TITLE:  Lawson's Enterprises, Inc., B-286708, January 31, 2001
BNUMBER:  B-286708
DATE:  January 31, 2001
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Lawson's Enterprises, Inc., B-286708, January 31, 2001

Decision

Matter of: Lawson's Enterprises, Inc.

File: B-286708

Date: January 31, 2001

Tina J. Copeland, Esq., for the protester.

Sherry Kinland Kaswell, Esq., and Alton E. Woods, Esq., Department of the
Interior, for the agency.

John L. Formica, Esq., and James A. Spangenberg, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.

DIGEST

A solicitation for the rehabilitation of a residence can only reasonably be
read as requiring the submission of bid guarantees with all bids, including
those under $100,000, and the protester's bid of under $100,000, which did
not include a bid guarantee, was properly rejected as nonresponsive.

DECISION

Lawson's Enterprises, Inc. protests the rejection of its bid as
nonresponsive under invitation for bids (IFB) No. 50181-0-B036, issued by
the United States Fish and Wildlife Service, Department of the Interior, for
the rehabilitation of a residence at the E.B. Forsythe National Wildlife
Refuge in New Jersey.

We deny the protest.

The IFB, issued on August 29, 2000, provided for the award of a fixed-price
contract for the rehabilitation of the residence. The contractor will be
required to provide all labor, materials, and equipment necessary to
rehabilitate the residence, to include, for example, the furnishing and
installation of framing, windows, doors, cabinets, a bathroom, and a
heating, ventilating and air conditioning system.

Three bids were received by the bid opening date of September 29. Lawson's
submitted the apparent low bid of $96,740, and Northside Danzi General
Contractors submitted the apparent second low bid of $130,500. Because the
Lawson's bid did not include a bid bond, its bid was rejected as
nonresponsive and award was made to Northside Danzi. Agency Report at 1.

Lawson's argues that the solicitation did not require a bid guarantee for
bids under $100,000. The protester points out that the Miller Act, 40 U.S.C.
sect.sect. 270a, 270d-1 (1994), requires payment and performance bonds only for
construction contracts that exceed $100,000, and that Federal Acquisition
Regulation (FAR) sect. 52.228-15, which was incorporated by reference in the
solicitation, provides that "[u]nless the resulting contract is $100,000 or
less, the successful offeror shall furnish performance and payment bonds."
The protester next points to FAR sect. 28.101, which states that "[a]
contracting officer shall not require a bid guarantee unless a performance
bond or a performance and payment bond is also required." The protester
concludes that given the provisions of the Miller Act and the FAR, as well
as FAR sect. 52.228-15, which was incorporated by reference in the IFB, the
solicitation cannot be read as requiring that payment or performance bonds
were required for contracts under $100,000, and consequently, cannot be read
as requiring bid guarantees for bids under $100,000.

Bid guarantees are requirements promulgated under the procurement
regulations and are not mandated by statute. Therefore, the contracting
activity does not derive its authority to require them from the Miller Act.
Because of this, we have long held that an agency may condition bid
acceptance, for contracts totalling less than the amount specified in the
Miller Act and the FAR for payment or performance bonds, upon the furnishing
of a bid guarantee by the time of bid opening. Kenard Constr. Co., Inc.,
B-248830, Sept. 25, 1992, 92-2 CPD para. 207 at 3; Hirt Telecom Co., B-231534,
June 7, 1988, 88-1 CPD para. 542 at 1. As such, neither the provisions of the
Miller Act nor the FAR requirements relating to payment or performance bonds
necessitate that an IFB be read, regardless of the remainder of the
provisions contained in the IFB, as requiring a bid guarantee only if the
bid totals more than $100,000. Where an IFB requires all bids to include a
bid guarantee, any bid (even one under the Miller Act threshold) failing to
provide the required guarantee by bid opening must be rejected as
nonresponsive. Hirt Telecom Co., supra.

Here, the standard form (SF) 1442 included in the IFB noted that a "bid
bond, 20%" was required, and block 13.B of the SF 1442 specified that "[a]n
offer guarantee . . . is . . . required." The IFB also incorporated by
reference the "Bid Guarantee" clause set forth at FAR sect. 52.228-1, specifying
that the failure to provide a proper bid guarantee could result in rejection
of the bid. IFB at 17. Given these provisions, the IFB, when read as a
whole, clearly required a bid guarantee for bids under (or over) $100,000.
Accordingly, the agency acted properly in rejecting the protester's bid as
nonresponsive, given that Lawson's failed to furnish the required bid
guarantee with its bid.

The protest is denied.

Anthony H. Gamboa

Acting General Counsel