B-179962, MAR 29, 1974

B-179962: Mar 29, 1974

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

MAKES BID NONRESPONSIVE SINCE BID GUARANTEE REQUIREMENT IS MATERIAL PART OF IFB WHICH CAN NOT BE WAIVED. 2. FACT THAT PROTESTER RECEIVED IFB WITH INSUFFICIENT TIME BEFORE BID OPENING TO OBTAIN PROPER BID GUARANTEE WILL NOT REQUIRE CANCELLATION OF PROCUREMENT AND RESOLICITATION OF BIDS SINCE PROPRIETY OF A PARTICULAR PROCUREMENT IS DETERMINED BY WHETHER ADEQUATE COMPETITION AND REASONABLE PRICES ARE RECEIVED. DETERMINATION OF REASONABLENESS OF BID PRICES IS FOR CONTRACTING OFFICER TO MAKE AND SUCH DETERMINATION WILL NOT BE DISTURBED BY GAO UNLESS ARBITRARY. 595.00 WAS REJECTED AS NONRESPONSIVE PURSUANT TO ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2-404.2(H) PROVIDING FOR THE REJECTION OF A BID WHEN A BID GUARANTEE IS REQUIRED AND THE BIDDER FAILS TO FURNISH SUCH GUARANTEE IN ACCORDANCE WITH THE REQUIREMENTS OF THE IFB.

B-179962, MAR 29, 1974

1. SUBMISSION OF BID GUARANTEE IN FORM OF PERSONAL CHECK RATHER THAN IN FORM OF FIRM COMMITMENT AS DEFINED BY INVITATION (BID BOND, CERTIFIED CHECK, ETC.) MAKES BID NONRESPONSIVE SINCE BID GUARANTEE REQUIREMENT IS MATERIAL PART OF IFB WHICH CAN NOT BE WAIVED. 2. FACT THAT PROTESTER RECEIVED IFB WITH INSUFFICIENT TIME BEFORE BID OPENING TO OBTAIN PROPER BID GUARANTEE WILL NOT REQUIRE CANCELLATION OF PROCUREMENT AND RESOLICITATION OF BIDS SINCE PROPRIETY OF A PARTICULAR PROCUREMENT IS DETERMINED BY WHETHER ADEQUATE COMPETITION AND REASONABLE PRICES ARE RECEIVED, NOT WHETHER EVERY POSSIBLE BIDDER AFFORDED AN OPPORTUNITY TO COMPETE. MOREOVER, DETERMINATION OF REASONABLENESS OF BID PRICES IS FOR CONTRACTING OFFICER TO MAKE AND SUCH DETERMINATION WILL NOT BE DISTURBED BY GAO UNLESS ARBITRARY, CAPRICIOUS OR MADE IN BAD FAITH.

TO SOUTHERN SPACE, INC.:

SOUTHERN SPACE, INC. (SOUTHERN), HAS PROTESTED THE REJECTION OF ITS BID AND THE AWARD OF A CONTRACT TO A HIGHER BIDDER UNDER INVITATION FOR BIDS DAFA03-74-B-0029 ISSUED OCTOBER 3, 1973, BY THE DEPARTMENT OF THE ARMY, PROCUREMENT DIVISION, FORT RICHARDSON, ALASKA.

THE SUBJECT IFB REQUIRED THE SUCCESSFUL BIDDER TO PERFORM ALL WORK FOR DRY CLEANING EQUIPMENT INSTALLATION, LAUNDRY, BUILDING 3225, FORT WAINWRIGHT, ALASKA.

UPON THE OPENING OF BIDS ON OCTOBER 24, 1974, THE PROTESTER'S LOW BID OF $24,595.00 WAS REJECTED AS NONRESPONSIVE PURSUANT TO ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2-404.2(H) PROVIDING FOR THE REJECTION OF A BID WHEN A BID GUARANTEE IS REQUIRED AND THE BIDDER FAILS TO FURNISH SUCH GUARANTEE IN ACCORDANCE WITH THE REQUIREMENTS OF THE IFB.

THE IFB IN THE INSTANT CASE INCLUDED STANDARD FORM (SF) 22, INSTRUCTIONS TO BIDDERS, PROVIDING IN PERTINENT PART AT PARAGRAPH 4, "BID GUARANTEE":

"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.

