B-140304, SEPTEMBER 21, 1959, 39 COMP. GEN. 209

B-140304: Sep 21, 1959

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CONTRACTS - SPECIFICATIONS - FAILURE TO FURNISH SOMETHING REQUIRED - BID SECURITY - ADMINISTRATIVE REJECTION - BID SECURITY CORRECTION A BID ACCOMPANIED BY BID SECURITY WHICH IS NOT THE TYPE OR IN THE AMOUNT REQUIRED BY THE INVITATION. ADJUSTMENT OF A BID SECURITY TO CONFORM TO A BID WHICH IS CORRECTED AFTER BID OPENING. ON THE BASIS THAT THE ERROR WAS OBVIOUS ON THE FACE OF THE BID OR THAT CLEAR AND CONVINCING EVIDENCE WAS PRESENTED TO SHOW THE NATURE OF THE ERROR AND THE INTENDED BID PRICE. PROVIDED THAT THERE WAS NO QUESTION AT THE TIME OF BID OPENING AS TO THE BIDDER'S ABILITY TO FURNISH THE BID SECURITY IN THE REQUIRED AMOUNT. 1959: REFERENCE IS MADE TO A LETTER OF JULY 24. THE QUESTION IS RAISED AS TO WHETHER IN FUTURE INSTANCES OF THIS TYPE THE CONTRACTING OFFICER MAY REJECT THE BID AS NONRESPONSIVE WITHOUT SUBMITTING THE MATTER TO OUR OFFICE FOR DECISION.

B-140304, SEPTEMBER 21, 1959, 39 COMP. GEN. 209

CONTRACTS - SPECIFICATIONS - FAILURE TO FURNISH SOMETHING REQUIRED - BID SECURITY - ADMINISTRATIVE REJECTION - BID SECURITY CORRECTION A BID ACCOMPANIED BY BID SECURITY WHICH IS NOT THE TYPE OR IN THE AMOUNT REQUIRED BY THE INVITATION, AND THE RECORD INDICATES THAT THE SURETY HAS SET A MAXIMUM BOND LIABILITY LESS THAN THE MINIMUM REQUIRED, THE CONTRACTING AGENCY AT THE CONTRACTING OFFICER LEVEL OR AT A HIGHER ECHELON MAY REJECT THE BID AS NONRESPONSIVE WITHOUT REFERRING THE MATTER TO THE COMPTROLLER GENERAL; HOWEVER, IF DOUBT EXISTS AS TO THE PROPER ACTION, THE MATTER SHOULD BE SUBMITTED FOR DECISION. ADJUSTMENT OF A BID SECURITY TO CONFORM TO A BID WHICH IS CORRECTED AFTER BID OPENING, ON THE BASIS THAT THE ERROR WAS OBVIOUS ON THE FACE OF THE BID OR THAT CLEAR AND CONVINCING EVIDENCE WAS PRESENTED TO SHOW THE NATURE OF THE ERROR AND THE INTENDED BID PRICE, MAY BE PERMITTED, PROVIDED THAT THERE WAS NO QUESTION AT THE TIME OF BID OPENING AS TO THE BIDDER'S ABILITY TO FURNISH THE BID SECURITY IN THE REQUIRED AMOUNT.

TO THE ADMINISTRATOR, VETERANS ADMINISTRATION, SEPTEMBER 21, 1959:

REFERENCE IS MADE TO A LETTER OF JULY 24, 1959, SIGNED BY THE DEPUTY ADMINISTRATOR, REQUESTING OUR VIEWS WITH RESPECT TO THE PROPER DISPOSITION OF BIDS NOT ACCOMPANIED BY BID SECURITY IN THE FORM OR AMOUNT REQUIRED BY THE TERMS OF THE INVITATION.

