B-155919, FEB. 4, 1965

B-155919: Feb 4, 1965

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CONTRACT -03629/W) WAS AWARDED FOLLOWING FORMAL ADVERTISING FOR BIDS. AMERICAN TOOL COMPANY WAS DETERMINED TO BE THE LOW BIDDER. SUCH DETERMINATION WAS BASED UPON THE FACT THAT THE LOW BID INDICATED THAT IT WAS SUBMITTED BY "AMERICAN TOOL COMPANY. IT WAS SIGNED BY DELORES J. THE LOW BIDDER WAS DETERMINED TO BE RESPONSIBLE FOLLOWING PERFORMANCE OF A PRE-AWARD SURVEY WHICH WAS BASED UPON THE ASSETS AND ACTIVITIES OF THE ORGANIZATION LOCATED AT THE ADDRESS SHOWN IN THE BID. IT IS REPORTED THAT THE REPORT OF THE SURVEY DISCLOSED THAT THE BIDDER WAS A DIVISION OF PINTO. IT WAS ASCERTAINED THAT THERE WAS NO SUCH MICHIGAN CORPORATION AS AMERICAN TOOL COMPANY. INVESTIGATION REVEALED THAT THE NAME WAS REGISTERED AS AN ASSUMED NAME BY ALEX PINTO IN 1956 AND THAT HE OPERATED A SOLE PROPRIETORSHIP UNDER THAT NAME UNTIL MARCH 10.

B-155919, FEB. 4, 1965

TO CAPTAIN J. LAWTON, FC, FINANCE AND ACCOUNTING OFFICE, DEPARTMENT OF THE ARMY:

BY FIRST ENDORSEMENT DATED JANUARY 11, 1965, THE CHIEF, FINANCIAL POLICIES DIVISION, OFFICE OF THE CHIEF OF FINANCE, HEADQUARTERS, FORWARDED YOUR LETTER AMXDE-L OF DECEMBER 4, 1965, REQUESTING DECISION WHETHER PAYMENTS UNDER CONTRACTS DA-20-113-AMC-03629/W) AND -03817/W) WITH AMERICAN TOOL COMPANY MAY BE MADE TO PINTO, INC.

CONTRACT -03629/W) WAS AWARDED FOLLOWING FORMAL ADVERTISING FOR BIDS. AMERICAN TOOL COMPANY WAS DETERMINED TO BE THE LOW BIDDER. SUCH DETERMINATION WAS BASED UPON THE FACT THAT THE LOW BID INDICATED THAT IT WAS SUBMITTED BY "AMERICAN TOOL COMPANY, PINTO BLDG., KALAMAZOO, MICHIGAN.' THE BID REPRESENTED THAT THE BIDDER OPERATES AS A MICHIGAN CORPORATION. IT WAS SIGNED BY DELORES J. BALDWIN AS OFFICE MANAGER.

THE LOW BIDDER WAS DETERMINED TO BE RESPONSIBLE FOLLOWING PERFORMANCE OF A PRE-AWARD SURVEY WHICH WAS BASED UPON THE ASSETS AND ACTIVITIES OF THE ORGANIZATION LOCATED AT THE ADDRESS SHOWN IN THE BID. IT IS REPORTED THAT THE REPORT OF THE SURVEY DISCLOSED THAT THE BIDDER WAS A DIVISION OF PINTO, INC., BUT THAT GOVERNMENT PERSONNEL INVOLVED IN THE SURVEY AND IN THE AWARD OF THE CONTRACT DID NOT OTHERWISE APPEAR TO BE AWARE OF THE LEGAL STATUS OF THE BIDDER.

AFTER AWARD OF THE CONTRACT, IT WAS ASCERTAINED THAT THERE WAS NO SUCH MICHIGAN CORPORATION AS AMERICAN TOOL COMPANY. INVESTIGATION REVEALED THAT THE NAME WAS REGISTERED AS AN ASSUMED NAME BY ALEX PINTO IN 1956 AND THAT HE OPERATED A SOLE PROPRIETORSHIP UNDER THAT NAME UNTIL MARCH 10, 1958. FROM THAT DATE UNTIL NOVEMBER 1, 1963, THE AMERICAN TOOL COMPANY WAS OPERATED BY A RECEIVER. THE RECEIVER REGISTERED AMERICAN TOOL COMPANY AS AN ASSUMED NAME IN HIS OWN NAME ON AUGUST 11, 1961. ON NOVEMBER 2, 1963, PURSUANT TO A COURT ORDER, THE ASSETS COMPRISING AMERICAN TOOL COMPANY WERE SOLD BY THE RECEIVER TO PINTO, INC.

