B-158539, MAR. 21, 1966

B-158539: Mar 21, 1966

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INC.: REFERENCE IS MADE TO YOUR LETTER OF MARCH 4. THE INVITATION FOR BIDS WAS ISSUED ON DECEMBER 13. BIDS WERE OPENED ON FEBRUARY 2. THE SPECIFICATIONS PROVIDED THAT AWARD WAS TO BE MADE ON THE BASIS OF EITHER BID ITEM 1 OR 2 PLUS BID ITEM 3. TWELVE BIDS WERE RECEIVED WITH THE APPARENT LOW BIDDER BEING JOHN A. YOUR CORPORATION WAS DETERMINED TO BE THE SECOND LOW BIDDER. THE LARGEST AMOUNT ON WHICH AWARD COULD BE MADE TO THE JOINT VENTURE IS $773. 000 IS SUFFICIENT FOR BID ITEM 1 ($748. IS DEFICIENT WHEN ITEM 3 ($7.15 UNIT PRICE PER LINEAR FOOT OF STEEL PILING MULTIPLIED BY THE ESTIMATED QUANTITY OF 3. 450 LINEAR FEET OF PILING) IS ADDED TO EITHER. YOUR BIDS WERE AS FOLLOWS: ITEM 1. YOU HAVE BASED YOUR PROTEST OF PROPOSED AWARD OF THE CONTRACT TO JOHN A.

B-158539, MAR. 21, 1966

TO STAMELL CONSTRUCTION COMPANY, INC.:

REFERENCE IS MADE TO YOUR LETTER OF MARCH 4, 1966, SUPPLEMENTING YOUR LETTER OF FEBRUARY 15, 1966, IN WHICH YOU PROTEST AGAINST THE PROPOSED AWARD OF CONTRACT NO. NBY-66382, RADIOLOGICAL CONTROL FACILITY, PORTSMOUTH NAVAL SHIPYARD, PORTSMOUTH, NEW HAMPSHIRE, BY THE DEPARTMENT OF THE NAVY, BUREAU OF YARDS AND DOCKS.

THE INVITATION FOR BIDS WAS ISSUED ON DECEMBER 13, 1965, AND BIDS WERE OPENED ON FEBRUARY 2, 1966, AT 2:00 P.M., E.S.T. THE INVITATION REQUIRED A BID BOND IN THE AMOUNT OF 20 PERCENT OF THE BID, AND THE SPECIFICATIONS PROVIDED THAT AWARD WAS TO BE MADE ON THE BASIS OF EITHER BID ITEM 1 OR 2 PLUS BID ITEM 3. TWELVE BIDS WERE RECEIVED WITH THE APPARENT LOW BIDDER BEING JOHN A. BERGGREN COMPANY, INCORPORATED, AND CHAPIN RILEY, A JOINT VENTURE. YOUR CORPORATION WAS DETERMINED TO BE THE SECOND LOW BIDDER.

THE LARGEST AMOUNT ON WHICH AWARD COULD BE MADE TO THE JOINT VENTURE IS $773,487.50. THE BID BOND SUBMITTED BY THEM IN THE AMOUNT OF $150,000 IS SUFFICIENT FOR BID ITEM 1 ($748,820), OR BID ITEM 2 ($728,599); BUT IS DEFICIENT WHEN ITEM 3 ($7.15 UNIT PRICE PER LINEAR FOOT OF STEEL PILING MULTIPLIED BY THE ESTIMATED QUANTITY OF 3,450 LINEAR FEET OF PILING) IS ADDED TO EITHER. YOUR BIDS WERE AS FOLLOWS: ITEM 1, $764,353; ITEM 2, $749,353; ITEM 3, $7.80.

YOU HAVE BASED YOUR PROTEST OF PROPOSED AWARD OF THE CONTRACT TO JOHN A. BERGGREN COMPANY, INCORPORATED, AND CHAPIN RILEY ON THE FOLLOWING GROUNDS: THAT THE BID BOND SUBMITTED WAS DEFICIENT; THAT ONE OF THE JOINT VENTURERS DID NOT SIGN THE BID BOND; THAT YOUR INVESTIGATION REVEALS NO WRITTEN INSTRUMENT CREATING THE JOINT VENTURE; AND THAT THE JOINT VENTURE HAS NO EXPERIENCE IN THE FIELD OF GENERAL CONTRACTING.

YOUR ATTENTION IS INVITED TO OUR DECISION IN 43 COMP. GEN. 238 AND PARAGRAPH 10-102.5 (II) OF THE ARMED SERVICES PROCUREMENT REGULATION TO THE EFFECT THAT REJECTION OF A BID IS NOT REQUIRED WHERE THE AMOUNT OF THE BID GUARANTEE, THOUGH LESS THAN THE AMOUNT REQUIRED BY THE INVITATION FOR BIDS IS EQUAL TO OR GREATER THAN THE DIFFERENCE BETWEEN THE PRICE STATED IN THE BID AND THE PRICE STATED IN THE NEXT HIGHER ACCEPTABLE BID. THEREFORE, SINCE THE AMOUNT OF THE BID BOND IN THIS CASE IS GREATER THAN THE DIFFERENCE BETWEEN THE AMOUNT OF THE LOW BID AND THE AMOUNT OF YOUR BID, IT WAS NOT REQUIRED THAT THE LOW BID BE REJECTED BECAUSE OF THE DEFICIENCY IN THE BID BOND.

THE RELATION OF THE PARTIES TO A JOINT VENTURE IS SO SIMILAR TO THAT IN A PARTNERSHIP THAT THEIR RIGHTS AND LIABILITIES ARE USUALLY TESTED BY PARTNERSHIP RULES. THE CONTRACT OF ONE PARTNER MADE WITHIN THE SCOPE OF THE PARTNERSHIP AFFAIRS IS BINDING ON THE FIRM AND EACH AND ALL OF THE PARTNERS. FURTHERMORE, WHILE A JOINT VENTURE IS FOUNDED ENTIRELY ON CONTRACT, NO PARTICULAR FORM OF EXPRESSION OR FORMALITY OF EXECUTION IS NECESSARY, AND THE CONTRACT MAY BE ORAL OR WRITTEN. FOR A GOOD DISCUSSION OF THE RULES GOVERNING THESE AREAS, SEE VOLUMES 48 AND 68 OF CORPUS JURIS SECUNDUM STARTING ON PAGES 801AND 386, RESPECTIVELY.

WE HAVE BEEN INFORMED BY THE BUREAU OF YARDS AND DOCKS, DEPARTMENT OF THE NAVY, THAT THE JOINT VENTURE DOES NOT LACK EXPERIENCE IN THE FIELD OF GENERAL CONTRACTING AND, IN FACT, THE JOHN A. BERGGREN COMPANY, INCORPORATED, HAS PERFORMED SATISFACTORILY FOR THE DEPARTMENT IN THE PAST.

ACCORDINGLY, WE FIND NO LEGAL OBJECTION TO THE ACTION TO BE TAKEN BY THE BUREAU IN AWARDING THE CONTRACT TO THE JOHN A. BERGGREN COMPANY, INCORPORATED, AND CHAPIN RILEY, AND, THEREFORE, YOUR PROTEST IS DENIED.