B-140052, AUGUST 7, 1959, 39 COMP. GEN. 83

B-140052, AUGUST 7, 1959, 39 COMP. GEN. 83

CONTRACTS - SPECIFICATIONS - BID BOND ON OTHER THAN REQUIRED FORM - COMPETITION RESTRICTION ALTHOUGH THE SUBMISSION OF A BID BOND ON OTHER THAN THE STANDARD GOVERNMENT FORM PRESCRIBED IN THE INVITATION IS NOT IN ITSELF A SUFFICIENT BASIS FOR REJECTION OF AN OTHERWISE ACCEPTABLE BID, A LIMITATION IN THE BID BOND ON THE TIME FOR ACTIONS AGAINST THE SURETY, WHEN THE STANDARD GOVERNMENT FORM DOES NOT CONTAIN ANY SUCH TIME LIMITATION, IS REGARDED AS A MATERIAL DEVIATION WHICH GOES BEYOND THE FORM AND AFFECTS THE RIGHTS AND OBLIGATIONS OF THE PARTIES AND, THEREFORE, RENDERS THE BID NONRESPONSIVE TO THE INVITATION. THE FAILURE OF A LOW BIDDER TO SUBMIT A BID BOND ON THE STANDARD GOVERNMENT BID BOND FORM PRESCRIBED IN THE INVITATION WHICH CONTAINED A PROVISION ADVISING BIDDERS THAT THE REQUIRED FORMS COULD BE OBTAINED FROM THE CONTRACTING OFFICER, WHEN NONE OF THE OTHER BIDDERS EXPERIENCE DIFFICULTY IN OBTAINING THE REQUIRED FORMS, DOES NOT MAKE THE PROCUREMENT RESTRICTIVE OF THE FULL AND FREE COMPETITION REQUIRED BY THE LAWS GOVERNING ADVERTISED FEDERAL PROCUREMENT, AND THE FACT THE LOW BIDDER SUBMITTED THE SAME FORM IN SATISFACTION OF THE BID BOND REQUIREMENT IN PREVIOUS PROCUREMENTS DOES NOT ESTABLISH THAT IT SHOULD BE CONSIDERED INTERCHANGEABLE WITH THE REQUIRED FORM.

TO WIDELL ASSOCIATES, INC., AUGUST 7, 1959:

WE REFER AGAIN TO YOUR TELEGRAM RECEIVED JUNE 29, 1959, PROTESTING THE REJECTION OF YOUR LOW BID SUBMITTED PURSUANT TO INVITATION NO. ENG 08-123- 59-68, ISSUED JUNE 2, 1959, BY THE ARMY ENGINEER DISTRICT AT JACKSONVILLE, FLORIDA, FOR A WATER SUPPLY TREATMENT SYSTEM AT HOMESTEAD AIR FORCE BASE, HOMESTEAD, FLORIDA.

WHEN BIDS WERE OPENED ON JUNE 18, 1959, AS SCHEDULED, IT WAS FOUND THAT THE LOW BID HAD BEEN SUBMITTED BY OUR FIRM IN THE AMOUNT OF $70,600. THE CONTRACTING OFFICER DETERMINED THAT YOUR BID WAS NOT RESPONSIVE BECAUSE THE BID BOND FURNISHED THEREWITH WAS ON A FORM FURNISHED BY THE SURETY WHICH PROVIDED FOR RIGHTS AND OBLIGATIONS WITH RESPECT TO THE PARTIES MATERIALLY DIFFERING FROM THOSE ESTABLISHED IN STANDARD FORM 24, PRESCRIBED FOR USE BY THE TERMS OF THE INVITATION. YOU WERE NOTIFIED OF THE CONTRACTING OFFICER'S DETERMINATION BY LETTER MAILED JUNE 25, 1959. PURSUANT TO SUCH DETERMINATION, AWARD WAS MADE ON JUNE 26, 1959, TO THE SECOND LOW BIDDER.

