B-232714, Oct 12, 1988

B-232714: Oct 12, 1988

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PROCUREMENT - Sealed Bidding - Bid guarantees - Responsiveness - Sureties - Liability restrictions DIGEST: A bid bond is defective when no penal sum has been inserted on the bond. The bid was rejected as nonresponsive because no penal sum had been entered on the bid bond accompanying the bid. We dismiss the protest without obtaining a report from the Army since it is clear from our analysis of the material furnished by R.D. That the protest is without merit. Construction was the apparent low bidder under the IFB. Construction argues that it should be allowed to correct its omission and that its bonding company's intent was to bond the bid. The purpose of a bid bond is to assure that a bidder will not withdraw its bid within the time specified for acceptance.

B-232714, Oct 12, 1988

PROCUREMENT - Sealed Bidding - Bid guarantees - Responsiveness - Sureties - Liability restrictions DIGEST: A bid bond is defective when no penal sum has been inserted on the bond, either as a percentage of the bid amount or as a fixed sum.

R.D. Construction:

R.D. Construction protests the rejection of its bid under invitation for bids (IFB) No. DABT-31-88-B-0066, issued by the Department of the Army for window replacement in family housing at Fort Leonard, Missouri. The bid was rejected as nonresponsive because no penal sum had been entered on the bid bond accompanying the bid.

We dismiss the protest without obtaining a report from the Army since it is clear from our analysis of the material furnished by R.D. Construction, that the protest is without merit. Bid Protest Regulation, 4 C.F.R. Sec. 21.3(m) (1988).

R.D. Construction was the apparent low bidder under the IFB. However, the Army found that R.D. Construction's bid bond did not include any penal sum or percentage figure to indicate the amount of the bond and found R.D. Construction's bid to be nonresponsive. R.D. Construction argues that it should be allowed to correct its omission and that its bonding company's intent was to bond the bid.

The purpose of a bid bond is to assure that a bidder will not withdraw its bid within the time specified for acceptance; it secures the liability of a surety to the government in the event the bidder fails to fulfill its obligations. Hydro-Dredge Corp., B-214408, Apr. 9, 1984, 84-1 CPD Para. 400. Thus, the sufficiency of a bid bond depends on whether the surety is clearly bound by its terms; when the liability of the surety is not clear, the bond properly may be regarded as defective. Id.

When required, a bid bond is a material part of a bid and must therefore be furnished with the bid. Baucom Janitorial Services, Inc., B-206353, Apr. 19, 1982, 82-1 CPD Para. 356. When a bidder supplies a defective bond, the bid itself is rendered defective and must be rejected as nonresponsive. Truesdale Construction Co., Inc., B-213094, Nov. 18, 1983, 83-2 CPD Para. 591. As with other matters relating to the responsiveness of a bid, the determination as to whether a bid bond is acceptable must be based solely on the bid documents themselves as they appear at the time of bid opening. See Central Mechanical, Inc., 61 Comp.Gen. 566 (1982), 82-2 CPD Para. 150.

Although the protester asserts that its intention, and the intention of its surety, was to submit a bid bond for the required 20 percent of the bid amount, it is not the bidder's or surety's intent which controls.

The relevant inquiry, rather, is whether the surety's obligation has been objectively manifested on the bidding documents so that the extent and character of its liability is clearly ascertainable therefrom. Allen County Bidders Supply, 64 Comp.Gen. 505 (1985), 85-1 CPD Para. 507.

It is a general rule of the law of suretyship that no one incurs a liability to pay a debt or to perform a duty for another unless he expressly agrees to be bound, for the law does not create relationships of this character by mere implication. See 44 Comp.Gen. 495 (1965). Therefore, in the event of default by the bidder in this case, the blank bid bond could be challenged by the surety, and the purpose of the bid bond would be defeated.

Moreover, we note that the language of the bid bond specifically refers to the liability of the surety as being "the above penal sum." Where no penal sum is inserted on the bond, no obligation in a sum certain is undertaken by the surety. Allen County Bidders Supply, supra.

We therefore conclude that the Army properly rejected R.D. Construction's bid as nonresponsive. The protest is dismissed.