A-58507, A-59060, A-59541, JANUARY 21, 1935, 14 COMP. GEN. 559

A-58507,A-59541,A-59060: Jan 21, 1935

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THE PUBLIC INTEREST IS FOR CONSIDERATION IN MAKING THE AWARD. WHETHER THE TECHNICAL FAILURE TO SUBMIT A BID BOND WITH THE BID MAY BE WAIVED AS IN THE PUBLIC INTEREST IS CONTROLLED BY THE CIRCUMSTANCES IN THE INDIVIDUAL CASE SURROUNDING THE FAILURE TO SUBMIT THE BID BOND WITH THE BID RATHER THAN A SHORT TIME THEREAFTER. THE LOWEST BID WAS SUBMITTED BY THE EDWARD J. WAS NOT ACCOMPANIED BY A BID BOND OR GUARANTY. THE LOWEST BID PROPERLY GUARANTEED IN ACCORDANCE WITH THE INVITATION FOR BIDS WAS SUBMITTED BY WM. YOU WERE ADVISED THAT UNLESS YOUR OFFICE FOUND SOME REASON TO THE CONTRARY. YOUR ATTENTION IS INVITED TO THE CIRCUMSTANCES NOT SET FORTH IN THE LETTER OF TRANSMITTAL. EIFF COMPANY SUBMITTED A BID FOR THAT WORK WHICH WAS NOT ACCOMPANIED BY A GUARANTY.

A-58507, A-59060, A-59541, JANUARY 21, 1935, 14 COMP. GEN. 559

BIDS - NECESSITY FOR BID BOND WHILE A BIDDER WHO FAILS TO ACCOMPANY HIS BID WITH A BID BOND AS REQUIRED IN THE REQUEST FOR BIDS OBTAINS THEREBY NO ABSOLUTE RIGHT TO AN AWARD EVEN THOUGH HIS BID MIGHT BE LOW AND OTHERWISE PROPER, THE PUBLIC INTEREST IS FOR CONSIDERATION IN MAKING THE AWARD. WHETHER THE TECHNICAL FAILURE TO SUBMIT A BID BOND WITH THE BID MAY BE WAIVED AS IN THE PUBLIC INTEREST IS CONTROLLED BY THE CIRCUMSTANCES IN THE INDIVIDUAL CASE SURROUNDING THE FAILURE TO SUBMIT THE BID BOND WITH THE BID RATHER THAN A SHORT TIME THEREAFTER, THE RESPONSIBILITY OF THE BIDDER, AND THE SAVING OF PUBLIC MONEYS TO BE MADE.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF WAR, JANUARY 21, 1935:

THERE HAS BEEN RECEIVED YOUR LETTER OF DECEMBER 26, 1934, AS FOLLOWS:

IN ACCORDANCE WITH YOUR REQUEST OF DECEMBER 6, 1934, THIS DEPARTMENT TRANSMITTED TO YOU BY LETTER OF DECEMBER 19TH THE PAPERS RESPECTING THE BIDS OPENED ON NOVEMBER 21, 1934, FOR THE CONSTRUCTION OF THE WILLS CREEK DAM A PART OF THE PROJECT FOR THE MUSKINGUM RIVER VALLEY RESERVOIRS, OHIO.

THE LOWEST BID WAS SUBMITTED BY THE EDWARD J. EIFF COMPANY FOR $628,007.50, BUT WAS NOT ACCOMPANIED BY A BID BOND OR GUARANTY. THE LOWEST BID PROPERLY GUARANTEED IN ACCORDANCE WITH THE INVITATION FOR BIDS WAS SUBMITTED BY WM. EISENBERG AND SONS, INC., FOR $674,852.60. THE EDWARD J. EIFF COMPANY FURNISHED A BID BOND TWO DAYS AFTER THE OPENING OF THE BIDS.

HAVING IN VIEW YOUR DECISION DATED OCTOBER 11, 1934, IN THE PARALLEL CASE OF THE AWARD FOR THE CONSTRUCTION OF THE FORT PECK SPILLWAY, YOU WERE ADVISED THAT UNLESS YOUR OFFICE FOUND SOME REASON TO THE CONTRARY, THIS DEPARTMENT PROPOSES TO AWARD THE CONTRACT TO THE EDWARD J. EIFF COMPANY. NO OTHER ACTION APPEARED TO BE CONSISTENT WITH YOUR PRIOR DECISION.

