B-151561, JUNE 21, 1963, 42 COMP. GEN. 725

B-151561: Jun 21, 1963

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BIDS - LATE - BID BOND A LOW BIDDER WHOSE BID WAS NOT ACCOMPANIED BY THE REQUIRED BID BOND BECAUSE HIS LUGGAGE CONTAINING THE BID GUARANTEE WAS LOST IN TRANSIT AND INADVERTENTLY MISSHIPPED BY THE AIRLINE SO THAT BID GUARANTEE DID NOT ARRIVE UNTIL AFTER BID OPENING TIME MAY NOT HAVE THE AIRLINE AFFIDAVITS CONCERNING THE LOST LUGGAGE REGARDED AS ESTABLISHING THE EXISTENCE OF THE BID GUARANTEE. THE LOW BID WITHOUT THE BID GUARANTEE IS NONRESPONSIVE TO THE INVITATION AND SHOULD BE REJECTED. BIDS WERE TO BE OPENED AT 10 A.M. BID BONDS OR OTHER BID SECURITIES WHICH ARE NOT RECEIVED PRIOR TO THE TIME SPECIFIED FOR RECEIPT OF BIDS WILL NOT BE ACCEPTABLE UNLESS THE LATENESS WAS DUE SOLELY TO DELAY IN THE MAILS FOR WHICH THE BIDDER WAS NOT RESPONSIBLE.

B-151561, JUNE 21, 1963, 42 COMP. GEN. 725

BIDS - LATE - BID BOND A LOW BIDDER WHOSE BID WAS NOT ACCOMPANIED BY THE REQUIRED BID BOND BECAUSE HIS LUGGAGE CONTAINING THE BID GUARANTEE WAS LOST IN TRANSIT AND INADVERTENTLY MISSHIPPED BY THE AIRLINE SO THAT BID GUARANTEE DID NOT ARRIVE UNTIL AFTER BID OPENING TIME MAY NOT HAVE THE AIRLINE AFFIDAVITS CONCERNING THE LOST LUGGAGE REGARDED AS ESTABLISHING THE EXISTENCE OF THE BID GUARANTEE, NOR MAY THE DELAY IN RECEIPT OF THE BID GUARANTEE BE REGARDED AS A DELAY IN THE MAILS; THEREFORE, THE LOW BID WITHOUT THE BID GUARANTEE IS NONRESPONSIVE TO THE INVITATION AND SHOULD BE REJECTED.

TO MCNUTT, DUDLEY AND EASTERWOOD, JUNE 21, 1963:

BY LETTER DATED MAY 17, 1963, AND SUBSEQUENT CORRESPONDENCE, YOU PROTESTED, ON BEHALF OF KEHNE ELECTRIC COMPANY, INC., AGAINST THE POSSIBLE REJECTION OF ITS BID SUBMITTED FOR THE CONSTRUCTION OF STAGE 102 AND 103 ADDITIONS TO PHILIP SUBSTATION, SPECIFICATION NO. DC-5932, TRANSMISSION DIVISION, SOUTH DAKOTA, MISSOURI RIVER BASIN PROJECT.

UNDER THE ADVERTISED SPECIFICATIONS, BIDS WERE TO BE OPENED AT 10 A.M., C.S.T., ON MAY 7, 1963, AT THE BUREAU OF RECLAMATION OFFICE, HURON, SOUTH DAKOTA. PARAGRAPH 1.A OF THE GENERAL CONDITIONS OF THE SPECIFICATIONS PROVIDES:

BID GUARANTEE.--- THE BIDDER SHALL FURNISH GUARANTEE WITH EACH BID IN AN AMOUNT NOT LESS THAN 20 PERCENT OF THE AMOUNT OF THE BID: * * *.

BID BONDS OR OTHER BID SECURITIES WHICH ARE NOT RECEIVED PRIOR TO THE TIME SPECIFIED FOR RECEIPT OF BIDS WILL NOT BE ACCEPTABLE UNLESS THE LATENESS WAS DUE SOLELY TO DELAY IN THE MAILS FOR WHICH THE BIDDER WAS NOT RESPONSIBLE.

PARAGRAPH 4 OF THE INSTRUCTIONS TO BIDDERS READS IN PART:

BID GUARANTEE. FAILURE TO FURNISH A REQUIRED BID GUARANTEE IN THE PROPER FORM AND AMOUNT, BY THE TIME SET FOR OPENING OF BIDS, MAY BE CAUSE FOR REJECTION OF THE BID.

