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TO THE SECRETARY OF THE AIR FORCE: REFERENCE IS MADE TO LETTER DATED AUGUST 22. ADDITIVE ALTERNATES FOUR AND FIVE WERE ALTERNATE TO EACH OTHER. THE INVITATION PROVIDED THAT "BID GUARANTY IN A PENAL SUM OF 20 PERCENT (EXPRESSED IN WORDS AND FIGURES) OF THE BID PRICE WILL BE REQUIRED IN SUPPORT OF EACH BID IF BID PRICE IS IN EXCESS OF $2. THE INVITATION FURTHER PROVIDED THAT: "AWARD WILL BE MADE ON THE LOWEST RESPONSIVE BASE BID. ADDITIVE ALTERNATES WILL BE AWARDED AT THE OPTION OF THE GOVERNMENT CONTINGENT UPON AVAILABILITY OF FUNDS. THE SIX BIDS RECEIVED WERE OPENED ON JUNE 15. THE THREE LOWEST BIDS WERE AS FOLLOWS: CHART BASE BID PLUS ALTERNATES BIDDER BASE BID 1. 316.80" IS OF A DIFFERENT TYPE FROM THE REST OF THE TYPED INSERTIONS ON THE BID BOND FORM.

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B-143404, SEP. 15, 1960

TO THE SECRETARY OF THE AIR FORCE:

REFERENCE IS MADE TO LETTER DATED AUGUST 22, 1960, FROM THE DEPUTY FOR PROCUREMENT AND PRODUCTION, FURNISHING A REPORT RELATIVE TO THE PROTEST BY THE ASSOCIATED GENERAL CONTRACTORS OF AMERICA, GEORGIA BRANCH, AND AARON TORCH AND SONS, INC., AGAINST THE AWARD OF THE CONTRACT MADE UNDER INVITATION FOR BIDS NO. 09-603-60-103 ISSUED BY ROBINS AIR FORCE BASE, GEORGIA.

THE INVITATION REQUESTED BIDS FOR MODIFICATIONS TO BUILDING 160 AT ROBINS AIR FORCE BASE, GEORGIA, FOR USE AS A GYRO SHOP. THE INVITATION REQUESTED A LUMP SUM BID FOR THE BASIC WORK AND IN ADDITION THERETO BIDS ON SIX ADDITIVE ALTERNATES, BUT ADDITIVE ALTERNATES FOUR AND FIVE WERE ALTERNATE TO EACH OTHER. THE INVITATION PROVIDED THAT "BID GUARANTY IN A PENAL SUM OF 20 PERCENT (EXPRESSED IN WORDS AND FIGURES) OF THE BID PRICE WILL BE REQUIRED IN SUPPORT OF EACH BID IF BID PRICE IS IN EXCESS OF $2,000.' THE INVITATION FURTHER PROVIDED THAT:

"AWARD WILL BE MADE ON THE LOWEST RESPONSIVE BASE BID. ADDITIVE ALTERNATES WILL BE AWARDED AT THE OPTION OF THE GOVERNMENT CONTINGENT UPON AVAILABILITY OF FUNDS. BIDS MUST BE ENTERED FOR BASE BID AND ALL ADDITIVE ALTERNATES.'

THE SIX BIDS RECEIVED WERE OPENED ON JUNE 15, 1960, AS SCHEDULED. THE THREE LOWEST BIDS WERE AS FOLLOWS:

CHART

BASE BID PLUS ALTERNATES

BIDDER BASE BID 1, 2, 3, 5, AND 6 AARON TORCH AND SONS, INC.

$341,584.00 $376,334.00 BROWN AND SON ELECTRIC CO., INC. 378,277.00 412,501.00 GEORGIA SOUTHERN CONSTRUCTION CO. 380,000.00 408,634.00

THE BID BOND SUBMITTED BY TORCH UNDER THE HEADING OF PENAL SUM CONTAINED THE FOLLOWING INSERTION:

"TWENTY PERCENT (20 PERCENT) OF AMOUNT BID $68,316.80.'

THE FIGURE "$68,316.80" IS OF A DIFFERENT TYPE FROM THE REST OF THE TYPED INSERTIONS ON THE BID BOND FORM. THE AMOUNT SHOWN IN FIGURES IS EXACTLY 20 PERCENT OF THE BASE BID ONLY.

THE BID BOND SUBMITTED BY BROWN AND SON ELECTRIC COMPANY, INC., READS:

"NOT TO EXCEED NINETY THOUSAND AND 00/100 DOLLARS ($90,000).'

THE BID BOND SUBMITTED BY GEORGIA SOUTHERN CONSTRUCTION COMPANY READS:

"TWENTY PERCENT (20 PERCENT) OF AMOUNT BID.'