IN ORDER THAT YOU MAY BE FULLY ADVISED IN THE MATTER, YOUR ATTENTION IS INVITED TO THE CIRCUMSTANCES NOT SET FORTH IN THE LETTER OF TRANSMITTAL. THE ABSTRACT OF BIDS OPENED NOVEMBER 13, 1934, FOR THE CONSTRUCTION OF THE TAPPEN DAM, ANOTHER ITEM OF THE SAME PROJECT, SHOWS THAT THE EDWARD J. EIFF COMPANY SUBMITTED A BID FOR THAT WORK WHICH WAS NOT ACCOMPANIED BY A GUARANTY, BEING THE ONLY ONE OF 28 BIDS NOT SO GUARANTEED. AS ITS BID FOR THE TAPPAN DAM WAS NOT THE LOW BID, NO FURTHER ACTION WAS TAKEN IN THE CASE, AND NO GUARANTY WAS SUBSEQUENTLY FURNISHED BY THE COMPANY.

IT, THEREFORE, APPEARS THAT THIS COMPANY HAS DELIBERATELY PURSUED THE PROCEDURE OF SUBMITTING UNGUARANTEED BIDS. SUCH A PROCEDURE, IF PERMITTED AND ENCOURAGED, WILL LEAD TO CHAOS IN THE LETTING OF PUBLIC WORKS, WITH CONSEQUENT LOSS TO THE UNITED STATES FAR EXCEEDING ANY ADVANTAGE THAT CAN BE SECURED FROM THE CONSIDERATION OF UNGUARANTEED BIDS LOWER THAN THE RESPONSIVE OFFERS SUBMITTED IN ACCORDANCE WITH THE INVITATION FOR BIDS.

THIS DEPARTMENT CONSIDERS THAT THE PUBLIC INTEREST WILL BE BEST SERVED IF THE BID OF THE EDWARD J. EIFF COMPANY FOR THE CONSTRUCTION OF THE WILLS CREEK DAM BE DISCARDED AS IRRESPONSIVE BECAUSE UNGUARANTEED AND AWARD MADE TO WM. EISENBERG AND SONS COMPANY FOR THE EXECUTION OF THE WORK FOR THE CONSIDERATION NAMED IN THE RESPONSIVE BID OF THAT COMPANY. YOUR CONSIDERATION OF THE CASE, IN THE LIGHT OF THESE DEVELOPMENTS, WILL BE APPRECIATED.

ALSO, THERE HAS BEEN RECEIVED YOUR LETTER OF DECEMBER 28, 1934, IN WHICH THE SUBJECT OF BID BONDS IS FURTHER DISCUSSED, AS FOLLOWS:

THE STATUTES, ORDERS, RULES, AND REGULATIONS UNDER WHICH BID BONDS ARE REQUIRED TO ACCOMPANY PROPOSALS FOR MATERIALS, EQUIPMENT, AND SERVICES TO BE PURCHASED BY THIS DEPARTMENT HAVE BEEN CONSIDERED, AND THE PURPOSES TO BE ACCOMPANIED BY AND THE UNDERLYING REASONS FOR THE REQUIREMENTS HAVE BEEN REVIEWED.

THE ACT OF APRIL 10, 1878 (20 STAT. 36), AS AMENDED BY THE ACT OF MARCH 3, 1883 (22 STAT. 487) (SECTION 218, TITLE 5, U.S. CODE), INVESTS IN THE SECRETARY OF WAR AUTHORITY TO PRESCRIBE RULES AND REGULATIONS TO BE OBSERVED IN THE PREPARATION, SUBMISSION, AND OPENING OF BIDS FOR CONTRACTS AND TO REQUIRE THAT EVERY BID BE ACCOMPANIED BY A WRITTEN GUARANTY AS THEREIN SET FORTH.

PURSUANT TO THIS AUTHORITY THE SECRETARY OF WAR HAS PRESCRIBED THE FOLLOWING RULES AND REGULATIONS:

"AT THE DISCRETION OF THE CHIEF OF BRANCH CONCERNED, BID BONDS MAY BE REQUIRED OR WAIVED (A) IN SPECIAL CASES, OR (B) BY GENERAL INSTRUCTIONS ISSUED TO PURCHASING OFFICERS, BUT WILL BE REQUIRED OR WAIVED ALIKE TO ALL BIDDERS (ARMY REGULATIONS 5-220, SECTION 2, PARAGRAPH 6).

