B-182936, APR 17, 1975

B-182936: Apr 17, 1975

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BID PROTEST IS TIMELY UNDER 4 C.F.R. 20.2(A) WHEN IT IS RECEIVED WITHIN 5 DAYS AFTER PROTESTER RECEIVED NOTIFICATION OF ADVERSE AGENCY ACTION. IN SPITE OF FACT THAT PROTESTER MAY HAVE RECEIVED ORAL. INFORMAL ADVICE OF ADVERSE AGENCY ACTION 6 WORKING DAYS BEFORE PROTEST WAS FILED. 2. BID WAS PROPERLY REJECTED AS NONRESPONSIVE WHERE IT FAILED TO INCLUDE BID BOND SINCE PROTESTER'S CLAIM THAT BID BOND HAD BEEN INADVERTENTLY MISPLACED WITHIN BID ROOM PRIOR TO BID OPENING WAS NOT ESTABLISHED BY EVIDENCE INDEPENDENT OF THAT FURNISHED BY BIDDER. SF-20 PROVIDED IN PART THAT "BID GUARANTEE IS REQUIRED WITH ANY BID IN EXCESS OF $2. PARAGRAPH 4 OF SF-22 STATED IN PERTINENT PART: "WHERE A BID GUARANTEE IS REQUIRED BY THE INVITATION FOR BIDS.

B-182936, APR 17, 1975

1. BID PROTEST IS TIMELY UNDER 4 C.F.R. 20.2(A) WHEN IT IS RECEIVED WITHIN 5 DAYS AFTER PROTESTER RECEIVED NOTIFICATION OF ADVERSE AGENCY ACTION, IN SPITE OF FACT THAT PROTESTER MAY HAVE RECEIVED ORAL, INFORMAL ADVICE OF ADVERSE AGENCY ACTION 6 WORKING DAYS BEFORE PROTEST WAS FILED. 2. BID WAS PROPERLY REJECTED AS NONRESPONSIVE WHERE IT FAILED TO INCLUDE BID BOND SINCE PROTESTER'S CLAIM THAT BID BOND HAD BEEN INADVERTENTLY MISPLACED WITHIN BID ROOM PRIOR TO BID OPENING WAS NOT ESTABLISHED BY EVIDENCE INDEPENDENT OF THAT FURNISHED BY BIDDER.

S. PUMA AND COMPANY, INCORPORATED:

ON NOVEMBER 26, 1974, THE ADMINISTRATIVE SERVICES BRANCH (ASB) OF THE GENERAL SERVICES ADMINISTRATION (GSA) ISSUED INVITATION FOR BIDS (IFB) NO. 49176-RNY74160 FOR THE RELOCATION OF THE VILLAGE STATION POST OFFICE, NEW YORK, NEW YORK. THE IFB INCLUDED STANDARD FORMS (SF) 20 AND 22. SF-20 PROVIDED IN PART THAT "BID GUARANTEE IS REQUIRED WITH ANY BID IN EXCESS OF $2,000." PARAGRAPH 4 OF SF-22 STATED IN PERTINENT PART:

"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 ADDITION, THE IFB CONTAINED GSA FORM 1903, A CHECKLIST INTENDED TO ASSIST BIDDERS IN INSURING THAT THEIR BIDS WERE PROPERLY PREPARED. ITEM 8 OF FORM 1903 INCLUDES THE FOLLOWING STATEMENT: "DOES YOUR BID GUARANTEE CONFORM TO THE REQUIREMENTS OF SF-20, INVITATION FOR BIDS AND SF-22, INSTRUCTIONS TO BIDDERS?"

EIGHT BIDS WERE RECEIVED AND OPENED AT 1:30 P.M. ON DECEMBER 19, 1974. THE LOW BID WAS SUBMITTED BY S. PUMA COMPANY, INCORPORATED (PUMA), BUT THE CONTRACT SPECIALIST DISCOVERED SHORTLY AFTER OPENING THE BIDS THAT NO BID BOND HAD BEEN INCLUDED WITH THIS BID. ACCORDING TO THE RECORD, MR. ALBERT PUMA, THE PRESIDENT OF PUMA, TELEPHONED THE CONTRACT SPECIALIST AT APPROXIMATELY 2:30 P.M. ON DECEMBER 19, AND HE WAS INFORMED THAT THE PUMA BID WAS NONRESPONSIVE BECAUSE NO BID BOND HAD BEEN INCLUDED WITH THE BID. APPROXIMATELY ONE HALF HOUR LATER MR. PUMA APPEARED AT THE OFFICE OF THE ASB WITH A BID BOND, CLAIMING THAT HE HAD FOUND IT UNDER A TABLE IN THE ROOM WHERE THE BIDS HAD BEEN OPENED. PUMA STATES THAT "INADVERTENTLY THE BID BOND WAS DROPPED BY THE COMPANY ESTIMATOR JUST INSIDE THE ENTRANCE TO THE BID ROOM, PRIOR TO HIS SEALING THE BID ENVELOPE." AT APPROXIMATELY 3:30 P.M. ON DECEMBER 19, MR. PUMA MET WITH THE ACTING CHIEF OF THE ASB AND WITH THE CONTRACT SPECIALIST. HE WAS ORALLY INFORMED THAT THE BID BOND COULD NOT BE ACCEPTED AFTER BID OPENING, AND HE WAS TOLD THAT HE HAD A RIGHT TO FILE A PROTEST IN THE MATTER.

