B-166601, JUN. 27, 1969, 48 COMP. GEN. 801

B-166601: Jun 27, 1969

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

ONLY BID RECEIVED THE REJECTION OF THE ONLY BID RECEIVED BEFORE BID OPENING BECAUSE IT WAS NOT SIGNED WAS NOT REQUIRED BY PARAGRAPH 2-450 OF THE ARMED SERVICES PROCUREMENT REGULATION. THE REPRESENTATIVE WHO HAD DELIVERED THE BID SHOULD HAVE BEEN PERMITTED TO SIGN IT. NOT ON THE BASIS THAT HIS AUTHORITY TO BIND THE BIDDER WAS KNOWN OR MADE OBVIOUS BY HIS CONDUCT. BECAUSE THE BID WAS THE ONLY ONE RECEIVED AND NEITHER THE QUESTION OF BIDDER OPTION TO ELECT AFTER BID OPENING WHETHER OR NOT TO BE BOUND. NOR THE QUESTION OF PREJUDICE TO OTHER BIDDERS WERE INVOLVED. 1969: REFERENCE IS MADE TO YOUR TELEGRAMS OF APRIL 3 AND 9. THE ABOVE INVITATION WAS ISSUED ON FEBRUARY 5. THE SPECIFIED BID OPENING TIME WAS 10:30 A.M.

B-166601, JUN. 27, 1969, 48 COMP. GEN. 801

BIDS--UNSIGNED--ONLY BID RECEIVED THE REJECTION OF THE ONLY BID RECEIVED BEFORE BID OPENING BECAUSE IT WAS NOT SIGNED WAS NOT REQUIRED BY PARAGRAPH 2-450 OF THE ARMED SERVICES PROCUREMENT REGULATION, BUT THE REPRESENTATIVE WHO HAD DELIVERED THE BID SHOULD HAVE BEEN PERMITTED TO SIGN IT, NOT ON THE BASIS THAT HIS AUTHORITY TO BIND THE BIDDER WAS KNOWN OR MADE OBVIOUS BY HIS CONDUCT, BUT BECAUSE THE BID WAS THE ONLY ONE RECEIVED AND NEITHER THE QUESTION OF BIDDER OPTION TO ELECT AFTER BID OPENING WHETHER OR NOT TO BE BOUND, NOR THE QUESTION OF PREJUDICE TO OTHER BIDDERS WERE INVOLVED--- THE ONLY OTHER BID RECEIVED BEING AN ACCEPTABLE LATE BID SUBMITTED AT A HIGHER PRICE. THEREFORE, THE UNSIGNED BID MUST NOW BE TREATED AS IF PERMISSION TO SIGN IT HAD BEEN GIVEN AND THE BID MAY BE CONSIDERED FOR AWARD.

TO THE MURDOCK, INC; JUNE 27, 1969:

REFERENCE IS MADE TO YOUR TELEGRAMS OF APRIL 3 AND 9, 1969, AND SUBSEQUENT CORRESPONDENCE, PROTESTING AGAINST FAILURE OF THE U.S. NAVY PURCHASING OFFICE, WASHINGTON, D.C; TO AWARD YOUR COMPANY A CONTRACT UNDER INVITATION FOR BIDS (IFB) NO. N00600-69-B-0313.

