B-168055, JAN. 28, 1970

B-168055, JAN. 28, 1970

BID PROTEST--BIDDER RESPONSIBILITY--RECEIVERSHIP DECISION SUSTAINING ONE OF NOVEMBER 26, 1969, DENYING PROTEST OF SQUARE DEAL TRUCKING CO; INC; AGAINST AWARD TO BALDWIN TRASH CO. BY NASA. A LOW BIDDER WHOSE CORPORATE BUSINESS WAS IN RECEIVERSHIP AND A RECEIVER HAD BEEN APPOINTED "TO CONTINUE, MANAGE AND OPERATE THE BUSINESS" DOES NOT HAVE TO HAVE BID REJECTED FOR LACK OF IDENTITY SINCE THERE WAS SUFFICIENT IDENTITY BETWEEN CORPORATION AND SAME CORPORATION UNDER COURT-APPOINTED RECEIVER. SINCE FORMER PRESIDENT OF CORPORATION HAD AUTHORITY TO SUBMIT BIDS HIS SIGNATURE ON BID IS JUST AS BINDING AS IF SIGNED BY THE RECEIVER.

TO MR. ALEXANDER BOSKOFF:

REFERENCE IS MADE TO YOUR LETTERS DATED NOVEMBER 26, AND 28 AND DECEMBER 9, 1969, REQUESTING RECONSIDERATION OF OUR DECISION, B 168055, DATED NOVEMBER 26, 1969, WHICH DENIED THE PROTEST OF THE SQUARE DEAL TRUCKING COMPANY, INCORPORATED, AGAINST ANY AWARD OF CONTRACT TO BALDWIN TRASH COMPANY UNDER ADVERTISED SOLICITATION NO. S 58213/663, ISSUED AUGUST 27, 1969, BY THE NATIONAL AERONAUTICS AND SPACE ADMINISTRATION, GODDARD SPACE FLIGHT CENTER, FOR THE PERFORMANCE OF TRASH AND DEBRIS REMOVAL SERVICES DURING A PERIOD OF ONE YEAR COMMENCING ON NOVEMBER 1, 1969.

THE FACTS AND CIRCUMSTANCES ARE SET FORTH FULLY IN OUR DECISION OF NOVEMBER 26, 1969, AND NEED NOT BE REPEATED HERE. WE HELD IN THE DECISION THE FACTS SHOWED THAT THE BALDWIN TRASH COMPANY CONTINUED OPERATIONS UNDER THE SAME MANAGEMENT AFTER THE RECEIVER WAS APPOINTED, AND THAT THE GOVERNMENT HAD BEEN GIVEN NOTICE OF THE ACTUAL AUTHORITY DELEGATED TO MR. BALDWIN WHO SIGNED THE BID AS PRESIDENT, IN CONNECTION WITH THE CONSIDERATION OF A PRIOR BID. WE HELD THAT THE FAILURE TO FURNISH EVIDENCE OF HIS AUTHORITY TO SIGN BIDS AT THE TIME OF BID OPENING UNDER THIS SOLICITATION MIGHT BE WAIVED AS A MINOR INFORMALITY OR IRREGULARITY IN BID PURSUANT TO THE PROVISIONS OF PARAGRAPH 10(B) OF STANDARD FORM 33A, MADE A PART OF THE SOLICITATION, AND SECTION 1-2.405 OF THE FEDERAL PROCUREMENT REGULATIONS. IN ADDITION, BECAUSE OF THE ADMINISTRATIVE PROBLEMS WHICH HAD ARISEN, WE ADVISED THE RECEIVER FOR THE BALDWIN TRASH COMPANY THAT FUTURE BIDS BY THE COMPANY MUST EITHER BE SIGNED BY THE RECEIVER OR, IF SIGNED BY MR. BALDWIN, BE ACCOMPANIED BY CURRENT EVIDENCE OF HIS AUTHORITY TO ACT FOR THE RECEIVER.

