B-175774, JUN 29, 1972, 51 COMP GEN 836

B-175774: Jun 29, 1972

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BIDS - BIDDER DESIGNATION - DISCREPANCY BETWEEN BID AND BID BOND WHERE THE PRINCIPAL NAMED IN A BID BOND WAS A JOINT VENTURE WHICH INCLUDED THE CORPORATION THAT WAS THE ONLY ENTITY NAMED IN THE LOW BID. TO EVIDENCE THAT A MISTAKE HAD BEEN MADE AND THE BIDDER INTENDED TO BE NAMED IN THE BID WAS THE JOINT VENTURE. AN ALLEGED MISTAKE IS PROPER FOR CONSIDERATION ONLY WHEN THE BID IS RESPONSIVE AT THE TIME OF SUBMISSION. 1972: REFERENCE IS MADE TO THE REQUEST FOR AN ADVANCE DECISION PURSUANT TO THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2-406.3(F) FORWARDED TO OUR OFFICE ON APRIL 20. THE BID FORM (STANDARD FORM 21) WAS SIGNED BY MR. A JOINT VENTURE" AND THE BOND WAS SIGNED BY MR. LOTT ALLEGES THAT "COMMITMENTS WERE MADE BY US FOR THE JOINT VENTURE CONTRACTING OF THIS JOB AND THIS WAS OUR ORIGINAL INTENT AS SHOWN IN THE BID BOND.".

B-175774, JUN 29, 1972, 51 COMP GEN 836

BIDS - BIDDER DESIGNATION - DISCREPANCY BETWEEN BID AND BID BOND WHERE THE PRINCIPAL NAMED IN A BID BOND WAS A JOINT VENTURE WHICH INCLUDED THE CORPORATION THAT WAS THE ONLY ENTITY NAMED IN THE LOW BID, THE STATEMENTS AND AFFIDAVITS SUBMITTED AFTER BID OPENING, TO EVIDENCE THAT A MISTAKE HAD BEEN MADE AND THE BIDDER INTENDED TO BE NAMED IN THE BID WAS THE JOINT VENTURE, MAY NOT BE ACCEPTED TO MAKE THE NONRESPONSIVE BID RESPONSIVE BY CHANGING THE NAME OF THE BIDDER. AN ALLEGED MISTAKE IS PROPER FOR CONSIDERATION ONLY WHEN THE BID IS RESPONSIVE AT THE TIME OF SUBMISSION, AND THE BID SUBMITTED NOT HAVING MET THE TERMS OF THE INVITATION FOR BIDS WHICH REQUIRED THE BID GUARANTEE TO BE SUBMITTED IN THE PROPER FORM AND AMOUNT BY THE TIME SET FOR THE OPENING OF BIDS, IT WOULD NOT BE PROPER TO CONSIDER THE REASONS FOR THE NONRESPONSIVENESS OF THE BID, WHETHER DUE TO MISTAKE OR OTHERWISE.

TO THE SECRETARY OF THE ARMY, JUNE 29, 1972:

REFERENCE IS MADE TO THE REQUEST FOR AN ADVANCE DECISION PURSUANT TO THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2-406.3(F) FORWARDED TO OUR OFFICE ON APRIL 20, 1972, BY MR. E. MANNING SELTZER, GENERAL COUNSEL, OFFICE OF THE CHIEF OF ENGINEERS. THE REQUEST CONCERNED THE ALLEGED MISTAKE IN BID OF CANYON CONSTRUCTION COMPANY AND ASSOCIATES, JOINT VENTURE, WHICH CONTENDS THROUGH ITS JOINT VENTURE MANAGER, MR. WAYNE H. LOTT, PRESIDENT OF CANYON CONSTRUCTION COMPANY (CANYON), THAT MR. LOTT INADVERTENTLY DESIGNATED CANYON RATHER THAN THE JOINT VENTURE AS THE BIDDER UNDER SOLICITATION DACA63-72-B-0093, ISSUED BY THE U.S. ARMY ENGINEER DISTRICT, FORT WORTH, TEXAS.

