Link: GAO Decision
Protestor: Capture, LLC
Agency: Department of Veterans Affairs
Disposition: Protest Denied.
Protester’s bid bond was properly rejected where the protester attached a letter to the bid bond stating that the surety’s support for the protester was contingent upon a number of conditions
General Counsel PC Highlight:
Capture, LLC protested the award to Seawolf Construction Corp. of a contract for the expansion of a parking garage at the VA Medical Center in Gainesville, Florida. Offerors were required to submit a bid guarantee for 20% of the bid price or $3 million, whichever was less. Capture submitted a bid bond with an attached letter from the attorney-in-fact for the corporate surety, indicating that it supported Capture on the project, subject to certain conditions. The agency rejected Capture’s bid bond as defective, on the grounds that the attachment rendered the bond unenforceable because the conditions from the surety limited the government’s rights.
The GAO first noted that a bid bond may be rejected as defective when it does not clearly establish the liability of the surety. The GAO pointed out that the letter indicated to the agency that the surety’s obligation was subject to certain conditions, of which the surety had been assured that Capture had notified the agency. However, the agency had never been informed of any conditions. The GAO agreed with the agency that the attached letter created sufficient uncertainty as to the obligation of the surety as to reasonably reject the bid bond as defective.
Where offerors are required to provide a bid bond as part of their complete proposal, offerors must ensure that the submitted bid bond complies with all requirements. In particular, a bid bond must clearly establish the liability of the surety. The bond should not place any restrictions or limitations on the government’s rights against the surety. Failure to submit a satisfactory bond, where that is a requirement of the RFP, will result in the rejection of the bid.