B-178730, NOV 6, 1973

B-178730, NOV 6, 1973

UNDATED BID BOND EXECUTED BY SURETY'S AGENT, WHO LATER DIES PRIOR TO BID OPENING, IS NOT DEFICIENT, SO AS TO RENDER BID NONRESPONSIVE, BECAUSE BOND BINDS SURETY WHEN EXECUTED AND OMISSION OF EXECUTION DATE IS A MINOR DEFECT PROPERLY WAIVABLE UNDER ASPR 2-405. SEE COMP. GEN. DECISIONS AND COURT CASES CITED. SBA DETERMINATION THAT FIRM COMPLIED WITH PROCUREMENT'S SMALL BUSINESS SIZE STANDARDS IS CONCLUSIVE ON PROCURING ACTIVITY UNDER 15 U.S.C. 637(B)(6) AND MUST ALSO BE ACCEPTED AS CONCLUSIVE BY GAO, IF NO EVIDENCE IS PRESENTED THAT SBA DETERMINATION WAS ARBITRARY OR CLEARLY ERRONEOUS. ALSO, GAO WILL NOT SUBSTITUTE ITS JUDGMENT FOR THAT OF CONTRACTING OFFICER WITH REGARD TO BIDDER'S RESPONSIBILITY, WHERE THERE IS NO CONVINCING EVIDENCE THAT CONTRACTING OFFICER'S DETERMINATION WAS ARBITRARY, CAPRICIOUS OR NOT BASED UPON SUBSTANTIAL EVIDENCE. DETERMINATIONS OF NONRESPONSIBILITY UNDER PRIOR PROCUREMENTS ARE NOT DETERMINATIVE AS TO BIDDER'S RESPONSIBILITY UNDER PRESENT PROCUREMENT. SEE COMP. GEN. DECISIONS CITED.

TO FRIED, FRANK, HARRIS, SHRIVER & KAMPELMAN:

REFERENCE IS MADE TO YOUR LETTER DATED MAY 24, 1973, AND SUBSEQUENT CORRESPONDENCE, PROTESTING ON BEHALF OF KLEEN-RITE JANITORIAL SERVICE, INC. (KLEEN-RITE), AGAINST THE AWARD OF A CONTRACT TO ANY OTHER BIDDER UNDER INVITATION FOR BIDS (IFB) NO. DABB06-73-B-0051, A 100 PERCENT SMALL BUSINESS SET-ASIDE, ISSUED BY THE PURCHASING AND CONTRACTING OFFICE, FORT DIX, NEW JERSEY, FOR THE PERFORMANCE OF CUSTODIAL SERVICES AT WALSON ARMY HOSPITAL AND ALLIED BUILDINGS.

WHEN BIDS WERE OPENED ON MAY 21, 1973, OLD ATLANTIC SERVICES, INC. (OLD ATLANTIC), WAS THE APPARENT LOW BIDDER ON ITEM 1 OF THE IFB AND WAS THE SECOND LOW BIDDER ON ITEM 2. NASH JANITORIAL SERVICE, INC. (NASH), WAS THE APPARENT LOW BIDDER ON ITEM 2 AND THE SECOND LOW BIDDER ON ITEM 1. KLEEN-RITE WAS THE THIRD LOW BIDDER ON BOTH ITEMS.