THE ABOVE INVITATION WAS ISSUED ON FEBRUARY 5, 1969, AND CALLED FOR THE FURNISHING OF ONE FORMING PRESS. THE SPECIFIED BID OPENING TIME WAS 10:30 A.M; FEBRUARY 27, 1969. PRIOR TO BID OPENING, AT APPROXIMATELY 9:30 A.M. FEBRUARY 27, A MR. BOGUMIL, DIRECTOR OF MANUFACTURING OF CHISHOLM-RYDER COMPANY, INC; VISITED THE OFFICE OF MR. EMANUAL WOLF, THE NAVY PURCHASING OFFICE (NPO) BUYER COGNIZANT OF THE SUBJECT SOLICITATION. MR. BOGUMIL DISPLAYED TWO BID PACKAGES TO MR. WOLF AND STATED THAT HIS PURPOSE IN VISITING THE NPO WASHINGTON OFFICE WAS TO DEPOSIT A BID ON THE PRESENT SOLICITATION AS WELL AS A SECOND SOLICITATION. HE ALSO INDICATED TO MR. WOLF THAT SINCE K. R. WILSON DIVISION OF CHISHOM-RYDER COMPANY, INC; WAS OPERATING BELOW CAPACITY AND WAS ANXIOUS TO RECEIVE NEW CONTRACTS, HE HAD BID LOW ON THE SUBJECT SOLICITATION AND WAS SURE THAT K. R. WILSON WOULD BE THE SUCCESSFUL BIDDER. MR. BOGUMIL DEPARTED AT 10:15 A.M. INDICATING THAT HE PLANNED TO DEPOSIT THE BIDS AND ATTEND THE BID OPENING. AT BID OPENING TIME K. R. WILSON DIVISION'S BID OF $45,750 WAS THE ONLY BID RECEIVED AND OPENED. HOWEVER, IT WAS DISCOVERED THAT, WHILE THE NAME "H. W. SCHUYLER, COMPTROLLER," WAS TYPED IN THE BLOCK ENTITLED "NAME AND TITLE OF PERSON AUTHORIZED TO SIGN OFFER," THERE WAS NO SIGNATURE NOR WAS THERE A SIGNATURE ANYWHERE ELSE ON THE BID.

GOVERNMENT REPRESENTATIVES AT THE BID OPENING INFORMED MR. BOGUMIL, WHO WAS PRESENT, THAT SINCE THE BID WAS UNSIGNED IT COULD NOT BE CONSIDERED FOR AWARD. MR. BOGUMIL REQUESTED PERMISSION TO SIGN THE BID, BUT WAS TOLD BY BID OPENING OFFICIALS THAT SINCE THE TIME FOR SUBMISSION OF BIDS HAD PASSED HE COULD NOT BE PERMITTED TO SIGN THE BID. MR. BOGUMIL THEN RETURNED TO THE OFFICE OF MR. WOLF, EXPLAINED TO MR. WOLF THAT THE BID HAD NOT BEEN SIGNED AND REQUESTED THAT THE BID BE CONSIDERED IN SPITE OF THE ABSENCE OF A SIGNATURE. LATER IN THE DAY A SECOND BID WAS RECEIVED FROM MURDOCK IN THE AMOUNT OF $55,579, HOWEVER WE UNDERSTAND THAT THE BUYER WAS NOT ADVISED UNTIL THE FOLLOWING DAY THAT A LATE BID HAD BEEN RECEIVED. AFTER AN INVESTIGATION IT WAS DETERMINED THAT MURDOCK'S BID HAD BEEN SENT BY CERTIFIED MAIL AND THAT THE LATENESS HAD BEEN DUE SOLELY TO A DELAY IN THE MAIL. THIS DETERMINATION APPEARS TO HAVE BEEN MADE ON MARCH 10, AT WHICH TIME THE BID WAS FORWARDED TO THE BUYER, WAS OPEND, AND WAS ENTERED ON THE ABSTRACT.

MR. WOLF AS WELL AS MR. WILLIAM R. COOPER, ANOTHER NPO BUYER, STATED THAT THEY HAD HAD PREVIOUS DEALINGS WITH MR. BOGUMIL AND WERE UNDER THE IMPRESSION THAT HE HAD THE AUTHORITY TO BIND THE CHRISHOLM RYDER CORPORATION CONTRACTUALLY, AND THAT HIS COMMITMENTS HAD ALWAYS BEEN CONFIRMED BY IT. IT DOES NOT APPEAR FROM THE RECORD, HOWEVER, THAT EITHER MR. WOLF OR MR. COOPER HAD ANY OTHER NOTICE, WRITTEN OR ORAL, OF MR. BOGUMIL'S AUTHORITY TO BIND THE CORPORATION IN CONTRACT MATTERS, OR THAT HE HAD IN FACT EVER SIGNED FORMAL CONTRACTUAL DOCUMENTS ON ITS BEHALF, ALL OF THE COMMITMENTS WHICH THEY REFERRED TO AS HAVING BEEN CONFIRMED BY THE COMPTROLLERS OF THE RESPECTIVE DIVISIONS HAVING BEEN ORAL.

