When an agency’s invitation for bids requires the submission of a bid guarantee, a bidder’s failure to include the original bid guarantee at bid opening may render the bid nonresponsive.
In a recent bid protest decision, the GAO held that a procuring agency properly rejected a bid because the bidder provided only a copy of the required bid guarantee with the bid.
The GAO’s decision in Hamilton Pacific Chamberlain, LLC, B-409795 (Aug. 11, 2014), involved an invitation for bids issued by the Department of Veterans Affairs for steam trap replacement and installation of a new steam trap monitoring system at a VA Medical Center. The IFB required each bidder to submit an original and a copy of its sealed bid. Bidders were also required to submit a bid guarantee or bid bond in the proper form, and the failure to do so could result in rejection of the bid.
Utility Systems Solutions, Inc. (US2) submitted both an original and a copy of its bid. The original bid did not include a bid guarantee; the copy of its bid did include a copy of the bid guarantee. The contracting officer rejected US2’s bid because of the failure to provide the required bid guarantee.
US2 filed an agency-level bid protest, contending that the failure to submit an original bid guarantee was a “minor informality,” and should have been waived by the VA. The VA decided to take corrective action by rescinding its rejection of US2’s bid. When a competitor, Hamilton Pacific Chamberlain LLC, learned that US2’s bid would be accepted, Hamilton filed a GAO bid protest. Hamilton argued that US2’s submission of a photocopied bid guarantee without original signatures rendered the bid nonresponsive, and was not a minor informality that could be waived by the VA.
The GAO agreed with Hamilton. The GAO cited prior bid protest decisions in which it had held that “copies of bid guarantee documents . . . generally do not satisfy the requirement for a bid guarantee since there is no way, other than by referring to the original documents after bid opening, for the contracting agency to be certain that there has not been alterations to which the surety had not consented and could be used as a basis to disclaim liability.”
In this case, the GAO held, “the record does not establish that US2 submitted an enforceable bid guarantee, as required by the IFB.” Further, the failure to provide an original guarantee “could not be cured by the submission of the original bond after bid opening because this would essentially provide the bidder with the option of accepting or rejecting the award by either correcting or not correcting the bond deficiency, which is inconsistent with the concept of procuring using sealed bids.” The GAO sustained Hamilton’s protest and recommended that the VA reject US2’s bid as nonresponsive.
The Hamilton Pacific Chamberlain case is a cautionary tale for companies submitting bids for procurements where bid guarantees are required. As the case demonstrates, an original signature will likely be required, and the agency will lack the power to waive the inadvertent omission of a bid guarantee containing an original signature.