A-80518, SEPTEMBER 21, 1936, 16 COMP. GEN. 285

A-80518: Sep 21, 1936

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CONTRACTS - AWARDS - SPLITTING THERE IS NO AUTHORITY FOR THE AWARD OF A CONTRACT TO MORE THAN ONE BIDDER UNDER ADVERTISED SPECIFICATIONS FOR TITLE REPORTS REQUIRED IN CONNECTION WITH A RECLAMATION SERVICE PROJECT. WHERE THE BIDS CONSTITUTING THE BASIS FOR THE AWARDS ARE NOT IDENTICAL. THERE IS NO SHOWING OF FACTS WHICH WOULD MAKE SUCH PROCEDURE DESIRABLE OR NECESSARY IN THE PUBLIC INTEREST. BIDS WERE ISSUED COVERING TITLE INSURANCE IN CONTRA COSTA COUNTY. BIDS WERE RECEIVED FROM TWO COMPANIES. THERE IS ENCLOSED HEREWITH A COPY OF A LETTER DATED JULY 29 FROM THE CONSTRUCTION ENGINEER. IT WILL BE NOTED THAT BOTH BIDS ARE ALMOST IDENTICAL AND THAT THE CONSTRUCTION ENGINEER RECOMMENDS ACCEPTANCE OF BOTH BIDS ON THE GROUND THAT TO DO SO WOULD BE ADVANTAGEOUS TO THE GOVERNMENT.

A-80518, SEPTEMBER 21, 1936, 16 COMP. GEN. 285

CONTRACTS - AWARDS - SPLITTING THERE IS NO AUTHORITY FOR THE AWARD OF A CONTRACT TO MORE THAN ONE BIDDER UNDER ADVERTISED SPECIFICATIONS FOR TITLE REPORTS REQUIRED IN CONNECTION WITH A RECLAMATION SERVICE PROJECT, WHERE THE BIDS CONSTITUTING THE BASIS FOR THE AWARDS ARE NOT IDENTICAL, AND THERE IS NO SHOWING OF FACTS WHICH WOULD MAKE SUCH PROCEDURE DESIRABLE OR NECESSARY IN THE PUBLIC INTEREST.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF THE INTERIOR, SEPTEMBER 21, 1936:

THERE HAS BEEN RECEIVED YOUR LETTER OF SEPTEMBER 9, 1936, AS FOLLOWS:

IN CONNECTION WITH THE ACQUISITION OF RIGHT OF WAY REQUIRED FOR THE CENTRAL VALLEY PROJECT, CALIFORNIA, THIS DEPARTMENT APPROVED THE PURCHASE OF TITLE REPORTS AND TITLE INSURANCE BY THE BUREAU OF RECLAMATION.

PURSUANT THERETO, BIDS WERE ISSUED COVERING TITLE INSURANCE IN CONTRA COSTA COUNTY. BIDS WERE RECEIVED FROM TWO COMPANIES, NAMELY, CONTRA COSTA TITLE COMPANY AND RICHMOND-MARTINEZ ABSTRACT AND TITLE COMPANY.

THERE IS ENCLOSED HEREWITH A COPY OF A LETTER DATED JULY 29 FROM THE CONSTRUCTION ENGINEER, BUREAU OF RECLAMATION, TRANSMITTING THE BIDS RECEIVED, TOGETHER WITH ALL RELATED PAPERS. IT WILL BE NOTED THAT BOTH BIDS ARE ALMOST IDENTICAL AND THAT THE CONSTRUCTION ENGINEER RECOMMENDS ACCEPTANCE OF BOTH BIDS ON THE GROUND THAT TO DO SO WOULD BE ADVANTAGEOUS TO THE GOVERNMENT. PARTICULAR ATTENTION IS INVITED TO PARAGRAPH 7 OF THE CONSTRUCTION ENGINEER'S LETTER IN WHICH HE STATES AS FOLLOWS:

"7. IT IS KNOWN, HOWEVER, THAT BOTH COMPANIES PRESUME TO OPERATE UNDER A CODE AND PROBABLY INTENDED TO MAKE SIMILAR BIDS. THE AREA IS IN THE "BAY DISTRICT," AN OLD SETTLED COMMUNITY, AND TITLES MAY BE EXPECTED TO BE COMPLICATED AND SUBJECT TO MANY CLOUDS, LIENS, AND DEFECTS. ORDINARILY, TITLE COMPANIES RENDER GRATUITOUS SERVICES TO THE BUREAU IN ITS PRELIMINARY WORK AND ARE WILLING TO FURNISH MUCH INFORMATION THAT OTHERWISE WOULD BE VERY DIFFICULT TO SECURE. IT HAS GENERALLY BEEN FOUND ADVANTAGEOUS TO CONTRACT WITH EACH COMPANY OPERATING IN A COUNTY AND TO DISTRIBUTE THE BUSINESS. IT WOULD ALSO OPERATE TO THE ADVANTAGE OF THE UNITED STATES IN CASES WHERE THE CONTRACTING COMPANY IS UNABLE TO RENDER EXPEDITIOUS SERVICE, DUE TO PRESS OF A VOLUME OF BUSINESS. OFFICERS OF THE CONTRA COSTA TITLE COMPANY HAVE SPENT CONSIDERABLE MONEY AND MUCH TIME IN ORGANIZING THE TERRITORY TO CONTRACT FOR REPAYMENT AND WHILE THEIR BID IS HIGHER IN CERTAIN CASES WE RECOMMEND, IF PRACTICABLE, THAT BOTH BIDS BE ACCEPTED.'

