B-246188, October 30, 1991

B-246188: Oct 30, 1991

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The Navy determined that Bermudez's bid guarantee was defective because its bid bond was not accompanied by a valid power of attorney attesting to the authority of the attorney-in-fact as the surety's agent and that the bid was therefore nonresponsive. The bid bond was not accompanied by a power of attorney form authorizing Mr. The agency thus determined that Bermudez's bid bond was defective and rejected the bid as nonresponsive. Garcia's authority to sign bid bonds for the surety company should have been waived as a minor informality by the agency. A bid bond is a material part of the bid and must be furnished with it. No one incurs a liability to pay the debts or to perform the duties of another unless that person expressly agrees to be bound. /1/ The determinative question as to the acceptability of a bid bond is whether the bid documents establish that the bond is enforceable against the surety should the bidder fail to meet is obligations.

B-246188, October 30, 1991

DIGEST: Evidence of the authority of a surety's agent to sign a bid bond on behalf of the surety must be furnished with the bid prior to bid opening, and the failure to furnish it renders the bid nonresponsive.

Attorneys

Bermudez & Longo, S.E.:

Bermudez & Longo, S.E. protests the rejection of its bid and award of a contract to Fracna Electric, Inc., under invitation for bids (IFB) No. N62470-91-B-1035, issued by the Department of the Navy. The Navy determined that Bermudez's bid guarantee was defective because its bid bond was not accompanied by a valid power of attorney attesting to the authority of the attorney-in-fact as the surety's agent and that the bid was therefore nonresponsive.

We dismiss the protest.

The IFB required the submission of a bid guarantee in the proper form by bid opening, and cautioned bidders that bid bonds must be accompanied by a copy of the signatory's authority to sign bonds for the surety company.

Bermudez's bid included a bid bond signed by Antonio Figueroa Garcia as the attorney-in-fact for the surety company. However, the bid bond was not accompanied by a power of attorney form authorizing Mr. Garcia to act on behalf of the surety company. The agency thus determined that Bermudez's bid bond was defective and rejected the bid as nonresponsive.

Bermudez contends that its failure to include a copy of Mr. Garcia's authority to sign bid bonds for the surety company should have been waived as a minor informality by the agency, or, in the alternative, constituted an apparent mistake correctable under Federal Acquisition Regulation (FAR) Sec. 14.406-1.

When required by an IFB, a bid bond is a material part of the bid and must be furnished with it. The bid bond secures the surety's liability to the government, thereby providing funds to cover the excess costs of awarding to the next eligible bidder in the event that the awardee fails to fulfill its obligations. Under the law of suretyship, no one incurs a liability to pay the debts or to perform the duties of another unless that person expressly agrees to be bound. /1/ The determinative question as to the acceptability of a bid bond is whether the bid documents establish that the bond is enforceable against the surety should the bidder fail to meet is obligations. Fred Winegar, B-243557, Aug. 1, 1991, 91-2 CPD Para. 111.

Absent a power of attorney authorizing Antonio Figueroa Garcia to act on behalf of the surety, the surety was not legally bound by the bid bond submitted with Bermudez's bid. In this regard, the instructions to complete the Standard Form 24 Bid Bond expressly require that "any person signing in a representative capacity (e.g., an attorney-in-fact) must furnish evidence of authority" with the bond. Since there was no evidence at the bid opening that the surety would be bound in the event Bermudez failed to execute the contract, the Navy correctly determined that the bid bond as submitted was defective. Techno Eng'g & Constr., Ltd., B-243983, July 23, 1991, 91-2 CPD Para. 87. Because a required bid bond is a material condition of responsiveness with which there must be compliance at the time of bid opening, the protester's failure to include with its bid a copy of Mr. Garcia's authority to sign bonds for the surety could not have been waived as a minor informality by the agency, Nova Group, Inc., B-220626, Jan. 23, 1986, 86-1 CPD Para. 80, nor could it be considered a correctable mistake. Kentucky Bridge and Dam, Inc., B-235806, July 17, 1989, 89-2 CPD Para. 56.

The protester also complains that the agency failed to promptly notify it that its bid had not been accepted as required by FAR Sec. 14.408-1. While we agree that the agency's conduct in this regard was procedurally deficient, Bermudez was in no way prejudiced by the agency's conduct, since the agency otherwise acted properly in rejecting the protester's bid. Main Elec. Ltd., B-224026, Nov. 3, 1986, 86-2 CPD Para. 511.

The protest is dismissed.

/1/ The surety must give its express consent in the bond documents because suretyship law strongly suggests that a bond will be strictly construed in favor of the surety, and that surety liability will not be found by construction or implication. William V. Walsh Constr. Co., Inc., B-241257, Oct. 3, 1990, 90-2 CPD Para. 270.