B-169369, APR. 7, 1970

B-169369, APR. 7, 1970

BONDS-BID SUFFICIENCY ALTHOUGH GAO DOES NOT ORDINARILY RENDER ADVANCE DECISIONS TO PROSPECTIVE BIDDERS, EXCEPTION IS CONSIDERED JUSTIFIED WHERE BIDDER REQUESTS DECISION ON SUFFICIENCY OF BID BOND IT PLANS TO SUBMIT WITH BID IN RESPONSE TO ARMY I.F.B; PROMPTED BY EARLIER ARMY DETERMINATION HOLDING SIMILAR BOND NONRESPONSIVE BECAUSE PRINCIPAL NAMED IN BOND WAS NOT SAME AS BIDDER, AND BIDDER IS ADVISED BOND IS SUFFICIENT. SINCE BID IS APPARENTLY INTENDED AS JOINT VENTURE, AND BIDDER AND PRINCIPAL ON BID BOND ARE SAME LEGAL ENTITIES, SURETY WOULD BE BOUND UPON BID BOND. THEREFORE, BID BOND IS SUFFICIENT AND BID WOULD NOT BE NONRESPONSIVE ON THIS ACCOUNT.

TO GRAFTON BOAT COMPANY, INCORPORATED:

REFERENCE IS MADE TO YOUR LETTER OF MARCH 18, 1970, WITH ENCLOSURES, REQUESTING OUR DECISION ON THE SUFFICIENCY OF A BID BOND TO BE SUBMITTED WITH YOUR BID IN RESPONSE TO INVITATION FOR BIDS NO. DACW61 70-B-0051, ISSUED BY THE UNITED STATES ARMY CORPS OF ENGINEERS, PHILADELPHIA DISTRICT. YOU REQUEST A PROMPT REPLY AS BIDS MUST BE SUBMITTED BY APRIL 13, 1970.

YOUR REQUEST FOR A DECISION WAS PROMPTED BY A DETERMINATION BY THE CORPS OF ENGINEERS, BALTIMORE DISTRICT, THAT THE BOND SUBMITTED WITH YOUR BID IN RESPONSE TO INVITATION FOR BIDS NO. DACW-31-70-B-0014 WAS NONRESPONSIVE TO THE BID BOND PROVISION OF THAT INVITATION. ALTHOUGH ALL BIDS WERE CONSIDERED EXCESSIVE AND REJECTED, YOU WERE ADVISED BY LETTER DATED MARCH 13, 1970, THAT YOUR BOND WAS CONSIDERED NONRESPONSIVE BECAUSE THE PRINCIPAL NAMED IN THE BOND, GRAFTON BOAT COMPANY, INCORPORATED, AND CONTINENTAL BOILER AND IRON WORKS, WAS NOT THE SAME AS THE BIDDER, GRAFTON BOAT COMPANY, INCORPORATED. IN SUPPORT OF ITS POSITION, THE CORPS OF ENGINEERS REFERS TO A DECISION OF THE COMPTROLLER GENERAL. ALTHOUGH THE DECISION REFERRED TO IS NOT IDENTIFIED, WE HAVE BEEN INFORMALLY ADVISED THAT THE REFERENCE IS TO 44 COMP. GEN. 495 (B-155837, FEBRUARY 17, 1965).

ORDINARILY OUR OFFICE DOES NOT CONSIDER QUESTIONS WHICH ARE ACADEMIC OR RENDER ADVANCE DECISIONS TO PROSPECTIVE BIDDERS. HOWEVER, WE CONSIDER AN EXCEPTION TO THESE RULES JUSTIFIED IN THE CIRCUMSTANCES PRESENTED HERE.

ALTHOUGH NOT SO STATED IN YOUR LETTER, IT APPEARS FROM THE INFORMATION YOU HAVE SUBMITTED THAT THE BID WAS INTENDED TO BE THAT OF THE JOINT VENTURE. IN ADDITION TO A COPY OF THE BID BOND, YOU HAVE FURNISHED A COPY OF THE "CERTIFICATION OF JOINT VENTURE WITH PARENT CO.", SUBMITTED WITH THE BID, WHICH CLEARLY EXPRESSES THE INTENTION AND AGREEMENT OF THE TWO AFFILIATED COMPANIES TO SUBMIT A JOINT BID UNDER THE SUBJECT INVITATION. THE AGREEMENT ALSO SPECIFIES THE INDIVIDUALS AUTHORIZED TO ACT ON BEHALF OF THE JOINT VENTURE. WE HAVE LEARNED FROM THE CORPS OF ENGINEERS THAT THE BID, WHICH NAMED ONLY GRAFTON BOAT COMPANY, INC; AS THE BIDDER, WAS SIGNED BY ONE OF THESE INDIVIDUALS, TIMOTHY A. GRAUL, VICE PRESIDENT, ENGINEERING/SALES.

SINCE THE BIDDER AND THE PRINCIPAL ON THE BID BOND ARE THE SAME LEGAL ENTITIES, THE SURETY WOULD BE BOUND UPON THE BOND SUBMITTED WITH THE BID IN THE EVENT OF A FAILURE BY THE BIDDER TO EXECUTE THE CONTRACT AND OTHER DOCUMENTS UPON ACCEPTANCE OF THE BID. THEREFORE, THE BID BOND IS SUFFICIENT AND THE BID WOULD NOT BE NONRESPONSIVE AND SUBJECT TO REJECTION ON THIS ACCOUNT.

IN ORDER TO AVOID ANY QUESTION AS TO THE SUFFICIENCY OF A BID BOND IN THE FUTURE, WE SUGGEST THAT THE BID AND THE BID BOND CLEARLY IDENTIFY THE BIDDER AND PRINCIPAL AS THE SAME LEGAL ENTITY.