IN B-139753, JUNE 19, 1959, 38 COMP. GEN. 851, WE HELD THAT A BID NOT ACCOMPANIED BY BID SECURITY OF THE TYPE OR IN THE AMOUNT REQUIRED TO BE SUBMITTED WITH THE BID BY THE TERMS OF THE INVITATION COULD NOT BE CONSIDERED FOR AWARD BY THE CONTRACTING OFFICER. THE QUESTION IS RAISED AS TO WHETHER IN FUTURE INSTANCES OF THIS TYPE THE CONTRACTING OFFICER MAY REJECT THE BID AS NONRESPONSIVE WITHOUT SUBMITTING THE MATTER TO OUR OFFICE FOR DECISION. IT IS IMPORTANT TO NOTE THAT THE BID BOND FURNISHED IN THAT CASE WAS SPECIFICALLY RESTRICTED TO A MAXIMUM OF $1,500, WHICH WAS MORE THAN 20 PERCENT BUT LESS THAN 25 PERCENT OF THE AMOUNT ACTUALLY BID. IN OTHER WORDS, IT WAS INDICATED THAT THE SURETY WOULD NOT HAVE BEEN WILLING TO FURNISH A BID BOND EQUAL TO 25 PERCENT OF THE BID. WHERE THE CONTRACTING AGENCY AT THE CONTRACTING OFFICER LEVEL OR AT A HIGHER ECHELON IS SATISFIED THAT A SITUATION COMES WITHIN THE RULE STATED IN 38 COMP. GEN. 851, AND THAT THE SURETY HAS SET A MAXIMUM BOND LIABILITY LESS THAN THE MINIMUM REQUIRED, ACTION MAY BE TAKEN IN COMPLIANCE THEREWITH WITHOUT REFERRING THE MATTER HERE. IF DOUBT EXISTS AS TO WHETHER THE SITUATION COMES WITHIN THE RULE, OR IF ADDITIONAL FACTS PRESENT CREATE A SUBSTANTIAL DOUBT AS TO WHETHER THE PRINCIPLE IS PROPERLY FOR APPLICATION, THE MATTER MAY BE SUBMITTED FOR RESOLUTION.

THE NEXT QUESTION PRESENTED CONCERNS THOSE INSTANCES WHERE A BID PRICE MAY BE INCREASED AFTER OPENING BECAUSE THE INTENTION TO HAVE SUBMITTED A HIGHER BID IS OBVIOUS ON THE FACE OF A BID--- AS IN THE CASE OF INCORRECT EXTENSION OF A UNIT PRICE OR A MISPLACED DECIMAL--- OR WHERE THE INTENTION TO HAVE SUBMITTED A HIGHER PRICE IS ESTABLISHED BY CLEAR AND CONVINCING EVIDENCE, AS PROVIDED IN OUR DECISIONS WITH RESPECT TO BID CORRECTIONS. SPECIFICALLY, OUR ADVICE IS REQUESTED AS TO BID SECURITY REQUIRED TO BE SUBMITTED WITH THE BID MAY ALSO BE INCREASED AFTER OPENING TO CONFORM TO THE PERMITTED INCREASE IN PRICE. ONE OF THE CHIEF PURPOSES OF THE RULE STATED AT 38 COMP. GEN. 532, REQUIRING THE REJECTION OF BIDS NOT COMPLYING WITH THE BID SECURITY OBTAINING AN OPTION TO DECIDE AFTER BID OPENING WHETHER TO MAKE HIS BID RESPONSIVE BY COMPLYING WITH THE BID SECURITY REQUIREMENT OR OF MAKING HIS BID NONRESPONSIVE BY FAILING TO COMPLY. CORRECTION OF AN ERROR IN A BID AFTER OPENING AND PRIOR TO AWARD IS AUTHORIZED ONLY WHERE THE ERROR IS OBVIOUS ON THE FACE OF THE BID OR WHERE CLEAR AND CONVINCING EVIDENCE IS PRESENTED AS TO THE NATURE OF THE ERROR AND THE INTENDED BID. IN VIEW OF THE STRONG SHOWING REQUIRED AS TO THE BONA FIDES OF A CLAIM OF ERROR, IT DOES NOT APPEAR THAT A BIDDER COULD OBTAIN AN UNDUE ADVANTAGE IF THE ADJUSTMENT IN THE AMOUNT OF BID SECURITY WERE PERMITTED CONSISTENT WITH THE AUTHORIZED BID CORRECTION. THEREFORE, UNDER THE CIRCUMSTANCES CONSIDERED ABOVE, IT APPEARS THAT SUCH ADJUSTMENT IN BID SECURITY MAY BE PERMITTED AFTER OPENING IF THE BIDDER CAN ALSO SHOW THAT NO SUBSTANTIAL QUESTION EXISTED AT THE TIME OF BID OPENING AS TO HIS ABILITY TO FURNISH THE BID SECURITY IN THE NECESSARY AMOUNT.