B-141907, FEB. 17, 1960

B-141907: Feb 17, 1960

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THE BIDS WERE OPENED IN ACCORDANCE WITH THE INVITATION. 875 WAS RECEIVED FROM THE LEGNANO ELECTRIC CORPORATION OF NEW YORK. ON THE DAY FOLLOWING BID OPENING THERE WAS RECEIVED IN THE CONTRACTING OFFICE A REGISTERED LETTER DATED DECEMBER 14. - BIDS AND MODIFICATIONS OR WITHDRAWALS THEREOF RECEIVED AFTER THE TIME SET FOR OPENING WILL NOT BE CONSIDERED. UNLESS THEY ARE RECEIVED BEFORE THE AWARD IS MADE. IT IS DETERMINED BY THE GOVERNMENT THAT FAILURE TO ARRIVE ON TIME WAS DUE SOLELY TO DELAY IN THE MAILS FOR WHICH THE BIDDER WAS NOT RESPONSIBLE.'. UPON INQUIRY YOUR OFFICE WAS ADVISED BY LETTER OF JANUARY 25. FROM THE POSTMASTER AT DENVER THAT THE LEGNANO LETTER SHOULD HAVE BEEN RECEIVED IN THE ORDINARY COURSE OF THE MAILS AT APPROXIMATELY 10 MINUTES PRIOR TO BID OPENING.

B-141907, FEB. 17, 1960

TO MR. B. P. BELLPORT, CONTRACTING OFFICER, BUREAU OF RECLAMATION:

YOUR LETTER OF FEBRUARY 2, 1960, WITH ENCLOSURES, YOUR REFERENCE D 150, REQUESTS OUR DECISION WITH RESPECT TO THE ACCEPTABILITY OF THE LOW BID SUBMITTED PURSUANT TO INVITATION NO. DS-5252 ISSUED BY THE BUREAU OF RECLAMATION ON OCTOBER 27, 1959, FOR THE PROCUREMENT OF A 75-TON TRAVELING CRANE.

THE BIDS WERE OPENED IN ACCORDANCE WITH THE INVITATION, AS AMENDED, AT 2:00 P.M., MST ON DECEMBER 15, 1959. THE LOWEST COMPLETE BID AT $65,875 WAS RECEIVED FROM THE LEGNANO ELECTRIC CORPORATION OF NEW YORK. AT 7:30 A.M., ON THE DAY FOLLOWING BID OPENING THERE WAS RECEIVED IN THE CONTRACTING OFFICE A REGISTERED LETTER DATED DECEMBER 14, 1959, FROM LEGNANO INCREASING THE PRICE TO $68,525. THE INVITATION PROVIDES AT PARAGRAPH 4 OF THE TERMS AND CONDITIONS AS FOLLOWS:

"4. LATE BIDS.--- BIDS AND MODIFICATIONS OR WITHDRAWALS THEREOF RECEIVED AFTER THE TIME SET FOR OPENING WILL NOT BE CONSIDERED, UNLESS THEY ARE RECEIVED BEFORE THE AWARD IS MADE, AND IT IS DETERMINED BY THE GOVERNMENT THAT FAILURE TO ARRIVE ON TIME WAS DUE SOLELY TO DELAY IN THE MAILS FOR WHICH THE BIDDER WAS NOT RESPONSIBLE.'

UPON INQUIRY YOUR OFFICE WAS ADVISED BY LETTER OF JANUARY 25, 1960, FROM THE POSTMASTER AT DENVER THAT THE LEGNANO LETTER SHOULD HAVE BEEN RECEIVED IN THE ORDINARY COURSE OF THE MAILS AT APPROXIMATELY 10 MINUTES PRIOR TO BID OPENING. IN VIEW OF THE EVIDENCE ESTABLISHING THAT THE DELAY IN THE RECEIPT OF THE MODIFICATION WAS DUE SOLELY TO DELAY IN THE MAILS FOR WHICH THE BIDDER WAS NOT RESPONSIBLE, WE CONCUR IN THE ADMINISTRATIVE RECOMMENDATION THAT THE LOW BID BE CONSIDERED FOR AWARD AS MODIFIED BY THE LETTER OF DECEMBER 14, 1959. B-139895, JULY 8, 1959.

PARAGRAPH A-1 OF THE GENERAL REQUIREMENTS OF THE INVITATION PROVIDES:

"BONDS. (A) BID SECURITY.--- GUARANTY WILL BE REQUIRED WITH EACH BID IN AN AMOUNT NOT LESS THAN 10 PERCENT OF THE TOTAL PRICE BID. THIS REQUIREMENT FOR BID GUARANTY WILL NOT BE WAIVED. BID BONDS OR OTHER BID SECURITIES WHICH ARE NOT RECEIVED PRIOR TO THE TIME SPECIFIED FOR RECEIPT OF BIDS WILL NOT BE ACCEPTABLE UNLESS THE LATENESS WAS DUE SOLELY TO DELAY IN THE MAILS FOR WHICH THE BIDDER WAS NOT RESPONSIBLE.'

