B-140154, JULY 29, 1959, 39 COMP. GEN. 60

B-140154: Jul 29, 1959

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CONTRACTS - SPECIFICATIONS - FAILURE TO FURNISH SOMETHING REQUIRED - BID BOND PREDATING BID A BID BOND WHICH CONTAINS THE WRONG DATE OF THE BID AND SHOWS THE DATE THE BOND WAS EXECUTED AS PRIOR IN TIME TO THE DATE OF THE BID. WHICH IS IDENTIFIABLE WITH THE ONLY INVITATION OUTSTANDING FOR THE PARTICULAR PROCUREMENT IS ENFORCEABLE BY THE GOVERNMENT AGAINST THE SURETY AND. WILL RESULT IN REJECTION OF THE BID. PARAGRAPH VIII OF THE INVITATION PROVIDES: BIDDERS WILL BE REQUIRED TO FURNISH WITH THEIR BID. THE SPECIFICATIONS WERE MODIFIED TO REQUIRE THAT THE REELS HAVE FLANGES WITH EDGES FLARED OUTWARD. BIDS WERE OPENED ON JULY 6. THE SECOND LOW BID WAS SUBMITTED BY THE MINNESOTA MINING AND MANUFACTURING COMPANY.

B-140154, JULY 29, 1959, 39 COMP. GEN. 60

CONTRACTS - SPECIFICATIONS - FAILURE TO FURNISH SOMETHING REQUIRED - BID BOND PREDATING BID A BID BOND WHICH CONTAINS THE WRONG DATE OF THE BID AND SHOWS THE DATE THE BOND WAS EXECUTED AS PRIOR IN TIME TO THE DATE OF THE BID, CONTRARY TO THE INSTRUCTIONS ON THE BID BOND FORM, BUT WHICH IS IDENTIFIABLE WITH THE ONLY INVITATION OUTSTANDING FOR THE PARTICULAR PROCUREMENT IS ENFORCEABLE BY THE GOVERNMENT AGAINST THE SURETY AND, THEREFORE, SUCH A TECHNICALLY DEFECTIVE BOND DOES NOT MAKE THE BID NONRESPONSIVE TO THE INVITATION.

TO POWELL, DORSEY, BLUM AND WHITE, JULY 29, 1959:

WE REFER AGAIN TO YOUR LETTER OF JULY 8, 1959, PROTESTING ON BEHALF OF AMPEX CORPORATION THE POSSIBLE AWARD TO ANY OTHER BIDDER OF A CONTRACT UNDER BUREAU OF THE CENSUS INVITATION FOR BIDS NO. 5921, ISSUED JUNE 15, 1959.

THE INVITATION SOLICITED BIDS ON A QUANTITY OF 5,000 REELS OF MAGNETIC INSTRUMENTATION TAPE. PARAGRAPH V OF THE INVITATION REQUIRES THE SUBMISSION OF SAMPLES WITH EACH BID AND PROVIDES THAT FAILURE TO FURNISH A SAMPLE WITHIN THE TIME STATED, OR FAILURE OF THE SAMPLE TO CONFORM TO THE SPECIFICATIONS OR OTHER REQUIREMENTS, WILL RESULT IN REJECTION OF THE BID. PARAGRAPH VIII OF THE INVITATION PROVIDES:

BIDDERS WILL BE REQUIRED TO FURNISH WITH THEIR BID, A BID BOND ON THE ENCLOSED STANDARD FORM NO. 24 IN THE AMOUNT OF 10 PERCENT OF THEIR BID.

BY TELEGRAM OF JULY 2, 1959, THE SPECIFICATIONS WERE MODIFIED TO REQUIRE THAT THE REELS HAVE FLANGES WITH EDGES FLARED OUTWARD.

BIDS WERE OPENED ON JULY 6, AS SCHEDULED IN THE INVITATION. THE CONTRACTING OFFICER HAS DETERMINED THAT THE LOW BID SHOULD BE REJECTED IN ACCORDANCE WITH THE PROVISIONS OF PARAGRAPH V BECAUSE THE SAMPLES SUBMITTED THEREWITH DID NOT CONFORM TO THE SPECIFICATIONS. THE SECOND LOW BID WAS SUBMITTED BY THE MINNESOTA MINING AND MANUFACTURING COMPANY. THE THIRD LOW BID WAS SUBMITTED BY AMPEX.

IN THE LETTER OF JULY 8 THE FOLLOWING IS SET OUT AS THE BASIS FOR YOUR CONTENTION THAT THE SECOND LOW BID SHOULD BE REJECTED:

CAREFUL EXAMINATION BY OUR MR. BUCHANAN OF THE BID OF MINNESOTA MINING, THE NEXT LOW BIDDER, DISCLOSES THAT THEIR CERTIFICATE OF BID BOND AT THE UPPER RIGHT HAND CORNER OF THE COMPARABLE PAGE TO THAT CLIPPED IN AMPEX'S ATTACHED BID BOND, CARRIED THE DATE JUNE 22, 1959. THREE LINES BELOW, WHERE IT IS ENTITLED " DATE OF BID.' THE DATE IS CARRIED AS JUNE 26TH. ON THE FACE OF THEIR BID, AT ABOUT THE MIDDLE OF THE PAGE, WHERE IT STATED " DATE OF BID," IT CARRIED THE DATE JULY 2D. YOUR ATTENTION IS RESPECTFULLY CALLED TO THE LAST LINE OF THE BACK PAGE OF THE BID BOND, WHICH STATES: "7. THE DATE OF THIS BOND MUST NOT BE PRIOR TO THE DATE OF THE INSTRUMENT IN CONNECTION WITH WHICH IT IS GIVEN.'

