B-177712, MAR 15, 1973

B-177712: Mar 15, 1973

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A BID GUARANTEE REQUIREMENT IN AN IFB IS MATERIAL. INC.: REFERENCE IS MADE TO YOUR LETTER DATED DECEMBER 19. THE BID GUARANTEE SHOULD HAVE BEEN NO LESS THAN $1. THERE WAS TYPED "$140.00" AND SHRADER SUBMITTED A CASHIER'S CHECK IN THE AMOUNT OF $140 WITH THE BID. THE BID WAS REJECTED AS NONRESPONSIVE SINCE THE BID GUARANTEE WAS NOT IN THE PROPER AMOUNT. YOU HAVE STATED THAT AN HONEST ERROR RESULTED IN THE BID GUARANTEE BEING MISCALCULATED BY A DECIMAL POINT AND THAT YOU IMMEDIATELY OFFERED TO RECTIFY THE MISTAKE WITH ANOTHER CASHIER'S CHECK FOR THE ADDITIONAL FULL AMOUNT. YOU HAVE CONTENDED THAT SINCE THE IMPROPER BID GUARANTEE WAS THE RESULT OF A TYPOGRAPHICAL ERROR AND THE BID WAS ABOUT $4.

B-177712, MAR 15, 1973

BID PROTEST - BID GUARANTEE - RESPONSIVENESS DECISION DENYING THE PROTEST OF SHRADER SOUND, INC., AGAINST THE REJECTION OF ITS LOW BID UNDER AN IFB ISSUED BY THE U.S. COAST GUARD. A BID GUARANTEE REQUIREMENT IN AN IFB IS MATERIAL, AND A CONTRACTING OFFICER CANNOT WAIVE A FAILURE TO COMPLY WITH THE REQUIREMENT, BUT INSTEAD MUST REJECT AS NONRESPONSIVE A BID NOT ACCOMPANIED BY A GUARANTEE IN THE FORM AND AMOUNT REQUIRED. 38 COMP. GEN. 532 (1959).

TO SHRADER SOUND, INC.:

REFERENCE IS MADE TO YOUR LETTER DATED DECEMBER 19, 1972, PROTESTING THE REJECTION OF YOUR LOW BID IN THE AMOUNT OF $6,671 SUBMITTED UNDER INVITATION FOR BIDS CG-24,815-A, ISSUED BY THE UNITED STATES COAST GUARD, DEPARTMENT OF TRANSPORTATION.

THE INVITATION REQUIRED THAT A BID GUARANTEE IN THE AMOUNT OF TWENTY PERCENT OF THE BID PRICE BE FURNISHED WITH EACH BID. BOTH THE INVITATION AND THE INSTRUCTIONS TO BIDDERS CONTAINED A STATEMENT THAT THE FAILURE TO FURNISH A BID GUARANTEE IN THE PROPER AMOUNT BY THE TIME SET FOR THE OPENING OF BIDS MAY BE A CAUSE FOR REJECTION OF THE BID. UNDER THE REQUIREMENTS OF THE INVITATION, THE BID GUARANTEE SHOULD HAVE BEEN NO LESS THAN $1,334.20. HOWEVER, ON THE SHRADER BID IN THE PLACE DESIGNATED FOR INDICATING THE AMOUNT OF THE BID GUARANTEE, THERE WAS TYPED "$140.00" AND SHRADER SUBMITTED A CASHIER'S CHECK IN THE AMOUNT OF $140 WITH THE BID. THE BID WAS REJECTED AS NONRESPONSIVE SINCE THE BID GUARANTEE WAS NOT IN THE PROPER AMOUNT.

YOU HAVE STATED THAT AN HONEST ERROR RESULTED IN THE BID GUARANTEE BEING MISCALCULATED BY A DECIMAL POINT AND THAT YOU IMMEDIATELY OFFERED TO RECTIFY THE MISTAKE WITH ANOTHER CASHIER'S CHECK FOR THE ADDITIONAL FULL AMOUNT. YOU HAVE CONTENDED THAT SINCE THE IMPROPER BID GUARANTEE WAS THE RESULT OF A TYPOGRAPHICAL ERROR AND THE BID WAS ABOUT $4,000 LESS THAN THE NEXT LOW BID, IT WOULD HAVE BEEN IN THE BEST INTEREST OF THE GOVERNMENT TO ACCEPT YOUR LOW BID.