PRIOR TO BID OPENING, YOU RECEIVED IN CONNECTION WITH THE LEGNANO BID AN IRREVOCABLE LETTER OF CREDIT FROM THE CHASE MANHATTAN BANK IN FAVOR OF THE BUREAU OF RECLAMATION IN AN AMOUNT UP TO $9,670, UPON SUBMISSION OF DRAFTS ACCOMPANIED BY THE BUREAU'S STATEMENT THAT THE "BID OF SOCIETA NAZIONALE DELLE OFFICINE DI SAVIGLIANO, UNDER INVITATION NO. DS-5252 * * * HAS BEEN ACCEPTED AND THEY FAILED TO ENTER INTO A CORRESPONDING CONTRACT.'

NO BID WAS RECEIVED IN THE NAME OF THE SAVIGLIANO FIRM. HOWEVER, A LETTER OF DECEMBER 11, 1959, FROM LEGNANO TRANSMITTING ITS BID STATES THAT THE UNIT OFFERED WILL BE MANUFACTURED "BY OUR PRINCIPAL, OFFICINE NAZIONALE DI SAVIGLIANO.' FURTHER, A BULLETIN PUBLISHED BY SAVIGLIANO WAS ENCLOSED WITH THE BID WHICH, THE LETTER ADVISES, PROVIDES BACKGROUND INFORMATION ON LEGNANO'S ,PRINCIPALS.' FINALLY, THE LETTER REFERS TO THE BID SECURITY BEING PREPARED THROUGH THE CHASE MANHATTAN BANK. IT IS REPORTED IN YOUR LETTER OF FEBRUARY 2 THAT PREVIOUS BIDS FROM LEGNANO HAVE BEEN ACCOMPANIED BY SIMILAR LETTERS OF CREDIT OF THE CHASE MANHATTAN BANK WHEN THE BID OFFERED EQUIPMENT OF SAVIGLIANO MANUFACTURE. YOU QUESTION WHETHER UNDER THE CIRCUMSTANCES THE LETTER OF CREDIT MAY BE REGARDED AS COMPLIANCE OF THE LEGNANO BID WITH THE BID SECURITY REQUIREMENT.

IN OUR DECISION AT 38 COMP. GEN. 532, WE HELD THAT NON-COMPLIANCE WITH A REQUIREMENT IN AN INVITATION THAT A BID BOND OR OTHER BID SECURITY BE SUBMITTED WITH THE BID REQUIRES THE REJECTION OF THE BID AS NONRESPONSIVE. THE PURPOSE OF THAT DECISION IS TO PRECLUDE FROM CONSIDERATION FOR AWARD A BID NOT ACCOMPANIED BY A VALID BID SECURITY IN THE AMOUNT REQUIRED UPON WHICH THE GOVERNMENT WOULD HAVE RECOURSE IN THE EVENT THE BIDDER FAILS TO ENTER INTO THE CONTRACT. 39 COMP. GEN. 60. ACCORDINGLY, WHETHER THE BID SECURITY REQUIREMENT HAS BEEN MET WITH RESPECT TO THE LEGNANO BID MUST DEPEND UPON WHETHER A DRAFT IN FAVOR OF THE UNITED STATES COULD VALIDLY BE DRAWN AGAINST THE LETTER OF CREDIT UPON THE FAILURE OF LEGNANO TO ENTER INTO THE CONTRACT.

WHILE THE BID WAS SUBMITTED IN THE NAME OF LEGNANO, THE TRANSMITTAL LETTER, AS INDICATED ABOVE, REFERS TO SAVIGLIANO AS THE PRINCIPAL OF LEGNANO. "PRINCIPAL" IS A TERM USED IN THAT CONTEXT TO DESCRIBE A PERSON (OR FIRM) WHO HAS AUTHORIZED ANOTHER TO ACT ON HIS ACCOUNT SUBJECT TO HIS CONTROL. DUGAS V. NASHUA MFG. CO. 62 F.SUPP. 846. A WRITTEN INSTRUMENT, ONE PORTION OF WHICH CONTAINS A MANIFESTATION THAT AN AGENT IS ACTING FOR A PRINCIPAL, IS INTERPRETED AS THAT OF THE PRINCIPAL AND NOT THE AGENT EVEN THOUGH IN ANOTHER PORTION OF THE INSTRUMENT OR IN THE SIGNATURE THE AGENT'S NAME APPEARS. SEE RESTATEMENT, SECOND, AGENCY SECTION 157. VIEW OF THE FOREGOING, AND OF THE PAST PRACTICE OF SECURING LEGNANO BIDS WITH LETTERS OF CREDIT IN THE NAME OF SAVIGLIANO, WE CONCLUDE THAT AS TO THE PARTIES TO THE LETTER OF CREDIT, LEGNANO SUBMITTED ITS BID AS AGENT FOR SAVIGLIANO. SINCE THE CONTRACT OF AN AGENT IS THE CONTRACT OF HIS PRINCIPAL, THE UNITED STATES WOULD BE PROTECTED BY THE LETTER OF CREDIT IN THE EVENT OF THE FAILURE OF LEGNANO TO PROCEED AFTER AWARD TO ENTER INTO THE CONTRACT. ACCORDINGLY, THE LETTER OF CREDIT MAY BE REGARDED AS SUBSTANTIAL COMPLIANCE WITH THE REQUIREMENT OF PARAGRAPH A 1 QUOTED ABOVE.