B-165301, NOVEMBER 26, 1968, 48 COMP. GEN. 369

B-165301: Nov 26, 1968

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- IS A NONRESPONSIVE BID. ALTHOUGH EVIDENCE OF AN AGENT'S AUTHORITY IS ACCEPTABLE AFTER BID OPENING WHEN THE APPARENT AUTHORITY OF THE AGENT WOULD ESTOP THE PRINCIPAL FROM DENYING THE AGENT'S AUTHORITY. TO PERMIT PROOF OF AN UNKNOWN AGENT'S AUTHORITY AFTER BID OPENING WOULD GIVE A BIDDER AN OPTION TO ELECT TO ABIDE BY A BID OR CLAIM THE BID WAS SUBMITTED IN ERROR BY A PERSON WITHOUT AUTHORITY TO ENTER INTO CONTRACTS ON ITS BEHALF. - AN OPTION THAT IS CONSIDERED A CHANCE TO SECOND-GUESS OTHER BIDDERS AFTER BID OPENING. 1968: FURTHER REFERENCE IS MADE TO YOUR LETTER DATED SEPTEMBER 20. YOU STATE THAT COOL- RITE'S LOW BID WAS REJECTED BECAUSE OF A TECHNICAL IRREGULARITY RESPECTING THE DELEGATED AUTHORITY OF THE PERSON SIGNING THE BID.

B-165301, NOVEMBER 26, 1968, 48 COMP. GEN. 369

AGENTS - OF PRIVATE PARTIES - AUTHORITIES - CONTRACTS - SIGNATURES A LOW BID SIGNED BY AN UNKNOWN AGENT OF THE CORPORATION SUBMITTING THE BID AND UNACCOMPANIED BY EVIDENCE OF THE AGENT'S AUTHORITY TO BIND THE PRINCIPAL--- A NECESSARY REQUIREMENT ABSENT ESTABLISHMENT OF AN AGENT'S AUTHORITY PRIOR TO BID OPENING--- IS A NONRESPONSIVE BID. ALTHOUGH EVIDENCE OF AN AGENT'S AUTHORITY IS ACCEPTABLE AFTER BID OPENING WHEN THE APPARENT AUTHORITY OF THE AGENT WOULD ESTOP THE PRINCIPAL FROM DENYING THE AGENT'S AUTHORITY, TO PERMIT PROOF OF AN UNKNOWN AGENT'S AUTHORITY AFTER BID OPENING WOULD GIVE A BIDDER AN OPTION TO ELECT TO ABIDE BY A BID OR CLAIM THE BID WAS SUBMITTED IN ERROR BY A PERSON WITHOUT AUTHORITY TO ENTER INTO CONTRACTS ON ITS BEHALF--- AN OPTION THAT IS CONSIDERED A CHANCE TO SECOND-GUESS OTHER BIDDERS AFTER BID OPENING, AND THEREFORE, MUST BE REGARDED AS FATAL TO THE BID.

TO THE INTERCONNECT ASSOCIATES, NOVEMBER 26, 1968:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED SEPTEMBER 20, 1968, ON BEHALF OF THE COOL-RITE CORPORATION, PROTESTING THE AWARD OF A CONTRACT TO THE SECOND LOW BIDDER UNDER INVITATION FOR BIDS NO. DAAA 15-69-B-0018, ISSUED BY THE U.S. ARMY, EDGEWOOD ARSENAL, MARYLAND. YOU STATE THAT COOL- RITE'S LOW BID WAS REJECTED BECAUSE OF A TECHNICAL IRREGULARITY RESPECTING THE DELEGATED AUTHORITY OF THE PERSON SIGNING THE BID. YOU STATE THAT EVIDENCE OF THIS AUTHORITY TO EXECUTE A BID ON BEHALF OF COOL-RITE WAS SUBMITTED IN WRITING IMMEDIATELY AFTER THE BID OPENING AND AT LEAST 1 MONTH PRIOR TO THE AWARD OF THE CONTRACT TO ANOTHER BIDDER.

