTAGE TO BECOME ELIGIBLE FOR AWARD, SUBMIT THE REQUIRED LITERATURE OR SAMPLES IN PROPER FROM; OR, (2) IF HE DECIDED THAT THE AWARD WOULD BE UNDESIRABLE, SUBMIT LITERATURE OR SAMPLES DIVERGING SO WIDELY FROM THE SPECIFICATIONS AS TO CAST SUBSTANTIAL DOUBT ON HIS ABILITY TO PERFORM, THUS IN MOST CASES ACCOMPLISHING THE REJECTION OF HIS BID AS A NONRESPONSIBLE BIDDER. WE BELIEVE THAT SUCH PROCEDURE, WHICH PERMITS A BIDDER "TWO BITES AT THE APPLE," TENDS TO SUBVERT THE PURPOSES OF THE STATUTES GOVERNING PROCUREMENT UNDER COMPETITIVE PROCEDURES. SEE 17 COMP. GEN. 554, 558.

WITH RESPECT TO A BID BOND REQUIRED BY THE TERMS OF THE INVITATION TO BE SUBMITTED WITH THE BID, THE RULE PRESENTLY FOLLOWED PROVIDES THAT THE REQUIREMENT MAY AND, NORMALLY, SHOULD BE WAIVED WHERE THE FAILURE TO COMPLY IS DUE TO AN INADVERTENCE OR OTHER EXCUSABLE CAUSE NOT BEARING UPON THE BIDDER'S ABILITY OR INABILITY TO OBTAIN THE BOND BECAUSE OF FINANCIAL OR RELATED REASONS. SEE, FOR EXAMPLE, 37 COMP. GEN. 293 AND 26 COMP. GEN. 49. THE RULE WAS ESTABLISHED ON THE ASSUMPTION THAT THE BID BOND DOES NOT MEASURABLY AFFECT THE COST OF THE SUPPLIES OR SERVICES BEING OBTAINED BY THE GOVERNMENT AND BECAUSE THE LIABILITY OF THE OTHERWISE ACCEPTABLE BIDDER TO THE GOVERNMENT FOR BREACH OF CONTRACT IN THE EVENT HIS BID IS ACCEPTED IS THE SAME WHETHER OR NOT A BID BOND HAS BEEN SUBMITTED. COMP. GEN. 305. EVEN SO, THE FAILURE TO SUBMIT A BID BOND WHEN REQUIRED IS NOT TO BE WAIVED IN EVERY CASE; RATHER, THE CRITERION USED IN DETERMINING THE ACCEPTABILITY OF THE DEFICIENT BID IS HELD TO BE THE BEST INTEREST OF THE GOVERNMENT. 14 COMP. GEN. 559. THUS, WE HAVE HELD THAT REGARDLESS OF THE BIDDER'S ABILITY TO PERFORM, FAILURE TO MEET THE BID BOND REQUIREMENT SHOULD NOT BE WAIVED WHERE THE EVIDENCE SHOWS THAT IT HAS BEEN DELIBERATE AND CONSISTENT. 16 COMP. GEN. 493. BASED ON THE FOREGOING, A BIDDER WHO FAILED TO SUBMIT A BID BOND WITH HIS BID AS REQUIRED BY THE TERMS OF THE INVITATION HAS IN THE GREAT MAJORITY OF CASES BEEN GIVEN AN OPPORTUNITY TO BECOME ELIGIBLE FOR AWARD BY MAKING UP THE DEFICIENCY AFTER OPENING AND BY PRESENTING EVIDENCE THAT THE FAILURE TO COMPLY INITIALLY WAS NOT DUE TO HIS INABILITY TO OBTAIN THE BOND BECAUSE OF FINANCIAL OR RELATED REASONS.