ESSENTIALLY YOUR LETTERS RESTATE YOUR PRIOR POSITION IN THIS MATTER THAT WITHOUT EVIDENCE OF AUTHORITY KNOWN TO THE AGENCY AT THE TIME OF BID OPENING, ONLY THE RECEIVER COULD PROPERLY SIGN THE BID. ADDITIONALLY, IN THE CONFERENCE DATED DECEMBER 5, 1969, AND YOUR LETTER DATED DECEMBER 9, 1969, YOU RAISED THE QUESTION WHETHER THE FAILURE IN THE BID TO DISCLOSE THAT THE BALDWIN TRASH CORPORATION WAS THEN OPERATING IN RECEIVERSHIP, RATHER THAN IN ITS PRIOR CORPORATE CAPACITY, DOES NOT MAKE THE BID NONRESPONSIVE. IN THE CIRCUMSTANCES OF THIS CASE WE DO NOT THINK SO.

THE RECEIVER IN THIS CASE WAS AUTHORIZED BY THE COURT "TO CONTINUE, MANAGE AND OPERATE THE BUSINESS OF THE BALDWIN TRASH COMPANY", WITH THE SPECIFIC AUTHORITY TO EMPLOY AGENTS TO OPERATE THE BUSINESS. ADMITTEDLY, THE STATUS OF THE CORPORATION IN RECEIVERSHIP MAY BE DIFFERENT FROM THE STATUS OF THE CORPORATION PRIOR TO THE RECEIVERSHIP SINCE IT IS GENERALLY RECOGNIZED THAT A CORPORATION CANNOT ACT IN ITS CORPORATE CAPACITY INDEPENDENTLY OF ITS RECEIVER. SEE TEXAS MUTUAL INSURANCE COMPANY V. STUTES, (1954),77 SO. 2ND 43. HOWEVER, IN THE INSTANT CASE, THE COURT PLACED THE RECEIVER IN AN ACTIVE CAPACITY APPOINTED TO CONTINUE THE BUSINESS RATHER THAN TO SERVE AS A PASSIVE RECEIVER, APPOINTED MERELY TO CONSERVE THE PROPERTY. SEE, GENERALLY, SECTION 7813 OF FLETCHER CYCLOPEDIA, CORPORATIONS, PERMANENT EDITION, VOLUME 16.

THE DIFFERENCE IN CORPORATE STATUS INVOLVES, WE THINK, A QUESTION NOT OF RESPONSIVENESS OF THE BID, BUT OF THE RESPONSIBILITY OF THE BIDDER. CORPORATION MAY BE INSOLVENT, EVEN THOUGH NOT IN RECEIVERSHIP, BUT THIS WOULD NOT PRECLUDE IT FROM BIDDING ON GOVERNMENT PROCUREMENTS. THE DETERMINATION OF A BIDDER'S RESPONSIBILITY MUST BE MADE BY THE CONTRACTING OFFICER BEFORE HE MAKES AWARD, AND WHETHER HE DOES OR NOT MAKE AN ADEQUATE INVESTIGATION OF THIS HAS NO BEARING ON THE RESPONSIVENESS OF THE BID SUBMITTED. THERE IS, IN OUR OPINION, SUFFICIENT IDENTITY BETWEEN THE BALDWIN TRASH COMPANY, INCORPORATED, AND THE SAME CORPORATION UNDER THE MANAGEMENT OF A RECEIVER APPOINTED BY THE COURT SPECIFICALLY TO CONTINUE THAT BUSINESS TO RESOLVE ANY DOUBTS ABOUT THE "IDENTITY" OF THE BIDDER FOR PURPOSES OF FEDERAL PROCUREMENT.

THE FOREGOING ASSUMES, OF COURSE, THAT ANY BID SUBMITTED BY THE CORPORATION IN RECEIVERSHIP HAS IN FACT BEEN AUTHORIZED BY THE RECEIVER. THE RECEIVER IN THIS CASE, UNDER AUTHORITY BY THE COURT TO EMPLOY AGENTS TO OPERATE THE BUSINESS, RETAINED THE PRESIDENT OF THE CORPORATION TO CONTINUE MANAGERIAL DUTIES IN THE GENERAL SCOPE OF THE BUSINESS ENTRUSTED TO HIS CARE. THE RECEIVER ON MAY 16, 1969, AUTHORIZED MR. BALDWIN, THE PRESIDENT OF THE CORPORATION, TO SUBMIT BIDS ON GOVERNMENT CONTRACTS. MR. BALDWIN ACTED UNDER THIS AUTHORITY IN SUBMITTING A BID IN THE PRESENT CASE. WE DO NOT DISAGREE WITH YOUR CONTENTION THAT MR. BALDWIN COULD NOT OBLIGATE THE CORPORATION OR THE CORPORATE "ESTATE" IN THE ABSENCE OF AUTHORITY FROM THE RECEIVER TO DO SO.