THE SUBJECT INVITATION, ISSUED ON JULY 22, 1968, REQUESTED BIDS TO BE OPENED ON AUGUST 12, 1968, FOR A TOTAL OF 94,500 PIECES OF ALUMINUM CAPS (A COMPONENT OF LAUNCHER AND GRENADES, SMOKE: HC-AND-WP XM176). THE RECORD BEFORE US INDICATES THAT A BID WAS RECEIVED FROM THE COOL RITE CORPORATION, C/O INTERCONNECT ASSOCIATES, 655 PARK AVENUE, FREEHOLD, NEW JERSEY. THIS BID WAS SIGNED "G. E. YUROWSKI, AGENT" BUT THE CONTRACTING OFFICER STATES THAT INITIALLY NO ATTENTION WAS GIVEN TO THE AUTHORITY OF MR. YUROWSKI TO SIGN THE BID. SINCE COOL-RITE'S BID WAS LOW, A PREAWARD SURVEY WAS MADE OF THE FIRM IN ANTICIPATION OF AN AWARD. LATER, DURING THE CUSTOMARY LEGAL REVIEW, IT WAS NOTED THAT THE BID HAD BEEN SIGNED BY AN AGENT BUT WAS NOT ACCOMPANIED BY EVIDENCE OF THE AGENT'S AUTHORITY TO BIND COOL-RITE TO ITS BID. PARAGRAPH 2 (B) OF THE INVITATION INSTRUCTIONS AND CONDITIONS PROVIDES THAT OFFERS SIGNED BY AN AGENT ARE TO BE ACCOMPANIED BY EVIDENCE OF THE AGENT'S AUTHORITY UNLESS SUCH EVIDENCE HAS BEEN PREVIOUSLY FURNISHED TO THE ISSUING OFFICE. THE CONTRACTING OFFICER ADVISES THAT NO EVIDENCE ESTABLISHING SUCH AUTHORITY HAD BEEN SUBMITTED TO HIS OFFICE PRIOR TO BID OPENING. HOWEVER, EVIDENCE OF SUCH AUTHORITY WAS SUBMITTED TO THE CONTRACTING OFFICE BY COOL-RITE AFTER BID OPENING. THEREAFTER, COOL RITE'S BID WAS REJECTED AS NONRESPONSIVE. WE ARE ADVISED THAT AWARD WAS MADE TO THE GEUDER, PAESCHKE AND FREY CO., THE SECOND LOW BIDDER, ON SEPTEMBER 19, 1968. THIS REQUIREMENT CARRIES A MILSTRIP PRIORITY 02 AND IS IN SUPPORT OF SOUTHEAST ASIA.

THE ISSUE RAISED BY THIS PROTEST IS WHETHER, UNDER THE FACTS OF THE CASE, IT WAS PROPER TO REJECT THE PROTESTER'S BID AS BEING NONRESPONSIVE FOR FAILURE TO FURNISH EVIDENCE OF THE AGENT'S AUTHORITY TO SIGN THE BID (AND THUS BIND THE PRINCIPAL) PRIOR TO OPENING, OR WHETHER IT WOULD HAVE BEEN PERMISSIBLE TO ACCEPT SUCH EVIDENCE AFTER OPENING AS A MINOR INFORMALITY. OUR OFFICE HAS HELD THAT EVIDENCE OF AN AGENT'S AUTHORITY MIGHT BE ACCEPTABLE AFTER OPENING WHERE BECAUSE OF THE KNOWN CORPORATE STATUS OF THE OFFICIALS SIGNING THE BID OR BY REASON OF PRIOR DEALINGS BETWEEN THE PARTIES, THE GOVERNMENT WOULD HAVE BEEN ENTITLED TO RELY ON THE AGENT'S APPARENT AUTHORITY WHICH THE PRINCIPAL WOULD HAVE BEEN ESTOPPED TO DENY. B-149134, SEPTEMBER 20, 1962, AND B-136047, SEPTEMBER 4, 1958.

