Matter of: Casper Construction Company, Inc. File: B-253887 Date: October 26, 1993

Matter of: Casper Construction Company, Inc. File: B-253887 Date: October 26, 1993

PROCUREMENT Contractor Qualification Corporate entities Corporate dissolution Bid was properly rejected where at the time of bid opening the protester's corporate charter had been involuntarily dissolved by the state in which it had been incorporated.

Attorneys

DECISION Casper Construction Company, Inc. protests the rejection of its bid under invitation for bids (IFB) No. 16-93-57, issued by the Forest Service, Wallowa-Whitman National Forest, for the removal of slash from logging areas by means of machine and grapple piling and for the subsequent burning of the slash. Casper's bid was rejected because the corporation had been involuntarily dissolved by the state of Oregon.

We deny the protest.

The IFB was issued on May 5, 1993. It required the submission of individual and total prices for two items. Item No. 1 required bidders to machine pile slash for natural regeneration and planting and then to burn the resultant slash. Item No. 2 required bidders to grapple pile slash for natural regeneration and then to burn the resultant slash. Bids were opened on June 7. Casper submitted the low bid of $18,041.64 on item No. 2.

The contracting officer initiated a review of the responsibility of Casper. During the review, the contracting officer telephoned the office of the Oregon Secretary of State to verify the validity of Casper's representation in its bid that Casper was incorporated in the state of Oregon. The staff person in the Office of the Secretary informed the contracting officer that, after the Office was notified that Casper's agent for legal services had resigned and after a 30-day period allowed for the appointment of a new agent had elapsed, the corporation had been involuntarily dissolved on January 20, 1993. According to the staff person in the Secretary's office, Oregon law provides that a corporation that has been administratively dissolved may not conduct any business except that necessary to "wind up" and liquidate its business and affairs. The contracting officer also sought to confirm that Thomas B. Forsythe who signed the bid as "PRES/SEC" was a corporate officer for Casper. The
Secretary's office advised that no list of corporate officers existed
since the corporation had been in existence for less than 1 year. The
contracting officer reviewed the Oregon law which appeared to confirm the
Oregon Secretary's opinion that a dissolved corporation could not conduct
any new business. She subsequently asked for a legal opinion from the
agency legal counsel. He advised her that the general rule in Oregon
provided that the dissolved corporation lacked legal capacity to contract
and recommended that she reject Casper's bid.

In view of this information, the contracting officer concluded that
Casper lacked the legal capacity to contract to perform the work.

On June 15, after being told by another contracting officer that Mr.
Forsythe had told him that Casper was not dissolved, the contracting
officer again telephoned the office of the Secretary of State and was
again told that Casper had been dissolved. Accordingly, on June 15, award
was made to Avery Contracting for $23,340.48, and a letter was sent to
Casper informing it that award had been made to another bidder. On June
17, after a conversation with Mr. Forsythe, the contracting officer again
called the office of the Secretary of State and was informed that Casper
had been dissolved but that its incorporation had been reinstated on June
15. According to Oregon statutes, the reinstatement of a corporation takes
effect as of the effective date of the administrative dissolution. Oregon
Revised Statutes Sec. 60.651 (1991).

Casper argues that it should receive the award since it is properly
incorporated in the state of Oregon. It questions the contracting
officer's reliance on merely verbal information given by an unnamed person
in the office of the Secretary of State. The contracting officer maintains
that the award was proper because at the time of award, the only
information the contracting officer had showed was that Casper could not
conduct business of the type required under the IFB due to the
administrative dissolution of its incorporation.

As a general rule, a sealed bid award may not be made to any entity
different from that which submitted the bid, and where a bid represents
that it was submitted by a corporation, it should be disregarded if no
such corporation exists. General Chem. Servs. Inc., B-241595, Jan. 30,
1991, 91-1 CPD Para. 94. Otherwise, irresponsible parties could undermine
sound competitive bidding procedures by submitting bids that could be
avoided or backed up by real principals as their interests might dictate.
Id. We believe Casper's bid was properly rejected. At the time of bid
opening, on June 7, the corporation had been dissolved under the laws of
Oregon since January 20, and was not reinstated until after award on June
15. Consequently, at the time of bid opening Casper was not a legally
sufficient corporation for bidding purposes.

Federal procurements must proceed in an orderly fashion. That means
contracting officers have to be able to make decisions based on the
information available at the time. The record shows that prior to making
an award decision, the contracting officer contacted the office of the
Secretary of State for Oregon on three occasions and was told that the
corporation had been involuntarily dissolved since January 20. While the
protester maintains that its corporate status has never been dissolved,
the record shows that on June 15, the protester filed an application for
reinstatement of corporate status with the Secretary of State which
specifically stated that the corporation had been dissolved on January 20.
On this record, the contracting officer properly determined that at the
time of bid opening, the protester was not a legally sufficient
corporation. We further believe that a contracting officer must be able to
rely on the information provided by the state of incorporation concerning
the bidder's corporate status at the time of the inquiry, without regard
to the possibility of future reinstatement of corporate status.

Moreover, the fact that Casper was reinstated after the award decision
does not affect the award. It is a basic principle of federal procurement
law that a bidder may not be permitted the option, after bid opening, of
validating a bid that otherwise would be rejected. Seaboard Elecs. Co.,
B-237352, Jan. 26, 1990, 90-1 CPD Para. 115.

The protest is denied.