B-297115, Johnson Machine Works, Inc., October 20, 2005

B-297115 Oct 20, 2005 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights Johnson Machine Works, Inc. (JMW) protests the rejection of its low bid under invitation for bids (IFB) No. W911WN-05-B-0004, issued by the Army Corps of Engineers, Department of the Army, for work on the Emsworth Locks and Dams, located on the Ohio River in western Pennsylvania. The Corps rejected JMW's bid because the surety's power of attorney attached to the bid bond failed to designate the individual who signed the bond on behalf of the surety as an attorney-in-fact authorized to bind the surety. We deny the protest. View Decision B-297115, Johnson Machine Works, Inc., October 20, 2005 Decision Matter of: Johnson Machine Works, Inc. File: B-297115 Date: October 20, 2005 Steven L. Briggerman, Esq., Grace Bateman, Esq., John T. Bergin, Esq., and Jamison L. Weinbaum, Esq., Seyfarth Shaw LLP, for the protester. David J. Buono, Esq., Dunn Carney Allen Higgins & Tongue LLP, for Oregon Iron Works, Inc., an intervenor. William A. Lubick, Esq., Army Corps of Engineers, for the agency. Louis A. Chiarella, Esq., and Christine S. Melody, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Where corporate surety's power of attorney form attached to bid bond failed to designate the individual who signed the bond on behalf of the surety as an attorney-in-fact authorized to bind the surety, contracting agency properly determined the bond was defective and the bid nonresponsive because it is not clear whether the surety would be bound. Evidence of the authority of surety's agent to sign bid bond on behalf of the surety must be furnished with a bid prior to bid opening, and failure to furnish it renders the bid nonresponsive. DECISION Johnson Machine Works, Inc. (JMW) protests the rejection of its low bid under invitation for bids (IFB) No. W911WN-05-B-0004, issued by the Army Corps of Engineers, Department of the Army, for work on the Emsworth Locks and Dams, located on the Ohio River in western Pennsylvania. The Corps rejected JMW's bid because the surety's power of attorney attached to the bid bond failed to designate the individual who signed the bond on behalf of the surety as an attorney-in-fact authorized to bind the surety. We deny the protest. The IFB, issued on July 22, 2005, sought the fabrication and delivery of two vertical lift gates as part of the rehabilitation project of the Emsworth Locks and Dams, to be performed within 180 calendar days after receipt of the Notice to Proceed. The IFB required each bidder to submit with its bid a bid guarantee (e.g., a bid bond supported by good and sufficient surety or sureties, postal money order, certified check, or cashier's check) in the amount of 20 percent of the bid price or $3 million, whichever was less. IFB sect. I-4. With regard to a bidder's submission of a bid bond as its bid guarantee, the solicitation stated that a valid power of attorney for an individual acting as agent for the surety shall accompany the bid bond, and that the failure to furnish a bid bond or a valid power of attorney, as specified, with the bid may result in rejection of the bid for noncompliance. IFB sect. L-5. Three bids, including the low bid of JMW, were received by the August 22 bid opening. The Corps rejected JMW's bid as nonresponsive, however, having determined that the bid guarantee was improper. Specifically, JMW's bid was accompanied by a bid bond that listed JMW as principal and Employers Mutual Casualty Company (EMC) as corporate surety. In the space provided for the surety, the bid bond contained the signature of David L. Hixenbaugh, who was identified as –attorney-in-fact— on behalf of the surety.[1] Agency Report (AR), Tab 4, JMW Bid, at 16. Included with JMW's bid bond was a power of attorney, signed by the surety's president, authorizing specific individuals (Sue A. Allen and Bruce D. Kingsbury) to bind the surety; the power of attorney, however, did not name Mr. Hixenbaugh as being authorized to bind the surety.[2] Id. at 18. The contracting officer determined that the liability of the surety on JMW's bid bond was uncertain, because there was no evidence to show that Mr. Hixenbaugh was an attorney-in-fact or was otherwise authorized to sign the bond on behalf of the surety. AR at 3. This protest followed. JMW argues that the agency should not have rejected its bid because the bid bond was valid and effective. In support thereof, JMW contends that the bid documents clearly established that Mr. Hixenbaugh was authorized to sign the bond and bind the surety. The Corps argues that the protester's failure to provide documentary evidence at the time of bid opening that Mr.