B-152589, OCT. 18, 1963

B-152589, OCT. 18, 1963

TO MR. CHARLES C. CAMPBELL, CONTRACTING OFFICER, UNITED STATES ATOMIC ENERGY COMMISSION:

REFERENCE IS MADE TO YOUR TWX DATED SEPTEMBER 27, 1963, REQUESTING AN ADVANCE DECISION AS TO THE PROPRIETY OF REJECTION OF THE LOW BID OF THE EVERETT D. BURGETT DRILLING COMPANY UNDER INVITATION FOR BIDS NO. 291-64- 2, FOR THE CONSTRUCTION OF A WATER WELL AT LOS ALAMOS, NEW MEXICO.

YOU STATE THAT THE TWO LOWEST BIDS WERE IN THE AMOUNTS OF $83,990 AND $90,578.50, RESPECTIVELY.

THE EVERETT D. BURGETT DRILLING COMPANY IS A PARTNERSHIP CONSISTING OF TWO PARTNERS. IN PREPARING ITS BID ON THIS PROCUREMENT, AS UPON SEVERAL OTHERS WHERE CONTRACTS WITH AGENCIES OF THE FEDERAL GOVERNMENT WERE EVENTUALLY OBTAINED, BOTH PARTNERS SIGNED AN APPLICATION FOR A BID BOND. WITH THE KNOWLEDGE AND CONSENT OF THE SURETY, ONLY ONE PARTNER SIGNED THE FACE OF THE BID BOND AT THE PLACE PROVIDED ON STANDARD FORM 24 FOR THE SIGNATURES OF INDIVIDUAL PRINCIPALS, AND THE BOND WAS ISSUED. THE BID BOND WAS PROPERLY EXECUTED IN ALL OTHER RESPECTS. FURTHERMORE, THE FULL BUSINESS NAME OF THE PARTNERSHIP WAS PROPERLY SET FORTH ON THE FACE OF THE BOND IN THE SPACE DESIGNATED FOR "PRINCIPAL.'

YOU MAINTAIN THAT YOU WERE OBLIGED TO DISQUALIFY THE BID BY THE WORDING OF INSTRUCTION 4 OF THE BACK OF THE BID BOND AND BY FEDERAL PROCUREMENT REGULATIONS 1-2.404-2 (F) AND 1-10.102-5. SECTION 1-2.404 2 (F), FPR, STATES THAT FAILURE TO FURNISH A BID BOND "IN ACCORDANCE WITH THE REQUIREMENTS OF THE INVITATION FOR BIDS" SHALL RESULT IN REJECTION OF THE BID, WITH THE EXCEPTIONS STATED IN SECTION 1-10.102 5, FPR, WHICH ARE NOT PERTINENT TO THE PRESENT CASE. INSTRUCTION NO. 4 ON THE BACK OF THE BID BOND (STANDARD FORM 24) STATES THAT ALL MEMBERS OF A PARTNERSHIP SHALL EXECUTE THE BOND AS INDIVIDUALS.

WHILE STANDARD FORM 24 (THE BID BOND) MAY BE CONSIDERED AS PART OF AN INVITATION FOR BIDS IN A GENERAL SENSE, WE DO NOT REGARD THE INSTRUCTIONS ON THE BACK OF THE FORM AS "REQUIREMENTS OF THE INVITATION FOR BIDS" WITHIN THE INTENDED MEANING OF THAT PHRASE AS USED IN SECTION 1-2.404-2 (F), FPR. FOR EXAMPLE, A DATE ON THE BOND PRIOR TO THE DATE ON THE BID ITSELF (FORBIDDEN BY INSTRUCTION NO. 7) IS NOT FATAL. 39 COMP. GEN. 60. A BID BOND SUBMITTED ON A COMMERCIAL FORM RATHER THAN ON STANDARD FORM 24 MAY BE ACCEPTABLE. 41 COMP. GEN. 585; CF. 39 COMP. GEN. 83. THE QUESTION PRESENTED IN SUCH CASES IS WHETHER THE GOVERNMENT OBTAINS THE SAME PROTECTION IN ALL MATERIAL RESPECTS UNDER THE BOND ACTUALLY SUBMITTED AS IT WOULD HAVE UNDER A BOND COMPLYING COMPLETELY WITH THE INSTRUCTIONS ON STANDARD FORM 24. 39 COMP. GEN. 60, 62; ID. 83, 85; 41 ID. 583, 587; B- 143876, SEPTEMBER 12, 1960.

IN THE INSTANT CASE, THE PARTNERSHIP AS PRINCIPAL, ACTING IN THE ORDINARY COURSE OF ITS BUSINESS, HAS CONTRACTED WITH A SURETY TO UNDERTAKE AN OBLIGATION TO THE PARTNERSHIP TO HOLD THE GOVERNMENT HARMLESS IN THE EVENT THE COMPANY REFUSES TO EXECUTE THIS PARTICULAR CONTRACT AND THE GOVERNMENT WILL BE ABLE TO ENFORCE THIS OBLIGATION. GOERIG V. CONTINENTAL CASUALTY CO., 167 F.2D. 930. INDEED, WE THINK THE SURETY COULD ENFORCE AN INDEMNIFICATION AGREEMENT AGAINST THE PARTNER WHO DID NOT JOIN IN THE EXECUTION OF THE BOND. SEABOARD SURETY CO. V. H. AND R. CONSTRUCTION CORPORATION, 153 F.SUPP. 641.

THE INTERESTS OF THE GOVERNMENT WILL NOT BE PREJUDICED IF THE BIDDER'S FAILURE TO FOLLOW PRECISELY THE BID BOND INSTRUCTIONS IS WAIVED IN THIS CASE. THE LOW BID OF THE EVERETT D. BURGETT DRILLING COMPANY MAY THEREFORE BE REGARDED AS RESPONSIVE AND CONSIDERED FOR AWARD.