B-144106, JAN. 17, 1961

B-144106: Jan 17, 1961

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INC.: FURTHER REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 26. PAGE 2 OF THE INVITATION PROVIDED: "BID GUARANTY IN A PENAL SUM OF 20 PERCENT OF THE BID PRICE (UNLESS OTHERWISE SPECIFIED) WILL BE REQUIRED IF THE BID PRICE IS IN EXCESS OF $3. IF BID BOND IS FURNISHED. ANY FORM OF BID GUARANTY IS ACCEPTABLE. FAILURE TO SUBMIT BID GUARANTY ON TIME IS CAUSE FOR REJECTION OF BID.'. THE LOW BID WAS SUBMITTED BY C.C. WAS DATED SEPTEMBER 1. THE NAME AND ADDRESS OF THE CORPORATE SURETY WERE TYPED AS "HARTFORD ACCIDENT AND INDEMNITY COMPANY. FORD ATTORNEY-IN- FACT" WERE EITHER TYPED OR STAMPED. THE SEAL OF THE SURETY WAS AFFIXED IN THE PROPER PLACE AND THE TYPED NAME AND THE SIGNATURE OF A WITNESS APPEAR IN THE SPACE FOR WITNESSING TO THE LEFT OF THE NAMES OF THE SURETY AND ITS ATTORNEY-IN-FACT.

B-144106, JAN. 17, 1961

TO MISHARA CONSTRUCTION COMPANY, INC.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 26, 1960, PROTESTING AGAINST AWARD TO ANOTHER BIDDER UNDER INVITATION NO. IFB-27 604 -61-5 ISSUED BY BASE PROCUREMENT OFFICE, PEASE AIR FORCE BASE, NEW HAMPSHIRE.

THE INVITATION, DATED AUGUST 10, 1960, REQUESTED BIDS--- TO BE OPENED SEPTEMBER 1, 1960--- FOR REPAIRING THE FUEL DISTRIBUTION SYSTEM AT PEASE AIR FORCE BASE. PARAGRAPH 3, PAGE 2 OF THE INVITATION PROVIDED:

"BID GUARANTY IN A PENAL SUM OF 20 PERCENT OF THE BID PRICE (UNLESS OTHERWISE SPECIFIED) WILL BE REQUIRED IF THE BID PRICE IS IN EXCESS OF $3,000. IF BID BOND IS FURNISHED, INDIVIDUAL BID BOND, STANDARD FORM 24 SHALL BE USED. HOWEVER, ANY FORM OF BID GUARANTY IS ACCEPTABLE. FAILURE TO SUBMIT BID GUARANTY ON TIME IS CAUSE FOR REJECTION OF BID.'

IN RESPONSE TO THE INVITATION, YOU SUBMITTED A BID IN THE AMOUNT OF $37,910 LESS A DISCOUNT OF ONE-TENTH OF 1 PERCENT, FIVE DAYS, ACCOMPANIED BY A BID BOND IN THE AMOUNT OF 20 PERCENT OF THE AMOUNT OF THE BID. THE LOW BID WAS SUBMITTED BY C.C. AND S. CONSTRUCTION CO., INC., OF STERLING, MASSACHUSETTS, IN THE AMOUNT OF $35,000 LESS A DISCOUNT OF 2 PERCENT, TEN DAYS, ACCOMPANIED BY A BID BOND IN THE AMOUNT OF $7,000. THE LATTER BOND, ON STANDARD FORM 24, WAS DATED SEPTEMBER 1, 1960. IN THE PLACE FOR SIGNING BY THE SURETY AT THE BOTTOM OF THE FORM, THE NAME AND ADDRESS OF THE CORPORATE SURETY WERE TYPED AS "HARTFORD ACCIDENT AND INDEMNITY COMPANY, 690 ASYLUM STREET, HARTFORD 15, CONNECTICUT," BELOW WHICH, IN THE LINES DESIGNATED "BY" AND "TITLE," THE WORDS ,FRANCIS W. FORD ATTORNEY-IN- FACT" WERE EITHER TYPED OR STAMPED. THE SEAL OF THE SURETY WAS AFFIXED IN THE PROPER PLACE AND THE TYPED NAME AND THE SIGNATURE OF A WITNESS APPEAR IN THE SPACE FOR WITNESSING TO THE LEFT OF THE NAMES OF THE SURETY AND ITS ATTORNEY-IN-FACT. HOWEVER, THERE WAS INADVERTENTLY OMITTED FROM THE BOND THE ACTUAL SIGNATURE OF THE ATTORNEY-IN-FACT, WHO STATED IN HIS LETTER OF SEPTEMBER 8, 1960---

"FOR SOME UNEXPLAINABLE REASON I HAD AFFIXED MY POWER OF ATTORNEY STAMP, BUT NEGLECTED TO SIGN MY NAME.

