B-158656, MAY 26, 1966

B-158656: May 26, 1966

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INC.: FURTHER REFERENCE IS MADE TO YOUR LETTER DATED MARCH 2. YOUR PROTEST WAS BASED ON IRREGULARITIES AND INADEQUACIES OF THE BID BONDS SUBMITTED BY THE SOUTHEASTERN ELECTRIC CONTRACTING CO. YOUR PROTEST STATES THE BELIEF THAT THE SOUTHEASTERN BID IS AN OFFER BY SOUTHEASTERN ALONE AND NOT THAT OF "JOINT VENTURERS" SO THAT AN ADDITIONAL BOND BY ANOTHER COMPANY NOT JOINED IN MAKING THE OFFER CANNOT BE ACCEPTED TO FULFILL THE INADEQUACY OF THE BID GUARANTEE. THE INVITATION FOR BIDS WAS ISSUED ON DECEMBER 30. BIDS WERE OPENED ON FEBRUARY 15. THE APPARENT LOW BIDDER WAS SOUTHEASTERN ELECTRIC CONTRACTING CO. YOUR COMPANY WAS SECOND LOW BIDDER WITH A BID OF $1. WAS THIRD LOW BIDDER WITH A BID OF $1.

B-158656, MAY 26, 1966

TO SEAWARD CONSTRUCTION COMPANY, INC.:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED MARCH 2, 1966, PROTESTING ANY AWARD OF A CONTRACT TO SOUTHEASTERN ELECTRIC CONTRACTING CO., INC., UNDER DEPARTMENT OF THE NAVY INVITATION FOR BIDS NO. NBY-60522.

YOUR PROTEST WAS BASED ON IRREGULARITIES AND INADEQUACIES OF THE BID BONDS SUBMITTED BY THE SOUTHEASTERN ELECTRIC CONTRACTING CO., INC., AND VOLTA ELECTRIC COMPANY, INCORPORATED, JOINT VENTURES, THE LOW BIDDER, AND ON THE ALLEGED LACK OF RESPONSIBILITY OF THE LOW BIDDER. YOUR PROTEST STATES THE BELIEF THAT THE SOUTHEASTERN BID IS AN OFFER BY SOUTHEASTERN ALONE AND NOT THAT OF "JOINT VENTURERS" SO THAT AN ADDITIONAL BOND BY ANOTHER COMPANY NOT JOINED IN MAKING THE OFFER CANNOT BE ACCEPTED TO FULFILL THE INADEQUACY OF THE BID GUARANTEE.

THE INVITATION FOR BIDS WAS ISSUED ON DECEMBER 30, 1965, AND BIDS WERE OPENED ON FEBRUARY 15, 1966. THE APPARENT LOW BIDDER WAS SOUTHEASTERN ELECTRIC CONTRACTING CO., INC., AND VOLTA ELECTRIC COMPANY, INCORPORATED, A JOINT VENTURE, WHICH BID $1,356,300 FOR ITEM 1 AND $1,156,300 FOR ITEM 2, ITEM 1 INCLUDING ITEM 2. YOUR COMPANY WAS SECOND LOW BIDDER WITH A BID OF $1,393,838 FOR ITEM 1 AND $1,233,838 FOR ITEM 2. ELECTROLINE NATIONAL, INC., WAS THIRD LOW BIDDER WITH A BID OF $1,399,000 FOR ITEM 1 AND $1,199,000 FOR ITEM 2.

THE INVITATION FOR BIDS REQUIRED SECURITY IN THE AMOUNT OF 20 PERCENT OF THE BID WHICH FOR THE SOUTHEASTERN-VOLTA BID WOULD BE $271,260. BID BONDS IN THE AMOUNT OF $170,000 WERE ISSUED BY THE UNITED BONDING INSURANCE COMPANY FOR EACH OF THE TWO JOINT VENTURERS, OR A TOTAL OF $340,000. THUS, THE AGGREGATE AMOUNT OF BOTH BONDS WAS ADEQUATE. WHILE IT IS REPORTED THAT TREASURY DEPARTMENT CIRCULAR NO. 570, DATED JUNE 1, 1965, LISTS THE INDEMNITY LIMIT FOR THE SURETY HERE INVOLVED AS $78,000, UNDER PARAGRAPH 10-102.5 (II) OF THE ARMED SERVICES PROCUREMENT REGULATION, 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. SINCE THE LIMITATION OF THE LOW BIDDER'S SURETY, $78,000, IS GREATER THAN THE DIFFERENCE BETWEEN THE LOW BID AND THE PRICE STATED IN YOUR BID, THE NEXT HIGHER ACCEPTABLE BID, IT IS NOT REQUIRED THAT THE LOW BID BE REJECTED BECAUSE OF THE DEFICIENCY IN THE BID BOND. SEE 43 COMP. GEN. 238.

WITH RESPECT TO THE EXPRESSION OF YOUR BELIEF THAT THE LOW BID IS AN OFFER BY SOUTHEASTERN ALONE AND NOT THAT OF A JOINT VENTURE, THIS IS NOT DISCLOSED BY THE RECORD BEFORE US, AND YOU HAVE FURNISHED NO EVIDENCE TO SUPPORT IT. IN FACT, THE BID IN QUESTION WAS SIGNED BY REPRESENTATIVES OF THE TWO FIRMS INVOLVED AND ON ITS FACE IT IS INDICATED THAT IT IS SUBMITTED BY A JOINT VENTURE.

AS TO THE RESPONSIBILITY OF THE LOW BIDDER, THE SMALL BUSINESS ADMINISTRATION (SBA) HAS ISSUED A CERTIFICATE OF COMPETENCY (COC) TO THE LOW BIDDER PURSUANT TO SECTION 8 (B) (7) OF THE SMALL BUSINESS ACT, AS AMENDED BY PUBLIC LAW 85-536, 15 U.S.C. 637 (B) (7). THE CERTIFICATE ISSUED BY SBA IS REQUIRED BY THE ACT AND ARMED SERVICES PROCUREMENT REGULATION 1-705.4 (A) TO BE ACCEPTED AS CONCLUSIVE BY THE CONTRACTING OFFICER WITH RESPECT TO THE BIDDER'S CAPACITY AND CREDIT IN RESPECT TO ITS PERFORMANCE OF THE WORK UNDER THE INVITATION HERE INVOLVED. SEE 38 COMP. GEN. 864.

ACCORDINGLY, WE SEE NO LEGAL OBJECTION TO AN AWARD BEING MADE TO THE LOW BIDDER UNDER THE INVITATION BY THE DEPARTMENT OF THE NAVY.