G2G LLC

B-416502 Sep 27, 2018 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights G2G, LLC, a service-disabled veteran-owned small business located in Rapid City, South Dakota, protests the rejection of its bid as nonresponsive under invitation for bids (IFB) No. 36C26318B0038, issued by the Department of Veterans Affairs (VA) for a construction project at the VA Black Hills Healthcare Center in Fort Meade, South Dakota. The protester challenges the agency's rejection of its bid for failing to submit a valid bid bond. We deny the protest. We deny the protest. View Decision Decision Matter of:  G2G, LLC File:  B-416502 Date:  September 27, 2018 Timothy M. Connelly, Esq., Tim Connelly Law PLLC, for the protester. David W. Altieri, Esq., and Donald C. Mobly, Esq., Department of Veterans Affairs, for the agency. Paula A. Williams, Esq., and Edward Goldstein, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Where an invitation for bids required submission of a bid guarantee, agency reasonably rejected protester's bid as nonresponsive where the bid bond was defective because it appeared to limit the liability of the corporate surety with respect to excess reprocurement costs in the event of contractor default. DECISION G2G, LLC, a service-disabled veteran-owned small business located in Rapid City, South Dakota, protests the rejection of its bid as nonresponsive under invitation for bids (IFB) No. 36C26318B0038, issued by the Department of Veterans Affairs (VA) for a construction project at the VA Black Hills Healthcare Center in Fort Meade, South Dakota.  The protester challenges the agency's rejection of its bid for failing to submit a valid bid bond. We deny the protest. BACKGROUND The agency issued the IFB on March 19, 2018, as a service-disabled veteran-owned small business set-aside.  The solicitation sought bids for the relocation of sterile processing services from the basement of Building 113 of the Healthcare Center to the first floor of the surgical suites in the same building; renovation of vacated surgical rooms on the second floor; and relocation of the endoscopy department to the second floor.  IFB at 1, 9.  Bidders were required to submit a bid guarantee with their bids in the amount of 20 percent of the bid price, or $3 million, whichever was less.  The IFB included the Federal Acquisition Regulation (FAR) provision 52.228-1, Bid Guarantee which informed bidders that failure to furnish a bid guarantee in the proper form and amount, by the time set for bid opening, could result in the rejection of the bid.  IFB at 8, 12.  The VA conducted bid opening on May 8, and G2G was the apparent low bidder.  G2G submitted a bid bond as its bid guarantee on commercial forms furnished by the American Institute of Architects in lieu of a completed FAR standard form (SF) 24 bid bond.  Of relevance here, G2G's submitted bid bond provided that in the event of the contractor's default (hereinafter referred to as paragraph 1): [the surety] pays to the Owner [the VA] the difference, not to exceed the amount of this Bond, between the amount specified in said bid and such larger amount for which the Owner may in good faith contract with another party to perform the work covered by said bid, then this obligation shall be null and void, otherwise to remain in full force and effect. Agency Report (AR) exh. 3, Protester's Bid Bond at 1 (emphasis added).  The protester's submitted bid bond further provided (hereinafter referred to as paragraph 3): When this Bond has been furnished to comply with a statutory or other legal requirement in the location of the Project, any provision in this Bond conflicting with said statutory or legal requirement shall be deleted herefrom and provisions conforming to such statutory or other legal requirement shall be deemed incorporated herein.  When so furnished, the intent is that this Bond shall be construed as a statutory bond and not as a common law bond. Id. (emphasis added). In reviewing G2G's bid, the contracting officer noted that the surety's bond obligations to the government represented a significant departure from the bond obligations set forth in SF 24 and did not, for example, clearly obligate the surety to cover all excess reprocurement costs in the event of default by the contractor.  The contracting officer determined that G2G's submitted bid bond was defective and informed G2G that its apparent low bid was rejected as nonresponsive for these reasons.  More specifically, the contracting officer informed G2G that its submitted bid bond was inconsistent with the requirement of FAR § 52.228-1(e) which requires the surety to cover any excess reprocurement costs in the event of default.  Protest exh. 2, VA Rejection Letter (June 7, 2018).