B-140081, SEP. 9, 1959

B-140081: Sep 9, 1959

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WAS ISSUED MAY 18. AFTER BIDS ON THE EARLIER INVITATION HAD BEEN OPENED IT WAS CONCLUDED THAT THE SPECIFICATIONS DID NOT CLEARLY SHOW THAT CERTAIN SCHEDULES OF THE INVITATION WERE TO BE BID ON THE MAN-HOUR RATHER THAN A SQUARE FOOT BASIS. THAT THE INVITATION WAS NOT CLEAR WITH RESPECT TO THE NECESSITY FOR A BIDDER TO SUBMIT WITH HIS BID A STATEMENT DISCLOSING HIS "METHOD OF ERATION.'. BECAUSE OF THESE DEFICIENCIES THE ORIGINAL INVITATION WAS WITHDRAWN AND REPLACED BY INVITATION NO. WHEN BIDS ON THE SECOND INVITATION WERE OPENED. IT WAS FOUND THAT ALLIED WAS THE LOW BIDDER. THAT BID WAS REJECTED. BECAUSE IT WAS NOT ACCOMPANIED BY A BID BOND AS REQUIRED BY THE PROVISION OF THE SPECIFICATION.

B-140081, SEP. 9, 1959

TO MILLER, BROWN, AND GILDERHORN:

WE REFER AGAIN TO YOUR LETTER OF JUNE 30, 1959, PROTESTING ON BEHALF OF ALLIED MAINTENANCE CO. INC., THE REJECTION OF THAT FIRM'S LOW BID SUBMITTED PURSUANT TO INVITATION NO. ENG-44-008-59-133 ISSUED JUNE 15, 1959, BY THE PURCHASING AND CONTRACTING OFFICE, FORT BELVOIR, VIRGINIA, FOR THE PERFORMANCE OF CERTAIN CUSTODIAL WORK.

AN EARLIER INVITATION FOR THE SAME WORK NO. ENG-44-008-59-72, WAS ISSUED MAY 18, 1959. THE SPECIFICATION FOR THAT INVITATION PROVIDED AT PARAGRAPH SP-15:

"BID BOND: EACH BIDDER SHALL FURNISH BID BONDS ON U.S. STANDARD FORM 24 IN THE PENAL SUM OF NOT LESS THAN 20 PERCENT OF TWELVE (12) TIMES THE BID PRICE OF SCHEDULES A THROUGH O MULTIPLIED, WHERE APPROPRIATE, BY THE RESPECTIVE SQUARE FOOTAGE PERTAINING TO EACH SCHEDULE.'

AFTER BIDS ON THE EARLIER INVITATION HAD BEEN OPENED IT WAS CONCLUDED THAT THE SPECIFICATIONS DID NOT CLEARLY SHOW THAT CERTAIN SCHEDULES OF THE INVITATION WERE TO BE BID ON THE MAN-HOUR RATHER THAN A SQUARE FOOT BASIS, AND, FURTHER, THAT THE INVITATION WAS NOT CLEAR WITH RESPECT TO THE NECESSITY FOR A BIDDER TO SUBMIT WITH HIS BID A STATEMENT DISCLOSING HIS "METHOD OF ERATION.' BECAUSE OF THESE DEFICIENCIES THE ORIGINAL INVITATION WAS WITHDRAWN AND REPLACED BY INVITATION NO. ENG-44-008-59-133 WHICH INCORPORATED REVISED SPECIFICATIONS CLARIFYING THE AMBIGUITIES. THE LATER SPECIFICATION INCLUDED A PARAGRAPH WITH RESPECT TO THE NECESSITY FOR BID BONDS IDENTICAL WITH THAT QUOTED ABOVE.

WHEN BIDS ON THE SECOND INVITATION WERE OPENED, IT WAS FOUND THAT ALLIED WAS THE LOW BIDDER; THAT BID WAS REJECTED, HOWEVER, BECAUSE IT WAS NOT ACCOMPANIED BY A BID BOND AS REQUIRED BY THE PROVISION OF THE SPECIFICATION. A CONTRACT PURSUANT TO THE INVITATION WAS AWARDED TO THE NEXT LOW BIDDER ON JULY 1, 1959.

