A-10703, A-10711, MARCH 2, 1926, 5 COMP. GEN. 674

A-10703,A-10711: Mar 2, 1926

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IT WILL BE LEFT TO THE ADMINISTRATIVE OFFICERS TO DETERMINE THE AUTHORITY OF THE AGENT SIGNING THE CONTRACT ON BEHALF OF THE CORPORATION AND WRITTEN EVIDENCE OF SUCH AUTHORITY WILL NOT BE REQUIRED TO BE FILED WITH THE CONTRACT AS HERETOFORE. THE PROPER SHOWING WILL BE AVAILABLE AND FURNISHED BY THE ADMINISTRATIVE OFFICE UPON REQUEST. 1926: I HAVE YOUR LETTERS OF JULY 29 AND JULY 31. SUBMITTING FOR DECISION THE QUESTION AS TO WHAT EVIDENCE IS NECESSARY TO ESTABLISH THE AUTHORITY OF AGENTS TO SIGN FOR AND BIND THE CORPORATION FOR WHICH THEY ARE ACTING IN CASES WHERE ACCEPTED BIDS OR PROPOSALS CONSTITUTE INFORMAL CONTRACTS FOR THE PURCHASE OF SUPPLIES OR THE PROCURING OF SERVICES BY GOVERNMENT AGENCIES.

A-10703, A-10711, MARCH 2, 1926, 5 COMP. GEN. 674

CONTRACTS - EVIDENCE OF AUTHORITY TO SIGN IN CONNECTION WITH CONTRACTS WITH CORPORATIONS HEREAFTER EXECUTED AND FILED IN THE GENERAL ACCOUNTING OFFICE, IT WILL BE LEFT TO THE ADMINISTRATIVE OFFICERS TO DETERMINE THE AUTHORITY OF THE AGENT SIGNING THE CONTRACT ON BEHALF OF THE CORPORATION AND WRITTEN EVIDENCE OF SUCH AUTHORITY WILL NOT BE REQUIRED TO BE FILED WITH THE CONTRACT AS HERETOFORE, IT BEING UNDERSTOOD, HOWEVER, THAT SHOULD ANY QUESTION INVOLVING THE AUTHORITY OF THE AGENT ARISE, THE PROPER SHOWING WILL BE AVAILABLE AND FURNISHED BY THE ADMINISTRATIVE OFFICE UPON REQUEST.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF THE TREASURY, MARCH 2, 1926:

I HAVE YOUR LETTERS OF JULY 29 AND JULY 31, 1925, SUBMITTING FOR DECISION THE QUESTION AS TO WHAT EVIDENCE IS NECESSARY TO ESTABLISH THE AUTHORITY OF AGENTS TO SIGN FOR AND BIND THE CORPORATION FOR WHICH THEY ARE ACTING IN CASES WHERE ACCEPTED BIDS OR PROPOSALS CONSTITUTE INFORMAL CONTRACTS FOR THE PURCHASE OF SUPPLIES OR THE PROCURING OF SERVICES BY GOVERNMENT AGENCIES, AND ESPECIALLY IN CASES WHERE THE AMOUNT INVOLVED IS FOR $1,000 OR LESS.

THE DECISIONS OF THIS OFFICE RELATIVE TO THE REQUIREMENTS FOR AN OFFICER OR AGENT OF A CORPORATION AFFIRMATIVELY TO SHOW HIS AUTHORITY TO ACT FOR HIS PRINCIPAL HAD REFERENCE TO WHAT WAS LAWFUL AND PROPER, THE PURPOSE BEING TO INDICATE TO ADMINISTRATIVE OFFICERS THE CHARACTER OF EVIDENCE REASONABLY NECESSARY TO JUSTIFY RECOGNITION OF THOSE REPRESENTING CORPORATE INTERESTS. IN CARRYING OUT THIS PURPOSE THE GENERAL ACCOUNTING OFFICE UNDERTOOK IN A SPIRIT OF COOPERATION TO AID THOSE IN AUTHORITY TO CARRY OUT SUCH LEGAL REQUIREMENTS BY PRESCRIBING THAT SUCH EVIDENCE SHOULD ACCOMPANY THE CONTRACTS WHEN FILED IN THE GENERAL ACCOUNTING OFFICE.

