“Not To Exceed” Bid Bond Error Sinks Bid

A bid bond containing an erroneous “not to exceed” limit of less than the 20 percent required by the solicitation was defective, and was properly rejected by the procuring agency.

The GAO’s recent bid protest decision in IMR Development Corporation, B-408585 (Nov. 13, 2013) is a reminder that when a bid guarantee is required, a contractor must ensure that the bid bond meets the government’s requirements.

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Bond Mistake Sinks Contractor’s Bid

Check your bid bonds, then check them again–especially if you are bidding on multiple procurements at the same time.

That’s the lesson to be learned from a recent GAO bid protest decision, in which a contractor’s bid was rejected because its bid bond referenced the wrong solicitation number and bid opening date.  Reading between the lines, it seems that a simple mistake occurred, confusing the solicitation with another procurement.  But assuming that to be the case, the simple mistake (and the contractor’s failure to catch it) cost the contractor an award.

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Who Are You? Ambiguity as to Identity of Bond Principal Costs Joint Venture a Contract

“Who Are You?” asks Pete Townshend, the songwriter behind the tune a later generation would come to know as “The CSI Song.”  It’s a good question when it comes to self-reflection (or catching criminals), but it’s not so great when the government is asking the same thing in reference to a bid bond.

An ambiguous bid bond can cost an otherwise successful offeror to lose a contract.  And as the GAO’s decision in GAO Protest of BW JV1, LLC, B-401841 (Dec. 4, 2009) demonstrates, it is especially important for offerors submitting as joint venturers or in other teaming arrangements to carefully consider their bid bond arrangements to eliminate any potential ambiguities.

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