B-161925, OCT. 11, 1967

B-161925: Oct 11, 1967

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A BIDDER WHO PROTESTS WARRANTY AND PERFORMANCE BOND REQUIREMENT BECAUSE SMALL BUSINESS FIRMS ARE UNABLE TO OBTAIN PERFORMANCE BOND FOR LENGTH OF WARRANTY PERIOD HAS HAD ALLEGATION CONFIRMED BY CONTRACTING AGENCY AND. DETERMINATION TO READVERTISE PROCUREMENT IS PROPER ACTION SINCE AN AWARD UNDER AN ADVERTISED PROCUREMENT ELIMINATING THE PERFORMANCE BOND WOULD NOT BE PROPER. PRESIDENT: REFERENCE IS MADE TO YOUR TELEGRAM OF JUNE 29. YOU HAVE MAINTAINED THAT IT IS IMPOSSIBLE FOR A SMALL BUSINESS TO OBTAIN A BOND COVERING THE 5-YEAR WARRANTY PERIOD AGAINST LEAKAGE. ALTHOUGH THE BOND REQUIREMENT WAS INCLUDED IN THE INVITATION IN GOOD FAITH. ALTHOUGH IT IS UNFORTUNATE THAT BIDS ON THE ITEM HAVE BEEN OPENED.

B-161925, OCT. 11, 1967

BIDS - RESTRICTIVE - SMALL BUSINESS PRECLUSION DECISION TO HASTINGS RADIOCHEMICAL WORKS CONCERNING PROTEST AGAINST WARRANTY CLAUSE IN GENERAL SERVICES ADMINISTRATION CONTRACT BECAUSE IT IMPOSES IMPOSSIBLE REQUIREMENTS UPON SMALL BUSINESS BIDDERS. A BIDDER WHO PROTESTS WARRANTY AND PERFORMANCE BOND REQUIREMENT BECAUSE SMALL BUSINESS FIRMS ARE UNABLE TO OBTAIN PERFORMANCE BOND FOR LENGTH OF WARRANTY PERIOD HAS HAD ALLEGATION CONFIRMED BY CONTRACTING AGENCY AND, THEREFORE, DETERMINATION TO READVERTISE PROCUREMENT IS PROPER ACTION SINCE AN AWARD UNDER AN ADVERTISED PROCUREMENT ELIMINATING THE PERFORMANCE BOND WOULD NOT BE PROPER.

TO MR. OTHEL L. PIRTLE, JR., PRESIDENT:

REFERENCE IS MADE TO YOUR TELEGRAM OF JUNE 29, 1967, AND SUBSEQUENT CORRESPONDENCE, PROTESTING THAT GENERAL SERVICES ADMINISTRATION INVITATION FOR BIDS FPNME-Z-96609-A-6-9-67 IMPOSES IMPOSSIBLE REQUIREMENTS UPON SMALL BUSINESS BIDDERS.

THE INVITATION REQUIRES THAT THE CONTRACTOR SHALL WARRANT ITEM 29, CESIUM 137 SOURCE, DELIVERED UNDER THE CONTRACT AGAINST LEAKAGE OF RADIOACTIVE MATERIAL FOR A 5-YEAR PERIOD AND FURTHER REQUIRES THAT THE SUCCESSFUL BIDDER FURNISH A PERFORMANCE BOND EQUAL TO 50 PERCENT OF THE TOTAL BID PRICE AWARDED.

YOU HAVE MAINTAINED THAT IT IS IMPOSSIBLE FOR A SMALL BUSINESS TO OBTAIN A BOND COVERING THE 5-YEAR WARRANTY PERIOD AGAINST LEAKAGE. THE GENERAL SERVICES ADMINISTRATION HAS ADVISED THAT, ALTHOUGH THE BOND REQUIREMENT WAS INCLUDED IN THE INVITATION IN GOOD FAITH, IT HAS NOW CONFIRMED YOUR ALLEGATION WITH TWO BONDING COMPANIES. ACCORDINGLY, THE GENERAL SERVICES ADMINISTRATION PROPOSES TO CANCEL ITEM 29 OF THE INVITATION AND TO READVERTISE THE ITEM AT A FUTURE DATE WITHOUT THE REQUIREMENT FOR A PERFORMANCE BOND COVERING THE WARRANTY PERIOD.

ALTHOUGH IT IS UNFORTUNATE THAT BIDS ON THE ITEM HAVE BEEN OPENED, AN AWARD UNDER AN ADVERTISED INVITATION ON TERMS DIFFERENT FROM THE ADVERTISED TERMS WOULD NOT BE PROPER. SEE 36 COMP. GEN. 759, 760-761. THUS, READVERTISEMENT APPEARS TO BE THE ONLY PROPER ALTERNATIVE IN THIS CASE.