AFTER BID OPENING K. R. WILSON DIVISION SUBMITTED A COPY OF A LETTER OF FEBRUARY 9, 1965, ADDRESSED TO THE NEW YORK PROCUREMENT DISTRICT, ROCHESTER REGIONAL OFFICE, BY CHISHOLM-RYDER, WHICH STATED THAT MR. BOGUMIL WAS AUTHORIZED TO SIGN FOR ANY AND ALL DIVISIONS OF CHISHOLM RYDER. ALSO, BY LETTER OF APRIL 25, 1969, ADDRESSED TO NPO, THE PRESIDENT OF CHISHOLM-RYDER STATED THAT MR. BOGUMIL HAS THE AUTHORITY TO SIGN QUOTATIONS AND TO NEGOTIATE CONTRACTS FOR THE CHISHOLM-RYDER, COMPANY, INC; AND ITS DIVISIONS. IN THEIR TELEGRAM OF JUNE 4, 1969, TO THIS OFFICE, K. R. WILSON DIVISION REAFFIRMED THIS AUTHORITY. OF COURSE, THE LATTER COMMUNICATIONS, HAVING BEEN WRITTEN AFTER BID OPENING, WOULD HAVE NO PROBATIVE VALUE TO ESTABLISH THAT ACCEPTANCE OF THE BID AS SUBMITTED WOULD HAVE BOUND THE CORPORATION, SINCE WE HAVE HELD THAT THE RESPONSIVENESS OF A BID MAY NOT BE ESTABLISHED BY MATERIAL FURNISHED BY THE BIDDER AFTER BID OPENING. 38 COMP. GEN. 819. NEITHER DOES IT APPEAR THAT THE CONTRACTING OFFICIALS WERE ON NOTICE OF THE 1965 STATEMENT TO THE NEW YORK PROCUREMENT DISTRICT.

IT IS THE PROCURING ACTIVITY'S CONENTION THAT GOVERNMENT REPRESENTATIVES (THE BUYERS MENTIONED ABOVE) WERE AWARE, PRIOR TO BID OPENING, THAT MR. BOGUMIL WAS AUTHORIZED TO BIND THE BIDDER TO A CONTRACT. ADDITIONALLY, IT IS STATED THAT MR. BOGUMIL'S EXPRESSIONS TO MR. WOLF, PRIOR TO OPENING, OF HIS CONFIDENCE OF RECEIVING THE AWARD ON THE PRESENT PROCUREMENT CONSTITUTED A CLEAR EXPRESSION OF AN INTENTION TO BE BOUND BY THE UNSIGNED BID. CONSEQUENTLY, IT IS CONTENDED THAT IN VIEW OF THE CIRCUMSTANCES SURROUNDING THE BID SUBMISSION, K. R. WILSON DIVISION WOULD BE UNABLE TO DISAVOW THE BID AND UPSET AN AWARD MADE TO IT ON THE GROUND THAT THE BID LACKED AN AUTHORIZED SIGNATURE. THEREFORE, THE ACTIVITY CONSIDERS THE ABSENCE OF A SIGNATURE TO BE MERELY A MINOR INFORMALITY WHICH MAY BE WAIVED PURSUANT TO ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2-405 (III) (B), AND PROPOSES TO MAKE AWARD TO K. R. WILSON DIVISION.

ACCORDING TO ASPR 2-405 THE CONTRACTING OFFICER SHALL GIVE THE BIDDER AN OPPORTUNITY TO CORRECT THE FAILURE TO SIGN A BID OR WAIVE SUCH DEFICIENCY, BUT ONLY IF---

(B) THE UNSIGNED BID IS ACCOMPANIED BY OTHER MATERIAL INDICATING THE BIDDER'S INTENTION TO BE BOUND BY THE UNSIGNED BID DOCUMENT SUCH AS THE SUBMISSION OF A BID GUARANTEE WITH BID, OR A LETTER SIGNED BY THE BIDDER WITH THE BID REFERRING TO AND CLEARLY IDENTIFYING THE BID ITSELF.

