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B-228200.3 1 (1989-03-02)

handle is hein.gao/gaobablen0001 and id is 1 raw text is: United States General Accounting Office Washington, D.C. 20548 Office of the General Counsel B-228200.3 March 2, 1989 The Honorable Ted Stevens United States Senate Dear Senator Stevens: This responds to your January 16, 1989, letter regarding our decision in Altex Enterprises, Inc., B-228200, Jan. 6, 1988, 67 Comp. Gen. (1988), 88-1 CPD 7. It is your understanding that we reversed the Department of the Army's determination that Altex was nonresponsible based on the failure of its sureties to grant the agency a security interest in real property. You state that several Alaskan subcontractors have not been paid by Altex for work performed under the awarded contract and that Altex's sureties cannot be located. In light of what has occurred, you question the decision to award to Altex. You ask for the background of our decision and the guidelines used to approve sureties on government contracts. Altex, a small business, protested the rejection of its bid based on a solicitation provision which required that individual sureties provide a security interest, such as an unencumbered mortgage, proof of title and an appraisal of property value. Altex asserted that these requirements were unduly restrictive of competition because they limited the use of individual sureties for bid and performance bonds in government contracts. In our decision, copy enclosed, we agreed with Altex that these requirements imposed upon individual sureties were so burdensome as to constitute a prohibition against individual sureties and, as such, would violate Federal Acquisition Regulation provisions permitting use of individual sureties. We sustained Altex's protest that these solicitation requirements were unduly restrictive of competition and directed the contracting officer to reassess the responsibility of Altex's individual sureties in light of our decision. Our decision advised that the contracting officer should reevaluate Altex's responsibility without consideration of the additional requirements and make an award to Altex if the agency otherwise found Altex responsible. Q44~7

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