BNUMBER:  B-274765
DATE:  December 27, 1996
TITLE:  Collins Companies

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Matter of:Collins Companies

File:     B-274765

Date:December 27, 1996

Joel S. Rubenstein, Esq., Bell, Boyd & Lloyd, for the protester.
Col. Nicholas P. Retson, Department of the Army, for the agency.
Robert Arsenoff, Esq., and Paul I. Lieberman, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Bid which included only a facsimile copy of a required bid bond and 
power of attorney was properly rejected as nonresponsive.

DECISION

Collins Companies protests the rejection of its low bid as 
nonresponsive under invitation for bids (IFB) No. DAKF57-96-B-0027, 
issued by the Department of the Army to replace siding on military 
housing units at Fort Lewis, Washington.  The Army rejected Collins's 
bid as nonresponsive because it contained only facsimile bid bond 
documents; the Army viewed such documents as not establishing that the 
surety would be bound to honor the bond in the event of default.  
Collins argues that its facsimile bid bond was authorized and binding 
and that therefore rejection of its bid was improper.

We deny the protest. 

The IFB, which was issued on August 14, 1996, with bid opening on 
September 13,  required bidders to submit a bid bond in the amount of 
20 percent of the bid price or $3,000,000, whichever was less.  On the 
day of bid opening, a representative of Collins called the contracting 
specialist to ascertain whether its bid package had been received; 
upon being informed that it had not been received, the representative 
asked whether a telefacsimile bid would be acceptable.  The protester 
asserts that in the ensuing conversation with the contracting 
specialist, it was informed that it would be acceptable to "fax 
everything over."  According to the contract specialist's sworn 
account of the conversation, she informed the representative that a 
telefaxed bid would be unacceptable because the Army needed original 
signatures on all documents.  Further, according to the specialist's 
statement, when Collins's representative asked if a copy could be 
telefaxed to an associate of the firm located in the area of the bid 
opening and then signed and hand delivered, she informed the 
representative that this would be an acceptable method of transmission 
if the bid documents all bore original signatures of persons 
authorized to bind the firm and if they were delivered in a sealed 
envelope prior to the time set for bid opening.

The package received from Collins by the time set for bid opening 
contained a bid with the original signature of an authorized 
representative on the cover page.  All documents relating to the bid 
bond were, however, telefaxed copies which bore no original 
signatures.  As a result, the contracting officer rejected Collins's 
bid as nonresponsive and this protest followed.

A bid bond is a form of guarantee designed to protect the government's 
interest in the event of default; if a bidder fails to honor its bid 
in any respect, the bid bond secures a surety's liability for all 
reprocurement costs.  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.  
The determinative question as to the acceptability of a bid bond is 
whether the bid documents, including the power of attorney appointing 
an attorney-in-fact with authority to bind the surety, establish 
unequivocally at the time of bid opening 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.  Morrison Constr. Servs., B-266233; B-266234, 
Jan. 26, 1996, 96-1 CPD  para.  26. 

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, to be certain that there had not been 
alterations to which the surety had not consented, and that the 
government would therefore be secured.  Id.  A telefaxed bid guarantee 
document, which is an electronically transmitted copy, is subject to 
the same uncertainty as a photocopy transmitted by mail; since it is 
not the original, there is no way to be certain that unauthorized 
alterations have not been made without referring to the original 
documents after bid opening.  Global Eng'g, B-250558, Jan. 11, 1993, 
93-1 CPD  para.  31[1].

Collins first asserts that, based on the September 13 conversation 
between its representative and the contracting specialist concerning 
telefaxed bids, the agency is estopped from rejecting its bid since, 
according to Collins, the specialist authorized the electronic method 
of transmission.  As indicated above, in the contracting specialist's 
statement recounting the conversation she denies that such advice was 
given.  In any event, even if we were to accept Collins's version, 
oral advice concerning the acceptability of photocopied (or telefaxed) 
bid bonds is not binding; a contractor relies on oral advice with 
respect to solicitation requirements at its own risk.  Pollution 
Control Indus. of Am., B-236329, Nov. 22, 1989, 89-2 CPD  para.  489.                                                             

Collins next argues that the telefaxed bid bond package, when read as 
a whole, establishes that the surety would be bound to honor the bond 
in the event of default.  For the reasons set forth below, we 
disagree.

The power of attorney form contained in the package contained the 
following statement in the left margin:

                    "WARNING
     THIS IS NOT A VALID POWER OF ATTORNEY IF THIS STATEMENT DOES NOT 
APPEAR IN RED INK"

In the telefaxed copy submitted to the Army in Collins's bond package, 
the quoted warning appeared in black print.  This fact would appear to 
make the power of attorney invalid on its face, thus calling into 
question the authority of the purported attorney-in-fact named in the 
document.  Global Eng'g, supra.  Collins argues that other language 
contained in the power of attorney form obviates this apparent 
invalidity.  In particular, Collins refers to the following excerpt 
from a resolution of the surety's board of directors quoted on the 
form:

     ". . . the signatures of [designated corporate officers] and the 
     seal of [the surety] may be affixed to any such power of attorney 
     or to any certificate relating thereto by facsimile. . . . "  
     (Emphasis added.)  

We have expressly considered this argument on other occasions where a 
telefaxed or photocopied power of attorney contained virtually 
identical language.  It is our view that phrases such as "affixed by 
facsimile" do not refer to telefaxed or photocopied documents, but 
rather to signatures produced by mechanical means, for example, 
stamped, printed or typewritten signatures.  In short, 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 telefaxed.  Frank and Son Paving, Inc., B-272179, Sept. 
5, 1996, 96-2 CPD  para.  106; Morrison Constr. Servs., supra; Global Eng'g, 
supra.

Collins attempts to distinguish its situation by arguing that another 
document contained in its telefaxed bid bond package authorizes 
transmission of bond documents by electronic means.  Specifically, the 
protester points to a telefaxed letter dated September 13 and signed 
by the purported attorney-in-fact which states:  "This letter 
authorizes Collins Companies to use in place of the original bid bond 
and power of attorney a fax copy of the same."  The problem with this 
reasoning is that the individual purporting to bind the surety under a 
telefax authorization is himself authorized by a power of attorney 
form which, as discussed above, is legally invalid on its face.  Under 
these circumstances, this individual's letter has no legal effect.

Since the telefaxed bid bond package contained in Collins's bid did 
not unequivocally establish that the surety would be bound to honor 
the bond in the event of default, the bid was properly rejected as 
nonresponsive.  Morrison Constr. Servs., supra. 

The protest is denied.

Comptroller General
of the United States
     
1. Here, the agency properly refused to consider documents submitted 
by Collins after bid opening which were intended to establish the 
responsiveness of its bid.