B-175679, MAY 17, 1972

B-175679, MAY 17, 1972

BID PROTEST - FAILURE TO SUBMIT REQUIRED BID BOND - FAILURE TO QUALIFY AS LOW BIDDER DECISION DENYING THE PROTEST OF EDWIN E. FRANCIS, INC., AGAINST AWARD OF A CONTRACT TO RAND CONSTRUCTION COMPANY, INC., UNDER AN IFB ISSUED BY THE NEW YORK DISTRICT CORPS OF ENGINEERS FOR AN ADDITION AND ALTERATIONS TO THE PATTERSON ARMY HOSPITAL AT FORT MONMOUTH, N.J. WHERE THE SOLICITATION REQUIRES A BID BOND, THE REQUIREMENT IS MATERIAL AND NONCOMPLIANCE RENDERS THE BID NONRESPONSIVE. 46 COMP. GEN. 11 (1966). IN ANY EVENT, PROTESTANT FAILED TO QUALIFY AS LOW BIDDER ON THE COMBINATION OF ADDITIVE AND BASE BID ITEMS UNDER THE EVALUATION METHOD PRESCRIBED IN THE INVITATION. ACCORDINGLY, THE PROTEST MUST BE DENIED.

TO EDWIN E. FRANCIS, INCORPORATED:

YOUR PROTEST AGAINST AWARD OF A CONTRACT TO ANOTHER BIDDER PURSUANT TO INVITATION FOR BIDS NO. DACA51-72-B-0049, ISSUED FEBRUARY 18, 1972, BY THE NEW YORK DISTRICT, CORPS OF ENGINEERS, FOR THE CONSTRUCTION OF AN ADDITION AND ALTERATIONS TO THE PATTERSON ARMY HOSPITAL AT FORT MONMOUTH, NEW JERSEY, HAS BEEN FORWARDED FOR OUR CONSIDERATION.

THE INVITATION CALLED FOR PRICES ON A BASE BID ITEM AND FOUR ADDITIVE BID ITEMS. THE BASE BID ITEM WAS FOR CONSTRUCTION OF THE ADDITION AND ALTERATIONS EXCEPT FOR THE ADDITIVES. THE ADDITIVE BID ITEMS CONSISTED OF (1) AN INCREASE IN THE REFRIGERANT PLANT CAPACITY TO AIR CONDITION AN AREA OF THE EXISTING HOSPITAL WHICH IS PRESENTLY UN-AIR CONDITIONED; (2) INSTALLATION OF A FAN COIL SYSTEM TO AIR CONDITION THE UN-AIR CONDITIONED AREA OF THE EXISTING HOSPITAL; (3) PROVIDING A NEW PARKING AREA COMPLETE WITH NEW PAVING AND CURBS; AND (4) PROVIDING A NEW DRIVEWAY TO THE BASEMENT MECHANICAL ROOM COMPLETE WITH NEW PAVING AND CURBS. BIDS WERE SCHEDULED FOR OPENING ON MARCH 22, 1972. ON MARCH 20, 1972, A MEMORANDUM WAS INCLUDED IN THE CONTRACT FILE SHOWING THAT $2,537,642 WAS AVAILABLE FOR THE PROJECT.

THE INVITATION PROVIDED FOR THE SUBMISSION WITH EACH BID OF A PROPER BID BOND OR OTHER SECURITY IN THE LESSER OF 20 PERCENT OF THE BID PRICE OR $3,000,000. THE INVITATION, AT PAGE IB-4, ALSO INCLUDED THE FOLLOWING:

"(C) THE LOW BIDDER FOR PURPOSES OF AWARD SHALL BE THE CONFORMING RESPONSIBLE BIDDER OFFERING THE LOW AGGREGATE AMOUNT FOR THE BASE BID PLUS (IN THE ORDER OF PRIORITY LISTED IN THE SCHEDULE) THOSE ADDITIVE ITEMS PROVIDING THE MOST FEATURES OF THE WORK WITHIN THE FUNDS DETERMINED BY THE GOVERNMENT TO BE AVAILABLE BEFORE BIDS ARE OPENED. *** "

BIDS WERE OPENED AS SCHEDULED ON MARCH 22, 1972. THE LOWEST AGGREGATE BID ON THE BASE ITEM AND THE FOUR ADDITIVES WAS SUBMITTED BY RAND CONSTRUCTION COMPANY, INCORPORATED (RAND), AT $1,963,500. RAND'S BID INCLUDED A PRICE OF $1,748,500 FOR THE BASE ITEM, AND THE RESPECTIVE AMOUNTS OF $34,000, $170,000, $9,000, AND $2,000 FOR ADDITIVES.

YOUR BID PRICE ON THE BASE ITEM WAS $1,648,500. YOUR BID DID NOT INCLUDE PRICES FOR ADDITIVES NOS. 1 AND 3. YOUR PRICES FOR ADDITIVES NOS. 2 AND 4 WERE $566,982 AND $280,400 RESPECTIVELY. YOUR PRICE ON THE BASE ITEM AND THE TWO ADDITIVES EXCEEDED RAND'S TOTAL PRICE ON THE BASE ITEM AND ALL OF THE FOUR ADDITIVES. THE CONTRACTING OFFICER THEREFORE DETERMINED RAND TO BE THE LOW BIDDER IN ACCORDANCE WITH THE QUOTED PROVISION OF THE IFB. THE CONTRACTING OFFICER ALSO CONSIDERED THAT YOUR BID WAS NOT RESPONSIVE TO THE INVITATION IN A MATERIAL RESPECT BECAUSE THE BID WAS NOT ACCOMPANIED BY THE REQUIRED BID BOND OR OTHER SECURITY.