BY LETTER DATED DECEMBER 19, 1974, PUMA'S COUNSEL FORWARDED TO THE GSA THE BID BOND AND ASKED THAT THE ABSENCE OF THE BOND BE OVERLOOKED, ESPECIALLY IN LIGHT OF THE FACT THAT THE BOND WAS DATED DECEMBER 2, 1974, WHICH WAS WELL IN ADVANCE OF THE BID OPENING DATE. A LETTER DATED DECEMBER 20, 1974, FROM ASB TO PUMA CONFIRMED THE ORAL ADVICE THAT PUMA'S BID WAS NONRESPONSIVE.

BY LETTER DATED DECEMBER 27, 1974, RECEIVED AT THE GENERAL ACCOUNTING OFFICE (GAO) ON DECEMBER 30, 1974, COUNSEL FOR PUMA FORWARDED A COPY OF PUMA'S DECEMBER 19 WRITTEN PROTEST TO THE GSA REGIONAL OFFICE, THE BID BOND IN QUESTION, AND A COPY OF A DECEMBER 27, 1974, LETTER TO AN ATTORNEY IN GSA'S REGIONAL OFFICE FURTHER PROTESTING THE REJECTION OF PUMA'S BID.

GSA BELIEVES THAT THE PROTEST TO THE GAO WAS NOT FILED IN A TIMELY FASHION AS REQUIRED BY 4 CODE OF FEDERAL REGULATIONS (CFR) 20.2(A), WHICH PROVIDES IN PART:

"SEC. 20.2 TIME FOR FILING.

(A) PROTESTERS ARE URGED TO SEEK RESOLUTION OF THEIR COMPLAINTS INITIALLY WITH THE CONTRACTING AGENCY. IF A PROTEST HAS BEEN FILED INITIALLY WITH THE CONTRACTING AGENCY, ANY SUBSEQUENT PROTEST TO THE GENERAL ACCOUNTING OFFICE FILED WITHIN 5 DAYS OF NOTIFICATION OF ADVERSE AGENCY ACTION WILL BE CONSIDERED PROVIDED THE INITIAL PROTEST TO THE AGENCY WAS MADE TIMELY."

THE PROVISION THAT"*** ANY SUBSEQUENT PROTEST TO THE GENERAL ACCOUNTING OFFICE (MUST BE) FILED WITHIN 5 DAYS OF NOTIFICATION OF ADVERSE AGENCY ACTION ***" HAS CONSISTENTLY BEEN INTERPRETED TO MEAN THAT TO BE TIMELY A PROTEST TO THE GAO MUST BE RECEIVED BY THE GAO WITHIN FIVE WORKING DAYS AFTER THE INITIAL ADVERSE AGENCY ACTION. SEE 52 COMP. GEN. 20 (1972) AND B-178205, OCTOBER 10, 1973. GSA ARGUES THAT THE ORAL NOTIFICATION OF NONRESPONSIVENESS TO PUMA ON DECEMBER 19 WAS SUFFICIENTLY DEFINITIVE TO CONSTITUTE INITIAL ADVERSE AGENCY ACTION AND TO START THE RUNNING OF THE FIVE DAY PERIOD WITHIN WHICH PUMA WAS REQUIRED TO NOTIFY THE GAO OF ITS PROTEST. UNDER SUCH AN INTERPRETATION THE PROTEST WAS NOT RECEIVED AT THE GAO UNTIL THE SIXTH WORKING DAY FOLLOWING PUMA'S NOTIFICATION OF ADVERSE AGENCY ACTION AND, THEREFORE, IT WAS NOT TIMELY.