THE BID OF KEHNE IN THE AMOUNT OF $461,000, WHEN OPENED AS SCHEDULED, DID NOT CONTAIN THE REQUIRED BID BOND. THE BID OF ELECTRICAL BUILDERS, INCORPORATED, APPARENTLY PROPER AS TO BID BOND REQUIREMENTS, WAS NEXT LOW IN THE AMOUNT OF $472,750. THIS BIDDER HAS PROTESTED AGAINST AWARD TO KEHNE IN VIEW OF THE IRREGULARITY IN ITS BID. THE CIRCUMSTANCES INVOLVED IN THE KEHNE BID SUBMISSION AS RESPECTS THE FAILURE TO TIMELY FURNISH THE REQUIRED BID BOND ARE AS FOLLOWS:

REPRESENTATIVES OF KEHNE LEFT TWIN CITIES FOR HURON, SOUTH DAKOTA, ON NORTH CENTRAL AIRLINES FLIGHT NO. 753 ON MAY 6, 1963, AT 1:45 P.M. INCLUDED IN THEIR LUGGAGE WERE THE BID FORMS AND BID GUARANTEE WHICH APPARENTLY WERE PROPERLY SIGNED AND EXECUTED PRIOR TO THEIR DEPARTURE. UPON THEIR ARRIVAL AT HURON AT 4:01 ON THAT DAY, IT WAS DISCOVERED THAT A PIECE OF LUGGAGE CONTAINING THE BID FORMS AND BID GUARANTEE WAS MISSING. THE MISSING LUGGAGE WAS LOCATED BY THE AIRLINE AT THE MINNEAPOLIS TERMINAL AT 7:30 P.M. ON MAY 6. THE AIRLINE ARRANGED TO HAVE THE MISSING LUGGAGE CARRIED TO HURON ON A FLIGHT WHICH WAS SCHEDULED TO ARRIVE AT 9:45 A.M. ON MAY 7. HOWEVER, DUE TO HEADWINDS AND INSTRUMENT FLIGHT OPERATIONS, THE LUGGAGE ARRIVED AT HURON AT 10:20 A.M. ON MAY 7. AFFIDAVITS HAVE BEEN FURNISHED TO OUR OFFICE WHICH SUPPORT THE REPORTED VERSION OF THE LATE ARRIVAL OF THE BID FORMS AND BID GUARANTEE.

THE RECORD INDICATES THAT KEHNE FURNISHED A HANDWRITTEN BID BEFORE BID OPENING THE EXACT AMOUNT OF ITS FORMAL BID AND THAT THE FORMAL BID AND REQUIRED BID BOND WERE DELIVERED TO THE BID OPENING OFFICE AT 10:45 A.M. ON MAY 7. IN THIS CONNECTION, WE ARE ADVISED THAT PRIOR TO BID OPENING, REPRESENTATIVES OF KEHNE VERBALLY ADVISED THE BUREAU THAT THE ORIGINAL BID PAPERS WERE TEMPORARILY LOST.

WE HELD IN DECISION 38 COMP. GEN. 532 THAT UNDER INVITATIONS FOR BIDS WHICH REQUIRE BIDDERS TO SUBMIT BID BONDS PRIOR TO THE BID OPENING, THE BID BOND REQUIREMENT IS A MATERIAL PART OF THE INVITATION WHICH CANNOT BE WAIVED AND NONCOMPLIANCE WITH THE BID BOND PROVISION REQUIRES THE REJECTION OF THE BID AS NONRESPONSIVE. THE BASIS FOR THIS RULE WAS STATED IN THE DECISION AS FOLLOWS:

* * * PERMITTING WAIVER OF A BID BOND REQUIREMENT STATED IN AN INVITATION FOR BIDS WOULD HAVE A TENDENCY TO COMPRISE THE INTEGRITY OF THE COMPETITIVE BID SYSTEM BY (1) MAKING IT POSSIBLE FOR A BIDDER TO DECIDE AFTER OPENING WHETHER OR NOT TO TRY TO HAVE HIS BID REJECTED. (2) CAUSING UNDUE DELAY IN EFFECTING PROCUREMENTS, AND (3) CREATING, BY THE NECESSARY SUBJECTIVE DETERMINATIONS BY DIFFERENT CONTRACTING OFFICERS, INCONSISTENCIES IN THE TREATMENT OF BIDDERS. * * * THIS RESULT COULD HARDLY BE SAID TO SERVE THE BEST INTERESTS OF THE UNITED STATES. CF. 14 COMP. GEN. 559.