WE HAVE BEEN ADVISED BY REPRESENTATIVES OF THE DEPARTMENT THAT, IN SOME AREAS OF PROCUREMENT, THE NET EFFECT OF THIS RULE HAS BEEN TO MAKE IT POSSIBLE FOR "FRINGE" OPERATORS TO DECIDE AFTER OPENING, WHEN THE BIDS OF MORE RESPONSIBLE COMPETITORS HAVE BEEN MADE KNOWN, WHETHER OR NOT TO ATTEMPT TO BECOME ELIGIBLE FOR AWARD. IT IS STATED THAT RESPONSIBLE BIDDERS OF EXPERIENCE HAVE NO FEAR IN SUBMITTING THEIR ESTIMATES AS BIDS, AND THAT SURETY COMPANIES HAVE NO RELUCTANCE IN GUARANTEEING SUCH BIDS. THE "FRINGE" BIDDER, ON THE OTHER HAND, MAY HAVE DIFFICULTY IN OBTAINING A BID BOND UNLESS THE SURETY HAS SOME ASSURANCE THAT THE AMOUNT BID IS SUFFICIENT TO PERMIT THE SUCCESSFUL EXECUTION OF THE CONTRACT. THIS ASSURANCE MAY COME FROM THE KNOWLEDGE MADE PUBLIC AT THE TIME OF BID OPENING. THUS, IF A "FRINGE" BIDDER SUBMITS A LOW BID WHICH IS OUT OF LINE WITH THOSE SUBMITTED BY MORE EXPERIENCED AND RESPONSIBLE BIDDERS, HE MAY BE UNABLE TO QUALIFY FOR A BID BOND. EVEN IF HE NEVERTHELESS IS AWARDED THE CONTRACT AND FAILS TO PERFORM, IT IS LIKELY THAT HE MAY LACK THE ASSETS TO SATISFY A RESULTING JUDGMENT FOR BREACH OF CONTRACT. IF, ON THE OTHER HAND, HIS BID, WHILE LOW, IS IN LINE WITH THE OTHER BIDS, HE WILL, VERY PROBABLY, BE ABLE TO OBTAIN A BID BOND TOGETHER WITH SOME EVIDENCE THAT HE COULD HAVE OBTAINED THE BOND PRIOR TO BID OPENING.

IT IS BELIEVED THAT THE EFFECT OF THE PRESENT PROCEDURE IS TO MAKE IT POSSIBLE FOR SOME BIDDERS TO OBTAIN "TWO BITES AT THE APPLE.' THIS IS NOT ONLY UNFAIR TO OTHER BIDDERS, BUT, AS STATED PREVIOUSLY, IS CONTRARY TO THE PURPOSES OF THE STATUTES GOVERNING PUBLIC PROCUREMENT. EVEN WHERE, AFTER CONSIDERATION OF THE EVIDENCE, IT IS DETERMINED THAT THE CIRCUMSTANCES SURROUNDING THE FAILURE TO SUBMIT THE BID BOND ARE NOT SUCH AS TO PERMIT WAIVER OF THE BID BOND REQUIREMENT, THE TIME LAPSE INCIDENT TO THE GATHERING AND EXAMINATION OF THE EVIDENCE IS SUCH AS TO DELAY AWARD AND CONSEQUENTLY THE ENTIRE PRODUCTION SCHEDULE, THEREBY WORKING AN UNDUE HARDSHIP ON THE SUCCESSFUL BIDDER.

