B-167039, JUL. 16, 1969

B-167039: Jul 16, 1969

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BID PROTEST - PROPRIETY OF SIGNATURE OF AGENT FOR NEWLY FORMED CORPORATION DECISION TO SECRETARY OF THE NAVY CONCERNING PROPRIETY OF PROPOSED REJECTION OF LOW BID OF JARDINE ENTERPRISES BECAUSE IT WAS SIGNED BY AN AGENT FOR A PRINCIPAL WITHOUT LEGAL CAPACITY. IS NOT WARRANTED. SECRETARY: REFERENCE IS MADE TO A LETTER DATED JUNE 6. WHICH WERE THE LOWEST RECEIVED. WERE SIGNED IN THE NAME OF ANTHONY JARDINE. WHOSE TITLE WAS LISTED IN THE APPROPRIATE PLACES ON THE RESPECTIVE BIDS AS "PRESIDENT.'. JARDINE ENTERPRISES CERTIFIED THAT IT WAS A PARTNERSHIP. WERE SUBMITTED. ALTHOUGH SUCH FORMAL INCORPORATION WAS ACCOMPLISHED ON APRIL 29. THE FOLLOWING TELEGRAM WAS DISPATCHED BY THE CONTRACTING OFFICE TO JARDINE ENTERPRISES: "INFO MADE AVAILABLE TO THE CONTRACTING OFFICER AT NSPCC.

B-167039, JUL. 16, 1969

BID PROTEST - PROPRIETY OF SIGNATURE OF AGENT FOR NEWLY FORMED CORPORATION DECISION TO SECRETARY OF THE NAVY CONCERNING PROPRIETY OF PROPOSED REJECTION OF LOW BID OF JARDINE ENTERPRISES BECAUSE IT WAS SIGNED BY AN AGENT FOR A PRINCIPAL WITHOUT LEGAL CAPACITY, IS NOT WARRANTED.

TO MR. SECRETARY:

REFERENCE IS MADE TO A LETTER DATED JUNE 6, 1969, WITH ENCLOSURES, FROM THE DEPUTY COMMANDER, PURCHASING, NAVAL SUPPLY SYSTEMS COMMAND, FILE SUP 0232A, CONCERNING THE PROTEST OF JARDINE ENTERPRISES AGAINST THE REJECTION OF THAT FIRM'S BIDS UNDER INVITATIONS FOR BIDS NOS. N00104-69-B-1676, - 1677, -1847, -1861, -1868, -1953, AND -2075, ISSUED BY THE NAVY SHIPS PARTS CONTROL CENTER, MECHANICSBURG, PENNSYLVANIA, ON THE GROUND THAT THE FIRM HAD NO "LEGAL CAPACITY.'

THE BIDS SUBMITTED BY JARDINE ENTERPRISES ON THE SUBJECT INVITATIONS, WHICH WERE THE LOWEST RECEIVED, WERE SIGNED IN THE NAME OF ANTHONY JARDINE, WHOSE TITLE WAS LISTED IN THE APPROPRIATE PLACES ON THE RESPECTIVE BIDS AS "PRESIDENT.' ON PAGE 2 OF STANDARD FORM 33, ATTACHED TO EACH OF THE SUBJECT BIDS, JARDINE ENTERPRISES CERTIFIED THAT IT WAS A PARTNERSHIP. AT THE TIME THE RESPECTIVE BIDS, CONTAINING OPENING DATES RANGING FROM MARCH 9, 1969, THROUGH APRIL 9, 1969, WERE SUBMITTED, JARDINE ENTERPRISES HAD NOT BEEN FORMALLY INCORPORATED IN ACCORDANCE WITH PENNSYLVANIA LAW, ALTHOUGH SUCH FORMAL INCORPORATION WAS ACCOMPLISHED ON APRIL 29, 1969.

