B-140307, SEP. 1, 1959

B-140307: Sep 1, 1959

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TO OTTINGER CONSTRUCTION COMPANY: REFERENCE IS MADE TO YOUR TELEGRAM AND LETTER OF JULY 27. BIDS WERE OPENED AT 2:30 P.M. YOUR BID WAS NOT ACCOMPANIED BY A BID BOND. THIS STATEMENT WAS CONFIRMED BY MR. IN YOUR CORRESPONDENCE WITH OUR OFFICE YOU HAVE FURNISHED THE ADDITIONAL INFORMATION THAT THE BOND WAS RECEIVED AT YOUR FORT WORTH OFFICE ON JULY 20 AND WAS FORWARDED THAT EVENING BY AIR MAIL TO YOUR REPRESENTATIVE AT HIS HOTEL IN LITTLE ROCK. WAS RETURNED BY THE HOTEL TO FORT WORTH. THE DISTRICT ENGINEER ADVISED YOU BY TELEGRAM OF JULY 23 THAT YOUR BID WAS NOT RESPONSIVE TO THE INVITATION AND COULD NOT BE CONSIDERED FOR AWARD. YOUR PROTEST IS DIRECTED AGAINST THAT ACTION. YOUR ARGUMENT IS.

B-140307, SEP. 1, 1959

TO OTTINGER CONSTRUCTION COMPANY:

REFERENCE IS MADE TO YOUR TELEGRAM AND LETTER OF JULY 27, AND YOUR ATTORNEY'S LETTER OF JULY 28, 1959, PROTESTING REJECTION OF YOUR LOW BID SUBMITTED IN RESPONSE TO INVITATION NO. ENG-03-050-60-01 ISSUED BY THE DISTRICT ENGINEER, LITTLE ROCK, ARKANSAS.

BIDS WERE OPENED AT 2:30 P.M. ON JULY 22, 1959. YOUR BID WAS NOT ACCOMPANIED BY A BID BOND, AS REQUIRED BY THE INVITATION. YOUR REPRESENTATIVE, WHO DELIVERED THE BID BY HAND, STATED AT THE OPENING THAT A BOND HAS BEEN MAILED TO HIM AT HIS LITTLE ROCK HOTEL BUT HAD NOT ARRIVED. THIS STATEMENT WAS CONFIRMED BY MR. OTTINGER IN A TELEPHONE CONVERSATION ON THE FOLLOWING DAY, AND IN YOUR CORRESPONDENCE WITH OUR OFFICE YOU HAVE FURNISHED THE ADDITIONAL INFORMATION THAT THE BOND WAS RECEIVED AT YOUR FORT WORTH OFFICE ON JULY 20 AND WAS FORWARDED THAT EVENING BY AIR MAIL TO YOUR REPRESENTATIVE AT HIS HOTEL IN LITTLE ROCK; WAS RETURNED BY THE HOTEL TO FORT WORTH, AND FORWARDED BY YOU TO THE DISTRICT ENGINEER ON JULY 24.

BECAUSE OF YOUR FAILURE TO SUBMIT THE BOND WITH YOUR BID, THE DISTRICT ENGINEER ADVISED YOU BY TELEGRAM OF JULY 23 THAT YOUR BID WAS NOT RESPONSIVE TO THE INVITATION AND COULD NOT BE CONSIDERED FOR AWARD. YOUR PROTEST IS DIRECTED AGAINST THAT ACTION.

