B-175477, AUG 3, 1972

B-175477, AUG 3, 1972

BID PROTEST - FAILURE TO SUBMIT BID GUARANTY - PREJUDICE TO BIDDERS DENIAL OF PROTEST ON BEHALF OF JOHNSON SERVICE COMPANY AGAINST THE REJECTION OF THEIR BID FOR FAILURE TO SUBMIT A BID GUARANTY UNDER A CONSTRUCTION IFB ISSUED BY THE DIRECTORATE OF PROCUREMENT AND PRODUCTION, HILL AFB, UTAH. WHILE IT IS UNFORTUNATE THAT JOHNSON DID NOT RECEIVE THE SF20 CONTAINING THE BID GUARANTY PROVISIONS, THAT FACT CANNOT JUSTIFY WAIVER OF THE REQUIREMENT THAT AN APPROPRIATE BID BOND BE SUBMITTED. SEE 46 COMP. GEN. 11 (1966). THE PREJUDICE TO OTHER BIDDERS RELATES NOT TO PRICE, BUT RATHER TO THE UNFAIR ADVANTAGE WHEREBY A BIDDER COULD ELECT, AFTER BID OPENING, WHETHER OR NOT TO COMPLY WITH A MATERIAL INVITATION PROVISION.

TO VAN COTT, BAGLEY, CORNWALL & MCCARTHY:

REFERENCE IS MADE TO YOUR LETTER OF MAY 11, 1972, WITH ENCLOSURES, AND PRIOR CORRESPONDENCE, PROTESTING, ON BEHALF OF THE JOHNSON SERVICE COMPANY, THE REJECTION OF ITS BID UNDER CONSTRUCTION INVITATION FOR BIDS (IFB) NO. 42650-72-B-2561, AS AMENDED, ISSUED BY THE DIRECTORATE, PROCUREMENT AND PRODUCTION, HILL AIR FORCE BASE, UTAH.

THE SOLICITATION CONSISTING, IN ADDITION TO THE SPECIFICATIONS, ETC., OF STANDARD FORM 20 (INVITATION FOR BIDS-CONSTRUCTION CONTRACT), STANDARD FORM 21 (BID FORM-CONSTRUCTION CONTRACT), AND STANDARD FORM 22 (INSTRUCTIONS TO BIDDERS-CONSTRUCTION CONTRACT) REQUIRED THE FURNISHING OF A BID GUARANTY IN THE PROPER FORM AND AMOUNT BY THE TIME SCHEDULED FOR THE OPENING OF BIDS. HOWEVER, JOHNSON FAILED TO FURNISH WITH THEIR BID THE REQUIRED BID GUARANTY AND, FOR THAT REASON, THE BID WAS REJECTED BY THE CONTRACTING OFFICER AS NONRESPONSIVE. THE ACTION TAKEN BY THE CONTRACTING OFFICER WAS IN CONSONANCE WITH ASPR 2-404.2(H) AND DECISIONS OF OUR OFFICE. THESE AUTHORITIES HOLD THAT AN INVITATION BID BOND REQUIREMENT IS A MATERIAL INVITATION REQUIREMENT WHICH CANNOT BE WAIVED. SEE, FOR EXAMPLE, 46 COMP. GEN. 11 (1966). HOWEVER, IT IS MAINTAINED THAT JOHNSON HAD NO ACTUAL OR CONSTRUCTIVE NOTICE OF THE BID GUARANTY REQUIREMENT SINCE THE BID PACKAGE RECEIVED FROM THE PROCUREMENT ACTIVITY DID NOT INCLUDE STANDARD FORM 20 WHICH CONTAINED THE BID GUARANTY PROVISIONS APPLICABLE TO THIS CONSTRUCTION PROJECT. IT IS THEREFORE PROPOSED THAT JOHNSON BE PERMITTED TO SUBMIT A PROPER BID GUARANTY SO THAT AWARD MAY BE MADE TO THEM AS LOW BIDDER.

IN THE LIGHT OF THE FACTS OF RECORD, WE FIND NO LEGAL BASIS TO QUESTION THE REJECTION OF THE JOHNSON BID BECAUSE OF THE BID GUARANTY DEFICIENCY.

