TITLE:  Schrepfer Industries, Inc., B-286825, February 12, 2001
BNUMBER:  B-286825
DATE:  February 12, 2001
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Schrepfer Industries, Inc., B-286825, February 12, 2001

Decision

Matter of: Schrepfer Industries, Inc.

File: B-286825

Date: February 12, 2001

Andrew W. Loewi, Esq., and Shelby L. Katz, Esq., Brownstein Hyatt & Farber,
for the protester.

Thomas J. Ingram, IV, Esq., U.S. Army Corps of Engineers, for the agency.

Jennifer D. Westfall-McGrail, Esq., and Christine S. Melody, Esq., Office of
the General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Agency properly determined bid bond accompanied by photocopied power of
attorney unacceptable because photocopied power of attorney does not
establish unequivocally at the time of bid opening that the bond would be
enforceable against the surety in the event that the bidder fails to meet
its obligations.

DECISION

Schrepfer Industries, Inc. protests the rejection of its low bid under
invitation for bids (IFB) No. DACW45-00-B-0020, issued by the Army Corps of
Engineers for the replacement of an irrigation conduit at Chatfield Lake in
Littleton, Colorado. The Corps rejected Schrepfer's bid as nonresponsive
because the power of attorney attached to its bid bond was a photocopy.
Schrepfer contends that the copy was sufficient to bind its surety and thus
should have been accepted.

We deny the protest.

The IFB, which was issued on August 1, 2000, required each bidder to submit
a bid guarantee with its bid. Six bids were received and opened on the
September 8 opening date. Schrepfer's bid was low; the bids of BRB
Contractors, Inc. and BT Construction, Inc. were second and third low,
respectively.

Upon review of Schrepfer's bid package, the contracting officer discovered
that the power of attorney that the protester had submitted with its bid
bond was a photocopy. Relying on our decision in Kemper Constr. Co., Inc.,
B-283286.2, Nov. 29, 1999, 99-2 CPD para. 98, the contracting officer determined
that the photocopied power of attorney was unacceptable because it did not
definitely establish the surety's intent to be bound; accordingly, she
rejected Schrepfer's bid as nonresponsive. The contracting officer then
reviewed the bid of BRB Contractors, the second low bidder, and discovered
that BRB, like Schrepfer, had submitted a photocopied power of attorney with
its bid bond; thus, she also rejected BRB's bid. The third low bidder, BT
Construction, was found to have submitted an original power of attorney with
its bid bond; hence, its bid was determined responsive. Due to this protest,
award has not yet been made.

Schrepfer contends that its bid bond and supporting power of attorney should
have been accepted.

A bid bond is a form of 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. 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. 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 have not been alterations to which the surety has not
consented, and that the government would therefore be secured. Kemper
Constr. Co., Inc., supra, at 3.

The protester argues, citing our decision in Daley Corp.--California
Commercial Asphalt Corp., J.V., B-274203.2, Dec. 9, 1996, 96-2 CPD para. 217,
that a photocopied power of attorney is acceptable where it is accompanied
by a certification stating that it is a true copy and is still in full force
and effect. Schrepfer maintains that its power of attorney was accompanied
by such a certification.

In Daley, we found a reproduced power of attorney to be acceptable where it
was accompanied by an updated certification, signed by the surety's
secretary, stating that the reproduction was a full, true, and correct copy
and that the power of attorney was still in full force and effect. The facts
in Daley are distinguishable from the facts here, however, in that here, the
power of attorney was not accompanied by an updated certification signed by
an authorized representative of the surety. Instead, the power of attorney
was accompanied by a photocopied certification. In other words, the evidence
that we relied on in finding the reproduced power of attorney to be
acceptable in Daley, i.e., an original certification by a current officer of
the surety authenticating the power of attorney and attesting to its
continuing validity, was not present here.

To the extent that the protester further argues that the presence of a
raised corporate seal on the bid bond itself was sufficient to render the
bond acceptable, while a raised corporate seal does constitute evidence of
the authenticity of a bond, Daley Corp.--California Commercial Asphalt
Corp., J.V., supra, at 4, it is not a substitute for a properly signed power
of attorney. Kemper Constr. Co., Inc., supra, at 4.

Because Schrepfer's power of attorney was a photocopy, which was not
accompanied by an original authenticating certification, there is no way,
other than through reference to the original power of attorney, for the
agency to determine whether it has been altered; thus, the bid documents
submitted by Schrepfer did not establish unequivocally at the time of bid
opening that the bond would be enforceable against the surety in the event
that the bidder failed to meet its obligations. Accordingly, we find that
the agency properly determined the bond unacceptable and rejected
Schrepfer's bid as nonresponsive.

The protest is denied.

Anthony H. Gamboa

Acting General Counsel