A-21999, MARCH 14, 1928, 7 COMP. GEN. 568

A-21999, MARCH 14, 1928, 7 COMP. GEN. 568

BIDS - IRREGULARITIES - BID BONDS UNDER THE STANDARD GOVERNMENT INSTRUCTIONS TO BIDDERS THE GOVERNMENT RESERVES THE RIGHT TO WAIVE INFORMALITIES WHENEVER SUCH WAIVER IS IN THE INTEREST OF THE UNITED STATES, AND THE FAILURE OF A BIDDER TO SUBMIT A BID BOND OR CERTIFIED CHECK IN THE REQUIRED AMOUNT IS AN IRREGULARITY WHICH MAY BE EXPLAINED AND UPON PROPER FACTS BE WAIVED WHERE IT IS SHOWN THAT THE BIDDER WAS NOT INFORMED OF THE AMOUNT OF BID BOND REQUIRED AND AFTER INQUIRY SUBMITTED A CERTIFIED CHECK FOR 5 PERCENT OF THE AMOUNT OF HIS BID, WHICH WAS THE LOWEST RECEIVED.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF THE INTERIOR, MARCH 14, 1928:

THERE HAS BEEN RECEIVED YOUR LETTER DATED MARCH 9, 1928, WITH ACCOMPANYING PAPERS, AS TO WHETHER YOU ARE AUTHORIZED, UNDER STANDARD GOVERNMENT INSTRUCTIONS TO BIDDERS, TO CONSIDER THE BID OF C. F. GRAFF IN THE SUM OF $231,947.10, FOR THE CONSTRUCTION OF THE KITTITAS DIVERSION DAM AND A PART OF THE MAIN CANAL OF THE KITTITAS DIVISION, YAKIMA IRRIGATION PROJECT, WHEN THE BID WAS ACCOMPANIED BY A BID GUARANTEE IN THE FORM OF A CERTIFIED CHECK FOR 5 PERCENT, AS THE AMOUNT THEREOF, INSTEAD OF 10 PERCENT, AS REQUIRED BY THE STANDARD GOVERNMENT FORM OF INVITATION FOR BIDS.

IT APPEARS THAT UNDER DATE OF DECEMBER 27, 1927, THE GOVERNMENT ADVERTISED FOR SEALED BIDS TO BE RECEIVED UNTIL 10 A.M. FEBRUARY 10, 1928, FOR THE CONSTRUCTION OF THE KITTITAS DIVISION DAM AND EARTHWORK, CANAL LINING, AND TUNNELS, FOR THE KITTITAS MAIN CANAL, KITTITAS DIVISION, YAKIMA PROJECT, WASHINGTON. PROSPECTIVE BIDDERS WERE NOTIFIED THAT A GUARANTEE WOULD BE REQUIRED FOR EACH BID OF 10 PERCENT OF THE AMOUNT OF THE BID AND WERE INSTRUCTED TO SEE PARAGRAPH 8 OF INSTRUCTIONS TO BIDDERS. THEY WERE FURTHER NOTIFIED TO CONSULT THE STANDARD GOVERNMENT INSTRUCTIONS TO BIDDERS, AND STANDARD GOVERNMENT CONSTRUCTION CONTRACT, BID BOND, AND PERFORMANCE BOND, AND THAT SAME "MAY BE OBTAINED UPON APPLICATION" TO THE "BUREAU OF RECLAMATION AT WASHINGTON, D.C., ELLENSBURG, WASHINGTON, OR DENVER, COLORADO.'

PARAGRAPH 16 OF THE INSTRUCTIONS TO BIDDERS IS AS FOLLOWS:

THE CONTRACT WILL BE AWARDED TO THE LOWEST RESPONSIBLE BIDDER COMPLYING WITH CONDITIONS OF THE INVITATION FOR BIDS, PROVIDED HIS BID IS REASONABLE AND IT IS TO THE INTEREST OF THE UNITED STATES TO ACCEPT IT. THE BIDDER TO WHOM THE AWARD IS MADE WILL BE NOTIFIED AT THE EARLIEST POSSIBLE DATE. THE UNITED STATES, HOWEVER, RESERVES THE RIGHT TO REJECT ANY AND ALL BIDS AND TO WAIVE ANY INFORMALITY IN BIDS RECEIVED WHENEVER SUCH REJECTION OR WAIVER IS IN THE INTEREST OF THE UNITED STATES. IT ALSO RESERVES THE RIGHT TO REJECT THE BID OF A BIDDER WHO HAS PREVIOUSLY FAILED TO PERFORM PROPERLY OR COMPLETE ON TIME CONTRACTS OF A SIMILAR NATURE, OR A BID OF A BIDDER WHO IS NOT IN A POSITION TO PERFORM THE CONTRACT.