YOU CONTEND IN YOUR TELEGRAM REFERRED TO ABOVE AND IN A LETTER OF JULY 1, 1959, TO THE ARMY ENGINEER DISTRICT, THAT THE PROPER BID BOND FORM WAS NOT SUPPLIED WITH THE INVITATION, YOU WERE NOT ADVISED WHERE SUCH FORM COULD BE OBTAINED, AND YOUR BONDING COMPANY WAS UNABLE TO OBTAIN A COPY "IN THIS AREA.' YOU FURTHER STATE THAT YOU HAVE BEEN USING THE SURETY-S' FORM REGULARLY WITHOUT QUESTION. FINALLY, YOU STATE IN THE TELEGRAM:

* * * NO OPPORTUNITY AFFORDED US TO FURNISH APPROPRIATE FORMS ALTHOUGH SURETY ABLE AND WILLING TO COMPLY IMMEDIATELY.

WITH RESPECT TO THE BID BOND THE INVITATION PROVIDES THE FOLLOWING INFORMATION ON THE FACE OF STANDARD FORM 20, INVITATION/FOR BIDS:

INFORMATION REGARDING BIDDING MATERIAL, BID GUARANTEE, AND BONDS

BID BOND ON U.S. STANDARD FORM NO. 24 IN A PENAL SUM OF 20 PERCENT OF THE BID PRICE OR $1,000,000, WHICHEVER IS THE LESSER, WILL BE REQUIRED IF THE BID PRICE IS IN EXCESS OF $2,000. THE BID BOND PENALTY WILL BE EXPRESSED IN TERMS OF A PERCENTAGE OF THE BID PRICE OR $1,000,000, WHICHEVER IS THE LESSER. FAILURE TO SUBMIT THE BOND ON TIME IS CAUSE FOR REJECTION OF THE BID.

FURTHER, THE INVITATION STATES AT PAGE INV-3:

THE ATTENTION OF ALL BIDDERS IS INVITED TO STANDARD GOVERNMENT FORMS OF BID BOND, PAYMENT BOND AND PERFORMANCE BOND, COPIES OF WHICH MAY BE OBTAINED UPON APPLICATION.

WE BELIEVE THAT THE FOREGOING QUOTED PROVISIONS ARE SUFFICIENT TO HAVE PUT PROSPECTIVE BIDDERS CLEARLY ON NOTICE THAT A BID BOND ON STANDARD FORM 24 IN THE AMOUNT STATED WAS REQUIRED TO BE SUBMITTED WITH EACH BID AND THAT COPIES OF THE PROPER FORM COULD BE OBTAINED FROM THE CONTRACTING OFFICER.

WE DO NOT THINK THAT THE MERE FAILURE TO UTILIZE A DESIGNATED FORM IS A SUFFICIENT BASIS TO REJECT AN OTHERWISE ACCEPTABLE BID. IN THIS INSTANCE, HOWEVER, THE DIFFERENCE GOES BEYOND THE QUESTION OF FORM AND ACTUALLY REPRESENTS A DIFFERENCE IN THE RIGHTS AND OBLIGATIONS OF THE PARTIES. SPECIFICALLY, THE BID BOND SUBMITTED BY OUR FIRM PROVIDES THE FOLLOWING AS A CONDITION PRECEDENT TO THE INCURRING OF AN OBLIGATION UNDER THE BOND BY THE SURETY:

THAT ANY SUITS AT LAW OR PROCEEDINGS IN EQUITY BROUGHT OR TO BE BROUGHT AGAINST THE SURETY TO RECOVER ANY CLAIM HEREUNDER MUST BE INSTITUTED AND SERVICE HAD UPON THE SURETY WITHIN NINETY (90) DAYS AFTER THE ACCEPTANCE OF SAID BID OF THE PRINCIPAL BY THE OBLIGEE.

THE STANDARD GOVERNMENT BID BOND FORM PRESCRIBES NO SUCH LIMITATION ON THE TIME WITHIN WHICH AN ACTION MUST BE BROUGHT AGAINST THE SURETY BY THE OBLIGEE AND THEREFORE THE GOVERNMENT COULD BRING SUIT AGAINST THE SURETY AT ANY TIME WITHIN A MUCH LONGER PERIOD THAN WOULD BE PERMISSIBLE UNDER THE BID BOND SUBMITTED BY YOU. SEE 50 AM. JUR. SURETYSHIP SECS. 44 AND 184. CONSIDERING THE SIZE AND COMPLEXITY OF THE FEDERAL GOVERNMENT AND THE FACT THAT SUIT WOULD HAVE TO BE BROUGHT BY THE DEPARTMENT OF JUSTICE, THERE IS A SERIOUS QUESTION AS TO WHETHER A SUIT AGAINST THE SURETY COULD BE BROUGHT IN THE NORMAL COURSE OF BUSINESS WITHIN THE TIME PERMITTED UNDER THE BOND FURNISHED BY YOU. IT APPEARS, THEREFORE, THAT THE BOND SUBMITTED BY YOU FAILS TO MEET A MATERIAL REQUIREMENT OF THE INVITATION AND CANNOT BE REGARDED AS RESPONSIVE; NOR CAN THE FAILURE TO COMPLY BE REMEDIED BY AN OFFER TO SUBMIT THE BID BOND ON THE PROPER FORM AFTER THE OTHER BIDS HAVE BEEN EXPOSED. SEE 38 COMP. GEN. 532.