YOU PROTESTED ON MAY 24 THAT BOTH OLD ATLANTIC AND NASH WERE NOT SMALL BUSINESS CONCERNS AS REQUIRED BY THE IFB AND THAT OLD ATLANTIC WAS NOT A "RESPONSIBLE PROSPECTIVE CONTRACTOR." SUBSEQUENTLY, NASH REFUSED TO SUBMIT SIZE STATUS INFORMATION TO THE SMALL BUSINESS ADMINISTRATION (SBA) SO ITS BID WAS REJECTED. THEREFORE, YOU WITHDREW YOUR PROTEST AGAINST NASH. HOWEVER, THE JACKSONVILLE, FLORIDA OFFICE OF THE SBA CONFIRMED THAT OLD ATLANTIC QUALIFIED AS A SMALL BUSINESS IN ACCORDANCE WITH THE IFB'S SMALL BUSINESS SIZE STANDARDS. ALSO, THE DEFENSE CONTRACT ADMINISTRATIVE SERVICES DIVISION CONDUCTED A PREAWARD SURVEY AT THE REQUEST OF THE PROCURING ACTIVITY AND FOUND OLD ATLANTIC SATISFACTORY IN TECHNICAL CAPABILITY, FINANCIAL CAPABILITY, PERFORMANCE RECORD AND ABILITY TO MEET THE REQUIRED SCHEDULE. ON JULY 2, IN ACCORDANCE WITH THE PROVISIONS OF ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2-407.8(B)(2), IT WAS DETERMINED THAT A PROMPT AWARD WOULD OTHERWISE BE ADVANTAGEOUS TO THE GOVERNMENT. CONSEQUENTLY, AN AWARD ON BOTH ITEMS WAS MADE TO OLD ATLANTIC.

UNDER 15 U.S.C. 637(B)(6) THE SBA DETERMINATION THAT OLD ATLANTIC IS A SMALL BUSINESS CONCERN IS CONCLUSIVE ON THE PROCURING ACTIVITY INVOLVED. 44 COMP. GEN. 271 (1964); 51 COMP. GEN. 531 (1972). SINCE YOU HAVE NOT TIMELY APPEALED TO THE SBA SIZE APPEALS BOARD AND HAVE PRESENTED NO EVIDENCE THAT THE SBA'S DECISION WAS ARBITRARY OR CLEARLY ERRONEOUS, IT MUST ALSO BE ACCEPTED AS CONCLUSIVE BY THE GENERAL ACCOUNTING OFFICE. SEE B-176101, OCTOBER 13, 1972.

YOU ALSO ALLEGED THAT UNDER THREE OTHER PROCUREMENTS THE ARMY AND THE SBA DETERMINED THAT OLD ATLANTIC WAS NOT A RESPONSIBLE CONTRACTOR. YOU CONTEND THAT SINCE OLD ATLANTIC WAS FOUND TO BE NOT RESPONSIBLE UNDER SMALLER, SIMILAR PROCUREMENTS, IT CANNOT BE A RESPONSIBLE BIDDER UNDER THE PRESENT IFB.

PAST DETERMINATIONS THAT OLD ATLANTIC WAS NOT RESPONSIBLE ARE NOT DETERMINATIVE AS TO ITS RESPONSIBILITY UNDER THE PRESENT IFB, SINCE THE QUESTION OF A BIDDER'S RESPONSIBILITY MUST BE BASED UPON ITS CAPACITY TO PERFORM AT THE TIME OF PERFORMANCE UNDER THE IFB. SEE 43 COMP. GEN. 228, 231 (1963); 51 COMP. GEN. 787, 788 (1972). MOREOVER, THE CONTRACTING OFFICER HAS FOUND THAT THE CAPACITY OF OLD ATLANTIC TO PERFORM THE SERVICES REQUIRED HAS BEEN SATISFACTORILY ESTABLISHED BASED UPON SERVICES CURRENTLY BEING RENDERED AT OTHER INSTALLATIONS AND THE FAVORABLE PREAWARD SURVEY. RESPONSIBILITY IS A QUESTION OF FACT TO BE DETERMINED BY THE CONTRACTING OFFICER AND NECESSARILY INVOLVES THE EXERCISE OF A CONSIDERABLE RANGE OF DISCRETION. WHERE, AS IN THIS CASE, THERE IS NO CONVINCING EVIDENCE THAT THE DETERMINATION WAS ARBITRARY, CAPRICIOUS, OR NOT BASED UPON SUBSTANTIAL EVIDENCE, WE WILL NOT SUBSTITUTE OUR JUDGMENT FOR THAT OF THE CONTRACTING OFFICER. 45 COMP. GEN. 4 (1968); 51 COMP. GEN. 703, 709 (1972).