IT FURTHER APPEARS THAT SEVERAL BIDS WERE RECEIVED FOR THIS WORK; THAT THE BID OF C. F. GRAFF, IN THE SUM OF $231,947.10, WAS THE LOWEST; AND THAT THE NEXT LOWEST BID RECEIVED WAS THAT OF THE DERBON CONSTRUCTION CO., IN THE SUM OF $250,350. HOWEVER, THE GRAFF BID WAS ACCOMPANIED BY A CERTIFIED CHECK IN THE SUM OF $12,000, BEING APPROXIMATELY 5 PERCENT OF HIS BID, AND THE DERBON CONSTRUCTION CO. HAS PROTESTED THE AWARDING OF THE CONTRACT TO MR. GRAFF ON THE GROUND THAT HE FAILED TO COMPLY WITH THE SPECIFICATIONS, IN NOT SUBMITTING A CERTIFIED CHECK IN THE SUM OF 10 PERCENT, THE AMOUNT OF THE GUARANTEE REQUIRED BY THE INVITATION FOR BIDS.

THE GUARANTEE REQUIRED TO BE SUBMITTED WITH BIDS IS FOR THE PURPOSE OF INSURING THAT THE SUCCESSFUL BIDDER WILL EXECUTE THE CONTRACT AND GIVE THE NECESSARY CONTRACT BOND FOR FAITHFUL PERFORMANCE OF SAID CONTRACT; IN OTHER WORDS, THE PURPOSE OF THE GUARANTY TO ACCOMPANY THE BID IS TO SECURE BONA FIDE BIDDERS FOR PUBLIC WORK AND TO MAKE THE GOVERNMENT WHOLE, IN EVENT A SUCCESSFUL BIDDER SHOULD FAIL OR REFUSE TO EXECUTE A CONTRACT IN ACCORDANCE WITH HIS PROPOSAL, SHOULD IT BE ACCEPTED, AND TO GIVE THE NECESSARY PERFORMANCE BOND. THE FAILURE TO ACCOMPANY A BID WITH THE REQUIRED AMOUNT OF GUARANTEE IS AN IRREGULARITY WHICH DOES NOT REQUIRE IMMEDIATE REJECTION OF THE BID BUT MAY BE EXPLAINED AND UPON PROPER FACTS BE WAIVED BY THE UNITED STATES IN EVENT IT IS TO ITS INTEREST SO TO DO. THIS IS TRUE IN THE PRESENT MATTER, WHERE THE BIDDER APPEARS NOT TO HAVE BEEN FURNISHED A COPY OF THE INVITATION FOR BIDS AND WAS NOT INFORMED OF THE EXACT AMOUNT OF GUARANTEE REQUIRED TO ACCOMPANY HIS BID, BUT WHO CONSULTED SURETIES IN THE PRACTICE OF GIVING BONDS FOR THE PERFORMANCE OF GOVERNMENT CONTRACTS AND WAS NOTIFIED THAT A CERTIFIED CHECK IN THE AMOUNT OF 5 PERCENT OF HIS BID WOULD PROBABLY BE SUFFICIENT. THERE APPEARS TO HAVE BEEN NO LACK OF GOOD FAITH IN THE MATTER, AND AS MR. GRAFF APPEARS WILLING TO EXECUTE THE CONTRACT AND GIVE THE NECESSARY PERFORMANCE BOND AND AS HIS BID IS CONSIDERABLY LOWER THAN THE NEXT LOWEST BID, THE INTERESTS OF THE UNITED STATES APPEAR AND THE IRREGULARITY IN THE BID MAY BE WAIVED.