BNUMBER: B-272179
DATE: September 5, 1996
TITLE: Frank and Son Paving, Inc.
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Matter of:Frank and Son Paving, Inc.
File: B-272179
Date:September 5, 1996
William L. Bruckner, Esq., Bruckner & Walker, for the protester.
George N. Brezna, Esq., and Diane D. Hayden, Esq., Department of the
Navy, for the agency.
Christine Davis, Esq., and James A. Spangenberg, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Bid including only a photocopy of the required bid bond is
nonresponsive.
DECISION
Frank and Son Paving, Inc. protests the rejection of its bid under
invitation for bids (IFB) No. N68711-93-B-2285, issued by the
Department of the Navy, Naval Facilities Engineering Command, for the
repair and resurfacing of specified streets and parking lots on the
Marine Corps Logistics Base, Barstow, California. The Navy rejected
Frank and Son's bid as nonresponsive because the bidder submitted a
photocopy of the required bid bond with its bid. The protester argues
that the rejection of its bid for this reason was improper.
We deny the protest.
The IFB required bidders to submit with their bids a bid bond in the
amount of 20 percent of the bid price. The IFB authorized facsimile
copies of any power of attorney attached to the bond.
The Navy received 14 bids at bid opening on April 3, 1996. Frank and
Son submitted the apparent low bid of $275,004. Along with its bid,
Frank and Son submitted photocopies of the required bid bond and power
of attorney.[1] The power of attorney appointed Michael E. Cundiff as
attorney-in-fact for the surety, American Motorists Insurance Company,
and Mr. Cundiff's signature appeared on the photocopied bid bond. The
surety's corporate seal was not visible on the photocopied documents.
The power of attorney contained a resolution adopted by the surety,
which provided:
"That the signature of the Chairman of the Board, the President,
any Vice President, or their appointees designated in writing and
filed with the Secretary, and the signature of the Secretary, the
seal of the Company, and certifications by the Secretary, may be
affixed by facsimile on any power of attorney or bond . . . and
any such power so executed, sealed, and certified with respect to
any bond or undertaking to which it is attached, shall continue
to be valid and binding upon the Company."
On May 17, the Navy rejected the protester's bid as nonresponsive
because the photocopied bid bond "did not bear an original signature
for the surety nor did it bear a corporate seal for the surety." This
protest followed.
The determinative question in judging the sufficiency of a bid
guarantee is whether it could be enforced if the bidder subsequently
fails to execute required contract documents and to provide
performance and payment bonds. Southern California Eng'g Co., Inc.,
B-232390, Oct. 25, 1988, 88-2 CPD para. 391. For the bid guarantee to be
viewed as enforceable, the surety must appear to be clearly bound
based on the information in the possession of the contracting officer
at the time of bid opening. The King Co. Inc., B-228489, Oct. 30,
1987, 87-2 CPD para. 423; Imperial Maintenance, Inc., B-224257, Jan. 8,
1987, 87-1 CPD para. 34. In general, photocopied bid bonds and facsimile
bid bonds (i.e., electronically transmitted copies) do not satisfy the
requirement for a bid guarantee because there is no way, other than by
referring to the original documents after bid opening, for the
contracting agency to detect unauthorized alterations, which the
surety could use as a basis to disclaim liability. Bird Constr.,
B-240002; B-240002.2, Sept. 19, 1990, 90-2 CPD para. 234.
Frank and Son asserts that, in this case, its surety clearly intended
to be bound by a photocopied bid bond. The protester claims that the
power of attorney expressly provided that bid bonds bearing facsimile
signatures--and, by implication, photocopied signatures--were
sufficient to bind the surety.
The power of attorney in question provided that "signature[s] . . .
designated in writing and filed with the [surety's] Secretary . . .
may be affixed by facsimile on any power of attorney or bond."
Although there is some implication to the contrary in Ray Ward Constr.
Co., B-256374, June 14, 1994, 94-1 CPD para. 367 and Services Alliance
Sys., Inc., B-255361, Feb. 22, 1994, 94-1 CPD para. 137, we do not view
the phrase "affixed by facsimile" as referring to facsimile or
photocopied documents, but rather to signatures produced by mechanical
means, for example, stamped, printed, or typewritten signatures. See
Morrison Constr. Servs., B-266233; B-266234, Jan. 26, 1996, 96-1 CPD para.
26; Global Eng'g, B-250558, Jan. 11, 1993, 93-1 CPD para. 31. In other
words, the phrase "affixed by facsimile" refers to signatures created
by facsimile, not to signatures transmitted by facsimile.
The same interpretation applies to the instant power of attorney. The
power of attorney provided for original signatures to be "designated
in writing and filed" with the surety's secretary and to be "affixed"
or mechanically reproduced by the surety on an original bid bond
document. The language does not reasonably suggest that the surety
consented to be bound by bid bonds which, after leaving the surety's
hands, had been photocopied or transmitted by facsimile.
The protester argues that this case is distinguishable from Morrison
Constr. Servs., supra, and Global Eng'g, supra, because, in those
cases, the bid documents authorizing signatures "affixed by facsimile"
were stated to be valid only if the documents' serial number appeared
in red, which effectively invalidated facsimile or photocopied
documents. Because no similar condition appeared in the power of
attorney submitted with its bid, Frank and Son argues that the phrase
"affixed by facsimile" should be construed to extend to facsimile or
photocopied bid bonds.
We disagree. As stated above, the instant power of attorney clearly
authorized only the mechanical reproduction of signatures on file with
the surety's secretary. Because the power of attorney did not
expressly extend the surety's liability to facsimile or photocopied
bid bonds, uncertainty existed as to the enforceability of the bond
submitted with Frank and Son's bid. As a result of this uncertainty,
the protester's bid was nonresponsive and was properly rejected.
The protester finally argues that the IFB, by authorizing the use of
facsimile powers of attorney, implied to bidders that facsimile or
photocopied bid bonds were also acceptable. This argument has no
merit. Not only does the provision in question only mention powers of
attorney, but facsimile bid bonds are generally not permissible in any
case because of the potential for unauthorized alterations. Bird
Constr., supra.
The protest is denied.
Comptroller General
of the United States
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1. Frank and Son states that it received facsimile copies of the bid
bond and power of attorney from its surety, which it photocopied and
submitted with its bid.