B-239687, May 24, 1990, 90-1 CPD 499
Highlights
We dismiss the protest without obtaining a report from the agency because it is clear from the face of the protest that it does not state a valid basis for protest. Kennedy explains that its bonding agent inadvertently left blank the box on its bid bond where the penal sum of the bond should have been inserted. Kennedy contends that the agency should nonetheless award it a contract because its price was low. The purpose of a bid bond is to assure that a bidder will not withdraw its bid within the time specified for acceptance. The sufficiency of a bid bond will depend on whether the surety is clearly bound by its terms. When the liability of the surety is not clear. The fact that Kennedy may have intended to submit a bid bond for the required 20 percent of the bid amount and for the surety to be bound thereby is irrelevant.
B-239687, May 24, 1990, 90-1 CPD 499
PROCUREMENT - Sealed Bidding - Bid guarantees - Responsiveness - Sureties - Liability restrictions PROCUREMENT - Sealed Bidding - Bids - Bid guarantees - Omission - Responsiveness DIGEST: Bid properly may be rejected as nonresponsive where bidder fails to indicate penal sum of bid bond either as a percentage of the bid amount or as a fixed sum.
Attorneys
Kennedy Electric Company, Inc.:
Kennedy Electric Company, Inc., protests an award to any other bidder under invitation for bids (IFB) No. 90-Z14, issued by the Central Intelligence Agency. Kennedy argues that its low bid should be accepted despite the fact that the bid bond accompanying its bid failed to indicate a penal sum either as a percentage of the bid price or as a fixed sum.
We dismiss the protest without obtaining a report from the agency because it is clear from the face of the protest that it does not state a valid basis for protest. Bid Protest Regulations, 4 C.F.R. Sec. 21.3(m) (1989).
Kennedy explains that its bonding agent inadvertently left blank the box on its bid bond where the penal sum of the bond should have been inserted. Kennedy contends that the agency should nonetheless award it a contract because its price was low.
The purpose of a bid bond is to assure that a bidder will not withdraw its bid within the time specified for acceptance; it secures the liability of a surety to the government in the event the bidder fails to fulfill its obligations. Allen County Builders Supply, 64 Comp.Gen. 505 (1985), 85-1 CPD Para. 507. Thus, the sufficiency of a bid bond will depend on whether the surety is clearly bound by its terms. When the liability of the surety is not clear, the bond properly may be regarded as defective and the bid rejected as nonresponsive. F&F Pizano, B-219591; B-219594, July 25, 1985, 85-2 CPD Para. 88.
The fact that Kennedy may have intended to submit a bid bond for the required 20 percent of the bid amount and for the surety to be bound thereby is irrelevant, since it is not the bidder's intent that controls. The relevant inquiry, rather, is whether the surety's obligation has been objectively manifested on the bidding documents so that the extent and character of its liability is clearly ascertainable therefrom. Allen Country Builders Supply, 64 Comp.Gen. 505 (1985), supra. Here, in our view, the requisite obligation could not be clearly created without inserting a specific penal sum or percentage in the place provided on the bond. Id.; M/V Constructor Co., B-232572, Sept. 20, 1988, 88-2 CPD Para. 272.
Since the protester concedes that the bid bond accompanying its bid failed to indicate the penal sum of the bond, we dismiss its protest.