"/A) AT THE DISCRETION OF THE CHIEF OF BRANCH CONCERNED, BID BONDS MAY BE REQUIRED OR WAIVED (A) IN SPECIAL CASES, OR (B) BY GENERAL INSTRUCTIONS ISSUED TO PURCHASING OFFICERS, BUT WILL BE REQUIRED OR WAIVED ALIKE TO ALL BIDDERS.

"/B) BID BONDS, SIGNED BY TWO RESPONSIBLE PARTIES, OR BY A QUALIFIED SURETY COMPANY, WILL BE REQUIRED TO ACCOMPANY BIDS WHENEVER, IN THE OPINION OF THE OFFICER AUTHORIZED TO MAKE THE CONTRACT, THEY ARE NECESSARY TO PROTECT THE PUBLIC INTEREST, AND WHEN SO REQUIRED, NO BID UNACCOMPANIED BY A BID BOND, EXECUTED IN MANNER AND FORM AS DIRECTED IN THE ADVERTISEMENT OR SPECIFICATIONS, WILL BE CONSIDERED" (772 O. AND R., CORPS OF ENGINEERS).

THESE REGULATIONS WERE DULY ISSUED PURSUANT TO SPECIFIC STATUTORY AUTHORITY AS ABOVE SET FORTH. IT IS WELL SETTLED BY NUMEROUS DECISIONS OF THE COURTS THAT A REGULATION BY A DEPARTMENT OF GOVERNMENT ADAPTED TO THE ENFORCEMENT OF AN ACT OF CONGRESS, THE ADMINISTRATION OF WHICH IS CONFIDED TO SUCH DEPARTMENTS, HAS THE FORCE AND EFFECT OF LAW (MARYLAND CASUALTY COMPANY V. U.S., 253 U.S. 342 349; 64 CT. OF CLS. 686; 5 COMP. GEN. 177).

THE ACT OF APRIL 10, 1878 (20 STAT. 36) AND THE AMENDMENT THERETO BY THE ACT OF MARCH 3, 1883 (22 STAT. 487) ARE THE PREVIOUS ENACTMENTS WHICH WERE CODIFIED INTO SECTION 218, SUPRA. THE 1878 ACT WAS ENACTED PURSUANT TO A BILL INTRODUCED IN THE HOUSE OF REPRESENTATIVES JANUARY 14, 1878, H.R. 2287, 45TH CONGRESS, SECOND SESSION. THE HISTORY OF THE BILL WHILE UNDER CONSIDERATION IN CONGRESS MAY BE FOUND ON PAGES 314, 1343, 1363, 2187, AND 2257 OF THE CONGRESSIONAL RECORD OF THAT SESSION. SEE ALSO SENATE REPORT NO. 218 ON THE BILL.

THE LEGISLATION WAS INITIATED AT THE REQUEST OF THE SECRETARY OF WAR AND ON THE ADVICE OF THE ATTORNEY GENERAL. SEE ANNUAL REPORT OF THE SECRETARY OF WAR, 1877, PAGES 15 AND 16, AND OPINIONS ATTORNEY GENERAL, VOLUME 9, PAGE 174. THE MOTIVE OF THE LEGISLATION WAS TO PREVENT FRAUDULENT AND SO- CALLED "STRAW BIDS" AND TO PREVENT COLLUSION BETWEEN BIDDERS WHEREIN LOW BIDDERS WOULD SELL OUT TO HIGHER BIDDERS, AFTER THE BIDS HAD BEEN OPENED. SEE PAGE 1343, CONGRESSIONAL RECORD, SUPRA.

THE ABOVE REGULATIONS WERE ADOPTED BY THE SECRETARY OF WAR AFTER LONG EXPERIENCE FROM WHICH IT WAS AMPLY DEMONSTRATED TO BE IN THE BEST INTERESTS OF THE UNITED STATES THAT THEY BE REQUIRED. THE FACTS AND CIRCUMSTANCES UPON WHICH THIS CONCLUSION WAS BASED ARE HEREINAFTER MORE FULLY SET FORTH.

