B-140732, JAN. 28, 1960

B-140732: Jan 28, 1960

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ATTORNEY AT LAW: REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 28. THE OTHER CASES CITED IN A MEMORANDUM WHICH WAS SUBMITTED TO YOU ON DECEMBER 14. IT IS YOUR CONTENTION THAT THE AUTHORITIES CITED IN SUCH MEMORANDUM INDICATE THAT A RECEIVER DOES NOT HAVE AUTHORITY TO ENTER INTO CONTRACTS OF THE NATURE HERE INVOLVED WITHOUT AN EXPRESS ORDER OF THE BANKRUPTCY COURT. THE LEGAL ARGUMENTS ADVANCED IN YOUR MEMORANDUM WERE CAREFULLY CONSIDERED IN ARRIVING AT OUR DECISION IN THE MATTER. IT WAS NOT BELIEVED NECESSARY OR REQUIRED TO DISCUSS THE LEGAL AUTHORITIES CITED SINCE WE DID NOT FEEL. THAT SUCH AUTHORITIES ARE DETERMINATIVE OF THE LEGALITY OF THE AWARD MADE HERE. THE BID OF AERO-TEST WAS SUBMITTED UNDER THE SIGNATURE OF BILL W.

B-140732, JAN. 28, 1960

TO MR. ALAN Y. COLE, ATTORNEY AT LAW:

REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 28, 1959, REQUESTING RECONSIDERATION OF OUR DECISION DATED DECEMBER 23, 1959, WHEREIN WE CONSIDERED THE PROTEST OF VACUDYNE CORPORATION AGAINST THE AWARD OF A CONTRACT TO AERO-TEST EQUIPMENT COMPANY, INC., BY HEADQUARTERS, OGDEN AIR MATERIEL AREA, HILL AIR FORCE BASE, UTAH, UNDER INVITATION FOR BIDS NO. 42 -600-59-354.

YOU PARTICULARLY POINT OUT THAT OUR DECISION "COMPLETELY FAILS TO TAKE INTO ACCOUNT AND GIVE DUE CONSIDERATION TO THE OPINION OF THE UNITED STATES SUPREME COURT IN CHICAGO DEPOSIT VAULT CO. V. MCNULTA, 153 U.S. 554, AND THE OTHER CASES CITED IN A MEMORANDUM WHICH WAS SUBMITTED TO YOU ON DECEMBER 14, 1959.' IT IS YOUR CONTENTION THAT THE AUTHORITIES CITED IN SUCH MEMORANDUM INDICATE THAT A RECEIVER DOES NOT HAVE AUTHORITY TO ENTER INTO CONTRACTS OF THE NATURE HERE INVOLVED WITHOUT AN EXPRESS ORDER OF THE BANKRUPTCY COURT, AND THAT NO SUCH AUTHORITY MAY BE IMPLIED FROM THE REFEREE'S ORDER OF MARCH 28, 1958, APPOINTING GEORGE E. LAWRENCE AS RECEIVER FOR AERO-TEST EQUIPMENT COMPANY, INC., TO "CONDUCT THE BUSINESS" OF THE DEBTOR.

THE LEGAL ARGUMENTS ADVANCED IN YOUR MEMORANDUM WERE CAREFULLY CONSIDERED IN ARRIVING AT OUR DECISION IN THE MATTER. HOWEVER, IT WAS NOT BELIEVED NECESSARY OR REQUIRED TO DISCUSS THE LEGAL AUTHORITIES CITED SINCE WE DID NOT FEEL, NOR DO WE NOW FEEL, THAT SUCH AUTHORITIES ARE DETERMINATIVE OF THE LEGALITY OF THE AWARD MADE HERE.

THE BID OF AERO-TEST WAS SUBMITTED UNDER THE SIGNATURE OF BILL W. SOLLEY, GENERAL MANAGER, WHO WAS APPOINTED BY THE RECEIVER TO ACT AS PRESIDENT AND GENERAL MANAGER OF AERO-TEST DURING RECEIVERSHIP WITH AUTHORITY TO SIGN BIDS AND CONTRACTS ON BEHALF OF THE DEBTOR CORPORATION. HOWEVER, AT THE TIME ALL BIDS WERE OPENED UNDER THE SUBJECT INVITATION ON AUGUST 13, 1959, AERO-TEST HAD BEEN RELEASED FROM BANKRUPTCY BY ORDER OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS ON AUGUST 6, 1959. MOREOVER, AT THE TIME OF OPENING OF BIDS, MR. SOLLEY WAS, IN FACT, PRESIDENT AND GENERAL MANAGER OF AERO-TEST. ALL CONTROL AND SUPERVISION OF AERO-TEST BY THE BANKRUPTCY COURT HAD BEEN DIVESTED, AND THE CORPORATION, THROUGH ITS OFFICERS, WAS ENTIRELY COMPETENT TO CONDUCT ITS AFFAIRS AS A LEGAL ENTITY ON AND AFTER AUGUST 6, 1959. IT IS OUR VIEW, THEREFORE, THAT THE BID OF AERO-TEST BECAME A VALID, SUBSISTING OFFER ON THE DATE BIDS WERE OPENED; THAT THE BID WHEN OPENED REPRESENTED A BINDING OFFER, WHICH PROPERLY COULD NOT BE DISAVOWED BY AERO-TEST, TO FURNISH THE ARTICLES COVERED BY THE INVITATION; AND THAT THE GOVERNMENT BY ACCEPTING SUCH BID CONSUMMATED A VALID AND BINDING CONTRACT.

WE FURTHER REVIEWED THE BASES RELIED UPON BY THE DEPARTMENT IN DETERMINING THAT AERO-TEST WAS A RESPONSIBLE BIDDER FOR THE PURPOSES OF THIS PROCUREMENT. WHILE THE DEPARTMENT DETERMINED IN MAY 1958 THAT AERO- TEST WAS A NON-RESPONSIBLE BIDDER IN CONNECTION WITH A PRIOR PROCUREMENT BECAUSE OF FINANCIAL DIFFICULTIES, THE FACILITIES CAPABILITY REPORT PREPARED WITH RESPECT TO THE INSTANT PROCUREMENT FOUND AERO-TEST "TO BE ENTIRELY RESPONSIBLE.' NO FACTUAL BASIS OF RECORD EXISTS WHICH WOULD OVERCOME SUCH DETERMINATION. IN THE ABSENCE THEREOF, AND FOR THE REASONS STATED IN OUR DECISION OF DECEMBER 23, 1959, WE ARE NOT IN A POSITION TO QUESTION SUCH DETERMINATION.

ACCORDINGLY, WE FIND NO LEGAL BASIS TO DISTURB THE CONCLUSION REACHED IN OUR DECISION OF ..END :

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