B-172750, SEP 27, 1971

B-172750, SEP 27, 1971

BID PROTEST - BID RESPONSIVENESS - DEFECTIVE BID GUARANTEE ADVISING THAT THE PROTEST OF STERN CONTRACTORS, INC., LOW BIDDER, AGAINST THE AWARD OF A CONTRACT TO ANOTHER FIRM UNDER AN IFB ISSUED BY THE LONG BEACH NAVAL SHIPYARD, CALIF., HAS MERIT BUT THE GOVERNMENT'S BEST INTERESTS WILL BE SERVED BY NOT DISTURBING THE AWARD ALREADY MADE. THE REQUIREMENT OF A BID GUARANTEE WAS NOT AUTOMATICALLY UNFULFILLED WHEN THE STERNS SUBMITTED IT ON AN OBSOLETE FORM, NOR WHEN THE GUARANTEE WAS NOTARIZED WITH A SEAL THAT EXPIRED BEFORE THE PROCUREMENT. FAILURE TO UTILIZE A DESIGNATED FORM IS NOT SUFFICIENT BASIS TO REJECT A BID. THE FACT THAT THE SEAL EXPIRED DOES NOT AFFECT THE VALIDITY OF THE AFFIDAVIT SINCE THE SEAL HAD NOT EXPIRED AT THE TIME THE AFFIDAVIT WAS EXECUTED. FURTHERMORE, THE FACT THAT ONE GUARANTEE FORM WAS BEING USED TO REPRESENT TWO SEPARATE GUARANTORS DOES NOT UNVALIDATE IT WHERE THE INTENT THAT IT BE SO USED IS CLEARLY MANIFESTED, AND THE FORM IS SIGNED BY EACH PARTY.

TO MR. SECRETARY:

REFERENCE IS MADE TO THE LETTER OF MAY 13, 1971, WITH ENCLOSURES, FAC 0211C:RP:WH, CONCERNING THE PROTEST BY STERN CONTRACTORS, INCORPORATED (STERN), AGAINST THE AWARD OF A CONTRACT TO ANOTHER CONCERN UNDER INVITATION FOR BIDS NO. N62474-71-B-0112, ISSUED BY THE LONG BEACH NAVAL SHIPYARD, CALIFORNIA.

BIDS WERE OPENED ON MARCH 30, 1971, AND FOUR BIDS WERE RECEIVED. STERN'S BID AT $96,600 WAS LOW, AND THE BID OF CONNOLLY PACIFIC COMPANY AT $97,777 WAS SECOND LOW.

THE SOLICITATION REQUIRED THAT THE BID BE ACCOMPANIED BY A BID GUARANTEE. PARAGRAPH 4(B) OF THE BID BOND INSTRUCTIONS PROVIDED THAT WHERE INDIVIDUAL SURETIES EXECUTE THE BOND, THEY SHALL BE TWO OR MORE RESPONSIBLE PERSONS; THAT A COMPLETED AFFIDAVIT OF INDIVIDUAL SURETY (STANDARD FORM 28), FOR EACH INDIVIDUAL SURETY, SHALL ACCOMPANY THE BOND AND THAT THE SURETIES MAY BE REQUIRED TO FURNISH ADDITIONAL SUBSTANTIATING INFORMATION CONCERNING THEIR ASSETS AND FINANCIAL CAPABILITY AS THE GOVERNMENT MAY REQUIRE.

THE AFFIDAVIT OF INDIVIDUAL SURETY FORM SUBMITTED WITH STERN'S BID, SIGNED BY GEORGE STERN AND HARRIET STERN, WAS AN OBSOLETE STANDARD FORM 28, NOVEMBER 1950 EDITION. THE AFFIDAVIT WAS EXECUTED ON NOVEMBER 26, 1965, AND WAS NOTARIZED WITH A SEAL WHICH EXPIRED ON APRIL 30, 1966. THE CURRENT STANDARD FORM 28, "AFFIDAVIT OF INDIVIDUAL SURETY" IS THE JUNE 1966 EDITION.

STERN'S BID WAS REJECTED AS NONRESPONSIVE FOR THE REASONS: (1) THE INFORMATION ON THE STANDARD FORM 28, 1950 EDITION, SUBMITTED WITH STERN'S BID AND THE CURRENT STANDARD FORM 28, 1966 EDITION, ARE NOT THE SAME; (2) THE AFFIDAVIT FURNISHED WITH STERN'S BID WAS THE AFFIDAVIT OF ONLY ONE INDIVIDUAL SURETY, THEREBY DEVIATING FROM ARMED SERVICES PROCUREMENT REGULATION (ASPR) 10-201.2(D) AND PARAGRAPH 4(B) OF THE BID BOND INSTRUCTIONS, WHICH REQUIRE AN AFFIDAVIT FROM AT LEAST TWO INDIVIDUAL SURETIES, EACH WITH A NET WORTH EQUAL TO THE TOTAL PENAL AMOUNT OF THE BOND; (3) THE AFFIDAVIT DID NOT FURNISH CURRENT FINANCIAL INFORMATION AND THE NOTARY SEAL ON THE AFFIDAVIT HAD EXPIRED IN 1966.

