Western Management Services, Inc.; Mac-Bestos, Inc.

Western Management Services, Inc.; Mac-Bestos, Inc. BNUMBER: B-266147; B-270153 DATE: January 23, 1996 TITLE: Western Management Services, Inc.; Mac-Bestos, Inc. ********************************************************************** Matter of:Western Management Services, Inc.; Mac-Bestos, Inc. File: B-266147; B-270153 Date: January 23, 1996 Stan B. Williams, Esq., for Western Management Services, Inc.; and Jim J. Rivas, Jr., for Mac-Bestos, Inc., the protesters. Col. Nicholas P. Retson, and Lt. Col. David S. Franke, Department of the Army, for the agency. Jeanne W. Isrin, Esq., and David A. Ashen, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST 1. Material defect in a bid bond cannot be corrected after bid opening since this would afford a bidder the option of accepting or rejecting the award by either correcting or not correcting the bond deficiency and therefore would be inconsistent with the integrity of the sealed bidding system. 2. Protest against rejection of bid as nonresponsive on the basis of a defective bid bond is denied where the language of a rider to the bond limits the liability of the surety and bidder under the performance and payment bonds required in the event of award. DECISION Western Management Services, Inc. (WMS) and Mac-Bestos, Inc. protest the rejection of their respective bids as nonresponsive under invitation for bids (IFB) No. DAKF06-95-B-0048, issued by the Department of the Army for the removal, disposal, and remediation of underground storage tanks at Fort Carson, Colorado. We deny the protests. The IFB contemplated a firm, fixed-price, indefinite delivery/indefinite quantity contract for a base period beginning with the date of award through September 30, 1996, and two 1-year option periods. The IFB required that a bid guarantee be submitted with the bid in the amount of "twenty percent (20%) of the bid price or $3,000,000, whichever is lesser." It warned that "[f]ailure to furnish a bid guarantee in the proper form and amount, by the time set for opening of bids, may be cause for rejection of the bid." The procurement was restricted to small disadvantaged business concerns under the section 8(a) program which were serviced by the Small Business Administration (SBA) district office in Denver, Colorado. Eight bids were received at bid opening. Although WMS submitted the apparent low bid of $3,435,713, the bid was rejected as nonresponsive because its bid guarantee of $10 was deemed inadequate. The second low bidder was an 8(a) contractor not serviced by the Denver SBA office, and thus was ineligible for award. Mac-Bestos submitted the third low bid, but the bid was rejected as nonresponsive because it contained a bid bond which was subject to a rider whose conditions limited the liability of the surety and bidder. WMS and Mac-Bestos thereupon filed these protests with our Office. WMS' PROTEST WMS argues that the IFB was ambiguous as to whether the relevant price upon which to base the amount of the required bid guarantee was the base period price only or the base period price plus the prices for the 2 option years; WMS claims that due to the alleged ambiguity it was unable to determine the proper bid bond amount by the bid opening date. Further, WMS claims that a bid guarantee is not ordinarily required or necessary in 8(a)-restricted procurements because, since SBA is the prime contractor in these procurements, it is unlikely that a contract would not be executed. In any case, argues WMS, the agency either should have waived any deficiency in its bid bond or permitted it to cure the deficiency by posting an adequate bond subsequent to bid opening. A bid guarantee is a material part of a bid and when a bond is required, it must be furnished with the bid package. Hugo Key & Son, Inc.; Alco Envtl. Servs., Inc., B-251053.4; B-251053.5, July 15, 1993, 93-2 CPD para. 21, aff'd, B-251053.6, Sept. 27, 1993, 93-2 CPD para. 192. Federal Acquisition Regulation (FAR) sec. 28.101-4(a) requires rejection of a bid that does not comply with a solicitation requirement for a bid guarantee, unless the deficiency can be waived under FAR sec. 28.101-4(c). The IFB required a bid guarantee of 20 percent of the bid price or $3,000,000, whichever was lesser. To the extent that WMS believed the IFB to be ambiguous as to whether to base the amount of the required bid guarantee on the base period price only or on the base period price plus the option prices, its protest in this regard is untimely; our Bid Protest Regulations require that protests based upon such alleged improprieties in a solicitation which are apparent prior to bid opening shall be filed prior to bid opening. 4 C.F.R. sec. 21.2(a)(1) (1995).