THE AMERICAN EMPLOYERS INSURANCE COMPANY IS THE SURETY ON THE GEORGIA SOUTHERN BOND AND IS THE SAME SURETY WHICH EXECUTED THE TORCH BOND.

IT APPEARS FROM THE RECORD THAT ROBINS AIR FORCE BASE OFFICIALS HAD PREVIOUSLY ADVISED BIDDERS THAT THEY MUST SHOW ON THE BID BOND FORM THE AMOUNT OF THEIR BONDS IN DOLLARS AND CENTS. HOWEVER, TORCH ALLEGES, AND THIS IS SUPPORTED BY THE BONDING AGENCY, THAT BY CUSTOM THE BONDING AGENTS WITH WHOM TORCH DOES BUSINESS HAVE INSISTED THAT HE NOT REVEAL TO THEM THE AMOUNT OF HIS BID SO THAT THEY MAY NOT IN ANY WAY BE SUSPECTED BY OTHER COMPETING BIDDERS FOR WHOM THEY MIGHT ALSO BE FURNISHING BID BONDS ON THE SAME JOB OF DIVULGING BID PRICE INFORMATION, AND THAT THE BONDING AGENCY AUTHORIZED HIM TO FILL IN THE DOLLAR AND CENT FIGURE.

SUBSEQUENT TO THE OPENING OF THE BIDS, A QUESTION WAS RAISED WITH TORCH DUE TO THE FACT THAT HIS BID BOND WAS EQUAL TO ONLY 20 PERCENT OF HIS BASE BID BUT NOT EQUAL TO 20 PERCENT OF THE BASE BID PLUS THE TOTAL OF ALL ADDITIVE ALTERNATES. IN RESPONSE THERETO, TORCH ADVISED THAT HE HAD INSERTED THE DOLLAR FIGURE IN AN EFFORT TO COMPLY WITH PREVIOUS REQUESTS OF PROCUREMENT PERSONNEL AND THE SPECIFIC REQUEST IN THE INVITATION THAT THE SUM OF THE BID BOND BE EXPRESSED IN WORDS AND FIGURES, AND THAT IN SO DOING A MISTAKE WAS MADE IN SHOWING THE AMOUNT IN FIGURES AS ONLY 20 PERCENT OF THE BASE BID RATHER THAN THE TOTAL OF THE BASE BID PLUS THE ADDITIVE ALTERNATES. THE SURETY COMPANY FORMALLY CONFIRMED THAT IT HAD GIVEN TORCH AUTHORITY TO INSERT THE AMOUNT IN FIGURES AND THAT IT HAD INTENDED THE BOND AS COVERING 20 PERCENT OF THE BASE BID PLUS THE ADDITIVE ALTERNATES.

THE LOCAL JUDGE ADVOCATE GENERAL RENDERED AN OPINION THAT TORCH'S BID WAS NONRESPONSIVE FOR THE REASON THAT THE BOND WAS INVALIDATED BY A MATERIAL ALTERATION BY THE BIDDER AFTER EXECUTION OF THE BOND BY THE SURETY. ALSO WAS INDICATED THAT THE BOND WOULD NOT BE VALID BECAUSE THE AMOUNT INSERTED DID NOT REPRESENT 20 PERCENT OF THE AMOUNT OF THE BASE BID PLUS ADDITIVE ALTERNATES AS REQUIRED BY THE INVITATION.

BASED UPON THE ABOVE OPINION, THE CONTRACTING OFFICER DETERMINED THE TORCH BID NONRESPONSIVE AND MADE THE AWARD TO BROWN AND SON ELECTRIC COMPANY, INC., AS THE LOWEST RESPONSIBLE BIDDER ON THE BASIC BID AS STATED IN THE INVITATION. THE AWARD, HOWEVER, INCLUDED ALL ADDITIVE ALTERNATES AND WAS IN THE TOTAL AMOUNT OF $412,501. ASIDE FROM TORCH'S BID THIS WAS NOT THE LOWEST BID FOR THE WORK AWARDED AS SHOWN ABOVE.

WE AGREE WITH THE STATEMENT MADE IN THE LETTER OF THE DEPUTY FOR PROCUREMENT AND PRODUCTION THAT AN ERROR WAS MADE BY THE PROCURING ACTIVITY IN SPECIFYING THAT THE AWARD WOULD BE BASED SOLELY ON THE LOWEST RESPONSIVE BASE BID AND IN MAKING AN AWARD FOR THE BASIC WORK PLUS ADDITIVE ALTERNATES TO A BIDDER WHOSE AGGREGATE BID ON THE ITEMS COVERED WAS NOT THE LOWEST RESPONSIVE BID RECEIVED THEREFOR.

