B-166799, MAY 15, 1969
Highlights
IS PROPER FOR ACCEPTANCE. IT IS YOUR POSITION THAT THE BID BOND REQUIRED BY THE SOLICITATION. WAS NOT DEFECTIVE MERELY BECAUSE THE ATTORNEY-IN-FACT. WAS NAMED THEREON AS PRINCIPAL. " AND THAT THE NAMING OF ONE OF THE COMPANIES ON THE BID BOND WAS IN EFFECT. THAT A BID BOND WAS PRIMA FACIE DEFICIENT BECAUSE THE PRINCIPAL NAMED ON THE BOND WAS NOT THE BIDDER. EVEN THOUGH THE TWO FIRMS WERE VERY CLOSELY INTERRELATED. WE FEEL THAT THE REASONING EXPRESSED IN THAT DECISION IS DISPOSITIVE OF THE MATTER HERE. WE HAVE HELD THAT THE WORD "MAY" AS USED IN A SIMILAR CONTEXT IS A WORD OF COMMAND WHICH GIVES EFFECT AND MEANING TO AN OTHERWISE MATERIAL INVITATION REQUIREMENT. 39 COMP. WE MUST CONCLUDE THAT THE BID OF SUMITOMO ELECTRIC IS NONRESPONSIVE TO THE BONDING PROVISIONS OF THE SOLICITATION AND.
B-166799, MAY 15, 1969
TO FINE AND POPE:
BY LETTER OF MAY 7, 1969, YOU REQUEST THAT OUR OFFICE ADVISE THE DEPARTMENT OF THE INTERIOR THAT THE BID OF SUMITOMO ELECTRIC INDUSTRIES, LTD., OSAKA, JAPAN, UNDER BUREAU OF RECLAMATION SOLICITATION DS-6662R, IS PROPER FOR ACCEPTANCE.
BRIEFLY, IT IS YOUR POSITION THAT THE BID BOND REQUIRED BY THE SOLICITATION, AND SUBMITTED WITH SUMITOMO ELECTRIC'S BID, WAS NOT DEFECTIVE MERELY BECAUSE THE ATTORNEY-IN-FACT, SUMITOMO SHOJI NEW YORK, INC., WAS NAMED THEREON AS PRINCIPAL. IN SUPPORT THEREOF, YOU STATE THAT THE TWO FIRMS ,CONSIDER THEMSELVES CLOSELY INTERRELATED AS PART OF THE SUMITOMO GROUP OF COMPANIES," AND THAT THE NAMING OF ONE OF THE COMPANIES ON THE BID BOND WAS IN EFFECT, AN INDEMNIFICATION OF THE OTHER. ALSO, YOU ARGUE THAT BECAUSE THE BONDING PROVISIONS OF THE SOLICITATION ADVISED PROSPECTIVE BIDDERS THAT THE FAILURE TO SUBMIT A PROPER BID BOND MAY, NOT SHALL, BE CAUSE FOR REJECTION, THE BIDDER'S FAILURE TO SUBMIT A PROPER BID BOND SHOULD BE WAIVED TO TAKE ADVANTAGE OF SUMITOMO ELECTRIC'S LOW BID.
CONCERNING THE INTERRELATION OF THE TWO COMPANIES WE HELD IN OUR DECISION AT 44 COMP. GEN. 495, THAT A BID BOND WAS PRIMA FACIE DEFICIENT BECAUSE THE PRINCIPAL NAMED ON THE BOND WAS NOT THE BIDDER, EVEN THOUGH THE TWO FIRMS WERE VERY CLOSELY INTERRELATED. WE FEEL THAT THE REASONING EXPRESSED IN THAT DECISION IS DISPOSITIVE OF THE MATTER HERE. WITH REFERENCE TO THE USE OF THE WORD "MAY" IN THE BONDING PROVISIONS THAT FAILURE TO FURNISH A PROPER GUARANTEE OF OFFER MAY BE A CAUSE FOR REJECTION, WE HAVE HELD THAT THE WORD "MAY" AS USED IN A SIMILAR CONTEXT IS A WORD OF COMMAND WHICH GIVES EFFECT AND MEANING TO AN OTHERWISE MATERIAL INVITATION REQUIREMENT. 39 COMP. GEN. 148.
FOR THESE REASONS, AND THOSE SET FORTH IN OUR DECISION OF TODAY TO THE SECRETARY OF THE INTERIOR (COPY ENCLOSED), WE MUST CONCLUDE THAT THE BID OF SUMITOMO ELECTRIC IS NONRESPONSIVE TO THE BONDING PROVISIONS OF THE SOLICITATION AND, AS SUCH, MAY NOT BE CONSIDERED FOR AWARD.