WITH RESPECT TO THE FIRST REASON FOR REJECTING STERN'S BID, WE HAVE HELD THAT THE MERE FAILURE TO UTILIZE A DESIGNATED FORM IS NOT A SUFFICIENT BASIS TO REJECT AN OTHERWISE ACCEPTABLE BID. SEE 39 COMP. GEN. 83 (1959) AND B-161904, JULY 17, 1967. WHILE THE FORMAT OF THE 1950 EDITION OF STANDARD FORM 28 IS NOT THE SAME AS THE CURRENT 1966 EDITION, THERE IS NO SUBSTANTIAL DIFFERENCE IN THE INFORMATION REQUESTED BY THE TWO FORMS. THEREFORE, THE FAILURE TO USE THE CURRENT STANDARD FORM 28 IS NOT A SUFFICIENT REASON TO REJECT STERN'S BID.

WITH RESPECT TO THE SECOND REASON, THE AFFIDAVIT OF INDIVIDUAL SURETY SUBMITTED WITH STERN'S BID CONTAINED THE SIGNATURES OF BOTH GEORGE STERN AND HARRIET STERN UNDER THE CAPTION "MY SIGNATURE AS SURETY,"; BOTH NAMES APPEARED UNDER THE CAPTION "MY NAME" ON THE TOP OF STANDARD FORM 28; AND BOTH SIGNED THE BID BOND UNDER THE CAPTION "INDIVIDUAL SURETIES." IN OUR VIEW THIS EVIDENCE INDICATES THAT THE ONE STANDARD FORM 28 FURNISHED WITH STERN'S BID WAS BEING USED TO REPRESENT TWO PERSONS ACTING AS SURETIES. THE FACT THAT ONLY ONE AFFIDAVIT FORM WAS USED WOULD NOT PREVENT IT FROM BEING AN AFFIDAVIT FOR MORE THAN ONE PERSON IF SUCH INTENT WAS CLEARLY MANIFESTED AND THE FORM WAS SIGNED BY EACH PARTY. SINCE THE AFFIDAVIT FORM SUBMITTED BY STERN INDICATED IT WAS TO BE AN AFFIDAVIT FROM TWO SURETIES AND THE AFFIDAVIT AND THE BID BOND WERE SIGNED BY THE TWO INDIVIDUALS AS SURETIES, WE DISAGREE WITH NAVY'S VIEW THAT THE AFFIDAVIT FURNISHED WITH STERN'S BID WAS THE AFFIDAVIT OF ONLY ONE INDIVIDUAL SURETY. THE PENAL AMOUNT OF THE BOND WAS $19,320 AND THE AFFIDAVIT SUBMITTED WITH STERN'S BID SHOWED A NET WORTH OF $238,610, WHICH WAS MORE THAN ADEQUATE TO COVER THE REQUIREMENT THAT EACH SURETY HAVE A NET WORTH AT LEAST EQUAL TO THE PENAL AMOUNT OF THE BOND.

REGARDING THE THIRD REASON FOR REJECTING STERN'S BID WE FIND THAT UNDER PARAGRAPH 4(B) OF THE BID BOND INSTRUCTIONS AND ASPR 10-201.2(D), THE CONTRACTING OFFICER SHOULD REQUEST EXTRINSIC EVIDENCE OF A SURETY'S NET WORTH WHERE INADEQUATE INFORMATION IS FURNISHED ON THE SURETY'S AFFIDAVIT. WE THEREFORE DO NOT AGREE THAT STERN'S BID WAS NONRESPONSIVE BECAUSE THE STANDARD FORM 28 FURNISHED WITH STERN'S BID DID NOT CONTAIN CURRENT FINANCIAL INFORMATION OF THE NET WORTH OF STERN'S SURETIES. THE FACT THAT THE NOTARY'S SEAL EXPIRED IN 1966 DOES NOT AFFECT THE VALIDITY OF THE AFFIDAVIT SINCE THE SEAL APPARENTLY HAD NOT EXPIRED AT THE TIME THE AFFIDAVIT WAS EXECUTED IN 1965.

IN OUR LETTER TO STERN WE HAVE ADVISED THAT WHILE WE DISAGREE THAT STERN'S BID WAS NONRESPONSIVE IT WOULD NOT BE IN THE GOVERNMENT'S BEST INTEREST TO DISTURB THE AWARD MADE. HOWEVER, WE ARE BRINGING THIS MATTER TO YOUR ATTENTION FOR APPROPRIATE ACTION IN FUTURE PROCUREMENTS.