"I SINCERELY HOPE THAT THIS LETTER WILL VERIFY THAT A MISTAKE WAS MADE AND THAT THE BID BOND WILL BE CONSIDERED VALID.'

IN YOUR LETTER OF SEPTEMBER 2, 1960, TO PEASE AIR FORCE BASE, YOU PROTESTED POSSIBLE AWARD TO C.C. AND S. CONSTRUCTION CO., INC., EXPRESSING THE VIEW THAT ITS BID BOND WAS INCOMPLETE AND INEFFECTIVE AND THAT ITS BID SHOULD BE REJECTED AS NONRESPONSIVE IN ACCORDANCE WITH OUR DECISION OF FEBRUARY 5, 1959, B-137319 (38 COMP. GEN. 532). HOWEVER, AWARD WAS MADE TO C.C. AND S. CONSTRUCTION CO., INC., ON SEPTEMBER 19, 1960 (CONTRACT NO. AF 27/604/-1408).

IN THE DECISION REFERRED TO BY YOU, 38 COMP. GEN. 532, IT WAS HELD (QUOTING FROM SYLLABUS):

"UNDER INVITATIONS FOR BIDS WHICH REQUIRE BIDDERS TO SUBMIT BID BONDS PRIOR TO BID OPENING, THE BID BOND REQUIREMENT IS A MATERIAL PART OF THE INVITATION WHICH CANNOT BE WAIVED BY CONTRACTING OFFICERS AND NONCOMPLIANCE WITH THE BID BOND PROVISION WILL REQUIRE REJECTING OF THE BID AS NONRESPONSIVE.'

HOWEVER, IN THAT CASE NO BID BOND WAS SUBMITTED UNTIL 28 MINUTES AFTER THE TIME SCHEDULED FOR BID OPENING. IN THE INSTANT MATTER, THE BID BOND WAS SUBMITTED WITH THE BID PRIOR TO THE TIME FOR OPENING BIDS, THE ONLY QUESTION BEING WHETHER THE BOND SUBMITTED BY C.C. AND S. CONSTRUCTION CO., INC., WAS IN FACT AN EFFECTIVE AND ENFORCEABLE BOND.

IN THE ABSENCE OF A STATUTE TO THE CONTRARY, IT HAS BEEN HELD BY THE COURTS THAT IT IS NOT ESSENTIAL TO THE VALIDITY OF A BOND THAT THE OBLIGOR SUBSCRIBE HIS NAME IF THE BOND IS SEALED AND DELIVERED. SEE JEFFERY V. UNDERWOOD, 1 ARK. 108; CURD V. FORTS, 9 KY. 43. SEE, ALSO, STEARNS LAW OF SURETYSHIP, 5TH ED., PAGE 249; RESTATEMENT, SECURITY SEC. 89, COMMENT C (1941); AND 11 C.J.S. BONDS, SEC. 16.

IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THIS MATTER AND THE AUTHORITIES ABOVE QUOTED, IT IS BELIEVED THAT THE SUBJECT BOND WOULD BE HELD VALID AND EFFECTIVE BY THE COURTS AND THAT SUCH DOUBT AS MAY EXIST ON THAT POINT SHOULD BE RESOLVED IN FAVOR OF THE VALIDITY OF THE BOND, THEREBY ENABLING THE GOVERNMENT TO OBTAIN THE BENEFIT OF THE LOW BID. ACCORDINGLY, THERE IS NOT FOUND ANY LEGAL BASIS FOR OBJECTION BY OUR OFFICE TO THE ACTION OF THE ADMINISTRATIVE OFFICE IN MAKING THE AWARD TO C.C. AND S. CONSTRUCTION CO., INC., AS THE LOWEST RESPONSIVE BIDDER.