[Protest Alleging Improper Bid Rejection by HHS]

B-216397: Dec 24, 1984

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A firm protested the National Institutes of Health's (NIH) rejection of its bid for a building renovation contract. After initially finding that the protester, who was the low bidder on the contract, was not responsible because of past unsatisfactory performance and instituting Certificate of Competency (COC) procedures, NIH discovered that the bidder's name and the bid bond principal's name were different. Therefore, it rejected the bid as nonresponsive. GAO has held that a bid bond which names a principal different from the nominal bidder is deficient and that this defect may not be waived as a minor informality, unless it can be established at the time of bid opening that the bidder is the same legal entity as the principal named on the bid bond. In this case, it was clear that the protester's use of different trade names on the bid and the bid bond had no effect on the entity's legal obligations since they were the same. NIH argued that Federal Acquisition Regulations (FAR) exempt agencies from submitting a nonresponsibility determination of a small business concern on construction contracts to the Small Business Administration where that determination is based on past unsatisfactory performance. However, GAO found that the NIH interpretation of the FAR was unreasonable, since negative responsibility determinations of small businesses competing for construction contracts are clearly subject to COC procedures. Accordingly, the protest was sustained. However, since the work was urgently needed, GAO did not believe that the award should be disturbed.