THE FACT REMAINS THAT HE HAD BEEN GIVEN SUCH AUTHORITY IN MAY 1969, AND THAT HIS SIGNATURE ON THE BID IN THE PRESENT CASE IN SEPTEMBER 1969 WAS JUST AS BINDING ON THE CORPORATION OR THE CORPORATE "ESTATE" AS IF THE BID HAD BEEN SIGNED BY THE RECEIVER, UNLESS HIS AUTHORITY HAD BEEN REVOKED PRIOR TO THIS BID. EVEN IF MR. BALDWIN'S AUTHORITY HAD BEEN REVOKED, WE HAVE BEEN CITED NO AUTHORITY TO ESTABLISH THAT SUCH A REVOCATION WOULD BE EFFECTIVE WITHOUT NOTICE OF THAT FACT AT LEAST TO THOSE AGENCIES OF THE GOVERNMENT TO WHICH THE BALDWIN TRASH COMPANY HAD SUBMITTED BIDS IN THE PAST.

YOU QUOTE THE FOLLOWING LANGUAGE FROM 48 COMP. GEN. 369 (1969), IN SUPPORT OF YOUR CONTENTION THAT THE BALDWIN BID MUST BE REJECTED:

"* * * IF SATISFACTORY EVIDENCE OF AN AGENT'S AUTHORITY TO ACT IS NOT FURNISHED WITH THE EXECUTED BID, * * * 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." IT SHOULD BE NOTED THAT THERE IS A VERY MATERIAL DIFFERENCE BETWEEN THE FACTS OF THE PRESENT CASE AND THOSE IN 48 COMP. GEN. 369. IN THE PRESENT CASE, EVIDENCE OF THE AGENT'S AUTHORITY HAD BEEN FURNISHED TO ANOTHER GOVERNMENT AGENCY THREE MONTHS BEFORE THE BID NOW IN QUESTION. NO SUCH PRIOR EVIDENCE OF AUTHORITY HAD BEEN FURNISHED IN THE CASE CITED. YOU STATE IN YOUR LETTER OF DECEMBER 9, 1969, THAT:

"IT IS SIMPLY INCONCEIVABLE AT THIS POINT FOR AN ARGUMENT TO BE MADE THAT A DOCUMENT FILED AT FORT MCNAIR WILL SATISFY FOR PROCUREMENT PURPOSES THE NECESSITIES AT GODDARD SPACE. * * * THE GOVERNMENT * * * HAS NO WAY OF OBJECTIVELY DETERMINING WHETHER OR NOT IN FACT AN AGENCY EXISTED AT THE TIME THE BID WAS SUBMITTED." THE THRUST OF YOUR ARGUMENT IS THAT EVEN IF PRIOR EVIDENCE OF AN AGENT'S AUTHORITY EXISTS, SINCE ONLY THE BIDDER KNOWS WHERE THAT EVIDENCE IS, AND HE MAY DECIDE NOT TO REVEAL THIS TO THE GOVERNMENT, HIS BID MUST BE REJECTED IF NOT ACCOMPANIED BY EVIDENCE OF THE AGENT'S AUTHORITY.

WE CANNOT AGREE WITH THIS CONTENTION. MR. BALDWIN HAD IN FACT BEEN GIVEN AUTHORITY TO BID ON THE CONTRACT IN QUESTION, AND THE RECORD BEFORE US DEMONSTRATES THAT HIS BID WAS BINDING ON THE RECEIVER IN BEHALF OF THE CORPORATION. THE EXISTENCE OF MR. BALDWIN'S AUTHORITY ADMITTEDLY HAD BEEN MADE KNOWN TO ANOTHER BRANCH OF THE GOVERNMENT PRIOR TO THE PRESENT BID. THIS IS SUFFICIENT, IN OUR OPINION, TO OVERCOME HIS FAILURE TO PRESENT ADDITIONAL EVIDENCE OF HIS AUTHORITY WITH HIS BID.

OUR DECISION OF NOVEMBER 26, 1969, DENYING YOUR PROTEST IS THEREFORE SUSTAINED.