IN THE PRESENT CASE, HOWEVER, THE PROCURING ACTIVITY ADVISES THAT THE CONTRACTING OFFICER HAD NOT HAD PRIOR DEALINGS WITH THE AGENT AS A REPRESENTATIVE FOR THE PROTESTOR AND EVIDENCE OF THE AGENT'S AUTHORITY HAD PREVIOUSLY BEEN FILED WITH THE ACTIVITY. UNDER SIMILAR CIRCUMSTANCES, OUR OFFICE HAS HELD THAT EVIDENCE OF THE AGENT'S AUTHORITY CANNOT BE ESTABLISHED AFTER BID OPENING. B-164244, JUNE 12, 1968; B-143132, AUGUST 10, 1960. IN THE CASE OF BIDS BY AGENTS, PARAGRAPH 2 (B) OF THE INVITATION INSTRUCTIONS AND CONDITIONS REQUIRES THAT SUCH BIDS BE ACCOMPANIED BY EVIDENCE OF THE AGENT'S AUTHORITY UNLESS SUCH EVIDENCE HAS BEEN PREVIOUSLY FURNISHED TO THE ISSUING OFFICE. IF SATISFACTORY EVIDENCE OF AN AGENT'S AUTHORITY TO ACT IS NOT FURNISHED WITH THE EXECUTED BID, THE GOVERNMENT AGENCY NECESSARILY MUST CALL UPON THE BIDDER TO FURNISH PROOF THAT THE AGENT HAD THE REQUISITE AUTHORITY. AT THAT TIME, THE BIDDER, IN EFFECT, COULD BE SAID TO HAVE AN OPTION. IF HE WISHES TO ACCEPT THE AWARD, HE WILL PRODUCE THE EVIDENCE. ON THE OTHER HAND, IF HE DECIDES TO REJECT THE AWARD, HE CAN DO SO VERY SIMPLY BY NOT FURNISHING THE EVIDENCE. THUS, THE BIDDER WILL BE IN A POSITION TO MAKE AN ELECTION EITHER TO ABIDE BY ITS BID OR TO CLAIM THAT IT WAS SUBMITTED IN ERROR BY A PERSON WITHOUT AUTHORITY TO ENTER INTO CONTRACTS ON ITS BEHALF. SEE 34 COMP. GEN. 439.

WE HAVE CONSISTENTLY TAKEN THE POSITION THAT A BIDDER MAY NOT HAVE MORE THAN ONE CHANCE UNDER THE SAME ADVERTISEMENT. FOR EXAMPLE, AS WE HELD IN 34 COMP. GEN. 82 "CONDITIONS OR RESERVATIONS WHICH GIVE A BIDDER A CHANCE TO SECOND-GUESS HIS COMPETITORS AFTER BID-OPENING MUST BE REGARDED AS FATAL TO THE BID.'

REGARDING YOUR CONTENTION THAT THE BUYER WAS ADVISED VERBALLY OF THE MANUFACTURER-BIDDER RELATIONSHIP PRIOR TO THE BID OPENING AND AGAIN IN PERSON DURING A CONFERENCE WITH THE BUYER AND OTHER PERSONNEL AT EDGEWOOD ARSENAL, THE CONTRACTING OFFICER HAS ADVISED THAT THE VERBAL ADVICE WAS BY TELEPHONE PRIOR TO BID OPENING IN A CONVERSATION BETWEEN THE BUYER AND MR. YUROWSKI. THE CONTRACTING OFFICER ALSO STATED THAT MR. YOROWSKI MADE NO INQUIRY AT THAT TIME CONCERNING THE SUBMISSION OF EVIDENCE ESTABLISHING HIS AUTHORITY AND THAT THE CONFERENCE WITH MR. MURPHY AND OTHER PERSONNEL AT EDGEWOOD ARSENAL WAS HELD AFTER BID OPENING. THUS, UNDER THESE CIRCUMSTANCES, EVIDENCE OF THE AGENT'S AUTHORITY WOULD NOT BE ACCEPTABLE AFTER BID OPENING.

ACCORDINGLY, THE REJECTION OF THE BID FOR FAILURE TO COMPLY WITH THE REQUIREMENTS OF THE INVITATION WAS LEGALLY REQUIRED.