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JLchief55

Bid Bond - Joint Venture

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Scenario - The low bid on a sealed bid construction project was from a Joint Venture formed for this project only.  The Bid Bond was not submitted in the JV Name, but in the established businesses name.  I questioned the validity, the contractor told me this is common, as JV's don't have the past performance to get bonding in the JV name and that if I find them non-responsive, they will protest.  Appreciate any guidance.

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Please don't let the threat of a protest stop you from doing the right thing.

Have you read FAR Subpart 28.1 and the provision at FAR 52.228-1?

I did a quick internet search and found GAO Bid Protest Decision B-228193 (http://www.gao.gov/products/449268) -- it might be helpful to you.

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 No legal counsel available to review adequacy of bonds??  Tricky.  

Here is a GAO Decision. http://www.gao.gov/decisions/bidpro/401841.pdf

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I recommend you review available GAO decisions, formulate your own opinion and rationale based on past GAO decisions, then reach out to someone in your legal office who has experience with suretyship law.  Adequacy of bid bonds is based on the actual form and content of the bond and comparison to past GAO decisions or court opinions.  

 

In addition to the case mentioned by ji20874, see if B-401841 and B-208332 apply to your situation.  If the principal is a joint venture (JV), only one party executed the bid bond, and the JV agreement requires both members to sign, the bond is defective and the bid must be rejected.

 

Also, the following cases deal with situations where the principal on a bond is different from the principal on a bid.  54 Comp. Gen. 271 (1974)), B-178566, and B-255098.  Generally, a principal different than the nominal bidder raises doubts as to the enforceability of the bond, rendering it deficient and the defect may not be waived as a minor informality.

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Thanks to all and I love this site!  I've had this sitting in legal for a week now and still no response, so thought I would bounce it off you experts :) 

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32 minutes ago, JLchief55 said:

Thanks to all and I love this site!  I've had this sitting in legal for a week now and still no response, so thought I would bounce it off you experts :) 

Possible indication that the lawyer is clueless. We had one once that would sit on everything. He PCSed to Germany.  They found his desk full of action items and divided up the work among all of the other attorneys in the office to work them off.   

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