YOUR ARGUMENT IS, IN SUBSTANCE, THAT SINCE PARAGRAPH 4 OF THE INSTRUCTIONS TO BIDDERS, WHICH WAS A PART OF THE INVITATION, PROVIDED THAT FAILURE TO SUBMIT THE REQUIRED SECURITY "MAY" BE CAUSE FOR REJECTION, AND PARAGRAPH 11 (B) STATED THAT THE GOVERNMENT RESERVED THE RIGHT TO WAIVE ANY INFORMALITY IN BIDS WHEN IN THE INTEREST OF THE GOVERNMENT, THE ACCEPTANCE OR REJECTION OF A BID FOR FAILURE TO SUBMIT A BOND IS A MATTER FOR THE EXERCISE OF DISCRETION BY THE CONTRACTING OFFICER AND THE HEAD OF THE DEPARTMENT. OUR DECISION B-137319, FEBRUARY 5, 1959, WHICH WAS REFERRED TO BY THE CONTRACTING OFFICER IN HIS NOTICE OF REJECTION, IS ATTACKED AS DEPRIVING THE PROPER ADMINISTRATIVE OFFICIALS OF THE RIGHT TO EXERCISE THE DISCRETION WHICH WAS RESERVED BY THE INVITATION, AND IT IS SUGGESTED THAT IT APPEARS THAT THE CONTRACTING OFFICER WOULD OTHERWISE HAVE ACCEPTED YOUR BID. WE FIND NOTHING IN THE RECORD TO SUPPORT THIS SUGGESTION EXCEPT THE FACT THAT THE CONTRACTING OFFICER CITED THAT DECISION.

THE DECISION REFERRED TO MAKES IT CLEAR THAT IT WAS RENDERED ON THE EXPRESS REPRESENTATION, RECOMMENDATIONS, AND URGING OF THE DEPARTMENT OF THE ARMY, THAT THE FORMER PRACTICE OF PERMITTING WAIVER OF FAILURE TO FURNISH BID BONDS UPON A SHOWING OF SOME CAUSE WAS ENCOURAGING BIDDERS ON THE BORDER LINE OF RESPONSIBILITY TO SUBMIT BIDS AND DECIDE AFTER OPENING WHETHER TO ATTEMPT TO ESTABLISH THEIR ELIGIBILITY FOR AWARD, AND WAS CREATING A SUBSTANTIAL ADMINISTRATIVE BURDEN IN DETERMINING WHETHER THE REQUIREMENT SHOULD BE WAIVED. CONSIDERING THE FACT THAT THERE IS NO GENERAL STATUTE REQUIRING ANY ADMINISTRATIVE AGENCY OF THE GOVERNMENT OT OBTAIN ANY BOND OR SECURITY WITH A BID, WE HAVE ADOPTED THE VIEW THAT, WHERE AN ADMINISTRATIVE DETERMINATION IS MADE THAT BID BONDS SHOULD BE REQUIRED IN CONNECTION WITH ANY SPECIFIC PROCUREMENT OR TYPE OF PROCUREMENT, THE FURNISHING OF SUCH BONDS SHOULD BE REGARDED AS A MATERIAL REQUIREMENT. IF NOT TO BE CONSIDERED MATERIAL, BONDS SHOULD NOT BE REQUIRED.

SO FAR AS CONCERNS THIS CASE, THE DECISION IN QUESTION WAS A PUBLIC APPROVAL BY OUR OFFICE OF THE PROPOSAL OF THE DEPARTMENT OF THE ARMY THAT THE REQUIREMENT OF BID BONDS SHOULD BE CONSIDERED AS A MATERIAL FEATURE OF FUTURE INVITATIONS AND THAT FAILURES OF BIDDERS TO FURNISH SUCH BONDS WITH THEIR INVITATIONS SHOULD NO LONGER BE WAIVED AS INFORMALITIES. IT WAS THEREIN SPECIFICALLY ANNOUNCED THAT THIS RULE WOULD APPLY TO ALL BIDS SUBMITTED UNDER INVITATIONS ISSUED MORE THAN 60 DAYS AFTER THE DATE OF THE DECISION. IN THE CIRCUMSTANCES, WE CONCLUDE THAT THE RULE MUST BE APPLIED TO THE BIDS HERE UNDER CONSIDERATION, AND THAT THE LANGUAGE OF THE INSTRUCTIONS TO BIDDERS, EVEN THOUGH IN THE SAME LANGUAGE AS PREVIOUSLY USED, MUST BE CONSTRUED IN THE LIGHT OF THE DECISION OF FEBRUARY 5, 1959.