KC Electrical Construction

B-411591 Aug 31, 2015 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights K.C. Electrical Construction (K.C. Electrical), of Midlothian, Illinois, protests the rejection of its apparent low bid as nonresponsive for lack of a valid bid bond under invitation for bids (IFB) No. IFBP04011500002, issued by the Department of Justice, Federal Bureau of Prisons (BOP) for the replacement of secondary electrical panels. K.C. Electrical contends that its bid complied with the requirements of Federal Acquisition Regulation (FAR) § 28.203. We deny the protest. We deny the protest. View Decision Decision Matter of: K.C. Electrical Construction File: B-411591 Date: August 31, 2015 Daniel Klaus for the protester. Pawandeep K. Chatha, Esq., and William D. Robinson, Esq., Department of Justice, Federal Bureau of Prisons, for the agency. Lois Hanshaw, Esq., and Christina Sklarew, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Protest that a bid was improperly rejected based on a failure to furnish documentation establishing a security interest by an individual surety is denied where the agency reasonably found the surety unacceptable and properly rejected the bid. DECISION K.C. Electrical Construction (K.C. Electrical), of Midlothian, Illinois, protests the rejection of its apparent low bid as nonresponsive for lack of a valid bid bond under invitation for bids (IFB) No. IFBP04011500002, issued by the Department of Justice, Federal Bureau of Prisons (BOP) for the replacement of secondary electrical panels. K.C. Electrical contends that its bid complied with the requirements of Federal Acquisition Regulation (FAR) § 28.203. We deny the protest. BACKGROUND The IFB was issued on March 2, 2015 as a small-business set-aside and contemplated the award of a fixed-price contract. IFB at 1-2, 29.[1] The IFB required each bidder to submit with its bid a separate bid bond,[2] Standard Form 24 (SF 24), with good and sufficient surety or sureties acceptable to the government. Id. at 15. The security was to be for an amount equal to 20 percent of the bid price or $3 million, whichever was less. Id. The IFB allowed bidders to furnish individual surety bonds. Id. Where individual sureties are involved, SF 24 states that a completed Affidavit of Individual Surety, SF 28, shall accompany the bond and that the government may require the surety to furnish additional substantiating information concerning its financial capability. Id. at 144. The IFB stated that failure to furnish all required information could result in the bidder being determined nonresponsive and ineligible for award. Id. at 2. Six bids were timely submitted and opened on April 9. Contracting Officer’s (CO) Statement at 1. K.C. Electrical was selected as the apparent low bidder. As required, the bid contained a completed Affidavit of Individual Surety, SF 28, on which the surety, the president of K.C. Electrical, listed as assets an escrow account with an escrow account number (#15A04097), a Federal Deposit Insurance Corporation (FDIC) number (#27006), and the amount of the bond ($119,000). Agency Report (AR), Tab 4, K.C. Electrical Bid, at 43. Attached to the Affidavit was an “Irrevocable Pledge of Escrow” (Irrevocable Pledge) from The Escrow Company, signed by the surety trustee, which stated: Know all men by these presents, that The Escrow Company existing under and by virtue of the laws of the State of Illinois, in the United States of America and having its principal office at 233 South Wacker Dr., 84th Floor, Chicago, IL 60606, desiring to comply with Clause 28-102, Federal Acquisition Regulations, hereby acknowledges and irrevocably assigns all proceeds of Escrow Account 15A04097 (FDIC 27006) up to Twenty percent of US Federal Bureau of Prisons, IFB P04011500002, not to exceed $119,000. Id. at 44. In reviewing the documents attached to K.C. Electrical’s bid bond, the CO was unable to find a direct connection between The Escrow Company, the escrow account, and the FDIC number. On May 13, after unsuccessful attempts to contact The Escrow Company, the CO informed K.C. Electrical that she could not conclude that the documentation provided for the individual surety met the requirements set forth in FAR § 28.203-1, Security Interests by an Individual Surety, and FAR § 28.203-2, Acceptability of Assets. AR, Tab 6, Agency Request for Clarification, at 3. The CO also requested documentation showing that The Escrow Company was a federally-insured institution. Id. In response, the CO received three letters on, or around, May 14. The first letter, from The Escrow Company, stated that the FDIC number provided in the Irrevocable Pledge belonged to American Chartered Bank and that The Escrow Company was the escrow trustee for the escrow account associated with the bid bond. AR, Tab 6, Agency Request for Clarification, at 9.