IN VIEW OF THE DIFFICULTIES ENCOUNTERED IN THE SECURING OF BONA FIDE AND PROPER BIDS, IT IS CONSIDERED HIGHLY UNDESIRABLE IN THE BEST INTERESTS OF THE UNITED STATES TO DISPENSE WITH THE REQUIREMENT IN PROPER CASES THAT A BID BOND OR ADEQUATE GUARANTY SHALL ACCOMPANY THE SUBMISSION OF BIDS.

THE GOVERNMENT, SINCE THE ACT OF MARCH 3, 1925 (4 STAT. 114), HAS BEEN COMMITTED BY LEGISLATIVE ENACTMENT, TOGETHER WITH THE APPROVAL, REQUEST, AND ASSENT OF THE ADMINISTRATIVE BRANCH OF THE GOVERNMENT, TO THE PRINCIPLE OF HOLDING BIDDERS TO THE TERMS OF THEIR BIDS FOR A SUFFICIENT PERIOD OF TIME FOR CONSIDERATION OF ACCEPTANCE OR REJECTION. DURING THE PAST 110 YEARS THE REQUIREMENTS UPON BIDDERS HAVE BECOME MORE AND MORE EXACTING IN THIS RESPECT IN ORDER TO ELIMINATE COLLUSION AMONG BIDDERS, STRAW BIDS, AND TO REQUIRE GUARANTY AND COLLATERAL SECURITY FROM BIDDERS AND SHOWINGS THAT BIDDERS IN FACT ARE RESPONSIBLE PARTIES QUALIFIED FOR THE WORK AND/OR TO SUPPLY THE NEEDS OF THE GOVERNMENT.

THIS DEPARTMENT CONSIDERS THAT TO DISPENSE WITH THE REQUIREMENT THAT SATISFACTORY GUARANTY SHALL ACCOMPANY THE BID IN ALL CASES WOULD RESULT IN A PROMPT RESUMPTION OF THE INTOLERABLE CONDITIONS WHICH THE LEGISLATION AND REGULATIONS WERE DESIGNED TO CORRECT AND REFORM. IT WOULD BE A VERY EASY MATTER FOR A PROSPECTIVE BIDDER TO DETERMINE AFTER BIDS ARE OPENED, AND THE GOVERNMENT ESTIMATE AND GENERAL LEVEL OF BIDS ARE KNOWN, WHETHER OR NOT HE WOULD WANT A JOB AT A CERTAIN FIGURE. RESPONSIBLE BIDDERS OF EXPERIENCE HAVE NO FEAR IN SUBMITTING THEIR ESTIMATES AS BIDS, AND SURETY COMPANIES HAVE NO RELUCTANCE IN GUARANTEEING SUCH BIDS. ONLY THE BIDDER OF LITTLE RESPONSIBILITY WILL FIND DIFFICULTY IN SECURING THE GUARANTY. MANY SUCH BIDDERS WOULD BE WILLING TO GAMBLE ON SUCH JOBS IF IT COSTS THEM NOTHING. WHEN BIDS ARE OPENED, THEY AT ONCE BENEFIT FROM THE EXPERIENCE AND JUDGMENT OF THE EXPERIENCED BIDDERS. IF SUCH A NONGUARANTEED BIDDER FINDS HIS BID IN LINE WITH THAT OF TRAINED BIDDERS, HE BACKS IT UP SINCE HE CAN THEN READILY SECURE BOND; IF HE FINDS HIS BID MATERIALLY BELOW THE LEVEL ESTABLISHED BY THE EXPERIENCED BIDDERS, HE SIMPLY FAILS TO ENTER INTO CONTRACT. THE GOVERNMENT MUST SUE TO RECOVER THE DIFFERENCE BETWEEN THE DEFAULTERS' AND THE ACCEPTED BID, AND, IF SUCCESSFUL IN THE SUIT, VERY PROBABLY WOULD FIND NO ASSETS TO REALIZE UPON.