THE WEIGHT OF AUTHORITY HAS BUILT UP COMPELLINGLY THAT SUCH A VARIANCE IS MATERIAL AND NECESSITATES INVALIDATION OF THE BID BOND, AND HENCE WE WOULD RESPECTFULLY REQUEST THAT THIS BID BE REJECTED.

IN OUR DECISION OF 38 COMP. GEN. 532, WE HELD THAT NONCOMPLIANCE WITH A REQUIREMENT IN AN INVITATION THAT A BID BOND OR OTHER BID SECURITY BE SUBMITTED WITH THE BID WILL BE HELD TO REQUIRE REJECTION OF THE BID AS NONRESPONSIVE. IN VIEW OF THE LANGUAGE OF PARAGRAPH VIII OF THE INVITATION QUOTED ABOVE, IT WOULD APPEAR THAT THE STATED PRINCIPLE IS PROPERLY FOR APPLICATION IN THIS CASE.

AS INDICATED IN YOUR LETTER, THE BOND SUBMITTED WITH THE BID OF MINNESOTA MINING CONTAINS THE WRONG DATE OF BID ( JUNE 25 INSTEAD OF JULY 2) AND SHOWS THE DATE THE BOND WAS EXECUTED AS PRIOR IN TIME TO THE DATE OF THE BID, CONTRARY TO PARAGRAPH 7 OF THE INSTRUCTIONS ON THE RESERVE SIDE OF THE BID BOND FORM. THE BID TO WHICH IT PERTAINS IS DESCRIBED ON THE BID BOND AS ONE TO "FURNISH MAGNETIC RECORDING TAPE TO THE BUREAU OF CENSUS.'

THE PURPOSE OF OUR DECISION AT 38 COMP. GEN. 532, WHICH WE BELIEVE TO BE CLEAR FROM THE LANGUAGE CONTAINED THEREIN, IS TO PRECLUDE THE CONSIDERATION FOR AWARD OF A BID WHICH IS NOT ACCOMPANIED BY A VALID BID BOND IN THE AMOUNT REQUIRED, UPON WHICH THE GOVERNMENT WOULD HAVE RECOURSE AGAINST THE SURETY IN THE EVENT THE BIDDER FAILS TO GO FORWARD WITH FAITHFUL PERFORMANCE OF THE CONTRACT. THE QUESTION HERE PRESENTED, THEREFORE, IS WHETHER THE BID BOND SUBMITTED BY MINNESOTA MINING COULD BE ENFORCED AGAINST THE SURETY IN THE EVENT AWARD WAS MADE TO MINNESOTA MINING AND THAT FIRM REFUSED TO PROCEED FURTHER WITH PERFORMANCE.

THE SURETY ON THE MINNESOTA MINING BOND IS A PAID OR COMMERCIAL SURETY. WITH RESPECT TO THE OBLIGATIONS OF SUCH A SURETY THE FOLLOWING IS QUOTED FROM 50 AM. JUR. SURETYSHIP, SECTION 155 (PAGE 1004).

IF THE CHARACTER AND EXTENT OF THE SURETY'S LIABILITY ARE ASCERTAINABLE FROM AN INSPECTION OF THE WHOLE INSTRUMENT, NO MERELY TECHNICAL DEFECTS WILL BE ALLOWED TO STAND IN THE WAY OF ITS ENFORCEMENT.

* EVEN THOUGH THE FORM OF A SURETY'S BOND IS EXPRESSLY PRESCRIBED BY STATUTE, THE SURETY MAY NOT DEFEND ON THE GROUND THAT THERE WAS A FAILURE TO CONFORM WITH THE STATUTORY REQUIREMENTS, IF THERE WAS A SUBSTANTIAL COMPLIANCE THEREWITH AND IF THERE IS NO PREJUDICIAL VARIATION.

MORE SPECIFICALLY TO THE POINT IT HAS BE N HELD THAT A BOND WHICH IS ERRONEOUSLY DATED OR BEARS NO DATE AT ALL IS NOT THEREBY RENDERED INVALID IF IT COMPLIES WITH THE OTHER ESSENTIALS NECESSARY TO GIVE IT A LEGAL AND BINDING EFFECT. IN RE MOFFITT'S ESTATE, 75 A.2D. 698.

IT IS OUR UNDERSTANDING THAT AT THE TIME OF BID SUBMISSION THERE WAS ONLY ONE INVITATION OUTSTANDING FOR THE PROCUREMENT OF MAGNETIC RECORDING TAPE BY THE BUREAU OF THE CENSUS. THEREFORE, IT DOES NOT APPEAR THAT THERE COULD ARISE ANY CONFUSION AS TO THE BID COVERED BY THE BID BOND. IN VIEW OF THE AUTHORITY CITED ABOVE, AND NOTWITHSTANDING THE PROVISIONS OF PARAGRAPH 7 ON THE REVERSE SIDE OF THE BID BOND FORM, IT APPEARS THAT THE BOND SUBMITTED WITH THE MINNESOTA MINING BID IS ENFORCEABLE BY THE GOVERNMENT AGAINST THE SURETY. ACCORDINGLY, IT DOES NOT APPEAR THAT THERE HAS BEEN PRESENTED A SUFFICIENT BASIS UPON WHICH TO CONCLUDE THAT THE MINNESOTA MINING BID SHOULD NOT BE CONSIDERED FOR AWARD.