When required, bid bonds are an essential aspect to a proper bid. Under FAR 52.228-1, they secure the liability of a surety to the government by providing funds to cover the excess costs of awarding to the next eligible bidder if the successful bidder defaults by failing to fulfill these obligations.
There is a standard form for bid bonds. Though it’s not required, using the standard form is probably the safest bet to avoid possible rejection of a bid, as one contractor learned the hard way.
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.
“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 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.