B-144597, FEBRUARY 20, 1961, 40 COMP. GEN. 469

B-144597: Feb 20, 1961

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BIDS - BID BOND - FAILURE TO SUBMIT - WAIVER WHERE EVIDENCE INDEPENDENT OF THAT OF A BIDDER ESTABLISHES THAT A PROPER BID BOND WAS OBTAINED IN TIME FOR SUBMISSION WITH A BID BUT DUE TO INADVERTENCE THE BOND WAS LEFT. ON THE DESK OF GOVERNMENT OFFICIAL IN THE BID OPENING OFFICE AND THAT DURING THE TIME PRIOR TO DISCOVERY OF THE BOND THE BIDDER DID NOT HAVE ACCESS TO THE ROOM IN WHICH THE BOND WAS LEFT. SUCH EVIDENCE SUBSTANTIATES THAT THE FAILURE TO TIMELY SUBMIT THE BOND WAS NOT DUE TO ANY LACK OF FINANCIAL RESPONSIBILITY ON THAT PART OF THE BIDDER AND THAT THE BIDDER DID NOT HAVE ANY ELECTION AFTER BID RESULTS WERE KNOWN TO MAKE HIS BID RESPONSIVE OR NOT SO THAT THE REASONS FOR THE RULE AGAINST WAIVER OF THE BOND REQUIREMENT ARE NOT PRESENT.

B-144597, FEBRUARY 20, 1961, 40 COMP. GEN. 469

BIDS - BID BOND - FAILURE TO SUBMIT - WAIVER WHERE EVIDENCE INDEPENDENT OF THAT OF A BIDDER ESTABLISHES THAT A PROPER BID BOND WAS OBTAINED IN TIME FOR SUBMISSION WITH A BID BUT DUE TO INADVERTENCE THE BOND WAS LEFT, PRIOR TO THE TIME SCHEDULED FOR OPENING, ON THE DESK OF GOVERNMENT OFFICIAL IN THE BID OPENING OFFICE AND THAT DURING THE TIME PRIOR TO DISCOVERY OF THE BOND THE BIDDER DID NOT HAVE ACCESS TO THE ROOM IN WHICH THE BOND WAS LEFT, SUCH EVIDENCE SUBSTANTIATES THAT THE FAILURE TO TIMELY SUBMIT THE BOND WAS NOT DUE TO ANY LACK OF FINANCIAL RESPONSIBILITY ON THAT PART OF THE BIDDER AND THAT THE BIDDER DID NOT HAVE ANY ELECTION AFTER BID RESULTS WERE KNOWN TO MAKE HIS BID RESPONSIVE OR NOT SO THAT THE REASONS FOR THE RULE AGAINST WAIVER OF THE BOND REQUIREMENT ARE NOT PRESENT; THEREFORE, IN SUCH CIRCUMSTANCES, THE BID MAY BE CONSIDERED AS HAVING BEEN SUBMITTED WITH A BOND.

TO FRANCIS W. MARKS, FEBRUARY 20, 1961:

REFERENCE IS MADE TO YOUR PROTEST ON BEHALF OF LEONARD RUGO, INC., AGAINST THE AWARD OF THE CONTRACT MADE TO WEXLER CONSTRUCTION COMPANY, INC., UNDER INVITATION FOR BIDS NO. ENG-19-016-61-22 FOR THE CONSTRUCTION OF BARRACKS, CONSOLIDATED MESS AND ADMINISTRATION, AND STORAGE BUILDINGS AT FORT DEVENS, AYER, MASSACHUSETTS.

THE INVITATION, AS AMENDED, PROVIDED THAT THE BIDS RECEIVED WOULD BE PUBLICLY OPENED AT 2:00 P.M. ON NOVEMBER 22, 1960, IN THE OFFICE OF THE AREA ENGINEER, U.S. ARMY CORPS OF ENGINEERS, NEW ENGLAND DIVISION, PORTLAND, MAINE. PARAGRAPH 5 OF THE INVITATION, STANDARD FORM NO. 20, PROVIDES:

BID BOND ON U.S. STANDARD FORM NO. 24 IN A PENAL SUM OF NOT LESS THAN 20 PERCENT OF THE BID PRICE OR IN A PENAL SUM OF $3,000,000, WHICHEVER IS THE LESSER AMOUNT, WILL BE REQUIRED WITH EACH BID IF THE BID PRICE IS IN EXCESS OF $2,000. FAILURE TO SUBMIT BID BOND WITH BID WILL CAUSE BID TO BE REJECTED.

