B-143876, SEP. 12, 1960

B-143876: Sep 12, 1960

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ATOMIC ENERGY COMMISSION: YOU HAVE. WE ARE ADVISED THAT THE INVITATION REQUIRED THAT A BOND OF NOT LESS THAN 10 PERCENT OF THE TOTAL PRICE ACCOMPANY EACH BID. IT WAS FOUND THAT THE LOW BID HAD BEEN SUBMITTED BY HAROLD G. THE BID BOND FURNISHED WITH THE LOW BID DESIGNATED THE PRINCIPAL AS "HAROLD LAPHAM AN INDIVIDUAL" AND THE BOND WAS SIGNED BY "HAROLD LAPHAM" AS PRINCIPAL. THE DISCREPANCY BETWEEN THE DESIGNATIONS ON THE BID FORM AND ON THE BID BOND WAS BROUGHT TO THE ATTENTION OF THE MESSRS. YOU WERE ADVISED BY LETTER OF AUGUST 22. THAT THE BID BOND WAS INTENDED TO DESIGNATE THE PRINCIPAL AS THE PARTNERSHIP OF HAROLD G. LAPHAM AND THAT THE ERROR WAS DUE TO A MISUNDERSTANDING BY THE SURETY.

B-143876, SEP. 12, 1960

TO MR. CHARLES W. REILLY, CONTRACTING OFFICER, U.S. ATOMIC ENERGY COMMISSION:

YOU HAVE, BY LETTER OF AUGUST 30, 1960, WITH ENCLOSURES, REFERENCE OC:CBR, REQUESTED OUR DECISION WITH RESPECT TO THE APPROPRIATE DISPOSITION OF THE LOW BID SUBMITTED IN RESPONSE TO AN INVITATION ISSUED BY YOUR OFFICE ON JULY 15, 1960, FOR THE REARRANGEMENT OF THE METALLOGRAPHY AREA AT THE KNOLLS ATOMIC POWER LABORATORY, SCHENECTADY, NEW YORK.

WE ARE ADVISED THAT THE INVITATION REQUIRED THAT A BOND OF NOT LESS THAN 10 PERCENT OF THE TOTAL PRICE ACCOMPANY EACH BID. UPON OPENING ON AUGUST 12, 1960, IT WAS FOUND THAT THE LOW BID HAD BEEN SUBMITTED BY HAROLD G. AND HAROLD W. LAPHAM, CO-PARTNERS, D/B/A HAROLD LAPHAM. THE BID BOND FURNISHED WITH THE LOW BID DESIGNATED THE PRINCIPAL AS "HAROLD LAPHAM AN INDIVIDUAL" AND THE BOND WAS SIGNED BY "HAROLD LAPHAM" AS PRINCIPAL.

THE DISCREPANCY BETWEEN THE DESIGNATIONS ON THE BID FORM AND ON THE BID BOND WAS BROUGHT TO THE ATTENTION OF THE MESSRS. LAPHAM BY YOUR OFFICE AFTER BID OPENING. YOU WERE ADVISED BY LETTER OF AUGUST 22, FROM THOSE GENTLEMEN, THAT THE BID BOND WAS INTENDED TO DESIGNATE THE PRINCIPAL AS THE PARTNERSHIP OF HAROLD G. AND HAROLD W. LAPHAM AND THAT THE ERROR WAS DUE TO A MISUNDERSTANDING BY THE SURETY. ACCOMPANYING THAT LETTER WAS A BID BOND DATED AUGUST 12, 1960, WHICH CORRECTLY DESIGNATED THE PRINCIPAL AS THE PARTNERSHIP.

UNDER THE CIRCUMSTANCES, YOU REQUEST OUR ADVICE AS TO WHETHER THE LOW BID MAY BE REGARDED AS RESPONSIVE AND CONSIDERED FOR AWARD.

WHERE AN INVITATION REQUIRES THAT A BID BE ACCOMPANIED BY A BOND IN A GIVEN FORM AND AMOUNT, FAILURE TO COMPLY WITH SUCH REQUIREMENT RENDERS THE BID NONRESPONSIVE. 38 COMP. GEN. 532. AS WE STATED AT 39 COMP. GEN. 60, THE PURPOSE OF THE RULE IS TO PRECLUDE FROM CONSIDERATION FOR AWARD A BID NOT ACCOMPANIED BY A VALID BOND IN THE AMOUNT REQUIRED UPON WHICH THE GOVERNMENT WOULD HAVE RECOURSE AGAINST THE SURETY IF THE BIDDER SHOULD FAIL TO GO FORWARD WITH FAITHFUL PERFORMANCE OF THE CONTRACT. AS IN THE LAST CITED CASE, THE ISSUE HERE IS WHETHER THE SURETY WOULD BE BOUND UPON THE BOND SUBMITTED WITH THE BID IN THE EVENT OF A FAILURE BY THE SUCCESSFUL BIDDER TO PROCEED.

THE LAW IS CLEAR THAT A SURETY IS NOT BOUND, UNDER A BOND ON WHICH THE PRINCIPAL IS AN INDIVIDUAL, UPON OBLIGATIONS INCURRED BY SUCH INDIVIDUAL JOINING WITH A THIRD PERSON AS PARTNER OR OTHERWISE. WATERMAN V. ALDEN, 143 U.S. 196, 201. SEE ALSO, UNITED STATES V. AMES, 99 U.S. 35; AND SOUTHERN SURETY CO. V. PLOTT, 28 F.2D 698. ACCORDINGLY, WE FIND THAT THE SURETY ON THE BOND SUBMITTED WITH THE BID WOULD NOT BE LIABLE UPON A BREACH OF THE CONDITIONS STATED, AND, THEREFORE, THE LOW BID MUST BE REGARDED AS NONRESPONSIVE FOR FAILURE TO CONFORM WITH THE MATERIAL REQUIREMENTS OF THE INVITATION. THE BID BOND SUBMITTED WITH THE LETTER OF AUGUST 22, 1960, MAY NOT BE REGARDED AS REMEDYING THE DEFECT SINCE IT DID NOT ACCOMPANY THE BID AS REQUIRED BY THE TERMS OF THE INVITATION.