WHILE IT IS TRUE THAT IN EXECUTING THE STANDARD FORM OF BID, THE BIDDER COVENANTS THAT THE UNITED STATES HAS SIXTY DAYS, OR OTHER FIXED PERIOD, AFTER THE DATE BIDS ARE OPENED WITHIN WHICH TO ACCEPT BIDS, AND THIS AGREEMENT WOULD FURNISH THE GOVERNMENT A CAUSE OF ACTION IF VIOLATED BY THE BIDDER, THE GOVERNMENT HAS NO GUARANTY THEREFROM AGAINST WITHDRAWAL OF BID BEFORE AWARD AND WOULD IN EVERY CASE HAVE TO RESORT TO A LAW SUIT TO PROTECT ITS INTERESTS. SUCH A SUIT COULD OFTEN BE DEFEATED BY A TRIVIAL OR UNIMPORTANT DEFECT IN THE SPECIFICATIONS WHICH WOULD BE SEIZED UPON BY AN IRRESPONSIBLE BIDDER AS A DEFENSE.

NOT ONLY WILL IRRESPONSIBLE BIDDERS SUBMIT INDIVIDUAL BIDS AS A GAMBLE, BUT, WITHOUT THE BID BOND REQUIREMENT, THEY MAY SUBMIT MULTIPLE STRAW BIDS, BACKING UP WITH PERFORMANCE BOND THEIR HIGHEST BID WHICH IS LOW ENOUGH TO TAKE THE AWARD. SUCH A COURSE WAS INSTANTLY SUGGESTED AS A PROBABILITY BY A RESPONSIBLE CONTRACTOR ON LEARNING OF YOUR RECENT RULING, WITH THE ADDED INFORMATION THAT BIDDERS HAVE ACTUALLY CONTEMPLATED SUCH PROCEDURE IN THE PAST IN CASES WHERE THE BID GUARANTEE WAS LOW IN AMOUNT.

ANOTHER EVIL WHICH THE BID BOND LARGELY ELIMINATES IS THE BID OF THE "BROKER," WHO HAS NO INTENTION OF DOING THE WORK HIMSELF BUT IS WILLING TO SUBMIT A BID WITH THE IDEA, IF SUCCESSFUL, OF SELLING THE JOB TO ANOTHER CONTRACTOR FOR ACTUAL PERFORMANCE. SURETY COMPANIES WILL NOT GIVE BID BONDS TO SUCH BIDDERS AND THE COST OF THE BID BOND OR OTHER BID SECURITY IS ALSO A DETERRENT.

I AM INCLOSING A COPY OF A LETTER FROM THE ASSOCIATED GENERAL CONTRACTORS OF AMERICA AND A COPY OF A RESOLUTION OF THE EXECUTIVE COMMITTEE OF THE DREDGE OWNERS' PROTECTIVE ORGANIZATION, WHICH DISCLOSE THE FEELING OF THOSE ORGANIZATIONS ON THE BID BOND REQUIREMENT.

SUMMARIZING, THE ABOLITION OF REQUIREMENT THAT BID SECURITY ACCOMPANY BIDS WILL RESULT IN THE FOLLOWING PRACTICES INIMICAL TO THE INTERESTS OF THE UNITED STATES:

(1) SUBMISSION OF STRAW BIDS BY BIDDERS OF LITTLE RESPONSIBILITY WHO HAVE NO INTENTION OF QUALIFYING UNLESS, AFTER THE OPENING OF BIDS, THEY FIND THEIR BID IS IN LINE WITH THE OTHER BIDDERS AND A PROFIT IS FELT ASSURED.

(2) SUBMISSION OF MULTIPLE BIDS BY DISHONEST BIDDERS UNDER DIFFERENT NAMES OF FICTITIOUS ORGANIZATIONS, WITH A VIEW OF QUALIFYING UNDER THE HIGHEST OF THESE BIDS WHICH IS LOW ENOUGH TO SECURE THE AWARD.

(3) SUBMISSION OF BIDS BY INDIVIDUALS WHO ARE REALLY "BROKERS" AND DO NOT INTEND TO PERFORM THE WORK BUT TO SELL THE JOB TO ANOTHER CONTRACTOR.

(4) UNFAIRNESS TO RESPONSIBLE BIDDERS BECAUSE OF BUSINESS LOST BY THEM THROUGH THE FOREGOING PRACTICES.

(5) UNFAIRNESS TO RESPONSIBLE BIDDERS BECAUSE THEIR EXPERIENCE AND TRAINING ARE TAKEN ADVANTAGE OF IN ESTABLISHING, TOGETHER WITH THE GOVERNMENT ESTIMATE, THE GENERAL LEVEL OF PRICES AT WHICH THE WORK MAY BE PERFORMED, ONLY TO LOSE THE AWARD THROUGH UNFAIR PRACTICES ABOVE ENUMERATED.