IN YOUR LETTER OF JUNE 30, 1959, YOU POINT OUT THAT ALLIED HAD SUBMITTED WITH ITS BID UNDER THE FIRST INVITATION A BID BOND WHICH WAS NOT RETURNED, THAT ALLIED OFFICIALS WERE OF THE OPINION THAT THE BID BOND REMAINED IN FULL FORCE AND EFFECT AND WAS APPLICABLE TO THE SECOND INVITATION AND THAT THIS BELIEF WAS STRENGTHENED BY THE FAILURE OF THE CONTRACTING OFFICER TO RETURN THE BID BOND. YOU NOTE FURTHER THAT THERE IS NO QUESTION CONCERNING THE ABILITY OF ALLIED EITHER TO OBTAIN THE REQUISITE BOND OR TO PERFORM THE WORK SATISFACTORILY. YOU ALSO OBSERVE THAT IN OUR DECISION AT 38 COMP. GEN. 532 (WHICH, IN EFFECT, ESTABLISHED THE FAILURE TO CONFORM TO A BID BOND REQUIREMENT AS A MATERIAL VARIATION NECESSITATING REJECTION OF THE BID) WE NOTED THAT UNDER THE RULE EXISTING PRIOR TO THE DECISION "FRINGE OPERATORS" COULD ELECT AFTER BID OPENING TO ACCEPT OR AVOID AWARD OF THE CONTRACT. YOU NOTE THAT ALLIED CANNOT BE SAID TO BELONG TO SUCH CATEGORY, NOR COULD ITS FAILURE TO SUBMIT A BID BOND WITH THE SECOND BID BE USED BY THE FIRM TO AVOID THE CONTRACT. FOR THESE REASONS, AND BECAUSE ACCEPTANCE OF THE ALLIED BID WOULD RESULT IN A SAVING TO THE GOVERNMENT OF SEVERAL THOUSAND DOLLARS, IT IS YOUR POSITION THAT THE ALLIED BID ON THE SECOND INVITATION SHOULD BE ACCEPTED.

WE THINK IT CLEAR FROM THE QUOTED LANGUAGE WITH RESPECT TO BID BONDS CONTAINED IN THE SECOND SPECIFICATION THAT SUCH BID BOND WAS REQUIRED TO ACCOMPANY EACH BID; IT APPEARS ALSO THAT THIS INTENT WAS CLEAR TO THE RESPONSIBLE ALLIED OFFICIALS. THE QUESTION IS WHETHER, SINCE THE FIRST INVITATION WAS WITHDRAWN IN FAVOR OF THE SECOND WHICH LATTER WAS, EXCEPT FOR THE CLARIFICATIONS PREVIOUSLY NOTED, SUBSTANTIALLY SIMILAR TO THE FORMER, COMPLIANCE WITH THE BID BOND REQUIREMENT UNDER THE EARLIER INVITATION MAY BE CONSIDERED AS COMPLIANCE WITH THE LATER.

OUR DECISION AT 38 COMP. GEN. 532 WAS INTENDED, AS WE BELIEVE TO BE CLEAR FROM ITS LANGUAGE, TO PRECLUDE CONSIDERATION FOR AWARD OF A BID UNACCOMPANIED BY A VALID BID BOND, UPON WHICH THE GOVERNMENT WOULD HAVE RECOURSE AGAINST THE SURETY IF THE BIDDER FAILED TO GO FORWARD WITH FAITHFUL PERFORMANCE OF THE CONTRACT. B-140154, JULY 29, 1959. THE BOND FURNISHED BY ALLIED WITH THE FIRST BID IS STATED ON ITS FACE TO BE APPLICABLE TO AN ACCOMPANYING BID DATED JUNE 11, 59,"FOR JANITORIAL SERVICES AT FT. BELVOIR, VIRGINIA INVITATION NO. ENG-44-008 59-72.' THE OBLIGATION OF A SURETY UNDER A BOND IS NORMALLY TO BE ASCERTAINED FROM THE LANGUAGE OF THE SURETYSHIP AGREEMENT. SEE 50 AM.JUR. SURETYSHIP SECTION 31. IN THE CIRCUMSTANCES DESCRIBED, IT DOES NOT APPEAR THAT THE SURETY ON THE BOND SUBMITTED WITH THE FIRST BID COULD BE REGARDED AS LIABLE FOR THE FAILURE OF ALLIED TO PERFORM IN ACCORDANCE WITH THE BID SUBMITTED UNDER THE SECOND INVITATION. ACCORDINGLY, WE CANNOT REGARD THE ACTION OF THE CONTRACTING OFFICER IN REJECTING THE LOW BID SUBMITTED BY ALLIED PURSUANT TO SECOND INVITATION AS LEGALLY OBJECTIONABLE; NOR CAN WE CONCLUDE EITHER THAT THE CONTRACTING OFFICER WAS REQUIRED TO RETURN THE BID BOND AFTER WITHDRAWAL OF THE FIRST INVITATION OR THAT ANY BIDDER REASONABLY SHOULD HAVE INFERRED FROM THE CONTRACTING OFFICER'S RETENTION OF THE BOND THAT IT WOULD SATISFY THE BID BOND REQUIREMENT UNDER THE SECOND INVITATION.