IN THIS REGARD, IN THE CONTRACTING OFFICER'S LETTER OF MARCH 13, 1972, IT WAS REASONED FROM THE DECISION IN 40 COMP. GEN. 126 (1960) THAT WHILE THE GOVERNMENT SHOULD HAVE MADE EVERY EFFORT TO SEE THAT INTERESTED BIDDERS RECEIVED TIMELY AND COMPLETE COPIES OF INVITATIONS AND AMENDMENTS THERETO, THE FACT THAT THERE MAY HAVE BEEN A FAILURE TO DO SO IN A PARTICULAR CASE DOES NOT WARRANT ACCEPTANCE OF A BID WHICH IS NOT FULLY RESPONSIVE. YOU CONTEND THAT THE CITED DECISION IS NOT APPLICABLE SINCE IT WAS BASED ON PREJUDICE TO OTHER BIDDERS AND THERE IS NONE IN THIS CASE SINCE IT WOULD NOT BE NECESSARY FOR JOHNSON TO AMEND ITS BID PRICE IF IT FURNISHED THE BID BOND. HOWEVER, THE PREJUDICE TO OTHER BIDDERS REFERRED TO IN THE CITED DECISION DID NOT RELATE TO PRICE AS SUCH BUT RATHER TO THE UNFAIR ADVANTAGE WHEREBY A BIDDER COULD ELECT, AFTER BID OPENING, WHETHER OR NOT TO COMPLY WITH A MATERIAL INVITATION PROVISION. THUS, THE PREJUDICE TO OTHER BIDDERS IN THE CITED CASE DEALING WITH THE FAILURE TO TIMELY ACKNOWLEDGE A MATERIAL INVITATION AMENDMENT IS THE SAME HERE WHERE A MATERIAL INVITATION REQUIREMENT FOR SUBMISSION OF A BID BOND IS NOT TIMELY COMPLIED WITH. ACCORDINGLY, WHILE IT IS UNFORTUNATE THAT JOHNSON DID NOT RECEIVE STANDARD FORM 20 CONTAINING THE BID GUARANTEE PROVISIONS, THAT FACT CANNOT JUSTIFY WAIVER OF THE REQUIREMENT THAT AN APPROPRIATE BID BOND BE SUBMITTED.

THE OTHER ARGUMENTS ADVANCED NEED NOT BE CONSIDERED SINCE THE FAILURE HERE TO FURNISH THE REQUIRED BID GUARANTY COULD NOT BE WAIVED UNDER THE REGULATIONS OR DECISIONS OF OUR OFFICE.

YOU ALSO CONTEND THAT THE AWARD OF THE CONTRACT WAS MADE IN VIOLATION OF ASPR 2-407.8(B)(3) WHICH PROVIDES:

"WHERE A WRITTEN PROTEST AGAINST THE MAKING OF AN AWARD IS RECEIVED, AWARD SHALL NOT BE MADE UNTIL THE MATTER IS RESOLVED, UNLESS THE CONTRACTING OFFICER DETERMINES THAT:

(I) THE ITEMS TO BE PROCURED ARE URGENTLY REQUIRED; OR

(II) DELIVERY OR PERFORMANCE WILL BE UNDULY DELAYED BY FAILURE TO MAKE AWARD PROMPTLY; OR

(III) A PROMPT AWARD WILL OTHERWISE BE ADVANTAGEOUS TO THE GOVERNMENT.

IF AWARD IS MADE UNDER (I), (II), OR (III) ABOVE, THE CONTRACTING OFFICER SHALL DOCUMENT THE FILE TO EXPLAIN THE NEED FOR AN IMMEDIATE AWARD, AND SHALL GIVE WRITTEN NOTICE OF THE DECISION TO PROCEED WITH THE AWARD TO THE PROTESTER AND, AS APPROPRIATE, TO OTHERS CONCERNED."

YOU STATE THAT THE CONTRACTING OFFICER PROCEEDED IMPROPERLY IN AWARDING THE CONTRACT TO HONEYWELL, INC., AFTER RECEIPT OF THE PROTEST FROM JOHNSON; THAT BECAUSE THE CONTRACTING OFFICER SIMULTANEOUSLY DENIED THE PROTEST OF JOHNSON AND AWARDED THE CONTRACT TO HONEYWELL, JOHNSON WAS NOT GIVEN EFFECTIVE NOTICE OF THE DECISION TO PROCEED WITH THE AWARD; AND THAT THE CONTRACTING OFFICER HAS NOT DOCUMENTED THE FILE TO EXPLAIN THE NEED FOR AN IMMEDIATE AWARD. ALSO, YOU STATE THAT JOHNSON HAS BEEN DEPRIVED OF ITS RIGHTS TO A FAIR HEARING OF ITS PROTEST AND AWARD OF THE CONTRACT IF IT PREVAILS; AND THAT IN EFFECT THE CONTRACTING OFFICER HAS FRUSTRATED THE RIGHT OF JOHNSON TO HAVE THE MATTER HEARD AND ADJUDICATED BY REGULAR ADMINISTRATIVE CHANNELS.

THE CONTRACTING OFFICER WAS NOT REQUIRED TO MAKE THE DETERMINATIONS PROVIDED IN ASPR 2-407.8(B)(3), SINCE THE AWARD WAS NOT MADE BEFORE THE PROTEST WAS RESOLVED BY THE CONTRACTING OFFICER. FURTHER, UNDER ASPR 2 407.8(B)(3) A CONTRACTING OFFICER IS NOT REQUIRED, AFTER HE HAS RESOLVED THE MATTER OF A PROTEST, TO HOLD AN AWARD IN ABEYANCE FOR THE PURPOSE OF DETERMINING WHETHER THE PROTESTING BIDDER INTENDS TO APPEAL THE CONTRACTING OFFICER'S DECISION TO HIGHER AUTHORITY WITHIN THE DEPARTMENT OR TO THE GENERAL ACCOUNTING OFFICE. THE RECORD DOES NOT INDICATE THAT THE CONTRACTING OFFICER WAS AWARE, PRIOR TO AWARD, THAT HIS DECISION ON THE PROTEST OF JOHNSON WOULD BE APPEALED TO THE GENERAL ACCOUNTING OFFICE.

IN VIEW OF THE FOREGOING, THE PROTEST IS DENIED.