B-159209, JUN. 23, 1966

B-159209: Jun 23, 1966

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EUGENE DREXLER: FURTHER REFERENCE IS MADE TO YOUR LETTER DATED MAY 24. BID OPENING WAS SCHEDULED FOR 3:00 P.M. THE BID OPENING WAS POSTPONED TO 3:00 P.M. ALL FIRMS THAT HAD DRAWN COPIES OF THE PLANS AND SPECIFICATIONS WERE ADVISED OF THE CHANGE BY TELEGRAM AND BID OPENING WAS HELD ON MAY 13. AWARD WAS MADE TO BALABAN-GORDON ON MAY 24. IT WAS PROVIDED IN THE INVITATION THAT BIDDERS SUBMIT A BID GUARANTEE IN THE SUM OF 20 PERCENT OF THE BID PRICE. " THERE ARE THREE BLANK BOXES. ONE IS FOR THE BID DATE. YOU HAVE ASSERTED IN BEHALF OF ZINGER. AS THE BID DATE INSTEAD OF "5/13/66" (THE DATE TO WHICH BID OPENING WAS POSTPONED) THE BID BOND CONTAINS A DEFECT SO SUBSTANTIAL AS TO OPERATE AS A FAILURE TO SUBMIT ANY BOND.

B-159209, JUN. 23, 1966

TO MR. EUGENE DREXLER:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED MAY 24, 1966, SUBMITTED AS ATTORNEY IN SUPPORT OF THE PROTEST FILED BY ZINGER CONSTRUCTION COMPANY, INC., VALLEY STREAM, NEW YORK (HEREAFTER ZINGER), AGAINST AWARD OF CONTRACT TO BALABAN-GORDON COMPANY, INC., NEW YORK, NEW YORK (HEREAFTER BALABAN-GORDON), THE LOW BIDDER UNDER INVITATION FOR BIDS NO. NBY 70515, ISSUED BY THE EASTERN DIVISION, NAVAL FACILITIES ENGINEERING COMMAND.

THE INVITATION, ISSUED APRIL 7, 1966, SOLICITED BIDS FOR THE REHABILITATION OF VARIOUS BUILDINGS AT THE MILITARY OCEAN TERMINAL, UNITED STATES NAVAL SUPPLY CENTER, BAYONNE, NEW JERSEY. BID OPENING WAS SCHEDULED FOR 3:00 P.M., E.D.T., MAY 10, 1966. ON MAY 5, 1966, BY NOTICE NO. 1, THE BID OPENING WAS POSTPONED TO 3:00 P.M., E.D.T., MAY 13, 1966. ALL FIRMS THAT HAD DRAWN COPIES OF THE PLANS AND SPECIFICATIONS WERE ADVISED OF THE CHANGE BY TELEGRAM AND BID OPENING WAS HELD ON MAY 13, 1966, AT THE SCHEDULED TIME. AWARD WAS MADE TO BALABAN-GORDON ON MAY 24, 1966.

