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Ambiguous Bond Backing Scuttles Lowest-bidding Contractor

Saturday, October 04, 2008 03:55 pm

 
Ambiguous Bond Backing Scuttles Lowest-bidding Contractor

A lengthy dispute over what constitutes an acceptable surety bond asset under the Federal Acquisition Regulations (FAR) ended in the government's favor -- in part because its interpretation was at least as reasonable as the contractor's.

As a bidder on a Federal Highway Administration (FHWA) project in the U.S. Virgin Islands, Tip Top Construction, Inc. (Tip Top) submitted the required suretybacked bid bond along with descriptions of the assets its individual surety pledged in support of the bond. Tip Top's bid represented the lowest price and shortest project timeline. However, FHWA did not award Tip Top the contract and instead eliminated the contractor from the running due to an allegedly defective bid bond. Specifically, FHWA claimed Tip Top's surety, Edmund C. Scarborough (ECS), had failed to offer an acceptable asset to back the bond. Tip Top protested, first to the Government Accountability Office's Office of General Counsel (GAO), which denied the protest, and then to the Claims Court.

Plain-face FAR reading stands

ECS had described the proffered asset as "previously mined, extracte [...]

 
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