IT CONSISTENTLY HAS BEEN HELD THAT UNDER THE COMPETITIVE BID PROCEDURE A BID TO BE CONSIDERED FOR AWARD MUST COMPLY WITH THE REQUIREMENTS OF THE INVITATION AT THE TIME OF BID OPENING. A BIDDER MAY NOT BE PERMITTED TO CHANGE OR MODIFY ITS BID AFTER THE OPENING AND IT DOES NOT MATTER WHETHER THE FAILURE TO COMPLY WAS DUE TO INADVERTENCE, MISTAKE OR OTHERWISE. COMP. GEN. 819, 36 ID. 535, 30 ID. 179.

IN SUPPORT OF YOUR ARGUMENT THAT THE BID OF KEHNE SHOULD BE CONSIDERED FOR AWARD, YOU CITE TWO DECISIONS OF OUR OFFICE REPORTED AT 39 COMP. GEN. 619 AND 40 ID. 469, WHEREIN WE DID NOT DISTURB THE CONSIDERATION OF BIDS WHICH WERE NOT ACCOMPANIED BY REQUIRED BID GUARANTEES.

YOU RELY ON THE STATEMENT OF FACTS IN THE EARLIER DECISION WHERE THE PROCUREMENT OFFICE RECEIVED TELEPHONIC ADVICE PRIOR TO BID OPENING THAT AN IRREVOCABLE LETTER OF CREDIT HAD BEEN ISSUED TO THE GOVERNMENT FOR THE ACCOUNT OF THE BIDDER, BUT DID NOT RECEIVE WRITTEN CONFIRMATION THEREOF UNTIL AFTER BID OPENING DUE TO A DELAY IN THE MAILS. IN THAT CASE, THE WRITTEN CONFIRMATION WAS FOR CONSIDERATION SINCE THE INVITATION SPECIFICALLY PERMITTED THE ACCEPTANCE OF BIDS WHERE LATE RECEIPT OF THE REQUIRED BID BOND WAS DUE TO DELAY IN THE MAILS FOR WHICH THE BIDDER WAS NOT RESPONSIBLE. WE HELD THERE THAT THE LETTER OF CREDIT SO ESTABLISHED REPRESENTED SUBSTANTIAL COMPLIANCE WITH THE INVITATION PROVISIONS RELATING TO BID BONDS. IN THE INSTANT CASE, THE EXISTENCE OF THE BID GUARANTEE PRIOR TO BID OPENING WAS NOT ESTABLISHED BY SOURCES INDEPENDENT OF KEHNE. THE AFFIDAVITS OF THE AIRLINE EMPLOYEES ONLY ESTABLISHED THAT A PIECE OF LUGGAGE WAS MISHANDLED NOT THAT A PROPER BID GUARANTEE WAS INADVERTENTLY MISSHIPPED. THE DELAY IN RECEIPT OF THE BID AND THE BID GUARANTEE HERE WAS NOT DUE TO A DELAY IN THE MAILS. IT WAS HAND-CARRIED BUT LOST IN TRANSIT AND SUBSEQUENTLY RECOVERED BUT AFTER BID OPENING. THUS, THE INSTANT CASE IS CLEARLY DISTINGUISHABLE FROM 39 COMP. GEN. 619.

IN 40 COMP. GEN. 469, WE HELD THAT THE REASONS FOR ADOPTING THE RULE ENUNCIATED IN 38 COMP. GEN. 532 HAD NO APPLICATION IN A SITUATION WHERE THERE WAS NO QUESTION BUT THAT A PROPER BID GUARANTEE HAD BEEN OBTAINED BUT WAS INADVERTENTLY LEFT BY THE BIDDER, PRIOR TO BID OPENING, ON A GOVERNMENT OFFICIAL'S DESK TO WHICH THE BIDDER DID NOT SUBSEQUENTLY HAVE ACCESS. IN OUR OPINION, THE RATIONALE OF THAT CASE IS NOT PRESENT HERE SINCE WE CANNOT HOLD THAT FOR ALL PRACTICAL PURPOSES THE KEHNE BID WAS ACCOMPANIED BY A BID GUARANTEE AS REQUIRED BY THE TERMS OF THE SOLICITATION. CF. B-144870, FEBRUARY 15, 1961.

WHILE AN ARTICLE ON BID GUARANTEES APPEARING IN THE OCTOBER 1962 ISSUE OF THE MILITARY LAW REVIEW MIGHT SUGGEST THAT A DIFFERENT CONCLUSION IS REQUIRED HERE, WE ARE NOT CONVINCED THAT THE RULE ADOPTED IN 38 COMP. GEN. 532 AND CONSISTENTLY THEREAFTER FOLLOWED SHOULD BE SO SUBSTANTIALLY RELAXED AS TO PERMIT RESUMPTION OF THE PRACTICES WHICH IT SOUGHT TO ELIMINATE.