BNUMBER:  B-266233; B-266234
DATE:  January 26, 1996
TITLE:  Morrison Construction Services

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Matter of:Morrison Construction Services

File:     B-266233; B-266234

Date:     January 26, 1996

John Chapman for the protester.
Gerald J. Brentnall, Jr., Esq., Rowley, Grace, Brentnall & Kraft, for 
Farinha, Inc., an interested party.
Calvin F. Boles IV, Esq., and Cynthia S. Guill, Esq., Department of 
the Navy, for the agency.
Susan K. McAuliffe, Esq., and Michael R. Golden, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Where bidder has submitted only photocopies of required bid guarantee 
documents as of the time of bid opening, the bid guarantees are of 
questionable enforceability and the bids were properly rejected as 
nonresponsive; since responsiveness cannot be established after bid 
opening, the defect in the bid guarantees cannot be cured by the 
submission of the original bid guarantee documents after bid opening.

DECISION

Morrison Construction Services protests the agency's rejection of its 
apparent low bids, and the award of contracts to Farinha, Inc., under 
invitations for bids (IFB) Nos. N62766-95-B-0402 and N62766-95-B-0403, 
issued by the Department of the Navy for the replacement of air 
conditioning and heat recovery units at a family housing area in Guam.  
Morrison challenges the agency's determination that the bid guarantees 
submitted with the protester's bids were defective because they were 
photocopies of required bid guarantee documents.

We deny the protests.

Each IFB required the submission of a bid guarantee in the amount of 
20 percent of the bid price.  The IFBs' instructions provided that all 
bids and bonds were to be submitted in "original format" and stated 
that bids must be manually signed.  Other than providing for the 
timely transmission by facsimile of acknowledgment of amendments, the 
IFBs did not expressly authorize facsimile bids or modifications.  Six 
bids were received by bid opening on August 17, 1995.  Morrison's 
apparent low bids were rejected, by letter of September 14, for 
including only photocopies of the required bid bond documents.  Awards 
were made to Farinha, the next low bidder, under the IFBs.  These 
protests followed.

Morrison explains that it mailed its bids, including the original bid 
bonds and power of attorney certificates, by certified mail on Friday, 
August 11 (5 days before the scheduled bid opening).  On Monday, 
August 14, upon learning that 5 days may not be sufficient time for 
receipt at the Guam bid openings, it sent a copy of the bids to its 
agent in Guam; that agent submitted the photocopied bids with notes 
from Morrison explaining, as stated above, why the photocopies of its 
bids were being submitted.  Morrison's original bid documents were 
received by the agency on August 25, 8 days after bid opening.  
Morrison contends that the bond documents are sufficient since they 
show that the surety was bound at the time of bid opening, that any 
perceived deficiency due to the photocopy nature of the bond documents 
should be waived as a minor informality, and that the agency could 
confirm after award that there were no alterations to the photocopied 
bond documents since the original bond documents were sent to the 
agency prior to bid opening.

A bid bond is a form of bid guarantee designed to protect the 
government's interest in the event of default; that is, if a bidder 
fails to honor its bid in any respect, the bid bond secures a surety's 
liability for all reprocurement costs.  Ray Ward Constr. Co., 
B-256374, June 14, 1994, 94-1 CPD  para.  367.  As such, a required bid bond 
is a material condition of an IFB with which there must be compliance 
at the time of bid opening; when a bidder submits a defective bid 
bond, the bid itself is rendered defective and must be rejected as 
nonresponsive.  Blakelee, Inc., B-239794, July 23, 1990, 90-2 CPD  para.  
65.  The determinative question as to the acceptability of a bid bond 
is whether the bid documents at the time of bid opening establish that 
the bond is enforceable against the surety should the bidder fail to 
meet its obligations.  If the agency cannot determine definitely from 
the documents submitted with the bid that the surety would be bound, 
the bid is nonresponsive and must be rejected.  Global Eng'g, 
B-250558, Jan. 11, 1993, 93-1 CPD  para.  31.  Photocopies 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 originals after 
bid opening, for the contracting agency to be certain that there had 
not been alterations to which the surety had not consented, and that 
the government would therefore be secured.  The King Co., Inc., 
B-228489, Oct. 30, 1987, 87-2 CPD  para.  423.

