[Protest of Bid Rejection for Lack of Bid Bond]

A firm protested the rejection of its bid under an invitation for bids issued by the Corps of Engineers. The bid was rejected because it did not include a bid bond with its bid. Instead, the protester attached to its bid bond form a pledge and assignment of collateral of all amounts which were due and payable or held as retainage under three ongoing Government contracts. The protester contended that this met the definition of a bid guarantee as set out in Defense Acquisition Regulations. The protester also asserted that there were sufficient funds being held by the Corps which were due and payable to cover the difference between the protester's and the next low offeror's bid. GAO found that one of the three contracts listed in the protester's assignment was identifiable as being a contract of the office conducting the procurement and that the sum due and payable was sufficient in amount to cover the base quantity of the work which the Corps intended to award. Nonetheless, GAO felt that the purported assignment lacked the requisite firm obligation required of a bid guarantee, because such funds are contingent upon a number of other factors. At the time of bid opening, the contracting officer could not be certain if the funds were in fact available for their intended purpose, a factor which is crucial to determine the responsiveness of a bid. The fact that a sufficient amount of money for the purpose of the bid guarantee is ultimately found to be available does not cure the deficiency of the bid. GAO found that the protester's bid was properly rejected as nonresponsive. Accordingly, the protest was denied.