THE DIFFICULTIES REPORTED IN OBTAINING PROMPTLY AND IN ALL INSTANCES THE EVIDENCE SO PRESCRIBED, WITH CONSEQUENT DELAYS AND CORRESPONDENCE IMPOSED UPON THIS OFFICE HAVE RAISED DOUBT AS TO THE ADVISABILITY OF THE GENERAL ACCOUNTING OFFICE CONTINUING TO VIEW THE EVIDENCE OF SUCH AUTHORITY IN EACH CASE. WHILE THOSE REPRESENTING CORPORATE INTERESTS SHOULD EXHIBIT SATISFACTORY EVIDENCE THAT THEY ARE ACTING WITHIN THE SCOPE OF THEIR AUTHORITY, WRITTEN EVIDENCE THEREOF IS NOT A PREREQUISITE TO ACTION BY THE GENERAL ACCOUNTING OFFICE IN DETERMINING THE LEGALITY OF PAYMENTS UNDER CONTRACTS EXECUTED BY REPRESENTATIVES OF CORPORATIONS, SUCH EVIDENCE GENERALLY GOING TO THE FORM OF THE AGREEMENT RATHER THAN TO MATTERS OF SUBSTANCE, IN WHICH THE GENERAL ACCOUNTING OFFICE IS PRIMARILY CONCERNED. IT MAY THEREFORE BE SAID THAT THE MATTER OF ASCERTAINING IN CONNECTION WITH TRANSACTIONS WITH CORPORATIONS WHETHER OR NOT AN ALLEGED AGENT OF A CORPORATION IS SUCH AGENT AND IS ACTING WITHIN THE SCOPE OF HIS AUTHORITY IS AN ADMINISTRATIVE RESPONSIBILITY. THE REQUIREMENTS HERETOFORE SUGGESTED BY THE GENERAL ACCOUNTING OFFICE ARE LEGAL AND PROPER, IN THAT CONNECTION, BUT IN VIEW OF THE FACT THAT PAYMENTS WILL BE AUTHORIZED OR CREDIT ALLOWED FOR PAYMENTS MADE, ONLY WHERE THE CONTRACT HAS BEEN PERFORMED TO THE EXTENT SUPPORTING THE PAYMENT, IT IS NOT MATERIAL IN SUCH CONNECTION THAT THERE APPEAR IN THIS OFFICE THE EVIDENCE OF THE AUTHORITY OF THE AGENT, AND SUCH CONTRACTS HEREAFTER RECEIVED IN THE GENERAL ACCOUNTING OFFICE APPEARING TO HAVE BEEN EXECUTED BY AN AGENT OF THE NAMED PRINCIPAL IF UNACCOMPANIED BY THE SHOWING OF THE AUTHORITY OF THE AGENT WILL THEREFORE BE RECEIVED WITHOUT QUESTION IN THIS RESPECT. IT WILL THUS BE LEFT TO THE RESPECTIVE ADMINISTRATIVE BRANCHES OF THE GOVERNMENT TO SATISFY THEMSELVES OF THE AUTHORITY OF SUCH AGENT, IN SUCH MANNER AS THEY MAY DEEM BEST IN THE LIGHT OF THEIR RESPONSIBILITY, BUT SO THAT SHOULD ANY QUESTION ARISE INVOLVING THE AUTHORITY OF THE AGENT, AS UPON FAILURE TO PERFORM, ETC., THE PROPER SHOWING WILL BE AVAILABLE AND BE PROMPTLY FURNISHED THIS OFFICE BY THE ADMINISTRATIVE OFFICE.

I ASSUME THE ABOVE TO BE SUFFICIENT TO MAKE UNNECESSARY FURTHER DETAILED REPLY TO THE MATTERS OF YOUR COMMUNICATION.