WE ARE NOT AWARE OF THE REASONS FOR THE INSISTENCE BY THE PROCUREMENT OFFICIALS AT ROBINS AIR FORCE BASE THAT THE AMOUNT OF THE BID BOND BE STATED IN FIGURES RATHER THAN AS A PERCENTAGE ONLY. IT IS BELIEVED THAT IT IS NOT UNUSUAL FOR BID BONDS RECEIVED BY THE GOVERNMENT, PARTICULARLY IN THE CONSTRUCTION FIELD, TO BE STATED IN PERCENTAGES ONLY. SO FAR AS IS KNOWN SUCH PRACTICE HAS NEVER PRESENTED ANY PARTICULAR PROBLEMS. INSOFAR AS THE BIDDER AND THE GOVERNMENT ARE CONCERNED, A PERCENTAGE ONLY WOULD APPEAR DESIRABLE SINCE IT AVOIDS SITUATIONS SUCH AS HAPPENED IN THE TORCH BID AND SITUATIONS THAT ARISE WHERE THERE IS AN OBVIOUS MISTAKE IN THE EXTENSION OF A UNIT PRICE OR IN THE ADDITION OF SEVERAL ITEMS OF WORK. THE SURETY WOULD APPEAR TO BE THE ONLY ONE AFFECTED BY THE INSERTION OF A PERCENTAGE ONLY AND IF IT DOES NOT BELIEVE IT NECESSARY TO PROTECT ITSELF BY STATING A DEFINITE OR MAXIMUM AMOUNT IT DOES NOT SEEM THAT THE GOVERNMENT SHOULD COMPLAIN.

AS STATED, TORCH WAS AUTHORIZED BY HIS SURETY TO INSERT ON THE BID BOND FORM THE DOLLAR AMOUNT MAKING UP 20 PERCENT OF HIS BID. IT IS OUR VIEW THAT THE AUTHORIZATION COVERED NOT ONLY 20 PERCENT OF THE BASE BID, BUT ALSO 20 PERCENT OF THE MAXIMUM POSSIBLE AMOUNT UNDER THE ADDITIVE ALTERNATES. SINCE TORCH WAS ACTING AS AN AUTHORIZED AGENT OF THE SURETY IN INSERTING THE FIGURES, WE SEE NO BASIS FOR CONCLUDING THAT SUCH INSERTION RENDERED THE BOND INVALID. ALSO, IT REASONABLY MAY BE ARGUED THAT THE BOND REQUIREMENT WAS 20 PERCENT OF THE BASE BID ONLY SINCE THIS WAS THE STATED BASIS FOR THE CONTRACT AWARD. IN ANY CASE, IT IS CLEAR THAT THE SURETY COULD NOT ESCAPE LIABILITY UNDER THE BOND AT LEAST TO THE EXTENT OF THE AMOUNT INSERTED. WHILE STRICT RULINGS HAVE RECENTLY BEEN MADE WITH RESPECT TO THE BID GUARANTY REQUIREMENTS EXPRESSED IN THE INVITATION, WE ARE OF THE OPINION, IN VIEW OF THE UNUSUAL CIRCUMSTANCES IN THIS CASE, THAT THE TORCH BID SHOULD NOT HAVE BEEN REJECTED BECAUSE OF THE BOND SUBMITTED BY IT.

THE STATUTES GOVERNING PUBLIC PROCUREMENT AFTER ADVERTISING AUTHORIZE THE CONTRACTING OFFICER TO MAKE AWARD ONLY TO THE RESPONSIBLE BIDDER WHO SUBMITS THE LOWEST RESPONSIVE BID FOR THE WORK TO BE PERFORMED. AS NOTED, WE CONCUR IN YOUR VIEW THAT THERE IS NO BASIS FOR AWARDING A CONTRACT FOR AN ENTIRE PROCUREMENT TO THE LOW BIDDER ON A PORTION OF THAT PROCUREMENT WITHOUT REGARD TO HIS RELATIVE STANDING WITH RESPECT TO THE REMAINDER OF THE PROCUREMENT INCLUDED IN THE CONTRACT. IN THIS INSTANCE, SINCE THE BIDDER TO WHOM AWARD WAS MADE DID NOT SUBMIT THE LOWEST RESPONSIBLE BID FOR THE PROCUREMENT AWARDED TO HIM EVEN DISCOUNTING THE TORCH BID, IT IS OUR VIEW THAT THE AWARD WAS NOT EFFECTED IN ACCORDANCE WITH THE CONTROLLING STATUTORY PROVISIONS. THE AWARD MUST THEREFORE BE REGARDED AS INVALID.

FOR THE REASONS STATED ABOVE, AWARD SHOULD BE MADE TO THE LOW BIDDER, AARON TORCH AND SONS, C., ON THE BASIS OF THE BID SUBMITTED BY IT, SUBJECT TO A FAVORABLE DETERMINATION OF RESPONSIBILITY.

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