ON APRIL 25, 1969, THE FOLLOWING TELEGRAM WAS DISPATCHED BY THE CONTRACTING OFFICE TO JARDINE ENTERPRISES:

"INFO MADE AVAILABLE TO THE CONTRACTING OFFICER AT NSPCC, MECH. PA. INDICATES JARDINE ENTERPRISES IS NOT REGISTERED WITH THE PA DEPT OF STATE CORP. BUREAU OR THE BUCKS COUNTY PROTHONOTARY'S OFFICE. IT IS THEREFORE CONCLUDED THAT JARDINE ENTERPRISES IS NOT A LEGAL ENTITY. ACCORDINGLY, ALL BIDS WILL BE REJECTED UNLESS EVIDENCE OF LEGAL ENTITY IS SUBMITTED BY WEDNESDAY, APRIL 30, 1969.'

THE "INFORMATION" REFERRED TO BY THE TELEGRAM CONSISTED OF LETTERS FROM RAILWAY SPECIALTIES CORPORATION TO THE CONTRACTING OFFICIALS TO THE EFFECT THAT ANTHONY JARDINE IN ADDITION TO BEING PRINCIPAL OFFICER OF JARDINE ENTERPRISES WAS ALSO THE PRINCIPAL OFFICER OF AMERICAN METAL FABRICATORS CO., A COMPANY WHICH ALLEGEDLY "HAS BEEN INVOLVED IN NUMEROUS SITUATIONS WHICH HAVE PROVED TO BE VERY EMBARRASSING TO THE GOVERNMENT PROCUREMENT AGENCIES AND TO THE SMALL BUSINESS ADMINISTRATION.' THE LETTERS MAINTAINED THAT THE FIRM NAME "JARDINE ENTERPRISES" WAS A "FICTICIOUS NAME" OR AN "UNREGISTERED ALIAS" OF AMERICAN METAL FABRICATORS CO.

ON THE MORNING OF APRIL 30, 1969, ACCORDING TO THE ATTORNEY FOR JARDINE ENTERPRISES, THE CONTRACTING OFFICER WAS ADVISED THAT JARDINE ENTERPRISES HAD BEEN FORMALLY QUALIFIED AS A CORPORATION IN ACCORDANCE WITH THE LAWS OF THE STATE OF PENNSYLVANIA ON THE PREVIOUS DAY. THIS INFORMATION WAS DISREGARDED BY THE CONTRACTING OFFICER ON THE GROUND THAT SUCH INFORMATION COULD NOT PROPERLY BE SUPPLIED AFTER THE OPENING OF BIDS. BY LETTER DATED MAY 13, 1969, TO THE ATTORNEY FOR JARDINE ENTERPRISES, THE CONTRACTING OFFICER DETERMINED THAT THE JARDINE BIDS SHOULD BE REJECTED ON THE GROUNDS THAT THE BIDS HAD BEEN SIGNED BY AN AGENT FOR A PRINCIPAL HAVING NO LEGAL CAPACITY. NO AWARDS HAVE BEEN MADE ON THE SUBJECT BIDS PENDING A RESOLUTION BY OUR OFFICE OF THE ACCEPTABILITY OR NONACCEPTABILITY OF THE JARDINE BIDS.

FOR REASONS SET OUT BELOW, WE MUST CONCLUDE THAT THE JARDINE BIDS SHOULD NOT BE REJECTED ON THE BASIS THAT THEY WERE SIGNED BY AN AGENT FOR A PRINCIPAL HAVING NO LEGAL CAPACITY.

WHILE THE STATE OF PENNSYLVANIA HAS A FICTICIOUS NAME ACT, WHICH REQUIRES A FILING WITH THE STATE CORPORATION BUREAU OR WITH THE COUNTY PROTHONOTARY'S OFFICE BY CORPORATIONS DOING BUSINESS UNDER NAMES OTHER THAN THEIR CORPORATE NAMES, THE FILING REQUIREMENT OF THAT ACT, BY ITS TERMS, DOES NOT AFFECT THE VALIDITY OF CONTRACTS ENTERED INTO IN VIOLATION OF ITS REQUIREMENTS. FURTHER, THE RECORD DOES NOT REFLECT THAT JARDINE ENTERPRISES WAS A FICTICIOUS NAME FOR AMERICAN METAL FABRICATORS CO., BUT RATHER THAT JARDINE ENTERPRISES WAS AT THE TIME BIDS WERE SUBMITTED UNDER THE INSTANT INVITATIONS AN ENTITY SEPARATE FROM AMERICAN METAL FABRICATORS, CO., AS EVIDENCED BY ITS LATER INCORPORATION IN ACCORDANCE WITH THE LAWS OF PENNSYLVANIA.

