Demolition/Abatement Constracts (Folders 1-2)

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C~iaptcr 4: 'Mcthods oC Sclcction http:'/w~~1~.fta.dot.go~ fta'libran':admin%BPPman~scct d0.htm Solicitation - If a bid guaranty is to be required, a solicitation clause is included that details: • the requirement; • the amount of the guaranty (typically 5 percent of offer price) and how it should be calculated; • acceptable forms of guaranty (usually, cashier's check, letter of credit, or bond from a licensed agency); and • that the guaranty must be submitted with the offer. Nonresponsiveness - You can include in your policy regarding bid guaranties the actions to be taken if one is not furnished in accordance with the solicitation requirement. • Normally in a biddi~tg environment, if the proper guaranty is not furnished with the bid, the bid is non-responsive. If you allowed the bidder to submit the missing guaranty or correct a defective guaranty after the bids were "exposed", you would be allowing "two bites from the apple." Once the bids are known, the bidder could decide to submit (or not) the bid guaranty based on how much money is left on the table! • In a competitive proposal process, if a guaranty was required and was not submitted, your solicitation document would determine whether it could be asked for during negotiations. But what do you do if you could award a contract without negotiations, (a right you will frequently reserve to yoursel~? If you have to ask one offeror for its bid guaranty, is that considered discussions or negotiations. If so, that would necessitate opening discussions with all offerors in the competitive range?83 For these reasons, and because proposers have other means of effectively withdrawing from competitive proposal processes, proposal guaranty is less frequently used than bid guaranty (even if a performance bond is ultimately required). What if the bid guaranty is not signed, but the bid is? What if you only received one offer and the guaranty was not included with that offer? What if the guaranty is received late? What if the amount of the guaranty is insufficient? What if the guaranty is not dated or has an incorrect date? These are all questions that could arise and can be considered in your policy formulation.84 Your policy would provide, e.g., that deficiencies affecting offer price would be material and would establish nonresponsiveness. Custodv of GuarantX - What do I do with the bid guaranty? It is recommended that if the guaranty is a bond or letter of credit, it be retained with the procurement file. If it is other than a bid bond, it is recommended that it be placed in a secure area (safe or locked file cabinet) with a notation in the procurement file its location. Unused Guarantv - Guaranties have a financial impact on proposers as long as they are in effect. Therefore, you will want to return it to the unsuccessful offerors as soon as it is prudent to do so (e.g., you have awarded the contract or the offeror is too far down the bid list to reasonably expect an award). You may establish a rule that all offerors beyond a certain rank (e.g., the fourth lowest and all higher bids, all proposers outside the competitive range} will immediately have their guaranty returned. Return unused guarantees to contractors ~fter the contingencies have been met -- all contractual requirements have been met and the required performance and payment bonds and insurance certificates are in place as protection for the owner in the event of default or non-performance of the contractor. Collection of Bond - Although you will seldom be involved in collecting funds from a bonding agency c7 of 4 S 01 i I 0!97 13:09:53