FINALLY, THE WEIGHING OF EVIDENCE TO DETERMINE WHETHER THE REQUIREMENT THAT THE BID BOND BE FURNISHED WITH THE BID SHOULD BE WAIVED IS LARGELY A SUBJECTIVE MATTER. IT SEEMS QUITE LIKELY THAT DIFFERENT CONTRACTING OFFICERS MAY ARRIVE AT OPPOSITE CONCLUSIONS FROM SETS OF FACTS WHICH ARE SUBSTANTIALLY SIMILAR. THIS INCONSISTENCY ITSELF IS UNDESIRABLE. EVEN MORE IMPORTANT, THE VERY SUBJECTIVITY OF THE DETERMINATION MUST INVARIABLY GIVE RISE TO THE EXERTION OF PRESSURES ON THE CONTRACTING OFFICER IN FAVOR OF ONE CONCLUSION OR ANOTHER WHICH CANNOT BUT HAVE AN ADVERSE EFFECT ON THE INTEGRITY OF THE COMPETITIVE BID SYSTEM. AS HAS OFTEN BEEN STATED, THE MAINTENANCE OF THE INTEGRITY OF THE SYSTEM IS INFINITELY MORE IN THE PUBLIC INTEREST THAN A FINANCIAL SAVING IN AN INDIVIDUAL CASE. 17 COMP. GEN. 554.

IN SUMMARY, WE NOW FEEL THAT ADHERENCE TO THE RULE PERMITTING WAIVER OF A BID BOND REQUIREMENT STATED IN AN INVITATION FOR BIDS WOULD HAVE A TENDENCY TO COMPROMISE THE INTEGRITY OF THE COMPETITIVE BID SYSTEM BY (1) MAKING IT POSSIBLE FOR A BIDDER TO DECIDE AFTER OPENING WHETHER OR NOT TO TRY TO HAVE HIS BID REJECTED, (2) CAUSING UNDUE DELAY IN EFFECTING PROCUREMENTS, AND (3) CREATING, BY THE NECESSARY SUBJECTIVE DETERMINATIONS BY DIFFERENT CONTRACTING OFFICERS, INCONSISTENCIES IN THE TREATMENT OF BIDDERS. THE NET EFFECT OF THE FOREGOING WOULD BE DETRIMENTAL TO FULLY RESPONSIVE AND RESPONSIBLE BIDDERS, AND COULD TEND TO DRIVE THEM OUT OF COMPETITION IN THOSE AREAS WHERE THE PRACTICES DESCRIBED OCCUR. THIS RESULT COULD HARDLY BE SAID TO SERVE THE BEST INTERESTS OF THE UNITED STATE. CF. 14 COMP. GEN. 559.

DESCRIPTIVE LITERATURE AND SAMPLES MAY OR MAY NOT CONSTITUTE A MATERIAL PART OF A BID, DEPENDING ON THE PURPOSE FOR WHICH THEY ARE DESIRED. THE PURPOSE OF A BID BOND, ON THE OTHER HAND, IS ALWAYS THE SAME, AND A REQUIREMENT THAT IT BE FURNISHED WOULD APPEAR TO BE OF EQUAL MATERIALITY IN ALL CASES. IT CANNOT BE QUESTIONED THAT THE FURNISHING OF A BID BOND IS REASONABLY RELATED TO THE PURPOSES OF A PROCUREMENT, AND IT IS A PROPER EXERCISE OF ADMINISTRATIVE JUDGMENT TO DETERMINE WHETHER OR NOT BID BONDS ARE NEEDED IN A PARTICULAR CASE. FOR THE REASONS STATED ABOVE, WE BELIEVE THAT WHERE SUCH A DETERMINATION HAS BEEN MADE AND THE INVITATION REQUIRES A BID BOND, THAT REQUIREMENT BECOMES A MATERIAL PART OF THE INVITATION, NONCOMPLIANCE WITH WHICH RENDERS A BID NONRESPONSIVE.

CONSEQUENTLY, IN THE CASE OF THE USUAL BID BOND REQUIREMENT, WAIVERS SHOULD NOT BE PERMITTED AND WHERE BONDS ARE REQUIRED LATE BONDS SHOULD BE TREATED LIKE LATE BIDS. PRIOR DECISIONS, TO THE EXTENT THEY ARE INCONSISTENT WITH THIS VIEW, WILL NO LONGER BE FOLLOWED. HOWEVER, SINCE THE NEW RULE REPRESENTS A DISTINCT DEPARTURE FROM THE OLD, IT WILL APPLY ONLY TO BIDS SUBMITTED UNDER INVITATIONS ISSUED MORE THAN 60 DAYS AFTER THE DATE OF THIS DECISION.

