In re Central Mechanical, Inc., B-206555

• Decision Date: 18 August 1982
• Docket Number: B-206555
• Citation: 61 Comp.Gen. 566
• Parties: MATTER OF: CENTRAL MECHANICAL, INC.
• Court: Comptroller General of the United States

61 Comp.Gen. 566

MATTER OF: CENTRAL MECHANICAL, INC.

No. B-206555

Comptroller General of the United States

August 18, 1982

Bids - guarantees - bid guarantees - assignment of retainages, etc - acceptability - firm commitment at bid opening requirement an assignment of funds held by the government as retainages or allegedly due the bidder under other government contracts in lieu of a bid bond lacks the requisite obligation as of the date of bid opening because the amounts actually payable from the funds held are contingent upon a number of factors extraneous to the bid.

Central mechanical, Inc. Protests the rejection of its bid under invitation for bids (IFB) no. Daca63-82-b-0013 issued by the fort worth district office of the corps of engineers (corps). Central's bid was rejected because it did not include with its bid a bond duly executed by a bonding agent. Instead, central attached to its complete bid bond form (standard form 24) a handwritten document purporting to pledge and assign as collateral all amounts which were due and payable or held as retainage under three identified ongoing government contracts. We deny the protest.

The protester contends that its bid should be accepted because it met the definition of a bid guarantee set out in the defense acquisition regulation (DAR) Sec. 10-101.4 (1976 ed.) As explained in paragraph 4 of the standard form (SF) 22 which was included in the ifb.

Sf 22 paragraph 4 states that:

A bid guarantee shall be in the form of a firm commitment such as a bid bond, postal money order, certified check cashier's check, irrevocable letter of credit or, in accordance with treasury department regulations, certain bonds or notes of the United States.

Central asserts that the above list is merely illustrative of the kind of security that is considered sufficient, that it is the substance of the guarantee which should control, and that in fact there is no more substantial guarantee that could be given than a firm commitment accompanying a bid permitting the government to continue to hold money which already is in its possession. The protester says that there can be no doubt that its unqualified "pledge and assignment" of these funds to satisfy the bonding requirement was a firm commitment which entitled the government to hold these funds as long as necessary to accomplish the purpose of the bonding requirement. Further, the protester says, the amount of the security given is sufficient because there were sufficient funds being held by the corps' fort worth district office, which were then due and...