EIGHTEEN BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION AND OF THESE THE BID OF WEXLER CONSTRUCTION COMPANY, INC., WAS THE APPARENT LOW BID ON ALL ITEMS. THE BID OF LEONARD RUGO, INC., WAS THE APPARENT SECOND LOW BID. A REVIEW OF THE BID OF THE WEXLER CONSTRUCTION COMPANY, INC., AT THE BID OPENING DESK DISCLOSED THAT ALTHOUGH THE BID STATED ON PAGE 2 THEREOF (1STANDARD FORM 21) THAT THERE WAS ENCLOSED A BID GUARANTEE CONSISTING OF A BID BOND ISSUED BY THE TRAVELERS INDEMNITY COMPANY IN THE AMOUNT OF 20 PERCENT OF THE ATTACHED BID, THE BOND WAS NOT WITH THE BID NOR WAS IT CONTAINED IN THE ENVELOPE RECEIVED AT THE BID OPENING DESK. IT WAS DECIDED, NEVERTHELESS, THAT THE BID SHOULD BE READ, AND IT WAS PUBLICLY READ.

THE CONTRACTING OFFICER (THE AREA ENGINEER) DETERMINED THAT SINCE THE WEXLER BID WAS NOT ACCOMPANIED BY A BID BOND AT THE TIME SET FOR THE OPENING OF THE BIDS, THE BID HAD TO BE REJECTED IN ACCORDANCE WITH RULINGS OF THIS OFFICE SUCH AS 38 COMP. GEN. 532 AND 39 ID. 827, WHICH ARE ALSO REFERRED TO IN YOUR LETTER OF JANUARY 10, 1961. THE WEXLER CONSTRUCTION COMPANY, INC., PROTESTED THE DETERMINATION BY THE CONTRACTING OFFICER AND, ON THE BASIS OF THE FACTS AND CIRCUMSTANCES APPEARING, THE OFFICE OF THE CHIEF OF ENGINEERS DETERMINED THAT THE BID SHOULD BE CONSIDERED RESPONSIVE. ACCORDINGLY, THE BID OF THE WEXLER CONSTRUCTION COMPANY, INC., WAS ACCEPTED ON DECEMBER 30, 1960.

THE FACTS AND CIRCUMSTANCES SURROUNDING THE BID BOND OF THE WEXLER CONSTRUCTION COMPANY, INC., AS HEREINAFTER SET FORTH ARE SUPPORTED BY AFFIDAVITS OF A REPRESENTATIVE OF THE TRAVELERS INDEMNITY COMPANY, REPRESENTATIVES OF THE WEXLER CONSTRUCTION COMPANY, INC., AND SEVERAL GOVERNMENT EMPLOYEES OF THE PORTLAND AREA OFFICE.

AT APPROXIMATELY 1:00 P.M. ON NOVEMBER 22, 1960, MR. RICHARD J. WARNER, A REPRESENTATIVE OF THE WEXLER CONSTRUCTION COMPANY, INC., ARRIVED AT THE PORTLAND AREA OFFICE AND REQUESTED TO SEE THE AREA OFFICE ENGINEER, MR. OMER F. GAGNON, WHO WAS NOT AVAILABLE TO SEE HIM AT THE TIME. MR. WARNER REQUESTED THE USE OF A TELEPHONE AND HE WAS ALLOWED TO USE IT.MR. WARNER THEN LEFT THE OFFICE, STATING THAT HE WOULD RETURN PRIOR TO THE BID OPENING TIME. HE RETURNED TO THE AREA OFFICE AT APPROXIMATELY 1:40 P.M., AT WHICH TIME HE SAW THE AREA OFFICE ENGINEER AND REQUESTED TO BE ALLOWED TO USE THE TELEPHONE. THE AREA OFFICE ENGINEER, BEING UNABLE TO FIND A TELEPHONE NOT IN USE AT A VACANT DESK, ALLOWED MR. WARNER TO USE THE TELEPHONE ON HIS DESK. WHILE MR. WARNER WAS SEATED AT HIS DESK USING THE TELEPHONE, THE AREA OFFICE ENGINEER STOOD BY HIS SECRETARY'S DESK AND CONTINUED DICTATING TO HER. SHORTLY BEFORE 2:00 P.M., HE TURNED TO MR. WARNER AND ADVISED HIM THAT HE SHOULD GET HIS BID IN AS THE BID OPENING TIME WAS DRAWING NEAR. THE AREA OFFICE ENGINEER AND HIS SECRETARY SAW MR. WARNER, AS HE WAS INSERTING DOCUMENTS IN AN ENVELOPE, LOOK OVER THE DESK, WHICH WAS COVERED WITH NUMEROUS PAPERS, AND LOOK REPEATEDLY ON THE FLOOR AS IF SOMETHING WAS MISSING. MR. WARNER SEALED THE ENVELOPE, LEFT WITHOUT SAYING ANYTHING AND PRESENTED THE BID AT THE BID OPENING DESK WHERE IT WAS DULY TIME-STAMPED IN AT 1:59 P.M. THE WEXLER BID WAS THEN TAKEN TO THE BID OPENING ROOM BY AN EMPLOYEE OF THE AREA OFFICE AND HANDED TO THE CUSTODIAN OF BIDS PRIOR TO OPENING. THE BID WAS RECORD AS BID NO. 18, AND WAS THE LAST BID RECEIVED.