DUE TO THE ANTICIPATED VOLUME OF BUSINESS, IT IS DESIRED TO CONTRACT WITH BOTH COMPANIES IN ORDER TO AVOID DELAY OF CONSTRUCTION WORK.

IN VIEW OF THE ABOVE, YOUR DECISION IS REQUESTED AS TO WHETHER CONTRACTS MAY BE AWARDED TO BOTH COMPANIES.

AN EARLY DECISION WILL BE APPRECIATED. PLEASE RETURN ENCLOSURES.

THE CONSTRUCTION ENGINEER REPORTED IN THE ABOVE REFERRED TO LETTER OF JULY 29, 1936:

5. THE RICHMOND-MARTINEZ ABSTRACT AND TITLE COMPANY ATTACHES TO ITS BID FORM OF TITLE INSURANCE POLICY PROPOSED AND AGREES TO MAKE PRELIMINARY TITLE REPORT. THE POLICY PROPOSED IS ISSUED BY THE CALIFORNIA PACIFIC TITLE AND TRUST COMPANY, DULY QUALIFIED UNDER THE LAWS OF THE STATE OF CALIFORNIA; THIS COMPANY ISSUES POLICIES FOR MANY TITLE AND ABSTRACT COMPANIES. THE COMPANY BIDS A MINIMUM OF $22.50, FOR WHICH IT WILL FURNISH THE SERVICE IN CASES WHERE THE PURCHASE PRICE PAID BY THE UNITED STATES DOES NOT EXCEED $1,500. FEES ARE GRADUATED UP FROM THE MINIMUM FOR CASES WHERE THE PURCHASE PRICE PAID IS IN EXCESS OF $1,500. TO THE ABOVE CHARGE WILL BE ADDED $5.00 FOR THOSE PARCELS SITUATED WITHIN IRRIGATION, RECLAMATION, OR OTHER IMPROVEMENT DISTRICTS FOR WHICH AN EXAMINATION OF TAXES AND ASSESSMENTS WILL BE REQUIRED, AND BIDDER AGREES TO FURNISH THE INFORMATION RELATIVE TO ASSESSMENT DISTRICTS REQUIRED BY THE DEPARTMENT IRRESPECTIVE OF THE PRINTED EXCEPTIONS IN THE POLICY.

6. THE BID OF THE CONTA COSTA TITLE COMPANY IS SIMILAR IN ALL RESPECTS TO THE ABOVE-MENTIONED BID, EXCEPT THAT THEY MAKE AN ADDITIONAL CHARGE OF $2.50 FOR COVERAGE FOR MUNICIPAL TAX AND ASSESSMENT EXAMINATION, AND DEFINE A PARCEL AS THAT PORTION OF THE LAND PURCHASED AND OWNED BY THE SAME PERSON OR PERSONS AND LOCATED WITHIN ONE SECTION. IF LOCATED IN TWO OR MORE SECTIONS, THE LAND IN EACH SECTION IS TO BE CONSIDERED AS CONSTITUTING A SEPARATE PARCEL. IT THEREFORE APPEARS THAT PAYMENTS TO THE CONTRA COSTA TITLE COMPANY WILL BE LARGER THAN THOSE TO THE RICHMOND- MARTINEZ ABSTRACT AND TITLE COMPANY, WHERE THE TRACT IS EXISTENT IN MORE THAN ONE SECTION AND WHERE SPECIAL REPORT ON MUNICIPAL AND ASSESSMENT TAXES IS REQUESTED.

THE LAW, SECTION 3709, REVISED STATUTES, CONTEMPLATES AND REQUIRES THAT THE CONTRACT BE AWARDED TO THE LOWEST RESPONSIBLE BIDDER, WHICH IN THIS CASE APPEARS TO BE THE CONTRA COSTA TITLE CO. THERE HAS BEEN NO SHOWING OF FACTS WHICH WOULD MAKE IT NECESSARY AND DESIRABLE IN THE PUBLIC INTERESTS TO CONTRACT WITH BOTH COMPANIES AND DIVIDE THE WORK BETWEEN THEM FOR THE PREPARATION OF THE TITLE REPORTS; THAT IS, THERE HAS BEEN NO SHOWING OF ANY PUBLIC INTEREST WHICH WOULD BE ADVERSELY AFFECTED BY SUCH DELAY AS MIGHT NECESSARILY BE INCIDENT TO ONE COMPANY PERFORMING THE WORK INSTEAD OF BOTH COMPANIES, AND IN THE ABSENCE OF SUCH A SHOWING YOU ARE ADVISED THAT THE AWARD OF CONTRACTS, AS PROPOSED, TO BOTH COMPANIES LEGALLY MAY NOT BE APPROVED.