A BID GUARANTEE SHALL BE IN THE FORM OF A FIRM COMMITMENT, SUCH AS A BID BOND, POSTAL MONEY ORDER, CERTIFIED CHECK, CASHIER'S CHECK, IRREVOCABLE LETTER OF CREDIT OR, IN ACCORDANCE WITH TREASURY DEPARTMENT REGULATIONS, CERTAIN BONDS OR NOTES OF THE UNITED STATES. ***"

THE SUBJECT IFB REQUIRED THAT:

"A. BID BONDS. EACH BIDDER SHALL SUBMIT WITH HIS BID A BID BOND (STANDARD FORM 24) WITH GOOD AND SUFFICIENT SURETY OR SURETIES ACCEPTABLE TO THE GOVERNMENT OR OTHER SECURITY AS PROVIDED IN PARAGRAPH 4 OF THE INSTRUCTIONS TO BIDDERS. ***"

THE PROTESTER'S BID WAS TIMELY RECEIVED BUT, IN LIEU OF A SECURITY CONSTITUTING A "FIRM COMMITMENT," ITS BID WAS ACCOMPANIED BY A PERSONAL CHECK DRAWN ON THE FIRST NATIONAL BANK AND TRUST COMPANY, MACON, GEORGIA, AND A LETTER FROM SOUTHERN'S GENERAL MANAGER DATED OCTOBER 21, 1973, STATING THAT HE "DID NOT HAVE SUFFICIENT TIME TO OBTAIN PROPER BID BOND FORM IN LIEU OF WHICH I AM ENCLOSING MY CHECK FOR $3,000.00."

UNDER THE REFERENCED INVITATION AND ASPR PROVISIONS, THE PROTESTER'S BID WAS REJECTED AS NONRESPONSIVE AND THE PERSONAL CHECK WAS RETURNED BY LETTER OF OCTOBER 25, 1973 WITH THE EXPLANATION THAT THE BID WAS CONSIDERED NONRESPONSIVE FOR FAILURE TO SUBMIT THE GUARANTEE IN THE FORM OF A CERTIFIED OR CASHIER'S CHECK.

BY LETTER OF NOVEMBER 1, 1973, THE PROTESTER SUBMITTED A CERTIFIED CHECK AND REQUESTED THAT ITS LOW BID BE GIVEN FAVORABLE CONSIDERATION. LETTER OF NOVEMBER 14, 1973, THE CONTRACTING OFFICER RETURNED THE CERTIFIED CHECK, EXPLAINING THAT IN ORDER TO BE HONORED, IT MUST HAVE BEEN RECEIVED NO LATER THAN BID OPENING.

WHILE THE PROTEST WAS STILL PENDING WITH GAO, AN AWARD WAS MADE TO CHANDLER PLUMBING AND HEATING, INC. THE NEXT LOW BIDDER AT $30,780, PURSUANT TO ASPR 2-407.8(B)(3)(I) BECAUSE THE CONTRACTUAL SERVICES WERE URGENTLY NEEDED.

SOUTHERN ALLEGES THAT INSUFFICIENT BIDDING TIME WAS RESPONSIBLE FOR ITS SUBMISSION OF A COMPANY CHECK IN LIEU OF A BID BOND. IT IS STATED THAT IT WAS FIRST APPRISED OF THE SUBJECT IFB THROUGH A COPY OF THE COMMERCE BUSINESS DAILY WHICH ARRIVED AT ITS OFFICE TUESDAY, OCTOBER 16, AT WHICH TIME ITS GENERAL MANAGER IMMEDIATELY PHONED THE ISSUING ACTIVITY AND REQUESTED AN AIR MAIL COPY OF THE IFB, SAID COPY ARRIVING SATURDAY, OCTOBER 20, WHEN THE BANKS WERE CLOSED. SINCE SUNDAY AND MONDAY WERE HOLIDAYS, SOUTHERN CONTENDS IT WAS NECESSARY TO AIR MAIL ITS BID ON MONDAY IN ORDER FOR IT TO ARRIVE IN TIME FOR THE WEDNESDAY (OCTOBER 24) BID OPENING.

SOUTHERN FURTHER CONTENDS THAT THE LACK OF SUFFICIENT ADVANCE NOTICE OF THE IFB TO PERMIT THE ACQUISITION OF A PROPER BID BOND RESULTED IN AN EXORBITANT PRICE FOR THE CONTRACTUAL SERVICES IN THAT SOUTHERN'S BID WAS MORE THAN $6,000 BELOW THAT OF THE SECOND LOW AND SUCCESSFUL BIDDER. ACCORDINGLY, SOUTHERN HAS REQUESTED THAT EITHER ITS BID BE RECONSIDERED OR THAT THE PROCUREMENT BE READVERTISED.

