B-157034, JUL. 2, 1965

B-157034: Jul 2, 1965

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TO THE SECRETARY OF THE INTERIOR: REFERENCE IS MADE TO YOUR LETTER OF JUNE 17. THE BIDS IN THIS CASE WERE OPENED ON APRIL 20. 765 WAS SUBMITTED BY THE CONTROL CORPORATION. A THOROUGH SEARCH OF THE RECORDS SHOWED THAT NO BID BOND FOR CONTROL WAS ON FILE AS OF THE TIME OF OPENING OF BIDS. THE DEFICIENCY WAS CORRECTED BY FILING A MODIFYING BID BOND ON MAY 3. THE LOW BID OF CONTROL WAS REJECTED AND THE CONTRACT WAS AWARDED ON MAY 7. SUCH ACTION WAS TAKEN IN ACCORDANCE WITH SECTION 1- 10.103-4 OF THE FEDERAL PROCUREMENT REGULATIONS (FPR) AND OUR DECISION OF FEBRUARY 5. MUST BE CONSIDERED MATERIAL REQUIREMENTS WHICH MAY NOT BE WAIVED AS INFORMALITIES AND THIS WAS THE MAIN POINT DISCUSSED IN OUR DECISION OF FEBRUARY 5.

B-157034, JUL. 2, 1965

TO THE SECRETARY OF THE INTERIOR:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 17, 1965, IN REGARD TO A PROTEST OF THE CONTROL CORPORATION AGAINST THE REJECTION OF ITS BID SUBMITTED IN RESPONSE TO INVITATION FOR BIDS NO. DS-6245 ISSUED BY THE BUREAU OF RECLAMATION, DENVER, COLORADO, ON MARCH 5, 1965.

THE BIDS IN THIS CASE WERE OPENED ON APRIL 20, 1965. THE LOW BID OF $49,765 WAS SUBMITTED BY THE CONTROL CORPORATION. ON PAGE "B" OF ITS BID CONTROL STATED THAT "CONTROL CORPORATION HAS BID BOND NO. S-1373429 ON FILE, FOR AN UNLIMITED AMOUNT.' A THOROUGH SEARCH OF THE RECORDS SHOWED THAT NO BID BOND FOR CONTROL WAS ON FILE AS OF THE TIME OF OPENING OF BIDS. CONTROL ADMITS THAT FACT IN ITS LETTER OF MAY 14, 1965, TO THE CONTRACTING OFFICE AND STATED THAT IT HAD DISCOVERED ON APRIL 30, 1965, THAT ITS ANNUAL BID BOND TO THE BUREAU OF RECLAMATION HAD EXPIRED. THE DEFICIENCY WAS CORRECTED BY FILING A MODIFYING BID BOND ON MAY 3, 1965, APPARENTLY RECEIVED THE NEXT DAY BY THE GOVERNMENT. THE LOW BID OF CONTROL WAS REJECTED AND THE CONTRACT WAS AWARDED ON MAY 7, 1965, TO THE SECOND LOW BIDDER. SUCH ACTION WAS TAKEN IN ACCORDANCE WITH SECTION 1- 10.103-4 OF THE FEDERAL PROCUREMENT REGULATIONS (FPR) AND OUR DECISION OF FEBRUARY 5, 1959, 38 COMP. GEN. 532.

BID BOND REQUIREMENTS IN ADVERTISED INVITATIONS, AS A GENERAL RULE, MUST BE CONSIDERED MATERIAL REQUIREMENTS WHICH MAY NOT BE WAIVED AS INFORMALITIES AND THIS WAS THE MAIN POINT DISCUSSED IN OUR DECISION OF FEBRUARY 5, 1959, 38 COMP. GEN. 532. THE FEDERAL PROCUREMENT REGULATIONS (SECTION 1-10.103-4) PROVIDE THAT, IN CERTAIN CASES, NONCOMPLIANCE WITH BID BOND REQUIREMENTS MAY BE WAIVED BUT THIS CASE DOES NOT COME WITHIN ANY OF THE EXCEPTIONS.

THE FACTS IN THIS CASE ARE SIMILAR TO THOSE INVOLVED IN UNITED STATES EX REL. BROOKFIELD CONSTRUCTION CO., INC., AND BAYLOR CONSTRUCTION CORPORATION V. J. GEORGE STEWART, 234 F.SUPP. 94, IN WHICH THE AMOUNT OF THE BID BOND WAS LESS THAN THAT REQUIRED BY THE INVITATION FOR BIDS. OUR OFFICE HAD HELD THAT THE LOW BID WAS PROPERLY REJECTED BECAUSE THE BID BOND WAS DEFICIENT IN AMOUNT AND THE COURT HELD THAT (QUOTING FROM THE SYLLABUS): "DECISION OF COMPTROLLER GENERAL THAT GOVERNMENT CONTRACTS SHOULD NOT BE AWARDED TO LOWEST BIDDERS WHO INADVERTENTLY FAILED TO ACCOMPANY BID WITH EXACT AMOUNT OF BOND REQUIRED BY INVITATION TO BID WAS NOT ERRONEOUS AS A MATTER OF LAW.'