ON JUNE 11, 1973, YOU SUBMITTED AN ADDITIONAL BASIS FOR YOUR PROTEST. YOU STATED THAT OLD ATLANTIC SUBMITTED WITH ITS BID, A BID BOND "PURPORTEDLY EXECUTED" BY WILLIAM A. GATLIN AS ATTORNEY-IN-FACT FOR OLD ATLANTIC'S CORPORATE SURETY, THE UNITED STATES FIDELITY & GUARANTY COMPANY. YOU FURTHER CONTENDED THAT SINCE THE BOND WAS NOT DATED, IT MUST BE PRESUMED THAT IT WAS NOT EXECUTED UNTIL ON OR IMMEDIATELY BEFORE THE MAY 21 BID OPENING DATE. YOU FURTHER ALLEGED THAT MR. GATLIN DIED ON OR ABOUT MAY 5, 1973. YOU CONCLUDED THAT SINCE THE DEATH OF AN AGENT AUTOMATICALLY TERMINATES THE AGENCY RELATIONSHIP, MR. GATLIN'S AUTHORITY TO ACT FOR THE SURETY TERMINATED MORE THAN TWO WEEKS PRIOR TO BID OPENING SO THAT OLD ATLANTIC'S BID BOND WAS NOT PROPERLY EXECUTED. CONSEQUENTLY, YOU CONTENDED THAT OLD ATLANTIC'S BID WAS NONRESPONSIVE AND MUST THEREFORE BE REJECTED.

IT CONSISTENTLY HAS BEEN HELD THAT A BOND, WHICH IS ERRONEOUSLY DATED OR BEARS NO DATE AT ALL, IS NOT THEREBY RENDERED INVALID, IF IT COMPLIES WITH THE OTHER ESSENTIALS NECESSARY TO GIVE IT A LEGAL AND BINDING EFFECT. RE MOFFITS ESTATE, 75 A. 2ND 698 (1950); 39 COMP. GEN. 60 (1959). ACCORDINGLY, THE OMISSION OF THE EXECUTION DATE IS A MINOR DEFECT, WHICH MAY BE PROPERLY WAIVED UNDER ASPR 2-405. SEE B 160659, JUNE 9, 1967.

THE EVIDENCE NOW OF RECORD SHOWS THAT MR. GATLIN DIED ON MAY 13, 1973, PRIOR TO BID OPENING, AND THAT THE BID BOND WAS EXECUTED BY MR. GATLIN ON OR BEFORE MARCH 26, 1973, THE ORIGINAL BID OPENING DATE. THIS EVIDENCE REFUTES YOUR PRESUMPTION THAT THE BOND WAS NOT EXECUTED UNTIL MAY 21 AFTER MR. GATLIN HAD DIED.

IN ANY EVENT, IT IS WELL SETTLED THAT A SURETY IS BOUND UNDER A SURETY CONTRACT WHEN THE CONTRACT HAS BEEN EXECUTED AND DELIVERED TO THE PRINCIPAL. 11 C.J.S. BONDS SEC 21. IN RE MOFFITS ESTATE, SUPRA. IT IS ALSO WELL SETTLED AS BETWEEN A PRINCIPAL AND THIRD PERSONS, WHO HAVE DEALT WITH THAT PRINCIPAL'S AGENT, THE TERMINATION OF THE AGENT'S AUTHORITY DOES NOT AFFECT THE RIGHTS AND LIABILITIES OF THE PARTIES AS TO AUTHORIZED TRANSACTIONS ALREADY CONCLUDED. 2A C.J.S. AGENCY SEC 110, SMITH V. SHEELEY, 12 WALL. 358, 20 L. ED. 430 (1871). THEREFORE, SINCE THE UNITED STATES FIDELITY & GUARANTY COMPANY IS BOUND BY MR. GATLIN'S EXECUTION OF THE BID BOND, THE BOND WAS SUFFICIENT AND OLD ATLANTIC'S BID WAS RESPONSIVE.

FOR THE AFORE GOING REASONS, YOUR PROTEST MUST BE DENIED.