IT IS OUR VIEW, HOWEVER, THAT PUMA'S PROTEST IS TIMELY. WHILE PUMA'S ORAL PROTEST ON DECEMBER 19 WAS REJECTED BY COGNIZANT GSA PERSONNEL, SUCH PERSONNEL ALSO ADVISED PUMA THAT HE HAD THE RIGHT TO FILE A PROTEST. BASED UPON SUCH ADVICE, PUMA'S COUNSEL FILED A WRITTEN PROTEST WITH GSA ON DECEMBER 19, AND THE PROTEST WAS REJECTED BY GSA'S LETTER DATED DECEMBER 20, 1974. IT WAS THEREFORE NOT UNTIL RECEIPT OF THAT LETTER SOMETIME AFTER DECEMBER 20 THAT PUMA RECEIVED NOTIFICATION OF THE GSA ADVERSE ACTION. SINCE DECEMBER 20, 1974, WAS A FRIDAY, IT IS REASONABLE TO ASSUME THAT PUMA DID NOT RECEIVE THE LETTER UNTIL THE NEXT WORK DAY, MONDAY, DECEMBER 23. THEREFORE, RECEIPT OF PUMA'S LETTER IN GAO ON DECEMBER 30, 1974, WAS TIMELY.

WITH REGARD TO THE MERITS OF THE PROTEST, PUMA CONTENDS THAT THE ABSENCE OF THE BID BOND IN THE BID ENVELOPE WAS MERELY AN INADVERTENT MISTAKE WHICH SHOULD NOT RENDER PUMA'S BID NONRESPONSIVE. PUMA POINTS OUT THAT ITS BID BOND WAS DATED DECEMBER 2, 1974, WELL AHEAD OF THE BID OPENING DATE. AS AUTHORITY FOR ITS POSITION PUMA CITES A COURT OF CLAIMS DECISION AND A COMPTROLLER GENERAL DECISION. PUMA RELIES ON ADELHARDT CONSTRUCTION COMPANY V. UNITED STATES, 123 CT. CL. 456, 459 (1952), IN WHICH THE COURT HELD THAT SUBMISSION OF A BID BOND WAS INTENDED FOR THE BENEFIT OF THE GOVERNMENT AND THAT "*** IT IS WELL ESTABLISHED THAT THERE ARE CIRCUMSTANCES IN WHICH A PARTY FOR WHOSE PROTECTION A REQUIREMENT IS MADE MAY WAIVE THAT REQUIREMENT." THUS, THE COURT HELD THAT THE GOVERNMENT WAS EMPOWERED TO WAIVE THE BID BOND REQUIREMENT OF THE SOLICITATION PURSUANT TO WHICH THE QUESTIONED CONTRACT WAS AWARDED AND THE PLAINTIFF COULD NOT ESCAPE LIABILITY FOR NONPERFORMANCE OF THE CONTRACT ON THE BASIS THAT THE GOVERNMENT WAS POWERLESS TO ACCEPT THE BID.

HOWEVER, BEGINNING WITH THE DECISION AT 38 COMP. GEN. 532 (1959) WE HAVE CONSISTENTLY HELD THAT BID BOND REQUIREMENTS MUST BE CONSIDERED A MATERIAL PART OF IFBS AND THAT A CONTRACTING OFFICER CANNOT WAIVE THE FAILURE TO COMPLY WITH THESE REQUIREMENTS. SEE 54 COMP. GEN. , B 181692, OCTOBER 8, 1974, AND CASES CITED THEREIN. WE SUMMARIZED THE RATIONALE FOR THE NEW RULE AT 38 COMP. GEN. 532, 536 SUPRA, AS FOLLOWS:

"WE NOW FEEL THAT ADHERENCE TO THE RULE 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 (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."

PUMA ALSO RELIES ON THE HOLDING IN 40 COMP. GEN. 469 (1961). IN THAT CASE A BID BOND WAS INADVERTENTLY MISPLACED BY THE LOW BIDDER ON A DESK IN THE ARMY AREA ENGINEER'S OFFICE SHORTLY BEFORE BID OPENING. THE CONTRACTING OFFICER DETERMINED THAT BECAUSE THE PROTESTER'S BID WAS NOT ACCOMPANIED BY A BID BOND AT THE TIME SET FOR THE OPENING OF THE BIDS THE BID HAD TO BE REJECTED BECAUSE IT WAS NONRESPONSIVE UNDER 38 COMP. GEN. 532, SUPRA. THE COMPTROLLER GENERAL OVERTURNED THE CONTRACTING OFFICER'S DETERMINATION, STATING AT PAGE 472:

"*** IT IS PERTINENT TO NOTE THE REASONS FOR ABANDONMENT OF THE EARLIER RULE. (BEFORE 38 COMP. GEN. 532, SUPRA.) ONE OF THE OBJECTIONS TO THE PRIOR RULE WAS THE DIFFICULTY OF DETERMINING OBJECTIVELY WHETHER THE FAILURE TO FURNISH A BID BOND ON TIME WAS DUE TO INADVERTENCE OR OTHER EXCUSABLE CAUSE, AND NOT DUE TO ANY LACK OF FINANCIAL RESPONSIBILITY ON THE PART OF THE BIDDER. IN THE USUAL CASE, INADVERTENCE COULD NOT BE ESTABLISHED BY EVIDENCE INDEPENDENT OF THAT FURNISHED BY THE BIDDER HIMSELF. SIMILARLY, THE BIDDER'S ABILITY TO SECURE A BID BOND WAS SOMETIMES ENHANCED BY THE BID RESULTS, MAKING IT DIFFICULT TO DETERMINE WHETHER HE COULD OR COULD NOT HAVE SECURED SUCH A BOND PRIOR TO OPENING. IN THE INSTANT CASE, THE STATEMENTS OF RESPONSIBLE GOVERNMENT PERSONNEL ESTABLISH CONCLUSIVELY THAT A PROPER BID BOND WAS IN FACT OBTAINED IN TIME FOR SUBMISSION WITH THE BID AND THAT ITS FAILURE TO BE SUBMITTED WITH THE BID WAS DUE TO INADVERTENCE.

"THE SECOND BASIC OBJECTION TO THE RULE FOLLOWED PRIOR TO 38 COMP. GEN. 532 WAS THE OPPORTUNITY IT AFFORDED BIDDERS TO OBTAIN 'TWO BITES AT THE APPLE' BY DECIDING AFTER BID RESULTS WERE KNOWN WHETHER OR NOT TO MAKE A BID RESPONSIVE BY SUBMITTING THE REQUIRED BID BOND. IN THE PRESENT CASE, THE OPPORTUNITY FOR SUCH CHOICE WAS NOT PRESENT SINCE IT IS ESTABLISHED BY THE STATEMENTS OF GOVERNMENT PERSONNEL THAT THE BOND REFERRED TO IN THE WEXLER BID WAS ACCIDENTALLY LEFT PRIOR TO BID OPENING TIME ON THE DESK OF A GOVERNMENT OFFICIAL IN THE OFFICE OF THE AREA ENGINEER WHERE BIDS WERE TO BE OPENED. IT IS FURTHER ESTABLISHED THAT THE BOND REMAINED CONTINUOUSLY ON THE DESK UNTIL ITS DISCOVERY ABOUT AN HOUR AFTER THE BEGINNING OF BID OPENING AND THAT NO REPRESENTATIVE OF THE BIDDER OR PERSON OTHER THAN GOVERNMENT PERSONNEL HAD ACCESS TO THE DESK IN THE INTERIM.

"IT IS CLEAR, THEREFORE, THAT THE OBJECTIONS WHICH LED TO THE ADOPTION OF THE RULE IN 38 COMP. GEN. 532 ARE NOT PRESENT IN THE INSTANT CASE. SUCH CIRCUMSTANCES, WE BELIEVE IT PROPERLY MAY BE CONCLUDED THAT FOR ALL PRACTICAL PURPOSES THE WEXLER BID WAS ACCOMPANIED BY A BOND AS REQUIRED AND WE WOULD NOT FEEL JUSTIFIED IN DIRECTING CANCELLATION OF THE AWARD WHICH WAS MADE TO WEXLER."

OUR DECISION AT 40 COMP. GEN. 469, SUPRA, WAS SPECIFICALLY LIMITED TO THE SITUATION IN WHICH EVIDENCE INDEPENDENT OF THAT PROVIDED BY A BIDDER ESTABLISHES THAT A PROPER BID BOND WAS ACQUIRED IN TIME FOR SUBMISSION WITH A BID BUT, DUE TO AN INADVERTENT ERROR, THE BID BOND WAS NOT SUBMITTED WITH THE BID. IN THE PRESENT CASE, HOWEVER, THERE IS NO AFFIRMATIVE EVIDENCE OTHER THAN THAT PROVIDED BY MR. PUMA THAT THE BID BOND WAS OUT OF THE CONTROL OF THE BIDDER AND IN THE HANDS OF THE GOVERNMENT PRIOR TO THE BID OPENING. IN FACT, QUESTIONING OF BUSINESS SERVICE CENTER PERSONNEL WHO HAD AN UNOBSTRUCTED VIEW OF THE BID ROOM REVEALED THAT MR. PUMA HAD NOT BEEN IN THE BID ROOM AT THE TIME OF BID OPENING OR ANY TIME THEREAFTER. IT IS REPORTED THAT WHEN MR. PUMA WAS INFORMED OF THIS HE THEN STATED THAT HE HAD NOT FOUND THE BID BOND UNDER THE TABLE IN THE BID OPENING ROOM AS ORIGINALLY REPORTED, BUT FOUND IT BY THE DOOR OF THE BUSINESS SERVICE CENTER. CONSEQUENTLY, PUMA'S RELIANCE ON THIS LIMITED EXCEPTION TO THE GENERAL RULE OUTLINED AT 38 COMP. GEN. 532, SUPRA, IS MISPLACED. SEE ALSO 42 COMP. GEN. 725 (1963).

ACCORDINGLY, THE BID PROTEST IS DENIED.