THE QUESTION NEXT ARISES AS TO WHETHER THE FULL AND FREE COMPETITION REQUIRED BY THE LAWS GOVERNING ADVERTISED FEDERAL PROCUREMENT HAVE BEEN MET IN THIS INSTANCE. IT MAY BE ARGUED THAT COMPETITION FROM YOUR FIRM WAS PRECLUDED BY YOUR INABILITY TO OBTAIN THE PROPER BOND FORM. WE NEED NOT CONSIDER WHAT THE EFFECT ON THE VALIDITY OF THE PROCUREMENT WOULD HAVE BEEN HAD IT BEEN SHOWN THAT YOU MADE EVERY REASONABLE EFFORT TO SUBMIT THE BID BOND IN THE PROPER FORM WITHIN THE TIME REQUIRED (ALTHOUGH WE HAVE HELD THAT THE FAILURE BY INADVERTENCE TO FURNISH AN INVITATION OR EVEN AN ADDENDUM TO AN INTERESTED BIDDER IS NOT SUFFICIENT TO RENDER A PROCUREMENT INVALID). IN THIS INSTANCE, HOWEVER, YOU WERE CLEARLY ADVISED BY THE PROVISION OF THE INVITATION QUOTED ABOVE THAT THE PROPER BID FORMS COULD BE OBTAINED FROM THE CONTRACTING OFFICER. A REPORT ON THE MATTER FROM THE DEPARTMENT OF THE ARMY SHOWS THAT THE CONTRACTING OFFICER STOOD READY AND ABLE AT ANY TIME PRIOR TO BID OPENING TO FURNISH YOUR FIRM OR ANY OTHER INTERESTED PARTY COPIES OF THE BOND FORM. WE NOTE ALSO THAT NONE OF THE OTHER SIX BIDDERS APPEARS TO HAVE EXPERIENCED ANY DIFFICULTY IN OBTAINING THE PROPER FORM. FURTHER, WE ARE QUITE CONFIDENT THAT ANY FEDERAL GOVERNMENT OFFICE IN THE GENERAL AREA WITH AUTHORITY TO AWARD THE TYPE OF CONTRACTS WITH WHICH BOND FURNISHING REQUIREMENTS ARE NORMALLY ASSOCIATED WOULD HAVE PROVIDED BID BOND FORMS AT YOUR REQUEST. WE ARE ALSO CONFIDENT THAT THE SURETY COMPANY INVOLVED, WHICH HAS FURNISHED MANY BONDS ON STANDARD FORM 24 IN THE PAST, WOULD HAVE HAD LITTLE DIFFICULTY IN SECURING SUCH FORMS.

THE FACT, AS INDICATED BY YOUR CORRESPONDENCE AND THE ADMINISTRATIVE REPORT, THAT YOU HAVE REGULARLY SUBMITTED THIS SAME FORM IN SATISFACTION OF THE BID BOND REQUIREMENT IN THE PAST WOULD TEND TO INDICATE THAT ITS SUBMISSION IN THIS INSTANCE WAS DUE TO A DELIBERATE POLICY RATHER THAN TO AN INABILITY TO OBTAIN THE DESIGNATED FORMS. THE FURTHER FACT THAT YOUR SURETY'S BID FORM MAY HAVE BEEN REGARDED AS ACCEPTABLE IN THE PAST DOES NOT, OF COURSE, ESTABLISH THAT IT SHOULD BE CONSIDERED INTERCHANGEABLE WITH THE STANDARD GOVERNMENT FORM.

FOR THE FOREGOING REASONS WE CONCLUDE THAT THERE HAS BEEN PRESENTED NO BASIS FOR DISTURBING THE AWARD MADE TO THE SECOND LOW BIDDER.