B-174754, FEB 16, 1972, 51 COMP GEN 508

B-174754: Feb 16, 1972

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BONDS - BID - PENAL SUM OMITTED THE CRITERIA FOR THE DETERMINATION THAT A BID BOND SUBMITTED WITH A BID IS SUFFICIENT IS WHETHER THE SURETY INTENDS TO BE OBLIGATED FOR A SUM CERTAIN AND OBJECTIVELY MANIFESTS SUCH AN INTENT. WHICH WAS REFERENCED TO THE SPECIFIC INVITATION THAT THE BID WAS SUBMITTED ON. THE REJECTION OF THE LOW BID WAS ERRONEOUS AND THE BID SHOULD BE REINSTATED SINCE THE SURETY KNEW THE EXTENT OF THE OBLIGATION UNDERTAKEN AND IN ISSUING THE BOND MANIFESTED THE INTENT TO BE BOUND IN THE REQUIRED PENAL SUM. 1972: REFERENCE IS MADE TO A LETTER. THE BID BOND WAS OTHERWISE PROPERLY COMPLETED. WAS IMPROPER. WE ARE OF THE OPINION. THAT THE SUFFICIENCY OF THE SUBMITTED BOND IS TO BE ASCERTAINED BY TWO CRITERIA.

B-174754, FEB 16, 1972, 51 COMP GEN 508

BONDS - BID - PENAL SUM OMITTED THE CRITERIA FOR THE DETERMINATION THAT A BID BOND SUBMITTED WITH A BID IS SUFFICIENT IS WHETHER THE SURETY INTENDS TO BE OBLIGATED FOR A SUM CERTAIN AND OBJECTIVELY MANIFESTS SUCH AN INTENT. THEREFORE, WHERE THE BID BOND ACCOMPANYING THE LOW BID OMITTED THE PENAL SUM REQUIRED BY THE INVITATION BUT THE SURETY SIGNED AND SEALED THE BOND, WHICH WAS REFERENCED TO THE SPECIFIC INVITATION THAT THE BID WAS SUBMITTED ON, THE REJECTION OF THE LOW BID WAS ERRONEOUS AND THE BID SHOULD BE REINSTATED SINCE THE SURETY KNEW THE EXTENT OF THE OBLIGATION UNDERTAKEN AND IN ISSUING THE BOND MANIFESTED THE INTENT TO BE BOUND IN THE REQUIRED PENAL SUM.

TO THE SECRETARY OF THE INTERIOR, FEBRUARY 16, 1972:

REFERENCE IS MADE TO A LETTER, 1333, WITH ENCLOSURES, DATED DECEMBER 17, 1971, FROM THE BUREAU OF RECLAMATION, ENGINEERING AND RESEARCH CENTER, DENVER, COLORADO, RESPONDING TO THE PROTEST OF UNITED POWER & CONTROL SYSTEMS, INC. (UNITED), REGARDING INVITATION FOR BIDS (IFB) DS 6917.

UNITED'S PROTEST QUESTIONS THE PROPRIETY OF THE CONTRACTING OFFICER'S REJECTION OF ITS LOW BID AS NONRESPONSIVE BECAUSE NO PENAL SUM HAD BEEN INSERTED IN THE BID BOND ACCOMPANYING ITS BID AS REQUIRED BY THE INVITATION. THE BID BOND WAS OTHERWISE PROPERLY COMPLETED. WE BELIEVE THAT UNITED'S PROTEST HAS MERIT AND THAT THE REJECTION OF ITS BID, UNDER THE CIRCUMSTANCES HERE PRESENT, WAS IMPROPER.

WE ARE OF THE OPINION, WITH RESPECT TO THE REQUIREMENT FOR SUBMISSION OF A BID BOND WITH A BID, THAT THE SUFFICIENCY OF THE SUBMITTED BOND IS TO BE ASCERTAINED BY TWO CRITERIA. FIRST, THE SURETY MUST HAVE INTENDED TO BE OBLIGATED FOR A SUM CERTAIN AND, SECOND, SUCH INTENT MUST BE OBJECTIVELY MANIFESTED.

IN THE PRESENT CASE, THE LOW BIDDER OBTAINED FROM THE SURETY AND SUBMITTED WITH ITS BID A BID BOND, SIGNED AND SEALED BY THE SURETY, WHICH REFERENCED THE SPECIFIC INVITATION ON WHICH THE BID WAS SUBMITTED. IN THE CIRCUMSTANCES, WE CONCLUDE THAT THE SURETY KNEW THE EXTENT OF THE OBLIGATION IT WAS UNDERTAKING AND THAT BY ISSUING THE BOND IT MANIFESTED ITS INTENT TO BE BOUND. TO REACH A CONTRARY CONCLUSION WOULD REQUIRE US TO IGNORE THE FACT OF BOND ISSUANCE AND THE PRECEDING PRELIMINARY ACTS ON THE PARTS OF THE SURETY SUCH AS SIGNING AND SEALING THE BOND FORM AND ATTACHING THERETO A POWER OF ATTORNEY SHOWING THE AUTHORITY OF ITS ATTORNEY-IN-FACT. GIVEN THE SURETY'S PRIOR KNOWLEDGE OF THE AMOUNT REQUIRED, THESE ACTIONS MUST BE ASSIGNED A REASONABLE SIGNIFICANCE WHICH WE TAKE TO BE THAT THE SURETY INTENDED TO BE BOUND IN THE REQUIRED PENAL SUM.

ACCORDINGLY, WE RECOMMEND THAT UNITED'S BID BE REINSTATED.