Questions Concerning Government Procurement Practices

A firm asked several questions concerning Government procurement practices. The bonding requirements imposed by the Government as a condition for receiving contracts were questioned. The purpose of bid guarantees is to insure that contractors execute performance or payment bonds and other contractual documents. Bid guarantees discourage bidders from rendering themselves ineligible for award after the bids of other bidders have been exposed. GAO did not believe that a preaward survey serves as a substitute for a bid bond. GAO was also asked why wage determinations for certain service contracts vary substantially depending on where the services are to be performed, even though the required tasks are essentially the same. The Department of Labor would be the most appropriate agency to respond to this concern, since it has the authority to make the wage determinations. The firm also objected to the fact that its bid was rejected in a Government procurement because it did not provide a bid guarantee and because it bid on a cost-plus-percentage-of-cost basis. Where a solicitation requires that a bid guarantee be submitted with a bid, the requirement is a material one which cannot be waived except in limited circumstances. Agencies are prohibited from entering into cost-plus-a-percentage-of-cost contracts. Thus, the agency was without authority to accept the bid.