THE QUESTION OF THE BIDDER'S ABILITY TO QUALIFY FOR A BOND OR TO PERFORM THE CONTRACT MAY NOT BE REGARDED AS CURING THE DEFICIENCY IN HIS BID EVEN WHERE THE FAILURE TO COMPLY WITH THE BID BOND REQUIREMENT IS DUE TO AN INADVERTENCE ON HIS PART. SEE 39 COMP. GEN. 827. WITH REGARD TO SOME OF THE COMMENTS OFFERED BY CONTROL AND NOT SPECIFICALLY COVERED BY OUR DISCUSSION HEREINABOVE, IT IS DESIRED TO POINT OUT THAT THE MATTER OF ACCEPTING MODIFICATIONS WHICH MAKE THE TERMS OF AN OTHERWISE ACCEPTABLE BID MORE FAVORABLE IS NOT FOR CONSIDERATION AS A BID NOT ACCOMPANIED BY A BID BOND IS NOT TO BE CONSIDERED AS "AN OTHERWISE ACCEPTABLE BID.' PARAGRAPH 9 OF THE STANDARD FORM 32 WHICH REFERS TO CURING DEFICIENCIES IN BONDS "FURNISHED IN CONNECTION WITH THIS CONTRACT" DOES NOT PERTAIN TO BID BONDS WHICH ARE ANTECEDENT TO THE FORMATION OF A CONTRACT AND WHICH EXPIRE WITH THE ENTERING INTO OF A PROPER CONTRACT. THE PROVISION IN THE INVITATION FOR CONSIDERING, IN CERTAIN CASES, THE ACCEPTANCE OF BIDS NOT ACCOMPANIED BY "A BID GUARANTEE IN THE PROPER FORM AND AMOUNT, BY THE TIME SET FOR OPENING OF BIDS" DOES NOT HAVE ANY APPLICATION HERE AS THE CASES WHICH THIS PROVISION IS DESIGNED TO COVER ARE THE FOUR EXCEPTIONS LISTED IN SECTION 1-10.103-4 OF THE FPR AND THIS CASE DOES NOT FALL WITHIN ANY OF THESE EXCEPTIONS.

WITH REGARD TO CONTROL'S GENERAL ALLEGATION THAT THE CONTRACTING OFFICER IN A PARTICULAR CASE SHOULD ALWAYS BE GUIDED BY THE MOTIVE TO OBTAIN THE BEST OR MOST ADVANTAGEOUS CONTRACT FOR THE GOVERNMENT, WE POINTED OUT IN OUR DECISION IN 38 COMP. GEN. 532 THAT THE BEST INTERESTS OF THE GOVERNMENT WOULD NOT BE SERVED BY PERMITTING A WAIVER OF THE BID BOND REQUIREMENT OR ALLOWING A BIDDER TO MAKE HIS BID RESPONSIVE BY FILING A PROPER BID BOND AFTER OPENING OF BIDS BECAUSE IT WOULD COMPROMISE THE INTEGRITY OF THE COMPETITIVE BID SYSTEM. WE FELT THAT IT MIGHT MAKE IT POSSIBLE FOR A BIDDER TO DECIDE AFTER OPENING WHETHER OR NOT TO ATTEMPT TO HAVE HIS BID REJECTED AND MIGHT CREATE, BY THE NECESSARY SUBJECTIVE DETERMINATIONS BY CONTRACTING OFFICERS, INCONSISTENCIES IN THE TREATMENT OF BIDDERS WITH THE POSSIBLE RESULT THAT IT MIGHT DRIVE OUT OF COMPETITION FULLY RESPONSIVE AND RESPONSIBLE BIDDERS IN THOSE AREAS WHERE SUCH GENERAL PRACTICES OCCURRED.

IN THIS CASE THE REPORTED FACTS DO NOT INDICATE THAT THE CONTRACTING OFFICER ACTED IMPROPERLY IN REJECTING THE BID OF CONTROL FOR ITS FAILURE TO ACCOMPANY ITS BID BY A PROPER BID BOND.

THE ORIGINAL BID AND PROTEST OF THE CONTROL CORPORATION, TOGETHER WITH THE INVITATION FOR BIDS AND OTHER DOCUMENTS, ARE RETURNED HEREWITH.