IT WAS PROVIDED IN THE INVITATION THAT BIDDERS SUBMIT A BID GUARANTEE IN THE SUM OF 20 PERCENT OF THE BID PRICE, EXECUTED ON STANDARD FORM 24, JUNE 1964 EDITION, A BID BOND FORM PRESCRIBED BY THE GENERAL SERVICES ADMINISTRATION AND EXTENSIVELY USED IN GOVERNMENT CONTRACTING. ON THIS FORM, UNDER SECTION TITLE "BID IDENTIFICATION," THERE ARE THREE BLANK BOXES. ONE IS FOR THE BID DATE; THE SECOND FOR THE INVITATION NUMBER; AND THE THIRD FOR THE SUBJECT OF THE INVITATION, I.E. * "CONSTRUCTION, AND THE THIRD FOR THE SUBJECT OF THE INVITATION, I.E.: "CONSTRUCTION," ,SUPPLIES," OR "SERVICES.' BALABAN GORDON INSERTED THE DATE "5/10/66" IN THE BOX FOR BID DATE; ,SPEC. NBY 70515" IN THE BOX FOR INVITATION NUMBER; AND, THE TERM "CONSTRUCTION" IN THE BOX FOR THE SUBJECT OF THE INVITATION. YOU HAVE ASSERTED IN BEHALF OF ZINGER, THE SECOND LOW BIDDER, THAT BY INSERTING "5/10/66, AS THE BID DATE INSTEAD OF "5/13/66" (THE DATE TO WHICH BID OPENING WAS POSTPONED) THE BID BOND CONTAINS A DEFECT SO SUBSTANTIAL AS TO OPERATE AS A FAILURE TO SUBMIT ANY BOND. YOU CONTEND THAT BALABAN GORDON DID NOT PROPERLY IDENTIFY THE BID AND, THEREFORE, THE CONTRACTING OFFICER COULD NOT ACCEPT THE BID WITHOUT OBTAINING THE CONSENT OF BALABAN-GORDON AS TO WHAT BID THEY INTENDED TO COVER BY THE BOND. YOU FURTHER CONTEND THAT BALABAN-GORDON MADE A MISTAKE WITH RESPECT TO PARAGRAPH 3 ON THE BID FORM 21 BY THEIR STATING THAT THEY HAD NOT PARTICIPATED IN CONTRACTS CONTAINING THE EQUAL OPPORTUNITY CLAUSE ORIGINALLY CONTAINED IN EXECUTIVE ORDER NO. 10925.

AS TO THIS LATTER CONTENTION NOTHING IN THE RECORD INDICATES BALABAN- GORDON MISTAKENLY FILLED IN THE PARAGRAPH, NOR HAVE YOU INTRODUCED ANY EVIDENCE SUBSTANTIATING YOUR BELIEF. NAVAL FACILITIES ENGINEERING COMMAND INFORMS US THEIR RECORDS INDICATE THAT BALABAN GORDON HAS NOT PERFORMED ANY WORK FOR THE COMMAND SINCE 1954. EXECUTIVE ORDER NO. 10925 IS DATED MARCH 6, 1961. THEREFORE, WE HAVE NO BASIS TO QUESTION THE REPRESENTATION, AND WE CONCLUDE THERE WAS NO ERROR.

WITH REGARD TO YOUR FORMER CONTENTION, WE CANNOT AGREE THAT THE DEFECT IN THE BID DATE WAS SO SUBSTANTIAL AS TO OPERATE AS A FAILURE TO SUBMIT ANY BOND.

STANDARD FORM 24 IS A BID GUARANTEE TO INDEMNIFY THE GOVERNMENT IN THE EVENT THE SUCCESSFUL BIDDER REFUSES TO EXECUTE A CONTRACT UPON ACCEPTANCE OF ITS BID. WHEN A BOND IS SUBMITTED IN THE CORRECT AMOUNT REQUIRED BY THE INVITATION FOR BIDS, BUT WHICH CONTAINS THE POSTPONED BID DATE UNDER THE BID IDENTIFICATION SECTION INSTEAD OF THE BID DATE TO WHICH THE OPENING WAS POSTPONED, THE TEST TO BE APPLIED IS WHETHER THE GOVERNMENT COULD ENFORCE AGAINST THE SURETY THE BOND AS SUBMITTED IN THE EVENT THE LOW BIDDER REFUSED TO PROCEED FURTHER WITH PERFORMANCE ONCE AWARD WAS MADE. CF. 39 COMP. GEN. 60 (1959).