THE RECORD, AS INDICATED BOTH BY THE LETTERS OF RAILWAY SPECIALTIES CORPORATION REFERRED TO ABOVE AND BY THE BRIEF SUBMITTED BY THE ATTORNEY FOR JARDINE ENTERPRISES, IN OUR OPINION, CLEARLY SHOWS THAT AT THE TIME OF BID SUBMISSION "JARDINE ENTERPRISES" AND ANTHONY JARDINE WERE ONE AND THE SAME. IN THIS REGARD IT WAS POINTED OUT THAT THE JARDINE BID LISTED THE HOME ADDRESS OF ANTHONY JARDINE AS THE PLACE OF BUSINESS OF JARDINE ENTERPRISES, THAT IT WAS THE INTENT OF ANTHONY JARDINE AT THE TIME OF BID OPENING TO FORM A CORPORATION OF WHICH HE WOULD BE PRESIDENT AND SOLE STOCKHOLDER, AND THAT SUCH A CORPORATION WAS THEREAFTER FORMED.

THERE IS NO INDICATION THAT A PARTNERSHIP EXISTED AT THE TIME THE BIDS WERE SUBMITTED, NOTWITHSTANDING THE CERTIFICATION TO THAT EFFECT IN THE BIDS, AS IT APPEARS THAT ANTHONY JARDINE ACTED ONLY IN HIS OWN BEHALF IN SUBMITTING HIS BIDS. ALSO, THERE WOULD SEEM TO BE LITTLE QUESTION THAT NO DE FACTO CORPORATION WAS IN EXISTENCE BECAUSE, WHILE THE INTENT ON THE PART OF ANTHONY JARDINE TO FORM A CORPORATION EXISTED AT THE TIME OF BID SUBMISSION, NO STEPS HAD BEEN TAKEN AT THAT TIME TO ACHIEVE CORPORATE STATUS.

IN THIS RESPECT, THE ATTORNEY FOR JARDINE ENTERPRISES STATED IN A LETTER DATED MAY 5, 1969, TO THE CONTRACTING OFFICER AS FOLLOWS:

"AT THE TIME HE SUBMITTED THE BID IN THE NAME -JARDINE ENTERPRISES ANTHONY JARDINE, PRESIDENT,- MR. JARDINE INTENDED TO FORM A CORPORATION BY THAT NAME OF WHICH HE WOULD BE PRESIDENT AND THE OWNER OF ALL OF THE ISSUED AND OUTSTANDING CAPITAL STOCK AND THAT SUCH CORPORATION WOULD BE THE CONTRACTOR IF THE BID PROVED SUCCESSFUL. HE SUBMITTED THE BID ON BEHALF OF THE CORPORATION TO BE FORMED BY HIM.'

ACCORDINGLY, IT APPEARS THAT AT THE TIME BIDS WERE SUBMITTED JARDINE ENTERPRISES WAS A SOLE PROPRIETORSHIP AND THAT BIDS SIGNED BY ANTHONY JARDINE WERE THEREFORE SIGNED BY HIM AS PRINCIPAL RATHER THAN AS AGENT WITH THE RESULT THAT HE WOULD BE PERSONALLY LIABLE ON ANY CONTRACTS AWARDED TO JARDINE ENTERPRISES. IN OUR OPINION, REJECTION OF THE BIDS IN QUESTION, ON THE BASIS THAT THE SIGNER IS AGENT FOR A PRINCIPAL WITHOUT LEGAL CAPACITY, IS NOT WARRANTED.

ACCORDINGLY, WE CONCLUDE THAT ON THE BASIS OF THE PRESENT RECORD, THE BIDS MAY BE CONSIDERED FOR AWARD IF OTHERWISE PROPER.