BNUMBER:  B-261948
DATE:  November 1, 1995
TITLE:  Shackelford Mechanical, Inc.

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Matter of:Shackelford Mechanical, Inc.

File:     B-261948

Date:     November 1, 1995         

William R. Purdy, Esq., Ott & Purdy, for the protester.
Marilyn W. Johnson, Esq., and Cynthia S. Guill, Esq., Department of 
the Navy, for the agency.
Jacqueline Maeder, Esq., and Paul Lieberman, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Agency properly determined that a bid bond was defective, and the bid 
therefore nonresponsive, where the surety's power of attorney 
authorizing the named attorney-in-fact to sign the bid bond on the 
surety's behalf contained an undated certification that the power of 
attorney had not been revoked, raising the question of whether the 
power of attorney had been revoked prior to the execution of the bid 
bond.

DECISION

Shackelford Mechanical, Inc. protests the rejection of its bid as 
nonresponsive, and the award of a contract to C.R. Hipp, Inc., under 
invitation for bids (IFB) No. N62467-94-B-0886, issued by the 
Department of the Navy for the extension of a natural gas piping 
system at Charleston Air Force Base, Charleston, South Carolina.  
We deny the protest.

The Navy received four bids at bid opening on June 13, 1995.  
Shackelford 
submitted the apparent low bid of $1,465,947, and Hipp's bid was 
second low at $1,642,419.  Along with its bid, Shackelford submitted 
the required bid bond on standard form 24.  The bond was dated May 23, 
1995, and signed by D.M. Ferris as attorney-in-fact for the surety, 
St. Paul Fire and Marine Insurance Company.  The bond was accompanied 
by a power of attorney from the surety listing D.M. Ferris as an 
attorney-in-fact.[1]  The power of attorney was signed by the 
secretary of the surety and notarized on October 25, 1994; however, 
the certification provision in the power of attorney--by which the 
secretary of the surety was to certify that the power of attorney 
remained in full force and effect and had not been revoked--was not 
properly completed.  An assistant secretary of the surety had signed 
his name on the signature line, and a seal was affixed to the 
certification, but the certification was undated.  Because the 
certification was undated, the Navy was concerned that the power of 
attorney may have been revoked prior to the execution of the bid bond, 
in which case Shackelford's bid bond would not be binding on the 
surety.  Consequently, the Navy informed Shackelford on June 26 that 
its bid was being rejected as nonresponsive.  

Shackelford filed an agency-level protest on June 27, arguing that the 
agency improperly rejected its bid as nonresponsive because an undated 
certification on a power of attorney accompanying a bid bond is a 
waivable minor informality.  The Navy denied this protest on June 29 
and awarded the contract to Hipp on the same day.  Shackelford then 
filed this protest in our Office, arguing that the certification is 
not conditioned upon any particular date but is an "open-ended 
representation, signed by a corporate officer of the surety, that the 
power of attorney is good."  Shackelford contends that, even though it 
is undated, the certification is complete on its face because it 
states that the power of attorney has not been revoked and is in full 
force and effect, and that it shall be binding on the surety if it 
bears a facsimile signature or facsimile company seal.[2]     

A bid bond is a written instrument executed by a bidder or contractor 
and a third party--the surety--to assure fulfillment of the 
contractor's obligations to the government.  FAR  28.001.  The bid 
bond secures the surety's liability to the government, thereby 
providing funds to cover the excess costs of awarding to the next 
eligible bidder in the event that the awardee fails to fulfill its 
obligations.  A.W. and Assocs., Inc., 69 Comp. Gen. 737 (1990), 90-2 
CPD  254.

When required by a solicitation, a bid bond is a material part of the 
bid and a valid bond must be furnished with the bid in order for it to 
be responsive.  A.D. Roe Co., Inc., 54 Comp. Gen. 271 (1974), 74-2 CPD  
194.  Specifically, where a required bid bond is accompanied by a 
power of attorney that on its face does not establish unequivocally 
that the person signing was authorized to bind the surety, the bid  
generally must be rejected as nonresponsive.  Integrity Works, 
B-258818, Feb. 21, 1995, 95-1 CPD  98.  This is so because only a 
valid power of attorney would establish that the surety expressly 
agreed to be bound to pay the bond.  This express agreement to be 
bound is required under the law of suretyship.  See Andersen Constr. 
Co.; Rapp Constr., Inc., 63 Comp. Gen. 248 (1984), 84-1 CPD  279.  A 
power of attorney is to be strictly construed, and we will not convert 
ambiguous aspects of powers of attorney into mere matters of form 
which can be explained away and waived.  Integrity Works, supra.  

