J & J Engineering, Inc.

• Decision Date: 13 February 1989
• Docket Number: B-233463.2
• Parties: J & J Engineering, Inc.: 89-1 CPD 147
• Court: Comptroller General of the United States

J & J Engineering, Inc.: 89-1 CPD 147

No. B-233463.2

Comptroller General of the United States

February 13, 1989

PROCUREMENT - Sealed Bidding - Bid guarantees - Sureties - Acceptability - Information submission DIGEST: 1. Where the protester was rejected as non-responsible for failing to provide the contracting officer with sufficient information to determine whether the sureties on the protester's individual surety bid bond were acceptable and the record shows the non-responsibility determination was reasonably based rejection of the protester's bid was proper. PROCUREMENT - Sealed Bidding - Bid guarantees - Responsiveness - Liability restrictions 2. Federal Acquisition Regulation provision which requires acceptance of a bid guarantee which is in an amount less than required but equal to or greater than the difference between that bid and the next acceptable bid does not apply where bid guarantee is otherwise defective due to lack of acceptable individual sureties. PROCUREMENT - Socio-Economic Policies - Small businesses - Competency certification - Applicability 3. An agency is not required to refer determination of non-responsibility of a bidder to the Small Business Administration for review under the Certificate of Competency procedures when the rejection of the bidder is based on the unacceptability of individual sureties. PROCUREMENT - Bid Protests - GAO procedures - Interested parties 4. Protester whose bid was properly rejected as non-responsible based on its bid bond is not an interested party under General Accounting Office's Bid Protest Regulations to protest on other grounds the award of a contract to another firm when award could be made to a bidder other than the protester if the protest were sustained. PROCUREMENT - Bid Protests - GAO procedures - GAO decisions - Reconsideration 5. Request for reconsideration is denied where protester fails to show any error of fact or law that would require reversal or modification of the initial dismissal.

J & J Engineering, Inc., protests the award of a contract to Oneida Construction Inc./David Boland under invitation for bids (IFB) No. N62467- 86-B-0090, issued by the Navy for construction of a storage facility at the Naval Supply Center, Jacksonville, Florida. J & J contends that its bid was improperly rejected based on the Navy's unwarranted finding that its bid bond using individual sureties was unacceptable; that the Navy was required to accept the bid guarantee because the individual sureties' assets were greater in amount than the difference between its bid price and the next acceptable bid; that the Navy did not notify the Small Business Administration (SBA) when it rejected J &amp J's bid; and that the Navy did not make a determination or request SBA's assistance in determining, whether Oneida qualified as a small disadvantaged business (SDB) in light of its status as a joint venture.

J & J also requests reconsideration of our December 6, 1988 dismissal of the firm's prior protest concerning the Navy's planned award of the contract to Simone Construction Company, the apparent low bidder. dismissed that protest because the Navy's rejection of Simone's bid, after J & J's protest was filed, rendered the protest academic. J & J now argues that the Navy's subsequent November 16 award to Oneida was in violation of the Competition in Contracting Act of 1984 (CICA), 31 U.S.C. Sec. 3553(c)(1) (Supp. IV 1986), since J & J's protest, filed November 3, was still pending in our Office.

We deny the protest and the request for reconsideration.

The solicitation, issued July 1, 1988, was set aside for SDBs and contemplated award of a firm, fixed-price construction contract. The IFB required bids to be accompanied by a bid bond (Standard Form (SF) 24) in the amount of 20 percent of the bid price or $3 million, whichever was less. Since J & J was bonded by individual rather than corporate sureties, J & J was required to submit a completed Affidavit of Individual Surety (SF 28) for each of the two required individual sureties.

The Navy received seven bids by the September 22 bid opening date. J & J was the second low bidder at $3, 697, 640. Due to the unacceptability of the individual sureties submitted by both Simone, the apparent low bidder, and J & J, in support of their bid bonds, the Navy rejected both bids and made award on November 16 to Oneida, the third low bidder at $3, 741, 000, a joint venture that furnished a corporate bid bond.

J & J's bid was rejected because the two individual sureties on its bid bond were found nonresponsible. In reviewing the SF 28s that J & J had submitted with its bond, the Navy found a number of assets listed on the affidavits to be questionable as to validity and/or worth. Initially, the Navy requested additional information from J & J by telephone on September 27 concerning the listed securities, gas and oil leases (certification of the activity and production of the leases), and the net worth of the individuals (certifications that the assets listed were liquid and readily attainable by the government in the event of default). J & J responded by telefaxing "review audits, " described by the certified public accountants (CPAs) who performed them as limited reviews of financial information submitted by the sureties themselves; the CPAs expressly state that the reviews are not the equivalent of a certified audit.

The Navy then telefaxed a letter to J & J on September 30, 1988 a copy of which was later mailed on October 3, requesting that J & J provide CPA- certified balance sheets and income statements with signed opinions for each individual surety, or alternatively, specific clarifying information for each of...