B-145861, MAY 29, 1961

B-145861: May 29, 1961

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YOU HAVE REQUESTED OUR ADVICE AS TO WHETHER THE LOW BID SUBMITTED BY MR. THE BID SECURITY FURNISHED BY THE LOW BIDDER WAS IN THE FORM OF A "BANK MONEY ORDER" ISSUED BY THE SPRINGHILL BANK AND TRUST COMPANY IN AN ADEQUATE AMOUNT TO THE ORDER OF "FEDERAL HOUSING ADMINISTRATION. THE FIRST QUESTION RAISED IS WHETHER THE FORM OF BID SECURITY MEETS THE REQUIREMENTS OF THE INVITATION. A BANK MONEY ORDER IS DEFINED AS AN INSTRUMENT ISSUED BY AN AUTHORIZED OFFICER OF A BANK EVIDENCING THE FACT THAT THE PAYEE MAY DEMAND AND RECEIVE UPON ENDORSEMENT AND PRESENTATION THE AMOUNT STATED. SUCH AN INSTRUMENT IS PAID FROM THE BANK'S FUNDS AND IS SOLELY THE LIABILITY OF THE ISSUING BANK. HAVING CHARACTERISTICS NOT MATERIALLY DIFFERENT FROM A CASHIER'S CHECK WHICH IS SPECIFICALLY STATED TO BE ACCEPTABLE.

B-145861, MAY 29, 1961

TO MR. OSBORNE KOERNER, CONTRACTING OFFICER, FEDERAL HOUSING ADMINISTRATION:

BY LETTER OF MAY 12, 1961, WITH ENCLOSURES, YOU HAVE REQUESTED OUR ADVICE AS TO WHETHER THE LOW BID SUBMITTED BY MR. D. C. COLLINS UNDER INVITATION NO. 5685 MAY BE CONSIDERED FOR AWARD.

THE INVITATION REQUIRED THE SUBMISSION WITH THE BID OF A BID GUARANTEE. STANDARD FORM 22, INCORPORATED BY REFERENCE IN THE INVITATION PROVIDES IN PART AT PARAGRAPH 4 AS FOLLOWS:

"A BID GUARANTEE SHALL BE IN THE FORM OF A FIRM COMMITMENT, SUCH AS A BID BOND, POSTAL MONEY ORDER, CERTIFIED CHECK, CASHIER'S CHECK, IRREVOCABLE LETTER OF CREDIT * * *.'

THE BID SECURITY FURNISHED BY THE LOW BIDDER WAS IN THE FORM OF A "BANK MONEY ORDER" ISSUED BY THE SPRINGHILL BANK AND TRUST COMPANY IN AN ADEQUATE AMOUNT TO THE ORDER OF "FEDERAL HOUSING ADMINISTRATION, GENERAL SERVICE DIV.' THE FIRST QUESTION RAISED IS WHETHER THE FORM OF BID SECURITY MEETS THE REQUIREMENTS OF THE INVITATION.

A BANK MONEY ORDER IS DEFINED AS AN INSTRUMENT ISSUED BY AN AUTHORIZED OFFICER OF A BANK EVIDENCING THE FACT THAT THE PAYEE MAY DEMAND AND RECEIVE UPON ENDORSEMENT AND PRESENTATION THE AMOUNT STATED. SUCH AN INSTRUMENT IS PAID FROM THE BANK'S FUNDS AND IS SOLELY THE LIABILITY OF THE ISSUING BANK. BABCOCK V. PERKINS, 134 N.E.2D 839; CROSS V. EXCHANGE BANK, 168 N.E.2D 910. IN VIEW OF THE FOREGOING DEFINITION, WE SEE NO REASON WHY THE BANK MONEY ORDER SHOULD NOT BE REGARDED AS A FIRM COMMITMENT, AS REQUIRED BY THE INVITATION, HAVING CHARACTERISTICS NOT MATERIALLY DIFFERENT FROM A CASHIER'S CHECK WHICH IS SPECIFICALLY STATED TO BE ACCEPTABLE.

THE QUESTION IS ALSO RAISED AS TO WHETHER THE FOLLOWING STIPULATION INCLUDED IN THE LOW BID RENDERS IT NON-RESPONSIVE:

"* * * HOWEVER ALL CHECKS OR ORDERS FOR PAYMENT OF MONEY BY THE GOVERNMENT WOULD HAVE TO BE MADE TO THE ORDER OF DAVE CLARENCE COLLINS AND SPRINGHILL BANK AND TRUST CO. SINCE THE BANK WILL BE FINANCING MR. COLLINS.'

PROTECTION OF THE BANK'S FINANCIAL INTEREST, WHICH APPEARS TO BE THE PURPOSE OF THE STIPULATION, MIGHT BETTER BE SERVED BY THE ASSIGNMENT OF AMOUNTS TO BECOME DUE PURSUANT TO THE ASSIGNMENT OF CLAIMS ACT OF 1940, AS AMENDED, 31 U.S.C. 203. HOWEVER, SINCE THE JOINT PAYEE PROVISION NEITHER GIVES THE BIDDER ANY UNDUE ADVANTAGE NOR PREJUDICES THE INTERESTS OF THE UNITED STATES OR THE OTHER BIDDERS, IT SHOULD NOT BE REGARDED AS A MATERIAL QUALIFICATION RENDERING THE BID NON RESPONSIVE.

THE CONTRACTOR SHOULD BE ADVISED OF THE APPLICABLE PROVISIONS OF THE ASSIGNMENT OF CLAIMS ACT AND, IF PROPER NOTICE AND COPIES OF AN ASSIGNMENT ARE FILED AS REQUIRED, PAYMENTS UNDER THE CONTRACT MAY THEN BE MADE TO THE ASSIGNEE. HOWEVER, IF THE CONTRACTOR AND THE BANK PREFER TO MAINTAIN THE EXISTING ARRANGEMENT, PAYMENT MAY BE MADE IN THE FORM REQUESTED BY THE BIDDER.