THE ABOVE CITED REGULATION IS IN ACCORD WITH THE DECISIONS OF OUR OFFICE IN WHICH WE HAVE HELD THAT UNSIGNED BIDS MAY NOT BE CONSIDERED FOR AWARD UNLESS THE BID IS ACCOMPANIED BY DOCUMENTARY OR OTHER EVIDENCE SHOWING A CLEAR INTENT TO SUBMIT A BID. 17 COMP. GEN. 497; 36 ID. 523; B-158607, APRIL 21, 1966. WHEN, AS IN THE PRESENT CASE, THE DOCUMENTRY EVIDENCE IS NOT PRESENT AND THE BID MERELY CONTAINS THE PRINTED NAME AND ADDRESS OF A COMPANY AND A REPRESENTATIVE OF THE COMPANY, OUR OFFICE HAS HELD THAT THE BID SHOULD BE REJECTED. THE REASON FOR THIS IS THAT WHEN A BID IS NOT SIGNED, AND THERE IS NO OTHER CLEAR INDICATION IN THE BID SUBMISSION THAT THE PURPORTED BIDDER INTENDED TO SUBMIT THE BID, THE CONTRACTING OFFICER CANNOT BE SURE THAT THE BID WAS SUBMITTED BY SOMEONE WITH AUTHORITY TO BIND THE BIDDER, AND THE ACCEPTANCE OF SUCH A BID MAY NOT AUTOMATICALLY OBLIGATE THE NAMED BIDDER. 34 COMP. GEN. 439; B-151724, JULY 15, 1963. THE ACTUAL TEST OF WHETHER FAILURE TO SIGN A BID MAY BE WAIVED IS WHETHER THE BID AS SUBMITTED WILL EFFECT A BINDING CONTRACT UPON ITS ACCEPTANCE WITHOUT RESORT TO THE BIDDER FOR CONFIRMATION OF ITS INTENTION. B-160125, NOVEMBER 25, 1966; AND B-157637, OCTOBER 27, 1965.

IT IS APPARENT, HOWEVER, THAT BOTH THE REGULATION AND THE DECISIONS CITED ABOVE ARE DIRECTED TO PREVENTING A BIDDER FROM ELECTING, AFTER BIDS HAVE BEEN OPENED AND PRICES HAVE BEEN REVEALED, WHETHER HE WILL ACKNOWLEDGE OR DENY THE BID, SINCE SUCH AN OPTION WOULD GIVE THE BIDDER AN UNFAIR ADVANTAGE OVER OTHER BIDDERS WHOSE BID PRICES WERE REVEALED AT BID OPENING. B-157637, OCTOBER 27, 1965; B-148235, MARCH 23, 1962; B-144470, MARCH 14, 1961.

CONVERSELY, WHERE ONLY ONE BID IS RECEIVED, AND THAT BID IS FOUND UPON BID OPENING TO BE UNSIGNED, WE SEE NO REASON WHY THE BID SHOULD BE REJECTED. CLEARLY, SINCE IN THAT SITUATION THERE ARE NO OTHER BIDDERS, IT WOULD NOT BE UNFAIR TO ASK THE BIDDER WHETHER HE INTENDS TO BE BOUND BY HIS BID, OR TO PERMIT HIM TO SIGN THE BID AFTER BID OPENING. SUCH WAS THE POSITION CHISHOLM-RYDER COMPANY WAS IN FROM THE TIME ITS BID WAS OPENED UNTIL THE TIME MURDOCK'S LATE BID WAS RECEIVED AND OPENED. DURING THAT TIME, MR. BOGUMIL REPEATEDLY ADVISED THAT THE COMPANY INTENDED TO BE BOUND BY ITS BID, AND HE OFFERED TO SIGN THE BID FOR THE COMPANY. IN SO DOING WE MUST ASSUME HE ALSO REPRESENTED THAT HE WAS AUTHORIZED TO SIGN THE BID AND THAT HIS SIGNATURE WOULD IN FACT BIND THE COMPANY. THAT SUCH WAS, IN FACT THE CASE WOULD APPEAR TO BE ESTABLISHED BY A LETTER DATED FEBRUARY 9, 1965, FROM THE PRESIDENT OF CHISHOLM-RYDER COMPANY TO THE ROCHESTER REGIONAL OFFICE, NEW YORK PROCUREMENT DISTRICT, WHICH READS AS FOLLOWS:

IN RESPONSE TO YOUR RECENT REQUEST, WE ADVISE THAT THE FOLLOWING INDIVIDUALS, UNTIL FURTHER NOTICE, ARE AUTHORIZED TO SIGN AND COMMIT THE RESPECTIVE DIVISIONS OF CHISHOLM-RYDER COMPANY, INC. TO CONTACT CIVILIAN AND MILITARY:

PREMAX DIVISION--------------------------- M. A. FINLEY

JOHN V. MAGLIO

K. R. WILSON DIVISION--------------------- H. W. SCHUYLER

CHARLES B. ATWELL

PUNCH PRODUCTS CORPORATION---------------- R. L. STEFANO

RALPH WELSBECK IN ADDITION TO THE ABOVE INDIVIDUALS, MR. WALTER A. BOGUMIL WHO IS WORKS MANAGER OF CHISHOLM-RYDER COMPANY, INC; IS AUTHORIZED TO SIGN FOR ANY AND ALL DIVISIONS OR AFFILIATES.

WE DO NOT, HOWEVER, CONSIDER THE QUESTION OF WHETHER MR. BOGUMIL HAD THE AUTHORITY TO SIGN THE BID, OR WHTHER THE NAVY PROCUREMENT OFFICIALS WERE AWARE OF SUCH AUTHORITY, AS BEING DISPOSITIVE OF THE QUESTION OF WHETHER MR. BOGUMIL SHOULD HAVE BEEN PERMITTED TO SIGN THE BID, OR WHETHER OTHER ACTION TO CONFIRM THE COMPANY'S INTENT TO BE BOUND SHOULD HAVE BEEN PERMITTED. OBVIOUSLY, IF MR. BOGUMIL HAD BEEN PERMITTED TO SIGN THE BID WHEN HE FIRST ASKED TO DO SO, NO UNFAIR ADVANTAGE WOULD HAVE RESULTED TO HIS COMPANY, OR AGAINST MURDOCK, WHOSE LATE BID HAD NOT YET BEEN RECEIVED. IF THE PROCURING OFFICIALS CONSIDERED ASSURANCE, OTHER THAN MR. BOGUMIL'S SIGNATURE, NECESSARY TO BIND CHISHOLM-RYDER COMPANY IN THE EVENT ITS BID WAS ACCEPTED, THEY COULD, AND SHOULD, HAVE REQUESTED SUCH ADDITIONAL ASSURANCE FROM THE COMPANY EITHER BEFORE OR AFTER MR. BOGUMIL SIGNED THE BID.

BASED UPON THE PRESENT RECORD, THERE IS NO DOUBT THAT THE COMPANY WOULD HAVE ACKNOWLEDGED MR. BOGUMIL'S AUTHORITY TO SIGN THE BID AND BIND THE COMPANY. HOWEVER, EVEN IF THE COMPANY HAD DENIED MR. BOGUMIL'S AUTHORITY TO SIGN AND HAD REFUSED TO ACCEPT AN AWARD, WE FAIL TO SEE HOW THE GOVERNMENT WOULD HAVE BEEN IN ANY WORSE POSITION THAN WHEN IT DECLINED TO LET MR. BOGUMIL SIGN, OR HOW CHISHOLM-RYDER COMPANY'S REFUSAL TO ACCEPT AN AWARD WOULD BE UNFAIR TO MURDOCK, SINCE SUCH REFUSAL WOULD PLACE MURDOCK IN AN UNDISPUTED POSITION TO RECEIVE THE AWARD AT ITS HIGHER BID PRICE.

IN VIEW OF THE FOREGOING, IT IS OUR OPINION THAT MR. BOGUMIL SHOULD HAVE BEEN PERMITTED TO SIGN THE BID IMMEDIATELY AFTER BID OPENING, AND THAT THE BID MUST NOW BE TREATED IN THE SAME MANNER AS IT WOULD IF MR. BOGUMIL HAD BEEN PERMITTED TO SIGN IT. SINCE IT APPEARS THAT SUCH ACTION WOULD IN FACT HAVE BOUND CHISHOLM-RYDER COMPANY TO ACCEPT AN AWARD, WE ARE ADVISING THE SECRETARY OF THE NAVY THAT WE AGREE WITH THE POSITION OF THE NAVAL SUPPLY SYSTEMS COMMAND THAT SUCH AN AWARD SHOULD NOW BE MADE.