(6) EVENTUAL LOSS TO THE UNITED STATES OF THAT INVALUABLE INFORMATION DERIVABLE FROM DEPENDABLE BIDS FROM RESPONSIBLE CONTRACTORS, SINCE ALL BIDDERS WOULD CEASE SUBMITTING GUARANTIES AND THE BIDS OF EVEN RESPONSIBLE BIDDERS WOULD LOSE THE ELEMENT OF STABILITY IN FAVOR OF THE ELEMENT OF GAMBLING FOR AWARD.

THIS OFFICE HAS NOT RECOMMENDED AND DOES NOT SUGGEST THAT THE REQUIRING OF BID BONDS IN PROPER CASES BE DISCONTINUED. THE QUESTION RAISED BY THIS OFFICE IN THE MATTER IS AS TO WHETHER WHEN THERE IS FAILURE ON THE PART OF A RESPONSIBLE BIDDER TO COMPLY STRICTLY WITH THE REQUIREMENT FOR SUBMISSION OF BID BOND WITH THE BID, RATHER THAN A FEW HOURS OR DAYS LATER, THE GOVERNMENT MUST IN ALL CASES--- NOTWITHSTANDING ITS OWN INTERESTS AND THE CIRCUMSTANCES CONNECTED WITH SUCH FAILURE--- GIVE NO CONSIDERATION TO SUCH BID. AS WAS STATED IN SUBSTANCE, IN MY LETTER TO YOU OF DECEMBER 27, 1934, A BIDDER WHO FAILS TO ACCOMPANY HIS BID WITH BID BOND AS REQUIRED OBTAINS THEREBY NO ABSOLUTE RIGHT--- EVEN THOUGH HIS BID MAY BE LOW AND OTHERWISE PROPER. THE ONLY MATTER REQUIRING CONSIDERATION IS THE PUBLIC INTEREST AND WHETHER, IN VIEW THEREOF, THE TECHNICAL FAILURE TO SUBMIT BID BOND WITH THE BID MAY BE WAIVED AND, IN SUCH CONSIDERATION, THE DIFFERENCE IN THE AMOUNT OF THE BIDS--- THE CIRCUMSTANCES SURROUNDING THE FAILURE TO SUBMIT THE BID BOND WITH THE BID RATHER THAN A SHORT TIME THEREAFTER--- AND THE USES OF THE PUBLIC MONEYS, BECOME CONTROLLING. THE SUBMISSION OF A GOVERNMENT NEED FOR BIDS IS NOT, OF COURSE, A LOTTERY IN WHICH THE GOVERNMENT HAS NO CHOICE BUT TO AWARD TO A BIDDER, REGARDLESS OF PRICE OR OTHER MATTERS INVOLVING A PUBLIC INTEREST, MERELY BECAUSE THAT IN ALL THINGS, MATERIAL AND IMMATERIAL, HIS HAPPENS TO BE THE ONLY BID FULLY MEETING ALL ADVERTISED REQUIREMENTS. NO BIDDER ACQUIRES AN ABSOLUTE RIGHT TO AN AWARD OF PUBLIC BUSINESS. THE PUBLIC INTEREST IS FIRST FOR CONSIDERATION AND EVEN INFORMATION GAINED FROM A PROFFER SUBMITTED SO LATE AS NOT TO BE ENTITLED TO CONSIDERATION AS A BID, MAY REQUIRE REJECTION OF ALL BIDS, IN THE PUBLIC INTEREST, AND READVERTISING.

THE OFFICE OF A BID BOND IS PRIMARILY TO GIVE THE GOVERNMENT ASSURANCE THAT THE BIDDER, IF AWARDED THE BUSINESS BID UPON, WILL CONTRACT, GIVE PERFORMANCE BOND, AND PERFORM OR WILL MAKE GOOD ANY LOSS SUSTAINED BY THE GOVERNMENT THROUGH HIS FAILURE TO SO CONTRACT AND PERFORM. IF THE BIDDER IS RESPONSIBLE, FINANCIALLY, THE BID BOND IS OF LITTLE OR NO ACTUAL VALUE TO THE GOVERNMENT IN SUCH CONNECTION AS ANY LOSS SUSTAINED THROUGH FAILURE OF THE BIDDER TO CONTRACT AND PERFORM WOULD BE RECOVERABLE FROM THE BIDDER.

