B-140330, SEP. 30, 1959

B-140330: Sep 30, 1959

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INC.: FURTHER REFERENCE IS MADE TO YOUR TELEGRAM DATED JULY 28. FOUR BIDS WERE RECEIVED IN RESPONSE TO THIS INVITATION. 900 WAS OFFERED BY THE STANDARD ROOFING AND SHEET METAL WORKS. WAS NEXT LOW BIDDER AT A PRICE OF $81. UPON OPENING AND RECORDING OF BIDS IT WAS DISCLOSED THAT THE BID BOND SUBMITTED BY THE LOW BIDDER. TELEPHONICALLY ADVISED THE CONTRACTING OFFICER THAT FOR MANY YEARS THEY HAVE BEEN PREPARING BID BONDS BASED ON 20 PERCENT OF THE BID PRICE AND IN PREPARING THE BID BOND FOR THIS INVITATION. ASSUMED THAT 20 PERCENT WAS THE AMOUNT REQUIRED. THIS WAS CONFIRMED IN WRITING AND ANOTHER BOND ISSUED IN THE CORRECT AMOUNT. AWARD OF CONTRACT WAS MADE TO THE STANDARD ROOFING AND SHEET METAL WORKS.

B-140330, SEP. 30, 1959

TO ELGIN SUPPLY COMPANY, INC.:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM DATED JULY 28, 1959, AND A COPY OF YOUR LETTER DATED JULY 29, 1959, PROTESTING THE ACTION OF THE DEPARTMENT OF THE AIR FORCE IN REFUSING TO MAKE AN AWARD OF A CONTRACT TO YOU PURSUANT TO INVITATION NO. IFB 30-618-59-77.

FOUR BIDS WERE RECEIVED IN RESPONSE TO THIS INVITATION. THE LOWEST BID PRICE, $73,900 WAS OFFERED BY THE STANDARD ROOFING AND SHEET METAL WORKS. THE ELGIN SUPPLY COMPANY, INC., WAS NEXT LOW BIDDER AT A PRICE OF $81,000.

UPON OPENING AND RECORDING OF BIDS IT WAS DISCLOSED THAT THE BID BOND SUBMITTED BY THE LOW BIDDER, STANDARD ROOFING, COVERED ONLY 20 PERCENT OF THE BID PRICE, WHEREAS THE INVITATION FOR BIDS REQUIRED A BID GUARANTY IN A PENAL SUM OF NOT LESS THAN 50 PERCENT OF THE BID PRICE.

IMMEDIATELY AFTER THE BID OPENING A REPRESENTATIVE OF THE BONDING COMPANY FOR STANDARD ROOFING, TELEPHONICALLY ADVISED THE CONTRACTING OFFICER THAT FOR MANY YEARS THEY HAVE BEEN PREPARING BID BONDS BASED ON 20 PERCENT OF THE BID PRICE AND IN PREPARING THE BID BOND FOR THIS INVITATION, ASSUMED THAT 20 PERCENT WAS THE AMOUNT REQUIRED. THIS WAS CONFIRMED IN WRITING AND ANOTHER BOND ISSUED IN THE CORRECT AMOUNT.

THE CONTRACTING OFFICER CONSIDERED THE $8,000 DIFFERENCE IN PRICE BETWEEN THE LOW BID SUBMITTED BY STANDARD ROOFING AND SHEET METAL WORKS AND THAT OF THE NEXT LOW BIDDER, ELGIN SUPPLY COMPANY, AND DETERMINED THAT ALTHOUGH THE LOW BIDDER FAILED TO COMPLY WITH THE BID BOND REQUIREMENTS INITIALLY, BUT HAD DONE SO IMMEDIATELY AFTER BID OPENING, THIS ACTION SHOULD BE WAIVED AS A MINOR INFORMALITY AS BEING IN THE GOVERNMENT'S BEST INTEREST. ACCORDINGLY, AWARD OF CONTRACT WAS MADE TO THE STANDARD ROOFING AND SHEET METAL WORKS.

IN OUR DECISION, B-137319, FEBRUARY 5, 1959 (38 COMP. GEN. 532), WE HELD THAT BEGINNING WITH ANY INVITATION ISSUED MORE THAN 60 DAYS AFTER THE DATE OF SUCH DECISION NON-COMPLIANCE WITH A REQUIREMENT OF THE INVITATION THAT A BID BOND OR OTHER BID SECURITY BE SUBMITTED WITH THE BID WOULD BE HELD TO REQUIRE REJECTION OF THE BID AS NON-RESPONSIVE. THUS, THE BID OF STANDARD ROOFING AND SHEET METAL WORKS SHOULD PERHAPS HAVE BEEN REJECTED BY THE CONTRACTING OFFICER AS NON-RESPONSIVE, ALTHOUGH IT MUST BE POINTED OUT THAT THAT DECISION DEALT WITH THE FAILURE TO FURNISH ANY BOND RATHER THAN ONE MERELY DEFICIENT IN AMOUNT.

ALTHOUGH THE AWARD WAS MADE TO THE STANDARD ROOFING COMPANY, PARAGRAPH 44 OF THE ADDITIONAL GENERAL PROVISIONS ENTITLED "APPROVAL OF CONTRACT," SPECIFIED THAT IF THE CONTRACT EXCEEDED $20,000 IT WOULD BE SUBJECT TO THE WRITTEN APPROVAL OF THE SECRETARY OF THE AIR FORCE OR HIS DULY AUTHORIZED REPRESENTATIVE AND SHOULD NOT BE BINDING UNTIL SO APPROVED. IN ACCORDANCE WITH THAT REQUIREMENT, THE CONTRACT WAS FORWARDED TO HEADQUARTERS AIR DEFENSE COMMAND ON JULY 27, 1959, FOR REVIEW AND APPROVAL.

HEADQUARTERS AIR DEFENSE COMMAND DISAPPROVED THE CONTRACT, AF 30 (618/403, SINCE THE PROJECT NO. SUF 17-8 HAD NEVER BEEN TECHNICALLY REVIEWED AND APPROVED BY HIGHER AUTHORITY. FURTHER, THE TECHNICAL SPECIFICATIONS USED IN THE INVITATION CONTAINED SIGNIFICANT DEFICIENCIES WHICH REQUIRED CORRECTION IN ORDER TO ASSURE THAT THE GOVERNMENT'S MINIMUM NEEDS WOULD BE FULFILLED.

AS A RESULT OF THE ABOVE DIRECTION, THE CONTRACT WAS CANCELED AND ALL BIDS WERE REJECTED. CHANGES IN THE PLANS AND SPECIFICATIONS WERE MADE; PRIOR TECHNICAL REVIEW AND APPROVAL WAS OBTAINED AND THE PROJECT READVERTISED UNDER INVITATION 30-618-60-9 ON AUGUST 17, 1959. BIDS WERE OPENED ON AUGUST 27, 1959. STANDARD ROOFING AND SHEET METAL COMPANY SUBMITTED THE LOW BID AT $74,450. THE ELGIN SUPPLY COMPANY, INC., WAS NEXT LOW BIDDER AT $111,400. EVALUATION OF BIDS IS CURRENTLY IN PROCESS AT THE PROCURING ACTIVITY AND NO AWARD HAS BEEN MADE.

IN THE CIRCUMSTANCES, NO FURTHER ACTION BY OUR OFFICE APPEARS REQUIRED AT THIS TIME. YOUR INTEREST AND SERVICES IN BRINGING THE MATTER TO OUR ATTENTION ARE APPRECIATED.