AT THE APPOINTED TIME THE BIDS RECEIVED WERE OPENED IN THE NUMBERED ORDER, THE WEXLER BID BEING LAST. THE AREA OFFICE ENGINEER'S SECRETARY ATTENDED THE BID OPENING TO TABULATE DATA, WHILE HE PROCEEDED WITH WORK AT HAND AT HIS DESK BUT HE DID OCCASIONALLY LOOK INTO THE BID OPENING ROOM. MR. WARNER LEFT THE AREA OFFICE IMMEDIATELY AFTER THE CONCLUSION OF THE PUBLIC BID OPENING AND DID NOT MENTION TO ANY GOVERNMENT PERSONNEL ANYTHING CONCERNING THE BID BOND. IT APPEARS POSSIBLE, HOWEVER, THAT HE WAS NOT IN FACT AWARE THAT THE BID BOND WAS MISSING, SINCE THE CONTRACTING OFFICER STATES THERE WAS NO PUBLIC ANNOUNCEMENT AT THE OPENING AS TO THE ABSENCE OF THE BOND. AFTER THE OPENING OF THE BIDS THE AREA OFFICE ENGINEER WENT TO THE BID OPENING ROOM AND DISCUSSED THE BIDS WITH THE AREA COUNSEL. HE WAS ADVISED THAT A BID BOND HAD NOT BEEN SUBMITTED WITH THE WEXLER BID. REMEMBERING THAT MR. WARNER WAS SEARCHING FOR SOMETHING WHILE AT HIS DESK PRIOR TO THE SEALING THE WEXLER BID, HE RETURNED TO HIS OFFICE AND LOOKED ON THE FLOOR AND THE DESK AND FOUND A BID BOND ON HIS DESK INTERMINGLED WITH VARIOUS CORRESPONDENCE. HE IMMEDIATELY CALLED IN THE AREA ENGINEER AND THE CHIEF, CONSTRUCTION DIVISION, AND ADVISED THEM OF THE DISCOVERY. THE BID BOND WAS TURNED OVER TO THE AREA COUNSEL. EMPLOYEES OF THE AREA OFFICE STATE THAT MR. WARNER LEFT THE OFFICE IMMEDIATELY AFTER THE BID OPENING AND THAT THERE IS NO EVIDENCE THAT ANY PERSON OTHER THAN GOVERNMENT PERSONNEL WERE IN THE AREA OFFICE ENGINEER'S OFFICE BETWEEN 2:00 P.M. AND THE TIME WHEN THE BID BOND WAS FOUND.

THE BID BOND ( STANDARD FORM 24) IS DATED NOVEMBER 22, 1960, REFERS TO THE INSTANT INVITATION WITH THE WEXLER CONSTRUCTION COMPANY, INC., AS PRINCIPAL AND THE TRAVELERS INDEMNITY COMPANY AS SURETY, AND IS IN A PENAL AMOUNT EQUAL TO 20 PERCENT OF THE BID. THE BOND IS SIGNED FOR THE SURETY COMPANY BY GEORGE W. MCCARTHY AS ATTORNEY-IN-1FACT. MR. MCCARTHY IN AN AFFIDAVIT DATED DECEMBER 20, 1960, AVERS THAT THE BOND WAS EXECUTED BY HIM AND WAS DELIVERED BY HIM TO THE OFFICE OF THE WEXLER CONSTRUCTION COMPANY, INC., 118 NEEDHAM STREET, NEWTON HIGHLANDS, MASSACHUSETTS, BEFORE 9:00 A.M. ON NOVEMBER 22, 1960.