THE RECORD EVIDENCES THAT THE LOW BIDDER UNDER THE SUBJECT SOLICITATION REPRESENTED ITSELF AS "CANYON CONSTRUCTION COMPANY," A CORPORATION INCORPORATED IN TEXAS, AND THE BID FORM (STANDARD FORM 21) WAS SIGNED BY MR. LOTT AS THE PRESIDENT OF THIS CORPORATION. HOWEVER, THE REQUIRED BID BOND ACCOMPANYING THE BID DESIGNATED AS PRINCIPAL "CANYON CONSTRUCTION COMPANY AND ASSOCIATES, A JOINT VENTURE" AND THE BOND WAS SIGNED BY MR. LOTT IN THE CAPACITY OF JOINT VENTURE MANAGER.

IN SUPPORT OF HIS POSITION THAT HE MADE A MISTAKE IN BIDDING, MR. LOTT ALLEGES THAT "COMMITMENTS WERE MADE BY US FOR THE JOINT VENTURE CONTRACTING OF THIS JOB AND THIS WAS OUR ORIGINAL INTENT AS SHOWN IN THE BID BOND." MR. LOTT ALSO SUBMITTED THREE AFFIDAVITS, ONE EXECUTED BY HIMSELF, ONE BY MR. JOE SHARP, THE PURPORTED PARTICIPANT IN THE JOINT VENTURE, AND ONE BY MR. C. A. SCHUTZE, JR., THE ATTORNEY-IN-FACT FOR FIDELITY AND DEPOSIT COMPANY OF MARYLAND, WHO EXECUTED THE BID BOND. THESE AFFIDAVITS ATTEST TO THE FACT THAT CANYON AND JOE SHARP INTENDED TO SUBMIT AS A JOINT VENTURE A BID UNDER THE SUBJECT SOLICITATION.

WE ARE OF THE VIEW THAT EVEN IF THE FAILURE TO NAME THE JOINT VENTURE AS THE BIDDER WAS THE RESULT OF INADVERTENCE, AS CONTENDED BY MR. LOTT, AN ALLEGED MISTAKE IS PROPER FOR CONSIDERATION ONLY IN CASES WHERE THE BID IS RESPONSIVE TO THE REQUIREMENTS OF THE INVITATION.

IT IS A WELL-ESTABLISHED PRINCIPLE OF PROCUREMENT LAW THAT WHETHER A BID IS RESPONSIVE TO THE INVITATION IS FOR DETERMINATION UPON THE BASIS OF THE BID AS SUBMITTED AND THAT IT IS NOT PROPER TO CONSIDER THE REASONS FOR THE UNRESPONSIVENESS, WHETHER DUE TO MISTAKE OR OTHERWISE. SEE 38 COMP. GEN. 819 (1959).

THIS PRINCIPLE IS IMPLEMENTED BY OUR DECISIONS B-169369, APRIL 7, 1970, AND 44 COMP. GEN. 495 (1965), AND WE ARE OF THE OPINION THAT ANY APPARENT CONFLICT BETWEEN THESE DECISIONS, AS CONTEMPLATED BY MR. SELTZER'S LETTER OF APRIL 20, CAN BE RECONCILED.

IN 44 COMP. GEN. 495, SUPRA, WHERE THE BIDDER AND THE PRINCIPAL NAMED IN THE ACCOMPANYING BID BOND WERE DETERMINED TO BE DISTINCT LEGAL ENTITIES, ALTHOUGH THEY WERE AFFILIATED, AN ISSUE WAS WHETHER THE SURETY'S OBLIGATION RAN TO A LEGAL ENTITY DIFFERENT FROM THAT EXPRESSLY IDENTIFIED ON THE BID BOND. WE HELD THAT IT DID NOT. WE WERE THEREFORE OF THE OPINION THAT THE BOND AS SUBMITTED WITH THE BID DID NOT ESTABLISH THAT THE SURETY HAD AN OBLIGATION TO PAY A DEBT OF THE BIDDER UNDER THE INVITATION, AND THAT THE ESTABLISHMENT OF SUCH A RELATIONSHIP AFTER BID OPENING WOULD TEND TO COMPROMISE THE INTEGRITY OF THE COMPETITIVE BID SYSTEM BY MAKING IT POSSIBLE FOR A BIDDER TO DECIDE AFTER OPENING WHETHER OR NOT TO MAKE HIS BID RESPONSIVE.