DIFFICULTIES SUCH AS YOU SUGGEST AS POSSIBLE ARE, OF COURSE, TO BE AVOIDED OR OVERCOME, AND WHILE, AS YOU POINT OUT, THE REQUIRING OF BID BONDS MAY OPERATE BENEFICIALLY IN SUCH DIRECTION THE PRIMARY PURPOSE OF SUCH BONDS IS AS STATED AND WHEN EMPLOYED FOR OTHER PURPOSES WOULD BE OBJECTIONABLE IF RESULTING IN AN UNNECESSARY DEPLETION OF THE APPROPRIATION. OTHER MEANS SEEM AVAILABLE TO OBVIATE SOME OF SUCH POSSIBLE DIFFICULTIES BUT IN ANY EVENT RELIANCE IN SUCH CONNECTION UPON BID BONDS MAY NOT PROPERLY EXTEND TO DRAINS UPON THE APPROPRIATION. FACT, THE PROCEDURE IN SUCH MATTERS APPARENTLY CANNOT BE SO GROOVED AS TO BECOME ROUTINE AND WHILE POSSIBLY NO RULE CAN BE STATED THAT WILL FIT THE FACTS IN ALL CASES, VARYING AS THEY DO, THE PUBLIC INTEREST MUST IN ALL INSTANCES HAVE FIRST CONSIDERATION.

IN THE INSTANT MATTER THE REQUEST FOR BIDS CONTAINED THE USUAL STIPULATIONS RESERVING THE RIGHT TO REJECT ANY AND ALL BIDS AND TO WAIVE INFORMALITIES IN THE PUBLIC INTEREST, AND THE FACTS WERE, AS UNDERSTOOD FROM YOUR REPORTS, THAT AS BETWEEN TWO RESPONSIBLE BIDDERS THE DIFFERENCE IN PRICE APPROXIMATED $46,000--- THE HIGHER BIDDER HAVING SUBMITTED A BID BOND WITH ITS BID IN COMPLIANCE WITH THE REQUEST FOR BIDS, WHILE THE LOW BIDDER SUBMITTED BID BOND 2 DAYS AFTER BIDS WERE OPENED. IN SUCH CIRCUMSTANCES TWO COURSES SEEMED OPEN--- REJECTION OF ALL BIDS AND READVERTISING, OR ACCEPTANCE OF THE LOW BID WITH DISREGARD OF THE TARDY FILING OF BID BOND. THERE APPEARING NO SUGGESTION THAT THE LOW BIDDER IS NOT FULLY RESPONSIBLE (IT APPEARING, ON THE CONTRARY, THAT YOU MAKE NO OBJECTION IN THAT REGARD/--- AND NOTHING TO JUSTIFY AN UNNECESSARY EXPENDITURE OF APPROXIMATELY $46,000 OF PUBLIC MONEY--- AND THAT THE TIME OF FILING BID BOND, IN SUCH CIRCUMSTANCES, WAS NOT SO VITAL A MATTER THAT IT MIGHT NOT PROPERLY AND SAFELY BE DISREGARDED UNDER THE RIGHT RESERVED IN THE REQUEST FOR BIDS, THIS OFFICE CONCLUDED THAT ACCEPTANCE OF THE LOW BID WAS JUSTIFIED AND PROPER IN THE USES OF THE APPROPRIATION PROPOSED TO BE CHARGED, AND SO HELD. NOTHING HAS BEEN FOUND IN THE FACTS AND ARGUMENTS SINCE SUBMITTED WHICH SEEMS TO WARRANT ANY MODIFICATION OF THE CONCLUSION HERETOFORE REACHED AND TO THE EFFECT THAT APPROPRIATED MONEYS MAY NOT BE CHARGED IN THIS CASE, IF AWARD BE MADE ON THE BIDDING AS HAD, WITH ANY AMOUNT IN EXCESS OF THE LOW BID SUBMITTED BY THE EDWARD J. EIFF CO. FOR PERFORMANCE OF THE WORK IN QUESTION.