B-166500, APR. 21, 1969
Highlights
PRESIDENT: REFERENCE IS MADE TO YOUR LETTER OF APRIL 1. THE SUM AND SUBSTANCE OF YOUR LETTER OF APRIL 1 IS THAT NATIONAL IS ACTING AS A FRONT FOR A FOREIGN INSURER WHICH IS NOT QUALIFIED UNDER SECTION 7 OF THE INVITATION PROVIDING THAT THE BIDDER BE A DOMESTIC INSURER AND THAT. AN AWARD SHOULD NOT HAVE BEEN MADE TO NATIONAL. SECTION 7 APPEARS TO BE FOR THE PURPOSE OF PROVIDING A DOMESTIC SOURCE THAT IS RESPONSIBLE AND WILL BE PRIMARILY LIABLE UNDER THE CONTRACT. IT HAS BEEN ESTABLISHED THAT NATIONAL IS SUCH A SOURCE SINCE IT HAS BEEN REPORTED THAT IT IS LICENSED TO TRANSACT BUSINESS IN 44 STATES. THE MATTER OF WHETHER NATIONAL DISPOSES OF THE PREMIUMS TO FOREIGN SOURCES OR HOW IT DISPOSES OF SUCH PREMIUMS TO THEM IS NOT INVOLVED IN DETERMINING NATIONAL'S QUALIFICATIONS.
B-166500, APR. 21, 1969
TO MR. J. MARTIN PAYNE, PRESIDENT:
REFERENCE IS MADE TO YOUR LETTER OF APRIL 1, 1969, REQUESTING RECONSIDERATION OF DECISION B-166500 OF MARCH 28, 1969, WHICH DENIED YOUR PROTEST AGAINST AN AWARD OF A CONTRACT BY THE MARITIME ADMINISTRATION TO THE NATIONAL INDEMNITY COMPANY UNDER INVITATION FOR BIDS NO. 17 FOR MARINE PROTECTION AND INDEMNITY INSURANCE COMMENCING APRIL 1, 1969.
THE SUM AND SUBSTANCE OF YOUR LETTER OF APRIL 1 IS THAT NATIONAL IS ACTING AS A FRONT FOR A FOREIGN INSURER WHICH IS NOT QUALIFIED UNDER SECTION 7 OF THE INVITATION PROVIDING THAT THE BIDDER BE A DOMESTIC INSURER AND THAT, THEREFORE, AN AWARD SHOULD NOT HAVE BEEN MADE TO NATIONAL.
HOWEVER, SECTION 7 OF THE INVITATION MERELY PROVIDES THAT THE BIDDER BE A DOMESTIC INSURANCE COMPANY AND ASSOCIATION ENGAGED IN UNDERWRITING THE FORM OF INSURANCE COVERED BY THE INVITATION AND DOES NOT PRECLUDE THE BIDDER FROM ENTERING INTO ARRANGEMENTS WITH FOREIGN SOURCES WITH RESPECT TO THE BUSINESS IT MAY UNDERWRITE AS A RESULT OF A CONTRACT UNDER THE INVITATION. ESSENTIALLY, SECTION 7 APPEARS TO BE FOR THE PURPOSE OF PROVIDING A DOMESTIC SOURCE THAT IS RESPONSIBLE AND WILL BE PRIMARILY LIABLE UNDER THE CONTRACT. IT HAS BEEN ESTABLISHED THAT NATIONAL IS SUCH A SOURCE SINCE IT HAS BEEN REPORTED THAT IT IS LICENSED TO TRANSACT BUSINESS IN 44 STATES.
THE MATTER OF WHETHER NATIONAL DISPOSES OF THE PREMIUMS TO FOREIGN SOURCES OR HOW IT DISPOSES OF SUCH PREMIUMS TO THEM IS NOT INVOLVED IN DETERMINING NATIONAL'S QUALIFICATIONS. AS WAS STATED IN DECISION B 163878, MAY 27, 1968, REFERENCED IN THE MARCH 28, 1969, DECISION:
"* * * THERE WAS NO REQUIREMENT IN THE INVITATION PRECLUDING REINSURANCE IN THE LONDON MARKET OR REQUIRING ALL OR ANY PORTION OF THE PREMIUMS BEING RETAINED IN THE UNITED STATES. * * *" IN VIEW OF THE FOREGOING, THE MARCH 28 DECISION IS SUSTAINED.