PRIOR TO THE DECISION OF FEBRUARY 5, 1959, 38 COMP. GEN. 532, THE FAILURE OF BIDDERS TO SUBMIT BID BONDS WHEN REQUIRED BY AN INVITATION COULD BE WAIVED BY CONTRACTING OFFICERS IT FAILURE WAS DUE TO INADVERTENCE OR OTHER EXCUSABLE CAUSE NOT RELATED TO THE BIDDER'S ABILITY TO SECURE THE BOND. THAT DECISION HELD THAT EFFECTIVE 60 DAYS THEREAFTER NONCOMPLIANCE WITH THE REQUIREMENTS OF AN INVITATION CONCERNING THE SUBMISSION OF A BID BOND WOULD REQUIRE REJECTION OF A BID AS NONRESPONSIVE. THIS RULE HAS BEEN CONSISTENTLY FOLLOWED SINCE.

HOWEVER, IT IS PERTINENT TO NOTE THE REASONS FOR ABANDONMENT OF THE EARLIER RULE. ONE OF THE OBJECTIONS TO THE PRIOR RULE WAS THE DIFFICULTY OF DETERMINING OBJECTIVELY WHETHER THE FAILURE TO FURNISH A BID BOND ON TIME WAS DUE TO INADVERTENCE OR OTHER EXCUSABLE CAUSE, AND NOT DUE TO ANY LACK OF FINANCIAL RESPONSIBILITY ON THE PART OF THE BIDDER. IN THE USUAL CASE, INADVERTENCE COULD NOT BE ESTABLISHED BY EVIDENCE INDEPENDENT OF THAT FURNISHED BY THE BIDDER HIMSELF. SIMILARLY, THE BIDDER'S ABILITY TO SECURE A BID BOND WAS SOMETIMES ENHANCED BY THE BID RESULTS, MAKING IT DIFFICULT TO DETERMINE WHETHER HE COULD OR COULD NOT HAVE SECURED SUCH A BOND PRIOR TO OPENING. IN THE INSTANT CASE, THE STATEMENTS OF RESPONSIBLE GOVERNMENT PERSONNEL ESTABLISH CONCLUSIVELY THAT A PROPER BID BOND WAS IN FACT OBTAINED IN TIME FOR SUBMISSION WITH THE BID AND THAT ITS FAILURE TO BE SUBMITTED WITH THE BID WAS DUE TO INADVERTENCE.

THE SECOND BASIC OBJECTION TO THE RULE FOLLOWED PRIOR TO 38 COMP. GEN. 532 WAS THE OPPORTUNITY IT AFFORDED BIDDERS TO OBTAIN "TWO BITES AT THE APPLE" BY DECIDING AFTER BID RESULTS WERE KNOWN WHETHER OR NOT TO MAKE A BID RESPONSIVE BY SUBMITTING THE REQUIRED BID BOND. IN THE PRESENT CASE, THE OPPORTUNITY FOR SUCH CHOICE WAS NOT PRESENT SINCE IT IS ESTABLISHED BY THE STATEMENTS OF GOVERNMENT PERSONNEL THAT THE BOND REFERRED TO IN THE WEXLER BID WAS ACCIDENTALLY LEFT PRIOR TO BID OPENING TIME ON THE DESK OF A GOVERNMENT OFFICIAL IN THE OFFICE OF THE AREA ENGINEER WHERE BIDS WERE TO BE OPENED. IT IS FURTHER ESTABLISHED THAT THE BOND REMAINED CONTINUOUSLY ON THE DESK UNTIL ITS DISCOVERY ABOUT AN HOUR AFTER THE BEGINNING OF BID OPENING AND THAT NO REPRESENTATIVE OF THE BIDDER OR PERSON OTHER THAN GOVERNMENT PERSONNEL HAD ACCESS TO THE DESK IN THE INTERIM.

IT IS CLEAR, THEREFORE, THAT THE OBJECTIONS WHICH LED TO THE ADOPTION OF THE RULE IN 38 COMP. GEN. 532 ARE NOT PRESENT IN THE INSTANT CASE. SUCH CIRCUMSTANCES, WE BELIEVE IT PROPERLY MAY BE CONCLUDED THAT FOR ALL PRACTICAL PURPOSES THE WEXLER BID WAS ACCOMPANIED BY A BOND AS REQUIRED AND WE WOULD NOT FEEL JUSTIFIED IN DIRECTING CANCELLATION OF THE AWARD WHICH WAS MADE TO WEXLER.