Shackelford Mechanical, Inc.

B-261948 Nov 01, 1995 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights Agency properly determined that a bid bond was defective. Hipp's bid was second low at $1. The bond was dated May 23. The bond was accompanied by a power of attorney from the surety listing D.M. Ferris as an attorney-in-fact. [1] The power of attorney was signed by the secretary of the surety and notarized on October 25. By which the secretary of the surety was to certify that the power of attorney remained in full force and effect and had not been revoked. Was not properly completed. A seal was affixed to the certification. The certification was undated. Because the certification was undated. The Navy was concerned that the power of attorney may have been revoked prior to the execution of the bid bond. View Decision Matter of: Shackelford Mechanical, Inc. File: B-261948 Date: November 1, 1995 Agency properly determined that a bid bond was defective, and the bid therefore nonresponsive, where the surety's power of attorney authorizing the named attorney-in-fact to sign the bid bond on the surety's behalf contained an undated certification that the power of attorney had not been revoked, raising the question of whether the power of attorney had been revoked prior to the execution of the bid bond. Attorneys DECISION Shackelford Mechanical, Inc. protests the rejection of its bid as nonresponsive, and the award of a contract to C.R. Hipp, Inc., under invitation for bids (IFB) No. N62467-94-B-0886, issued by the Department of the Navy for the extension of a natural gas piping system at Charleston Air Force Base, Charleston, South Carolina. We deny the protest. The Navy received four bids at bid opening on June 13, 1995. Shackelford submitted the apparent low bid of $1,465,947, and Hipp's bid was second low at $1,642,419. Along with its bid, Shackelford submitted the required bid bond on standard form 24. The bond was dated May 23, 1995, and signed by D.M. Ferris as attorney-in-fact for the surety, St. Paul Fire and Marine Insurance Company. The bond was accompanied by a power of attorney from the surety listing D.M. Ferris as an attorney-in-fact. [1] The power of attorney was signed by the secretary of the surety and notarized on October 25, 1994; however, the certification provision in the power of attorney--by which the secretary of the surety was to certify that the power of attorney remained in full force and effect and had not been revoked--was not properly completed. An assistant secretary of the surety had signed his name on the signature line, and a seal was affixed to the certification, but the certification was undated. Because the certification was undated, the Navy was concerned that the power of attorney may have been revoked prior to the execution of the bid bond, in which case Shackelford's bid bond would not be binding on the surety. Consequently, the Navy informed Shackelford on June 26 that its bid was being rejected as nonresponsive. Shackelford filed an agency-level protest on June 27, arguing that the agency improperly rejected its bid as nonresponsive because an undated certification on a power of attorney accompanying a bid bond is a waivable minor informality. The Navy denied this protest on June 29 and awarded the contract to Hipp on the same day. Shackelford then filed this protest in our Office, arguing that the certification is not conditioned upon any particular date but is an "open-ended representation, signed by a corporate officer of the surety, that the power of attorney is good." Shackelford contends that, even though it is undated, the certification is complete on its face because it states that the power of attorney has not been revoked and is in full force and effect, and that it shall be binding on the surety if it bears a facsimile signature or facsimile company seal. [2] A bid bond is a written instrument executed by a bidder or contractor and a third party--the surety--to assure fulfillment of the contractor's obligations to the government. FAR Sec. 28.001. The bid bond secures the surety's liability to the government, thereby providing funds to cover the excess costs of awarding to the next eligible bidder in the event that the awardee fails to fulfill its obligations. A.W. and Assocs., Inc., 69 Comp.Gen. 737 (1990), 90-2 CPD Para. 254. When required by a solicitation, a bid bond is a material part of the bid and a valid bond must be furnished with the bid in order for it to be responsive. A.D. Roe Co., Inc., 54 Comp.Gen. 271 (1974), 74-2 CPD Para. 194. Specifically, where a required bid bond is accompanied by a power of attorney that on its face does not establish unequivocally that the person signing was authorized to bind the surety, the bid generally must be rejected as nonresponsive. Integrity Works, B-258818, Feb. 21, 1995, 95-1 CPD Para. 98.