B-149167, AUG. 31, 1962

B-149167, AUG. 31, 1962

TO JOHN R. MOTT, INC.:

YOUR LETTER OF JUNE 10, 1962, PROTESTS THE AWARD OF A CONTRACT TO CARRY U.S. MAIL ON STAR ROUTE 35565 FROM MARCH 10, 1962, TO JUNE 30, 1962, TO JUNE 30, 1965. YOUR BID, THE LOWEST RECEIVED, WAS REJECTED BY THE POST OFFICE DEPARTMENT ON THE GROUND THAT A PROPERLY EXECUTED BOND WAS NOT FURNISHED.

SECTION 6419 OF TITLE 39, U.S.C. STATES THAT BEFORE THE BOND, WHICH MUST ACCOMPANY A BID FOR TRANSPORTING MAIL, CAN BE APPROVED, THE SURETIES MUST "SUBMIT SIGNED STATEMENTS" THAT THEY OWN REAL ESTATE WORTH TWICE THE REQUIRED AMOUNT OF THE BOND. THE BOND FORM IN THE INSTANT CASE INCLUDED A STATEMENT TO THE EFFECT THAT THE VALUE OF THE PROPERTY OFFERED BY THE SURETIES WAS TWICE THE AMOUNT OF THE BOND. SPACES FOR THE SURETIES' SIGNATURES WERE PROVIDED AT THE END OF THE FORM, BUT THE PROPOSED SURETIES DID NOT SIGN IN THOSE SPACES. HOWEVER, UNDER APPROPRIATE HEADINGS, THE FORM ALSO CONTAINED SPACES FOR THE NAMES, RATHER THAN THE SIGNATURES, OF THE SURETIES, FOLLOWED BY SPACES FOR THE DESCRIPTION, VALUE, AND LOCATION OF THE PROPERTY OFFERED AS SECURITY. THE PROPOSED SURETIES COMPLETED THE LATTER THREE SPACES, INDICATING THAT THEIR SECURITY WAS TWICE THE AMOUNT OF THE BOND, AND UNDER THE FIRST SPACE, TITLED "NAMES OF SURETIES," THEY INSERTED THEIR ACTUAL SIGNATURES. ON THE BACK OF THE FORM, THE LOCAL POSTMASTER CERTIFIED THAT THE PROPOSED SURETIES DID IN FACT SIGN THE DOCUMENT. NONETHELESS, THE POST OFFICE DEPARTMENT DETERMINED THAT THE FAILURE TO SIGN THE BOND FORM IN THE CORRECT PLACES MADE THE BID NONRESPONSIVE, ON THE GROUND THAT THE SIGNATORIES COULD LEGALLY CLAIM THAT THEY DID NOT PROPERLY ASSUME THE OBLIGATIONS OF SURETIES.

BIDS WHICH ARE NOT ACCOMPANIED BY A VALID BOND IN THE AMOUNT REQUIRED ARE NONRESPONSIVE AND MAY NOT BE CONSIDERED FOR AWARD. 38 COMP. GEN. 532. HOWEVER, AS WE HELD IN A DECISION DATED MARCH 8, 1962, A BID MAY BE RESPONSIVE NOTWITHSTANDING A DEFICIENCY IN EXECUTION OF A BOND, PROVIDED THE GOVERNMENT COULD ENFORCE SUCH BOND AGAINST THE NAMED SURETIES IF THE CONTRACTOR FAILED TO GO FORWARD WITH FAITHFUL PERFORMANCE OF THE CONTRACT. THEREFORE, THE QUESTION FOR DECISION HERE IS WHETHER THE DEFICIENCY IN EXECUTION OF THIS BOND GOES TO MERE FORM, IN WHICH CASE THE BID WOULD BE RESPONSIVE, OR GOES TO ACTUAL SUBSTANCE, IN WHICH CASE THE SURETY CONTRACT WOULD BE UNENFORCEABLE AND, CONSEQUENTLY, THE BID WOULD BE NONRESPONSIVE.

IN DETERMINING WHETHER A CONTRACT HELD BY THE GOVERNMENT IS UNENFORCEABLE, THE COURTS WILL APPLY THE PRINCIPLES OF GENERAL CONTRACT LAW. PRIEBE AND SONS V. UNITED STATES, 332 U.S. 407, 411 (1947). GENERALLY, SEE ALSO 50 N.W.L.REV. 72. IT IS WELL ESTABLISHED THAT UNLESS A GOVERNING STATUTE REQUIRES THE PARTY BEING CHARGED TO SIGN THE BOND IN A PARTICULAR PLACE, IT IS IMMATERIAL WHETHER THE SIGNATURE APPEARS AT THE BOTTOM, AT THE TOP, OR IN THE BODY OF THE WRITING. STEARNS LAW OF SURETYSHIP, SECTION 3.5. TO THE SAME EFFECT, SEE WILLISTON ON CONTRACTS, 3D EDITION, SECTION 585, CORBIN ON CONTRACTS, SECTION 521, AND CASES CITED THEREIN. ALSO, SEE CASES CITED AND DISCUSSED AT 112 A.L.R. 940, ET SEQ.

IN THE INSTANT CASE, THE ONLY STATUTORY REQUIREMENT IN REGARD TO THE SIGNATURES OF THE SURETIES IS THAT THEIR STATEMENTS BE "SIGNED.' WHILE IT WOULD HAVE BEEN PREFERABLE FOR THE SURETIES TO HAVE AFFIXED THEIR SIGNATURES IN THE PLACES DESIGNATED, THE STATUTE DID NOT DIRECT THEM TO DO SO. SINCE THE PROPOSED SURETIES DID SIGN THE BOND, ALBEIT IN THE WRONG PLACE, AND SINCE THEIR SIGNATURES CAN BE PROVED BY THE CERTIFICATION OF THE LOCAL POSTMASTER, IN OUR OPINION THE INSTRUMENT THEY OFFERED WAS LEGALLY BINDING, AND HAD THE GOVERNMENT ACCEPTED THE OFFER, IT WOULD HAVE HELD AN ENFORCEABLE CONTRACT AGAINST THEM. IN VIEW OF THIS CONCLUSION WE THINK THE POST OFFICE DEPARTMENT GAVE UNDUE WEIGHT TO A PURELY FORMAL TECHNICALITY, AND IN DOING SO, IMPROPERLY REJECTED YOUR BID. THE POST OFFICE DEPARTMENT WILL BE NOTIFIED OF OUR CONCLUSION.

HOWEVER, WE NOTE THAT ALTHOUGH THE CONTRACT COVERING STAR ROUTE 35565 WAS AWARDED ON MARCH 20, 1962, WE DID NOT RECEIVE YOUR PROTEST AGAINST THE AWARD UNTIL JUNE 14, 1962, ALMOST THREE MONTHS AFTER THE EVENT OF WHICH YOU COMPLAIN. IN VIEW OF THE UNDUE DELAY IN SUBMITTING YOUR PROTEST, AND THE TIME WHICH HAS ELAPSED SINCE AWARD WAS MADE TO AN INNOCENT AND GOOD FAITH BIDDER, WE DO NOT THINK IT WOULD BE IN THE BEST INTERESTS OF THE GOVERNMENT TO CANCEL THE SUBJECT CONTRACT.