BEGINNING WITH THE DECISION IN 38 COMP. GEN. 532 (1959), OUR OFFICE HAS CONSISTENTLY HELD THAT A BID GUARANTEE REQUIREMENT IN AN INVITATION FOR BIDS IS MATERIAL AND THAT A CONTRACTING OFFICER CANNOT WAIVE A FAILURE TO COMPLY WITH THE REQUIREMENT BUT MUST REJECT AS NONRESPONSIVE A BID NOT ACCOMPANIED BY A BID GUARANTEE IN THE FORM AND AMOUNT REQUIRED. THE BASIS FOR THIS RULE WAS STATED IN THAT DECISION AS FOLLOWS:

*** PERMITTING WAIVER OF A BID BOND REQUIREMENT STATED IN AN INVITATION FOR BIDS WOULD HAVE A TENDENCY TO COMPROMISE THE INTEGRITY OF THE COMPETITIVE BID SYSTEM BY (1) MAKING IT POSSIBLE FOR A BIDDER TO DECIDE AFTER OPENING WHETHER OR NOT TO TRY TO HAVE HIS BID REJECTED, (2) CAUSING UNDUE DELAY IN EFFECTING PROCUREMENTS, AND (3) CREATING, BY THE NECESSARY SUBJECTIVE DETERMINATIONS BY DIFFERENT CONTRACTING OFFICERS, INCONSISTENCIES IN THE TREATMENT OF BIDDERS. THE NET EFFECT OF THE FOREGOING WOULD BE DETRIMENTAL TO FULLY RESPONSIVE AND RESPONSIBLE BIDDERS, AND COULD TEND TO DRIVE THEM OUT OF COMPETITION IN THOSE AREAS WHERE THE PRACTICES DESCRIBED OCCUR. THIS RESULT COULD HARDLY BE SAID TO SERVE THE BEST INTERESTS OF THE UNITED STATES. ***

FURTHERMORE, SECTION 1-10.103-4 OF THE FEDERAL PROCUREMENT REGULATIONS (FPR) REQUIRES REJECTION OF A BID AS NONRESPONSIVE FOR FAILURE TO COMPLY WITH THE INVITATION BID GUARANTEE REQUIREMENTS, EXCEPT IN FOUR SITUATIONS, NONE OF WHICH IS APPLICABLE TO THIS CASE. MOREOVER, OUR OFFICE HAS HELD THAT IT IS CONTRARY TO ESTABLISHED FORMAL COMPETITIVE PROCUREMENT PROCEDURES TO CORRECT A NONRESPONSIVE BID TO MAKE IT RESPONSIVE. 38 COMP. GEN. 819 (1959). SEE ALSO FPR 1-2.400-3, WHICH IN PERTINENT PART, PROVIDES:

*** THE AUTHORITY CONTAINED HEREIN TO PERMIT CORRECTION OF BIDS IS LIMITED TO BIDS WHICH, AS SUBMITTED, ARE RESPONSIVE TO THE INVITATION FOR BIDS, AND MAY NOT BE USED TO PERMIT CORRECTION OF BIDS TO MAKE THEM RESPONSIVE. ***

ALSO, OUR OFFICE HAS HELD THAT THE MAINTENANCE OF THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM IS INFINITELY MORE IN THE PUBLIC INTEREST THAN A FINANCIAL SAVINGS IN AN INDIVIDUAL CASE. 17 COMP. GEN. 554 (1938).

FOR THE FOREGOING REASONS, THE REJECTION OF YOUR BID AS BEING NONRESPONSIVE WAS PROPER, AND YOUR PROTEST IS THEREFORE DENIED.