THE SURETY ON THE BALABAN-GORDON BOND IS A PAID OR COMMERCIAL SURETY. WITH RESPECT TO THE REQUISITES, CONTENTS AND VALIDITY OF A BOND ISSUED BY SUCH A SURETY THE FOLLOWING IS QUOTED FROM 12 AM. JUR. 2D BONDS, SECTION 4 (PAGE 408):

"* * * DEFECTS, OR ERRORS IN THE CONTENT OR EXECUTION OF A BOND, IF NOT OF A MATERIAL CHARACTER, WILL NOT ORDINARILY CHANGE THE VALIDITY OR EFFECT OF THE INSTRUMENT * * * .'

ONE OF THE CASES CITED AS AN EXAMPLE OF A CASE CONTAINING A DEFECT NOT OF A MATERIAL CHARACTER IS IN RE MOFFITTS ESTATE, 75 A.2D 698 (1950). THAT CASE THE VALIDITY OF A BOND WAS NOT AFFECTED BY THE FACT THAT IT WAS ERRONEOUSLY DATED. THE COURT, ON PAGE 699, STATED:

"* * * THE FACT THAT A BOND IS ERRONEOUSLY DATED, OR BEARS NO DATE AT ALL WILL NOT AFFECT ITS VALIDITY IF COMPLIANCE HAS BEEN MADE WITH OTHER ESSENTIALS NECESSARY TO GIVE IT A LEGAL AND BINDING EFFECT.'

THIS PRINCIPLE, WHILE APPLYING TO A DIFFERENT FACT SITUATION, IS APPLICABLE HERE. THE DATE IN QUESTION IN THE MOFFITT CASE WAS NOT PART OF THE IDENTIFICATION SECTION OF THE BOND FORM, BUT WAS THE DATE OF EXECUTION OF THE BOND ITSELF. IN THE PRESENT CASE, THE PURPOSE OF THE BOX "BID DATE" IS ONLY TO IDENTIFY THE BID COVERED BY THE BOND. IT DOES NOT REPRESENT THE COMMENCEMENT OF THE TIME LIMITATION FOR WHICH THE SURETY MAY BE LIABLE UNDER THE BOND. THE BOND AND THE BID MUST BE CONSIDERED TOGETHER, AND THE EFFECTIVE DATE OF THE SURETY'S LIABILITY WOULD NOT BEGIN UNTIL THE ACCEPTANCE OF THE BID BY THE GOVERNMENT. GENERALLY, THE GOVERNMENT HAS A SIXTY-DAY PERIOD AFTER OPENING TO ACCEPT A BID AND THE DATE OF OPENING IS DETERMINED BY THE INVITATION, NOT BY THE BOND. THEREFORE, SINCE THE DATE OF OPENING WAS POSTPONED, THE FACT THAT THE ORIGINAL DATE WAS NOT CHANGED ON THE BID BOND FORM WOULD NOT AFFECT THE PERIOD OF LIABILITY WHICH THE SURETY ORIGINALLY CONTRACTED FOR.

BY PLACING A BID DATE "5/10/66" IN THE BID IDENTIFICATION INSTEAD OF "5/13/66" BALABAN-GORDON DID NOT FAIL TO IDENTIFY WHAT BID WAS COVERED BY THE BOND. NOT ONLY WAS THE BID IDENTIFICATION NUMBER CORRECT (WHICH IS THE ONLY INVITATION OUTSTANDING WITH THAT NUMBER FOR THE REHABILITATION OF BUILDINGS AT THE MILITARY OCEAN TERMINAL), BUT ALSO THE TERM "CONSTRUCTION" WAS PRESENT. THE DATE "5/10/66" ACTUALLY DOES ASSIST IN IDENTIFYING THE BID AS THAT WAS THE DATE ORIGINALLY SCHEDULED FOR OPENING.

THEREFORE, IT DOES NOT APPEAR THAT THERE COULD ARISE ANY CONFUSION AS TO THE BID COVERED BY THE BOND. THE BOND SUBMITTED WITH THE BALABAN-GORDON BID IS ENFORCEABLE BY THE GOVERNMENT AGAINST THE SURETY, AND ACCORDINGLY, YOUR PROTEST IS DENIED.