IN OUR DECISION B-169369, SUPRA, WHERE THE PRINCIPAL NAMED ON THE BID BOND WAS A JOINT VENTURE WHICH INCLUDED A CORPORATION AS A MEMBER, AND THE NOMINAL BIDDER WAS THE CORPORATION, WE HELD THAT IT APPEARED FROM THE INFORMATION SUBMITTED WITH THE BID THAT THE BID WAS INTENDED TO BE THAT OF THE JOINT VENTURE. IN PARTICULAR, WE NOTED THAT IN ADDITION TO A COPY OF THE BID BOND, A COPY OF THE "CERTIFICATE OF JOINT VENTURE WITH PARENT CO." SUBMITTED WITH THE BID, CLEARLY EXPRESSED THE INTENTION AND AGREEMENT OF THE TWO AFFILIATED COMPANIES TO SUBMIT A JOINT BID. THUS, WE CONCLUDED THAT SINCE THE INTENDED BIDDER AND THE PRINCIPAL ON THE BID BOND WERE THE SAME LEGAL ENTITY, THE SURETY WAS BOUND BY THE BOND SUBMITTED WITH THE BID IN THE EVENT OF A FAILURE BY THE INTENDED BIDDER TO EXECUTE THE CONTRACT AND OTHER DOCUMENTS UPON ACCEPTANCE OF THE BID. IN LIGHT OF THIS CONCLUSION, WE HELD THAT THE BID BOND WAS SUFFICIENT AND THE BID WAS RESPONSIVE AND NOT SUBJECT TO REJECTION.

IN EACH OF THE REFERENCED CASES THE DECISION OF THIS OFFICE ADDRESSED THE ISSUE OF WHETHER THE BID AS SUBMITTED WAS RESPONSIVE, INSOFAR AS THE SOLICITATION IN EACH CASE REQUIRED THE BIDDER TO SUBMIT A BINDING BID BOND AND THERE WAS AN APPARENT CONFLICT BETWEEN THE PRINCIPAL NAMED ON THE BID BOND AND THE NOMINAL BIDDER. IN 44 COMP. GEN. 495, SUPRA, WE NOTED THAT EVIDENCE OF THE SURETY'S OBLIGATION TO THE NOMINAL BIDDER WOULD HAVE TO BE ESTABLISHED BY EVIDENCE OUTSIDE THE BID, WHEREAS IN B 169369, SUPRA, WE WERE ABLE TO CONCLUDE FROM THE BID ITSELF THAT THE INTENDED BIDDER WAS THE SAME LEGAL ENTITY AS THE PRINCIPAL NAMED ON THE BID BOND, AND WE HELD THAT THE BID WAS RESPONSIVE TO THE BONDING REQUIREMENT OF THE INVITATION.

IN THE INSTANT CASE THE SOLICITATION ALSO REQUIRES EACH BIDDER TO SUBMIT A BID BOND WITH ITS BID. IN THIS REGARD PARAGRAPH 4 OF THE INSTRUCTIONS TO BIDDERS (STANDARD FORM 22) STATES AS FOLLOWS:

WHERE A BID GUARANTEE IS REQUIRED BY THE INVITATION FOR BIDS, FAILURE TO FURNISH A BID GUARANTEE IN THE PROPER FORM AND AMOUNT, BY THE TIME SET FOR OPENING OF BIDS, MAY BE CAUSE FOR REJECTION OF THE BID.

IN LIGHT OF THE FOREGOING, SINCE THE PRINCIPAL MATERIAL EVIDENCING THE JOINT VENTURE OF CANYON AND JOE SHARP AS THE INTENDED BIDDER ARE THE STATEMENTS AND AFFIDAVITS SUBMITTED AFTER THE BID OPENING, WE ARE OF THE VIEW THAT THE BID SUBMITTED BY MR. WAYNE H. LOTT IS NONRESPONSIVE, AND THAT THE BID MAY NOT BE MADE RESPONSIVE BY CHANGING THE NAME OF THE NOMINAL BIDDER.

ACCORDINGLY, THE SUBJECT BID SHOULD BE REJECTED.

THE FILE FORWARDED WITH MR. SELTZER'S APRIL 20 REQUEST IS RETURNED.