Protest of GSA Contract Award

B-203608: Jun 15, 1982

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A firm protested the award of a contract under an invitation for bids (IFB) issued by the General Services Administration (GSA) for custodial services. The protest stemmed from the rejection of the protester's bid as nonresponsive based on the financial inadequacy of one of the individual sureties listed on the protester's bid bond. The protester contended that it was unreasonable for GSA to accept only sureties with net worths in excess of their total outstanding surety obligations. GSA took the position that, contrary to a number of prior decisions, the question of surety acceptability relates to bid responsiveness rather than responsibility. The agency's requirement that both individual sureties on a bid bond have net worths in excess of their total outstanding surety obligations was unobjectionable since it was reasonably related to the purpose for which a bid guarantee was intended, namely, to protect the Government's financial interest in the event of default on the bid. However, questions concerning an individual surety's financial acceptability are matters of responsibility rather than responsiveness. Although questions concerning individual surety's acceptability are matters of responsibility, a bidder may not after bid opening substitute an acceptable individual surety for one deemed unacceptable because such a substitution would alter the sureties' joint and several liability under the bid bond, the principal factor in determining the bid's responsiveness to the bid guarantee requirements. GSA asked whether bidder nonresponsibility determinations based on the unacceptability of an individual surety must be referred to the Small Business Administration (SBA). Bidder nonresponsibility determinations based on the unacceptability of an individual surety on a required bid bond need not be referred to SBA for review under the Certificate of Competency procedures; such determinations are based solely on the qualifications of the individual surety and there is no indication that Congress intended the Small Business Act to bring surety qualifications under the scrutiny of SBA. Accordingly, the protest was denied.

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