B-159296, JUN. 23, 1966

B-159296, JUN. 23, 1966

TO THE PECK IRON AND METAL CO., INC.:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 14, 1966, INQUIRING WHETHER UNITED STATES CURRENCY AND/OR OBLIGATIONS OF THE UNITED STATES, IN THE FACE AMOUNT REQUIRED, MAY BE SUBSTITUTED IN LIEU OF PERFORMANCE BOND ON STANDARD FORM 25 TO SATISFY THE REQUIREMENTS IN INVITATION FOR BIDS (IFB) NO. 18-6068, ISSUED BY THE DEFENSE SURPLUS SALES OFFICE, DEFENSE SUPPLY AGENCY (DSA), BROOKLYN, NEW YORK.

THERE IS NO REQUIREMENT THAT OUR OFFICE RENDER AN ADVANCE DECISION TO A PROSPECTIVE BIDDER, IN THE ABSENCE OF AN ACTUAL OR IMMINENT CONTROVERSY RELATIVE TO A PARTICULAR PROCUREMENT. SINCE DSA IS RESPONSIBLE FOR THE PREPARATION OF THE IFB, IT IS OUR VIEW THAT ANY QUESTION YOU MAY HAVE CONCERNING THE REQUIREMENTS OF THE IFB SHOULD BE PRESENTED DIRECTLY TO DSA IN THE FIRST INSTANCE.

FOR YOUR INFORMATION, HOWEVER, ARMED SERVICES PROCUREMENT REGULATION 10- 202 PROVIDES AS OLLOWS:

"10-202 OPTIONS IN LIEU OF SURETIES. ANY ONE OR MORE OF THE TYPES OF SECURITY LISTED BELOW MAY BE DEPOSITED BY THE CONTRACTOR IN LIEU OF FURNISHING CORPORATE OR INDIVIDUAL SURETIES ON BONDS. ANY SUCH SECURITY ACCEPTED BY THE CONTRACTING OFFICER SHALL BE PROMPTLY TURNED OVER TO THE DISBURSING OFFICER CONCERNED FOR ARMY, NAVY, AND DEFENSE SUPPLY AGENCY CONTRACTS, AND TO THE ACCOUNTING AND FINANCE OFFICER CONCERNED FOR AIR FORCE CONTRACTS, EXCEPT THAT WHEN UNITED STATES BONDS OR NOTES ARE INVOLVED, THEY SHALL BE DEPOSITED AS PROVIDED IN 10 202.1. ANY SUCH SECURITY OR ITS EQUIVALENT SHALL BE RETURNED TO THE CONTRACTOR WHEN THE OBLIGATION OF THE BOND HAS BY ITS TERMS CEASED.

"10-202.1 UNITED STATES BONDS OR NOTES. IN ACCORDANCE WITH THE PROVISIONS OF THE ACT OF 24 FEBRUARY 1919, AS AMENDED (6 U.S.C. 15) AND TREASURY DEPARTMENT CIRCULAR NO. 154 (6 FEBRUARY 1935), ANY PERSON REQUIRED TO FURNISH A BOND HAS THE OPTION, IN LIEU OF FURNISHING SURETY OR SURETIES THEREON, OF DEPOSITING UNITED STATES BONDS OR NOTES IN AN AMOUNT EQUAL AT THEIR PAR VALUE TO THE PENAL SUM OF THE BOND, TOGETHER WITH AN AGREEMENT AUTHORIZING THE COLLECTION OR SALE OF SUCH UNITED STATES BONDS OR NOTES IN THE EVENT OF DEFAULT ON THE PENAL BOND. THE CONTRACTING OFFICER MAY TURN THESE SECURITIES OVER TO THE DISBURSING OFFICER OR ACCOUNTING AND FINANCE OFFICER AS PROVIDED IN 10-202, OR DEPOSIT THEM WITH THE TREASURER OF THE UNITED STATES, A FEDERAL RESERVE BANK, BRANCH FEDERAL RESERVE BANK HAVING THE REQUISITE FACILITIES, OR OTHER DEPOSITARY DULY DESIGNATED FOR THAT PURPOSE BY THE SECRETARY OF THE TREASURY, UNDER PROCEDURES PRESCRIBED BY THE DEPARTMENT CONCERNED AND TREASURY DEPARTMENT CIRCULAR NO. 154. HOWEVER, THE CONTRACTING OFFICER SHALL DEPOSIT WITH THE TREASURER OF THE UNITED STATES ALL SUCH BONDS AND NOTES RECEIVED BY HIM IN THE DISTRICT OF COLUMBIA.

"10-202.2 CERTIFIED OR CASHIER'S CHECKS, BANK DRAFTS, MONEY ORDERS, OR CURRENCY. ANY PERSON REQUIRED TO FURNISH A BOND HAS THE OPTION, IN LIEU OF FURNISHING SURETY OR SURETIES THEREON, OF FURNISHING A CERTIFIED CASHIER'S CHECK, A BANK DRAFT, A POST OFFICE MONEY ORDER, OR CURRENCY, IN AN AMOUNT EQUAL TO THE PENAL SUM OF THE BOND, WHICH THE CONTRACTING OFFICER WILL IMMEDIATELY DEPOSIT WITH THE APPROPRIATE ACTIVITY NAMED IN 10 -202. CERTIFIED OR CASHIER'S CHECKS, BANK DRAFTS, OR POST OFFICE MONEY ORDERS SHALL BE DRAWN TO THE ORDER OF THE TREASURER OF THE UNITED STATES.'

YOUR ATTENTION IS DIRECTED TO THE FACT THAT THE SUBSTITUTION OF CURRENCY OR THE OTHER DESIGNATED ASSETS WHICH IS PERMITTED BY THE REGULATION IS NOT IN LIEU OF THE REQUIRED BOND, BUT MERELY AN ALTERNATIVE TO THE FURNISHING OF A SURETY THEREON.