B-168020, FEB. 17, 1970

B-168020: Feb 17, 1970

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A BIDDER WHO WAS UNABLE TO BE CONSIDERED FOR AWARD OF A CONTRACT FINANCED IN PART BY FEDERAL FUNDS BECAUSE OF INABILITY TO OBTAIN A BID BOND SHOULD ASSERT HIS COMPLAINT BEFORE THE CALIFORNIA STATE INSURANCE CO. ATTENTION IS DIRECTED TO ASSISTANCE BEING OFFERED MINORITY CONTRACTORS TO OBTAIN BONDING BY THE SURETY UNDERWRITERS ASSOCIATION OF NORTHERN CALIFORNIA. ALLEN: FURTHER REFERENCE IS MADE TO YOUR LETTER DATED OCTOBER 28. YOUR PROTEST IS BASED ON THE CONTENTION THAT TRANS-BAY WAS NOT AWARDED THE SUBJECT CONTRACT FOR THE REASON THAT SEVERAL PRIVATE INSURING BONDING COMPANIES ARBITRARILY AND CAPRICIOUSLY DENIED A BOND TO TRANS-BAY. IT SHOULD BE OBSERVED THAT THE SAN FRANCISCO REDEVELOPMENT AGENCY IS A STATE AGENCY.

B-168020, FEB. 17, 1970

BID PROTEST--BONDING REQUIREMENT DECISION CONCERNING PROTEST OF TRANS-BAY ENGINEERS AND BUILDERS, INC; AGAINST AWARD OF A SITE IMPROVEMENT CONTRACT TO ANOTHER FIRM BY THE SAN FRANCISCO REDEVELOPMENT AGENCY. A BIDDER WHO WAS UNABLE TO BE CONSIDERED FOR AWARD OF A CONTRACT FINANCED IN PART BY FEDERAL FUNDS BECAUSE OF INABILITY TO OBTAIN A BID BOND SHOULD ASSERT HIS COMPLAINT BEFORE THE CALIFORNIA STATE INSURANCE CO. ATTENTION IS DIRECTED TO ASSISTANCE BEING OFFERED MINORITY CONTRACTORS TO OBTAIN BONDING BY THE SURETY UNDERWRITERS ASSOCIATION OF NORTHERN CALIFORNIA.

TO MR. CLAUDE O. ALLEN:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED OCTOBER 28, 1969, PROTESTING ON BEHALF OF TRANS-BAY ENGINEERS & BUILDERS, INC; AGAINST THE AWARD OF A CONTRACT TO ANY OTHER FIRM PURSUANT TO SITE IMPROVEMENT CONTRACT NO. 1, HUNTERS POINT REDEVELOPMENT PROJECT, N.D.P. A-5-1, SAN FRANCISCO REDEVELOPMENT AGENCY, SAN FRANCISCO, CALIFORNIA.

YOUR PROTEST IS BASED ON THE CONTENTION THAT TRANS-BAY WAS NOT AWARDED THE SUBJECT CONTRACT FOR THE REASON THAT SEVERAL PRIVATE INSURING BONDING COMPANIES ARBITRARILY AND CAPRICIOUSLY DENIED A BOND TO TRANS-BAY, THUS PRECLUDING TRANS-BAY FROM ANY CHANCE OF RECEIVING AN AWARD FROM THE SAN FRANCISCO REDEVELOPMENT AGENCY.

AT THE OUTSET, IT SHOULD BE OBSERVED THAT THE SAN FRANCISCO REDEVELOPMENT AGENCY IS A STATE AGENCY, AND NOT A FEDERAL AGENCY. HOWEVER, SINCE THE SUBJECT PROJECT WAS FINANCED, IN PART, BY FUNDS MADE AVAILABLE BY THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT UNDER THE PROVISIONS OF TITLE 1 OF THE HOUSING ACT OF 1949, 42 U.S.C. 1450, ET SEQ; THE SAN FRANCISCO REGIONAL OFFICE OF THE DEPARTMENT SUBMITTED A REPORT TO OUR OFFICE IN RESPONSE TO YOUR LETTER. WE ARE ENCLOSING A COPY OF SUCH REPORT, WHICH IS SELF-EXPLANATORY, FOR YOUR INFORMATION. WE FIND NOTHING IN SUCH REPORT WHICH IS CONTRARY TO THE GENERAL RULE THAT WHERE AN INVITATION REQUESTS A BID BOND, THIS REQUIREMENT IS A MATERIAL PART OF THE BID AND MAY NOT BE WAIVED. 38 COMP. GEN. 532 (1959). IN ANY EVENT, IT WOULD APPEAR THAT ANY COMPLAINTS AGAINST PRIVATE BONDING COMPANIES LOCATED IN CALIFORNIA SHOULD BE ASSERTED BEFORE THE CALIFORNIA STATE INSURANCE COMMISSION.

WITH REGARD TO FUTURE ACTION ON TRANS-BAY'S PROBLEMS IN THE BONDING AREA, YOU MIGHT OBSERVE THE COMMENT ON PAGE 6 OF THE ENCLOSED REPORT THAT PROGRAMS TO ASSIST MINORITY CONTRACTORS TO OBTAIN BONDING CAPACITY ARE NOW BEING CONSIDERED BY THE MEMBERSHIP OF THE SURETY UNDERWRITERS ASSOCIATION OF NORTHERN CALIFORNIA.