CONCERNING THE BID GUARANTEE REQUIREMENT SET FORTH IN PARAGRAPH 4 OF SF 22, WE HAVE CONSISTENTLY HELD THAT SUCH A REQUIREMENT IS A MATERIAL PART OF THE INVITATION WHICH CANNOT BE WAIVED, AND FAILURE TO COMPLY THEREWITH WILL RENDER A BID NONRESPONSIVE. SEE B-175477, AUGUST 3, 1972; 46 COMP. GEN. 11 (1966). THE LANGUAGE OF THAT PARAGRAPH REQUIRED THE DEPOSIT OF A BID GUARANTEE IN THE PROPER FORM, AND DEFINED SUCH FORM AS "A FIRM COMMITMENT, SUCH AS A BID BOND, POSTAL MONEY ORDER, CERTIFIED CHECK, CASHIER'S CHECK, IRREVOCABLE LETTER OF CREDIT OR, IN ACCORDANCE WITH TREASURY DEPARTMENT REGULATIONS, CERTAIN BONDS OR NOTES OF THE UNITED STATES ***." AN UNCERTIFIED PERSONAL CHECK, SUCH AS THE ONE SUBMITTED WITH SOUTHERN'S BID, LACKS THE STATUS OF A FIRM COMMITMENT INASMUCH AS SUCH INSTRUMENTS ARE SUBJECT TO SUCH EVENTS AS INSUFFICIENT FUNDS OR STOP- PAYMENT ORDERS. SEE B-175597, B-176178, AUGUST 14, 1972. MOREOVER, A BID GUARANTEE DEFICIENCY MAY NOT BE CURED AFTER BID OPENING DUE TO THE PREJUDICE THAT MIGHT RESULT TO OTHER BIDDERS FROM THE UNFAIR ADVANTAGE ACCRUING TO A BIDDER WHO COULD ELECT, AFTER BID OPENING, WHETHER OR NOT TO COMPLY WITH SUCH A MATERIAL INVITATION PROVISION. B-175477, SUPRA.

WITH REGARD TO THE ALLEGATION OF INSUFFICIENT NOTICE OF THE PROCUREMENT TO OBTAIN A PROPER BID BOND, THE PROCURING ACTIVITY STATES THAT A BIDDERS MAILING LIST WAS UTILIZED; THAT THE PROCUREMENT WAS SYNOPSIZED IN THE COMMERCE BUSINESS DAILY IN ACCORDANCE WITH ASPR 1 1003.1, AND WAS POSTED IN VARIOUS PUBLIC PLACES; THAT SIXTEEN SOURCES WERE SOLICITED AND THREE BIDS, EXCLUSIVE OF SOUTHERN'S, WERE RECEIVED. ALTHOUGH SOUTHERN'S NAME WAS NOT AMONG THOSE TYPED ON THE BIDDERS MAILING LIST, AFTER IT REQUESTED THE BID PACKAGE, ITS NAME WAS ADDED TO THE MAILING LIST WITH THE NOTATION THAT THE BID WAS SENT OCTOBER 15, 1973, BY AIR MAIL. IN THIS CONNECTION, WE NOTE THAT THE PROTESTER STATES THAT IT REQUESTED A COPY OF THE IFB ON OCTOBER 16, 1973, AND NOT ON OCTOBER 15. IN ANY EVENT, THE PROCURING ACTIVITY STATES THAT SOUTHERN WAS NOT INTENTIONALLY EXCLUDED FROM THE COMPETITION.

WE HAVE HELD THAT THE PROPRIETY OF A PARTICULAR PROCUREMENT MUST BE DETERMINED FROM THE GOVERNMENT'S POINT OF VIEW UPON THE BASIS OF WHETHER ADEQUATE COMPETITION AND REASONABLE PRICES ARE OBTAINED, NOT UPON WHETHER EVERY POSSIBLE BIDDER WAS AFFORDED AN OPPORTUNITY TO COMPETE. B-172307, JULY 16, 1971, AND CASES CITED THEREIN. FURTHERMORE, WE DO NOT FIND THAT THE PROTESTER WAS INTENTIONALLY EXCLUDED FROM THE BIDDERS MAILING LIST OR OTHERWISE DENIED A REASONABLE OPPORTUNITY TO COMPETE.

IN THIS CASE, THE AWARD WAS MADE AT THE PRICE OF $30,780.00, A SUM WHICH EXCEEDED THE GOVERNMENT'S ESTIMATE BY $3,780, AND WHICH THE PROCURING ACTIVITY DETERMINED TO BE REASONABLE. SUCH A DETERMINATION IS THE RESPONSIBILITY OF THE CONTRACTING AGENCY AND WILL NOT BE DISTURBED BY OUR OFFICE UNLESS ARBITRARY, CAPRICIOUS OR MADE IN BAD FAITH. B-171472, MAY 11, 1972. IN THIS CASE WE DO NOT BELIEVE THAT THE CONTRACTING OFFICER ABUSED HIS DISCRETION OR ACTED IN BAD FAITH BY DETERMINING THE SECOND LOW BID TO BE REASONABLE.

ACCORDINGLY, THE PROTEST IS DENIED.