National Defense:

Review of Bidding Procedures Alleging Unfair Requirements

PLRD-81-63: Published: Sep 1, 1981. Publicly Released: Sep 1, 1981.

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GAO was asked to examine certain bidding procedures at Griffiss Air Force Base because of allegations raised that bidding practices at Griffiss prevented small businesses from adequately competing because of a requirement for a 20-percent cash deposit.

GAO found that the procedures followed by Griffiss complied with existing Defense Acquisition Regulations which require a performance bond for any fixed-price construction contract in excess of $25,000 and a bid guarantee of not less than 20 percent of the bid amount. The bid guarantee can take the form of a bid bond, postal money order, certified check, cashiers check, irrevocable letter of credit, or certain bonds or notes of the United States. Under the Small Business Administration (SBA) Surety Bond Guarantee Program, SBA will assist a business in compiling the necessary data required by the surety companies. In the procurement in question, 38 small businesses bid on the contract. This indicated that there was no intent at Griffiss to prevent small businesses from bidding.

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