Accordingly, a bid must be rejected as nonresponsive where there is 
ambiguity about the authority of the person signing the bond on behalf 
of the surety.  For example, a bid may not be accepted where the power 
of attorney, by its terms, lapsed prior to the date the bid bond was 
executed, E&R, Inc., B-255868, Mar. 29, 1994, 94-1 CPD  218, where 
the certification provision in the power of attorney by which the 
secretary of the surety was to certify that the power of attorney 
remained in full force and effect had not been signed, Fred Winegar, 
B-243557, Aug. 1, 1991, 91-2 CPD  111, or where the power of attorney 
named a person different from the individual who actually signed the 
bid bond, Environmental Management Servs., Inc., B-245508, Sept. 18, 
1991, 91-2 CPD  261; Baldi Bros. Constr., B-224843, Oct. 9, 1986, 
86-2 CPD  418.  For the same reason, where a power of attorney stated 
that only the original was valid but the bidder submitted with its bid 
a photocopy of the power of attorney, rather than the original, the 
agency properly rejected the bid, since the contracting officer could 
not determine from the bid documents whether the person signing the 
bond had authority to bind the surety.  The King Co. Inc., B-228489, 
Oct. 30, 1987, 87-2 CPD  423.

The authority of the person executing a bid bond on behalf of the 
surety, and consequently the validity of the bid bond, are most 
clearly free of ambiguity where the power of attorney is signed 
immediately prior to the execution of the bid bond.  Reversing the 
order casts into doubt the signer's authority at the time the bond is 
executed.  See, e.g., A.W. and Assocs., Inc., supra.  When the power 
of attorney is dated well in advance of the bid bond, doubt may arise 
about whether the power of attorney had expired or been revoked by the 
time the person signed the bid bond.  See, e.g., Quantum Constr., 
Inc., B-255049, Dec. 1, 1993, 93-2 CPD  304.

Here, the certification section of the power of attorney submitted by 
Shackelford was undated and, thus, the continuing validity of the 
power of attorney was not confirmed.  Because the power of attorney 
was executed October 25, 1994, and the bond was not executed until 7 
months later, on May 23, 1995, the significant passage of time raised 
concern that the power of attorney could have been revoked.  Quantum 
Constr., Inc., supra.  Under these circumstances, the contracting 
officer could not be certain that the power of attorney remained in 
full force and effect; since the missing date meant that the power of 
attorney did not establish unequivocally that the agent was authorized 
to bind the surety, rejection of the bid was proper.[3]  Id.

Shackelford's argument that the certification is valid because of the 
statements on the power of attorney regarding the binding nature of a 
facsimile signature or facsimile company seal misconstrues the purpose 
of this language.  The fact that the certification is signed and 
sealed has no binding effect here, where the authority of the 
signatory is called into question.  A corporate seal merely attests or 
authenticates the signature, Fred Winegar, supra, and allowing for 
facsimiles merely permits the bidder to submit a facsimile of the 
power of attorney, rather than the original, with its bid.  Here, at 
the time of bid opening, it was not clear from the face of the bid 
that the bond signatory was authorized to bind the surety.

The protest is denied.

Comptroller General
of the United States
  
1. In the context of bid bonds, a power of attorney is the authority 
given one person, the attorney-in-fact, to act on behalf of a surety 
company in signing bonds.  Federal Acquisition Regulation (FAR)  
28.001.  

2. Shackelford also argues that the bid bond must be found valid and 
binding under applicable Mississippi Law.  However, the validity and 
construction of contracts of the United States and their consequences 
on the rights and obligations of the parties present questions of 
federal law not controled by the law of any state.  The GR Group, 
Inc., B-242570, Apr. 29, 1991, 91-1 CPD  418; Nationwide Roofing and 
Sheet Metal, Inc., 64 Comp. Gen. 474 (1985), 85-1 CPD  454.  We will 
look to state law for guidance only in the absence of controlling 
federal law.  Pete Vicari Gen. Contractor, Inc., 69 Comp. Gen. 191 
(1990), 90-1 CPD  92.  Here, the FAR and prior decisions of our 
Office provide adequate legal basis for our resolution of 
Shackelford's protest.  In addition, public policy supports the 
dominance of federal law in this regard.  Agencies generally must be 
able to ascertain the adequacy of a bid bond solely from the documents 
submitted at bid opening.  See A&A Roofing Co., Inc., B-219645, Oct. 
25, 1985, 85-2 CPD  463.  As a result, uniform federal regulations 
exist to ascertain the sufficiency of bid bonds; ignoring these 
uniform regulations to require that agencies instead attempt to 
determine whether bidders have furnished adequate bid guarantees under 
the laws of an individual state would detract from the agencies' 
ability to promptly and definitively determine the adequacy of bid 
bonds.  See The GR Group, Inc., supra.

3. The protester cites our decision in J.W. Bateson Co., Inc., 
B-189848, Dec. 16, 1977, 77-2 CPD  472, for the proposition that the 
lack of a date on the certification is a waivable informality.  
Shackelford's reliance is misplaced.  As stated in Bateson, the 
appropriate test to determine the validity of a bid bond is whether 
the government obtains the same protection in all material respects 
under the bond actually submitted with an informality as it would 
under a bond complying with the exact requirements relating to bid 
bonds.  The government is not comparably and adequately protected when 
the bid includes a stale and undated power of attorney certification 
since this raises a serious question as to whether the power of 
attorney had been revoked prior to bid opening.  Quantum Constr., 
Inc., supra.