WHEN THE DISCREPANCY IN THE AMERICAN TOOL COMPANY BID WAS OBSERVED AFTER THE AWARD, THE SITUATION WAS DISCUSSED WITH REPRESENTATIVES OF THE BIDDER. THEREAFTER, A LETTER WAS RECEIVED FROM PINTO, INC., SIGNED BY MICHAEL PINTO AS PRESIDENT OF PINTO, INC. THE LETTER STATED THAT PINTO, INC., IS A MICHIGAN CORPORATION, THAT IT ACQUIRED THE ASSETS OF AMERICAN TOOL COMPANY ON NOVEMBER 1, 1963, AND THAT SINCE THEN IT HAS EMPLOYED AMERICAN TOOL COMPANY AS A TRADE NAME IN ITS BUSINESS ACTIVITIES. MOREOVER, THE LETTER STATED THAT PINTO, INC., RATIFIES THE BIDS OF AMERICAN TOOL COMPANY ON CONTRACTS -03629/W) AND 03817/W) AND CONFIRMS THAT THEY ARE THE BIDS OF PINTO, INC. SUBSEQUENTLY, AN AFFIDAVIT WAS RECEIVED FROM MICHAEL PINTO SUBSTANTIALLY AFFIRMING THE FOREGOING.

A CHECK ON THE EMPLOYER'S IDENTIFICATION NUMBER FURNISHED IN CONNECTION WITH THE BID HAS REVEALED THAT IT WAS ISSUED BY THE INTERNAL REVENUE SERVICE TO "PINTO, INC., DOING BUSINESS AS AMERICAN TOOL COMPANY, DIVISION OF PINTO, INC., PINTO BUILDING, KALAMAZOO, MICHIGAN.'

AN INVOICE FOR PROGRESS PAYMENTS FROM PINTO, INC., AMERICAN TOOL COMPANY DIVISION, HAS BEEN RECEIVED. IN VIEW OF THE FOREGOING, YOU INQUIRE WHETHER THE AWARD RESULTED IN A VALID CONTRACT AND WHETHER THE PROGRESS PAYMENTS MAY BE MADE TO PINTO, INC.

THIS CASE IS UNLIKE THE SITUATIONS IN 33 COMP. GEN. 549 AND 41 ID. 61 CITED BY YOU. THOSE CASES RULED OUT THE MAKING OF AN AWARD TO A PARTY DIFFERENT FROM THE ONE THAT BID; HOWEVER, IN THE IMMEDIATE CASE, THE AWARD WAS MADE TO THE BIDDER ACTUALLY SUBMITTING THE BID. THEREFORE, IT IS OUR BELIEF THAT THE INSTANT CASE IS GOVERNED BY THE DECISION IN 18 COMP. DEC. 779. IN THAT CASE A CONTRACT WAS AWARDED TO AN AGENT IN HIS OWN NAME WITHOUT DISCLOSING HIS PRINCIPAL. SUBSEQUENTLY, THE AGENT AND THE PRINCIPAL SOUGHT TO HAVE THE CONTRACT TRANSFERRED TO THE PRINCIPAL. WAS STATED THAT UPON DISCOVERY OF THE PRINCIPAL-AGENT RELATIONSHIP, THE GOVERNMENT COULD HOLD EITHER THE PRINCIPAL OR THE AGENT RESPONSIBLE AND IT WAS HELD THAT THE PRINCIPAL COULD BE PERMITTED TO COMPLETE THE CONTRACT AND TO RECEIVE ANY PAYMENTS DUE THEREUNDER. MOREOVER, AS YOU POINT OUT, IT IS THE LAW THAT A PRINCIPAL WHO ACTS UNDER AN ASSUMED NAME IS BOUND BY THE CONTRACT MADE IN THE ASSUMED NAME. 3 AM.JUR. 2D. AGENCY SECTION 315. SINCE IN THE IMMEDIATE CASE AMERICAN TOOL COMPANY AND PINTO, INC., ARE FOR ALL PRACTICAL AND LEGAL PURPOSES ONE AND THE SAME COMPANY, THE FORMER BEING THE TRADE NAME OF THE LATTER, WE PERCEIVE NO REASON WHY A RULE DIFFERENT FROM THAT FOLLOWED IN 18 COMP. DEC. 779 SHOULD PREVAIL.

IN THE CIRCUMSTANCES, IT IS OUR VIEW THAT THERE IS A VALID CONTRACT AND THAT PROGRESS PAYMENTS THEREUNDER MAY BE PAID TO PINTO, INC.

SINCE IT HAS BEEN DETERMINED THAT THE LISTING OF AMERICAN TOOL COMPANY ON THE CONSOLIDATED LIST OF CONTRACTORS INDEBTED TO THE UNITED STATES RELATES TO THE INDEBTEDNESS OF ALEX PINTO DOING BUSINESS AS AMERICAN TOOL COMPANY AND NOT TO ANY INDEBTEDNESS OF PINTO, INC., AND SINCE IT DOES NOT APPEAR THAT PINTO, INC., ASSUMED THE LIABILITY OF ALEX PINTO, NO WITHHOLDING OF ANY PAYMENTS TO PINTO, INC., SEEMS WARRANTED OR JUSTIFIED.

NO REASON IS PERCEIVED WHY THE RULING IN THIS CASE SHOULD NOT APPLY TO CONTRACT -03817/W) WHICH IS UNDERSTOOD TO HAVE BEEN AWARDED SUBSTANTIALLY UNDER THE SAME CIRCUMSTANCES AS CONTRACT -03629/W).

THE VOUCHER AND INVOICE OF PINTO, INC., WHICH ACCOMPANIED THE REQUEST FOR DECISION ARE RETURNED HEREWITH.