WITH REFERENCE TO THE PRESENT CASE, THE OLD RULE WILL BE FOLLOWED. THEREFORE, AND IN THE LIGHT OF ASPR 2-404.1, THE MERE SUBMISSION OF THE BID BOND 28 MINUTES LATE WOULD NOT JUSTIFY REJECTION OF THE BID.

IN THE CASE AT ISSUE IT IS FURTHER REPORTED THAT UPON EXAMINATION THE BID BOND WAS FOUND TO BE DEFICIENT IN CERTAIN RESPECTS, INCLUDING THE FOLLOWING: (1) THE BOND WAS EXECUTED IN THE NAME OF CO PRINCIPALS, RAVAL, INC., AND RA-1JEF, ALTHOUGH THE BID WAS SUBMITTED BY RA-1JEF ONLY; AND (2) THE PENAL SUM OF THE BOND WAS LESS THAN THE AMOUNT REQUIRED. ON THE MATTER OF THE CO-PRINCIPALS, THE GENERAL RULE IS THAT A SURETY UNDER A BOND IN THE NAME OF TWO PRINCIPALS IS NOT LIABLE FOR THE DEFAULT OF ONLY ONE OF THEM. OKLAHOMA PORTLAND CEMENT COMPANY V. CHANEY, 150 P. 884 AND DOLESE BROTHERS COMPANY V. CHANEY AND RICKARD, 145 P. 1119. HOWEVER, IN THE ABSENCE OF ANY INFORMATION AS TO THE RELATIONSHIP BETWEEN THE TWO NAMED PRINCIPALS, OR AS TO WHETHER RAVAL, INC., WOULD HAVE BEEN BOUND BY A CONTRACT AWARDED IN THE NAME OF RA-1JEF MANUFACTURING COMPANY, WE ARE NOT IN A POSITION TO DETERMINE THE EFFECT OF THIS APPARENT IRREGULARITY. MEMORANDUM FOR RECORD DATED SEPTEMBER 9, 1958, SUBMITTED WITH THE ADMINISTRATIVE REPORT, INDICATES THAT THE ONLY DEFECT IN THE BOND POINTED OUT TO THE REPRESENTATIVE OF THE BIDDER WAS THE TIME OF SUBMISSION. THINK THAT THE RA-1JEF COMPANY SHOULD BE NOTIFIED OF THE OTHER DEFICIENCIES IN THE BID BOND FURNISHED AND BE GIVEN AN OPPORTUNITY TO CORRECT THE DEFICIENCIES AND TO SHOW THAT THEY WERE DUE TO AN OVERSIGHT OR SIMILAR CAUSE. IN OTHER WORDS, IF THE RA-1JEF COMPANY CAN ESTABLISH THAT AT THE TIME OF BID OPENING IT WAS IN A POSITION, AND INTENDED, TO FURNISH A BOND IN THE PROPER FORM AND AMOUNT SOLELY ON THE STRENGTH OF ITS OWN FINANCIAL STANDING, THE BID MAY NOT BE REJECTED FOR ANY DEFICIENCY IN THE BID BOND FIRST SUBMITTED. IF, HOWEVER, THE COMPANY IS UNABLE SO TO DO, ITS BID MAY BE REJECTED. SEE IN THIS CONNECTION 31 COMP. GEN. 20.

IT IS INDICATED IN THE ADMINISTRATIVE REPORT THAT OTHER BASES MAY EXIST FOR REJECTION OF THE RA-1JEF BID. THE FOREGOING IS STATED WITHOUT CONSIDERATION OF SUCH OTHER CAUSES AND IS NOT INTENDED TO AFFECT ANY DISPOSITION OF THE BID WHICH MAY BE WARRANTED BY ANY OTHER FACTORS.