Coal Was Not Acceptable Bid Bond Asset

The Court of Appeals for the Federal Circuit affirmed the dismissal of a bid protest because the Court of Federal Claims correctly concluded coal was not an acceptable bid bond asset. The invitation for bids for the construction of a traffic circle required bidders to submit a bid bond. The contracting officer rejected the protester's low bid on the grounds its individual surety bond, which was secured by approximately $191 million in mined coal, did not constitute an acceptable bid bond under FAR 28.203. The Government Accountability Office (23 CGEN ¶112,596) and the CFC (52 CCF ¶78,977) both denied protests on the basis that the CO reasonably rejected the bid as unacceptable, finding mined coal is not an acceptable asset because it cannot be placed into an escrow account, as required for pledges of assets under FAR 28.203-1(b)(1). On appeal from the CFC's dismissal, the protester argued the CFC affirmed the government's rejection of the bid on a ground not invoked by the government, in violation of the principle enunciated by the Supreme Court in SEC v. Chenery Corp. (332 US 194).