IT APPEARS TO BE YOUR POSITION THAT YOUR COMPANY WAS ENTITLED TO AWARD ON THE BASE BID ITEM BECAUSE IT HAD SUBMITTED THE LOWEST BASE BID PRICE. YOU NOTE THAT YOU HAVE PREVIOUSLY SUBMITTED BIDS TO THE NEW YORK DISTRICT, CORPS OF ENGINEERS, WHICH WERE NOT ACCOMPANIED BY BID BONDS AND THE DISTRICT DID NOT RAISE ANY QUESTION CONCERNING THE ABSENCE OF A BID SECURITY. YOU ALSO CONTEND, IN EFFECT, THAT SUBPARAGRAPHS 5(B) AND 5(D) OF STANDARD FORM 22 VALIDATE YOUR BID PRICE AS A QUALIFIED UNIT, AND THAT YOU ARE ENTITLED TO AN AWARD ON THE BASIS OF SUBPARAGRAPH 10(A) OF STANDARD FORM NO. 22 WHICH PROVIDES THAT AWARD OF CONTRACT WILL BE MADE TO THAT RESPONSIBLE BIDDER WHOSE BID, CONFORMING TO THE INVITATION FOR BIDS, IS MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED.

THE CONTRACTING OFFICER RECOGNIZES THAT YOUR COMPANY SUBMITTED TWO PREVIOUS BIDS TO THE NEW YORK DISTRICT, CORPS OF ENGINEERS. HOWEVER, THE BIDS WERE NOT ELIGIBLE FOR AWARD SINCE THEY WERE NOT LOW. THEREFORE, THE CONTRACTING OFFICER WAS NOT OBLIGED TO ADVISE YOU OF THE CONSEQUENCE OF THE FAILURE TO SUBMIT REQUIRED BID SECURITY.

YOU STATE THAT AT SMALL BUSINESS CONFERENCES SPONSORED BY THE GOVERNMENT THE SPEAKERS INDICATED THAT WHEN A COMPANY IS THE LOW BIDDER IT SHOULD INFORM THE GOVERNMENT OF ITS ABILITY TO OBTAIN PERFORMANCE AND PAYMENT BONDS AND THIS WOULD BE SUFFICIENT FOR THE GOVERNMENT. PERFORMANCE AND PAYMENT BONDS MUST NORMALLY BE PROVIDED BY THE SUCCESSFUL BIDDER ON A CONSTRUCTION PROJECT AFTER AWARD OF A CONTRACT. THE SUBMISSION OF AN APPROPRIATE BID BOND OR OTHER ACCEPTABLE SECURITY IS A CONDITION OF ELIGIBILITY FOR AWARD. THE TWO SITUATIONS ARE NOT SIMILAR AND A RULE OR PROCEDURE APPLICABLE TO PERFORMANCE AND PAYMENT BONDS WOULD NOT NECESSARILY APPLY TO BID SECURITY.

THE RULE IS CLEAR THAT GENERALLY WHERE THE SOLICITATION REQUIRES THE SUBMISSION OF BID SECURITY WITH THE BID, THE REQUIREMENT IS MATERIAL AND NONCOMPLIANCE RENDERS A BID NONRESPONSIVE. 46 COMP. GEN. 11 (1966), 38 COMP. GEN. 532 (1959). SEE ALSO UNITED STATES V STEWART, 234 F. SUPP. 94 (1964), IN WHICH THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA, UPHELD THE REJECTION OF A BID ACCOMPANIED BY A BOND DEFICIENT IN AMOUNT DESPITE THE FACT THAT AN ADEQUATE BID BOND WAS OFFERED BY THE BIDDER AFTER THE OPENING OF BIDS.

REGARDLESS OF THE SIGNIFICANCE OF YOUR FAILURE TO PROVIDE ACCEPTABLE BID SECURITY WITH YOUR BID, YOUR COMPANY DID NOT QUALIFY AS THE LOW BIDDER ON THE COMBINATION OF BASE BID AND ADDITIVE BID ITEMS UNDER THE EVALUATION METHOD PRESCRIBED IN THE INVITATION. SINCE THE LOW ACCEPTABLE BID PRICE FOR THE BASE ITEM PLUS ALL ADDITIVES WAS WITHIN THE AMOUNT OF AVAILABLE FUNDS AS DETERMINED AND RECORDED BY THE GOVERNMENT BEFORE THE OPENING OF BIDS, AWARD MAY PROPERLY BE MADE TO THAT LOW BIDDER, RAND. B-170168, SEPTEMBER 10, 1970. WE FIND NOTHING IN SUBPARAGRAPHS 5(B) OR 5(D) OF STANDARD FORM 22 WHICH WOULD JUSTIFY A DIFFERENT CONCLUSION.

ACCORDINGLY, YOUR PROTEST IS DENIED.