Morrison contends that it submitted a proper bid guarantee in its bid 
under each IFB.  Morrison first argues that the photocopied power of 
attorney submitted with each bid includes language showing that 
facsimile documents (i.e., facsimile copies of the bond and power of 
attorney) would bind the surety; the protester contends that its 
photocopied documents should at least be treated as facsimile 
documents.  Our Office resolved a similar issue in our decision in 
Global Eng'g, supra, where the photocopy of the power of attorney 
submitted with the bid clearly stated that the power of attorney is 
valid only if numbered in red and the copy was printed in black ink 
only.  Here, the photocopy of the power of attorney submitted with 
Morrison's bids at bid opening provided a warning that "this power of 
attorney is invalid without the red border."  The photocopy of the 
power of attorney in Morrison's bids, including the border, was 
printed in black ink only.  As we recognized in our decision in Global 
Eng'g, supra, this fact alone would appear to make the power of 
attorney submitted prior to bid opening invalid on its face.  See The 
King Co., Inc., supra.  Moreover, the language cited by Morrison does 
not provide that the submission of documents transmitted by facsimile, 
as the protester contends, would bind the surety.  The exact language 
on the power of attorney (referring to the signatures of certain 
officers "affixed by facsimile to any Power of Attorney" binding the 
company "to any bond or undertaking to which it is validly attached") 
does not refer to facsimile or photocopy documents but, rather, refers 
to a signature on the power of attorney produced by mechanical means, 
such as a typewritten, printed, or stamped signature.  See Federal 
Acquisition Regulation (FAR)  sec.  14.405(c)(2); Global Eng'g, supra.  
Without the required red border, or some other indication of 
originality and authenticity (for example, an original corporate seal, 
as was the case in Ray Ward Constr. Co., supra), the contracting 
officer reasonably could determine at bid opening that the 
attorney-in-fact did not have the authority to bind the surety.  The 
King Co., Inc., supra.

Additionally, the terms of the power of attorney, stated above in 
part, do not mention the acceptability of facsimile signatures on the 
bond, as in this case, or provide that the surety would be bound where 
the bond had other than an original signature of the attorney-in-fact.  
Without some semblance of originality of the required bid guarantee 
documents, we believe the agency at bid opening also could reasonably 
determine that the documents were not "validly" attached, as required 
in the conditions of the power of attorney.  Consequently, as we found 
in Global Eng'g, the possibility of alterations to the bond documents 
after the surety signed them, and the possibility that the surety 
could disclaim liability on the bond, existed at the time of bid 
opening.  Since the surety's liability was unclear at the time of bid 
opening, the agency acted properly in rejecting the bid.  Id.

Morrison contends that the agency must consider its original bid 
documents, which were in the mail to the agency before bid opening 
(and were received 
8 days after bid opening), either as an acceptable late bid, or as 
sufficient proof of the accuracy of the photocopied bid guarantee 
documents submitted at bid opening to allow a waiver of the bidding 
defect as a minor informality.  We disagree.  First, the late receipt 
of the protester's original bid documents does not fit within the 
solicitation and FAR exception relating to overseas procurements, FAR  sec.  
52.214-32, which applies to a procurement in Guam, see Kentucky Bridge 
& Dam, Inc., 70 Comp. Gen. 97 (1990), 90-2 CPD  para.  405, since regardless 
of how the package was sent, there has been no showing of mishandling 
by the government (i.e., the contracting agency) causing the late 
receipt.  See Winston Corp., B-243394, Apr. 8, 1991, 91-1 CPD  para.  
360.[1]

Second, it would have been improper for the agency to have considered 
the late bid documents for the purposes of confirming the accuracy of 
the photocopied ones and thereby to cure the defect in the bid 
guarantee.  As stated above, a required bid bond is a material IFB 
condition so that a defective bond renders the bid nonresponsive.  The 
sealed-bid system requires that responsiveness be determined solely on 
the information available at bid opening.  See Global Eng'g, supra. 

The protests are denied.

Comptroller General
of the United States 

1. The IFBs' terms, applicable procurement regulations, and decisions 
issued by our Office provide that the only exception permitted for 
considering late bids on overseas procurements, whether sent by first 
class, registered, or certified mail, is where it is determined by the 
government that the late receipt of the bid was due solely to 
mishandling by the government after receipt at the government 
installation.  FAR  sec.  52.214-32(a); Kentucky Bridge & Dam, Inc., supra.  
The bid package must be delivered to the contracting agency 
installation before the mishandling can occur; that is, mishandling by 
the government under these rules does not include mishandling by the 
Postal Service.  Id.