B-241689, B-241689.2, Feb 13, 1991, 90-2 CPD ***

B-241689,B-241689.2: Feb 13, 1991

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The contracting officer determined that both the sureties were in fact partnerships. While conceding that Crow Arbors was unacceptable as an individual surety. " is an individual and thus properly acceptable as an individual surety. /2/ The protester explains that Mr. Ligon is the managing partner of the Regal Group with authority pursuant to the partnership agreement to "pledge ... or otherwise obligate the property as he deems proper and necessary.". A bid bond assures that the bidder will not withdraw its bid within the time specified for acceptance and. Will execute a written contract and furnish performance and payment bonds. The bid itself is rendered defective and must be rejected as nonresponsive.

B-241689, B-241689.2, Feb 13, 1991, 90-2 CPD ***

PROCUREMENT - Sealed Bidding - Bid guarantees - Sureties - Acceptability DIGEST: Agency acted properly in rejecting a bid which proposed partnerships, rather than individuals, as individual sureties.

Attorneys

TRL Construction Company:

TRL Construction Company protests the rejection of its bid under invitation for bids (IFB) No. DACA27-90-B-0064, issued by the United States Army Corps of Engineers for the construction of two child development centers at Fort Campbell, Kentucky.

We deny the protest.

TRL's bid contained a bid bond executed by "Roger T. Ligon DBA /1/ Regal Group," and "Crow Arbors of Hickory Ridge Phase IIB Limited Partnership," as individual sureties. As required, TRL provided completed Standard Forms (SF) 28, Affidavits of Individual Surety, for both sureties. On its affidavit, Ligon pledged in support of the bond 4.44 acres of property "improved with an apartment complex." The documents provided with the affidavit indicated that Regal Group II, a Tennessee general partnership, held title to the property pledged. Crow Arbors also pledged real estate in support of the bond, but failed to submit any proof of its ownership of the property or evidence of its value.

The contracting officer determined that both the sureties were in fact partnerships, rather than individuals, and therefore could not serve as individual sureties. Having found TRL's sureties and thus its bid bond unacceptable, the contracting officer rejected TRL's bid.

The protester, while conceding that Crow Arbors was unacceptable as an individual surety, contends that Mr. Ligon, despite his completing the bond as "Roger T. Ligon DBA Regal Group," is an individual and thus properly acceptable as an individual surety. /2/ The protester explains that Mr. Ligon is the managing partner of the Regal Group with authority pursuant to the partnership agreement to "pledge ... or otherwise obligate the property as he deems proper and necessary." The protester states that by completing the bond as "Roger T. Ligon DBA Regal Group," Mr. Ligon signed the bond "individually by virtue of his authority vested in the ...
partnership agreement."

A bid bond assures that the bidder will not withdraw its bid within the
time specified for acceptance and, if required, will execute a written
contract and furnish performance and payment bonds.
W.R.M. Constr., Inc.,
B-239847, Sept. 18, 1990, 69 Comp.Gen. ***, 90-2 CPD Para. 227.
When a
bidder supplies a defective bond, the bid itself is rendered defective and
must be rejected as nonresponsive.
A.W. and Assocs., Inc., B-239740,
Sept. 25, 1990, 69 Comp.Gen. ***, 90-2 CPD Para. 254.
The FAR recognizes
as acceptable forms of security bonds from both individual sureties and
corporate sureties, FAR Sec. 28.201(a), and provides that "an individual
surety is one person, as distinguished from a business entity."
FAR Sec.
28.001.
Further, as the agency has noted, Instruction 2 on the Affidavit
of Individual Surety specifies that "no corporation, partnership, or other
unincorporated associations or firms, as such, are acceptable as
individual sureties."

We believe it is clear that Mr. Ligon, by completing the bond as "Roger
T. Ligon DBA Regal Group," and pledging an asset owned by the Regal Group,
was acting on behalf of the partnership in his capacity as general
partner.
It simply makes no sense to conclude that Mr. Ligon completed
the bond as an individual and not in his capacity as managing partner of
the Regal Group when he completed the bond as "Roger T. Ligon DBA Regal
Group."
If he wished to complete the bond in his individual capacity, he
needed only to use his name rather than the designation that means that in
executing the bond he was "doing business as" DBA the Regal Group.

As partnerships cannot serve as individual sureties, FAR Sec. 28.201(a)
and Affidavit of Individual Surety-- Instruction 2, TRL's bid bond was
defective and the agency acted properly in rejecting TRL's bid.
A.W. and
Assocs., Inc., B-239740, supra.

The protest is denied.

/1/ Doing business as.

/2/ According to Federal Acquisition Regulation (FAR) Sec. 28.203(b), a single individual surety is adequate support for a bond if the unencumbered value of the assets pledged is sufficient.