BNUMBER:  B-274203.2
DATE:  December 9, 1996
TITLE:  Daley Corporation-California Commercial Asphalt Corporation,
J.V.

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Matter of:Daley Corporation-California Commercial Asphalt Corporation, 
          J.V.

File:     B-274203.2

Date:December 9, 1996

Davide Golia, Esq., Marks & Golia, LLP, for the protester.
Frank K. Kotarski, Esq., Christopher M. Bellomy, Esq., and George N. 
Brezna, Esq., Department of the Navy, for the agency.
Linda C. Glass, Esq., and Paul I. Lieberman, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Agency improperly rejected bid on the basis of minor irregularities in 
power of attorney to execute bid bond where the attached power of 
attorney certificate was properly executed by the surety's corporate 
officers, and the certificate was embossed with the surety's original 
seal.

DECISION

Daley Corporation-California Commercial Asphalt Corporation, J.V. 
(Daley-CCAC) protests the rejection of its bid as nonresponsive for 
lack of a valid bid bond under invitation for bids (IFB) No. 
N68711-94-B-1587, issued by the Department of the Navy for certain 
construction at the Marine Corps Air Station at Miramar, California.  
The protester contends that the agency unreasonably concluded that 
Daley-CCAC's bid bond was defective.  

We sustain the protest.

The IFB, which required submission of a bid guarantee, was issued on 
July 1, 1996.  At bid opening on August 1, the low bid was rejected as 
nonresponsive because it failed to offer the required 120-day bid 
acceptance period.  Daley-CCAC, the second low bidder, included in its 
bid package a bid guarantee in the form of a bid bond, dated July 30, 
1996, from American Motorists Insurance Company (AMIC) signed by K. R. 
Viodes as attorney-in-fact.  Accompanying the bid bond was a power of 
attorney, dated July 30, 1996, appointing K. R. Viodes as AMIC's 
attorney-in-fact.  The power of attorney is certified by the facsimile 
signature of W.A. Grauzas, Secretary, and executed by the facsimile 
signature of J. S. Kemper III, Executive Vice President. 

On the back of the power of attorney is an undated notary 
certification that states in part:
 
     "I, Irene Klewer, a Notary Public, do hereby certify that 
     J.S. Kemper, III and F.C. McCullough personally known to me to be 
     the same persons whose names are respectively as Exec. Vice 
     President and Secretary of the American Motorists Insurance 
     Company, a Corporation of the State of Illinois, subscribed to 
     the foregoing instrument."  

Beneath the notary certification was a certification dated July 30, 
1996, and executed by N. J. Zarada as secretary which states in part:  

     "I, N.J. Zarada, Secretary of the American Motorists Insurance   
     Company, do hereby certify that the attached Power of Attorney 
     dated July 26, 1993 on behalf of the person(s) as listed on the 
     reverse side is a true and correct copy and that the same has 
     been in full force and effect since the date thereof and is in 
     full force and effect on the date of this certificate; and I do 
     further certify that the said J.S. Kemper, III and W.A. Grauzas 
     who executed the Power of Attorney as Exec. Vice President and 
     Secretary respectively were on the date of the execution of the 
     attached Power of Attorney the duly elected Exec. Vice President 
     and Secretary of the American Motorists Insurance Company." 

The Navy, after examining the power of attorney, concluded that it 
contained numerous irregularities that raised uncertainties regarding 
the validity of the power of attorney, and therefore the validity of 
the bond itself.  Specifically, the Navy considered the power of 
attorney appointment attested to by a facsimile signature of W. A. 
Grauzas as Corporate Secretary and dated July 30, 1996, to be 
inconsistent with the certification on the same date by N. J. Zarada, 
also as secretary.  The Navy also noted that the undated notary 
certification, which referred to F.C. McCullough as secretary, and the 
July 30, 1996 certification signed by N. J. Zarada, as secretary, that 
the power of attorney was in full force which referred to a power of 
attorney dated July 26, 1993 added further uncertainty.  On the basis 
of these perceived discrepancies, the Navy rejected the protester's 
bid as nonresponsive. 

A bid guarantee is a form of security that assures the government that 
a bidder will not withdraw its bid within the period specified for 
acceptance and, if required, will execute a written contract and 
furnish required performance and payment bonds.  Federal Acquisition 
Regulation (FAR)  sec.  28.001.  The bid guarantee 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 these obligations.  A.W. and Assocs., 
Inc., 69 Comp. Gen. 737 (1990), 90-2 CPD  para.  254.

When required by a solicitation, a bid guarantee is a material part of 
the bid, and a valid guarantee 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  para.  194.  Where a bid bond is submitted as a bid 
guarantee and the 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 must generally be rejected as 
nonresponsive.   Quantum Constr., Inc., B-255049, Dec. 1, 1993, 93-2 
CPD  para.  304.  This is so because  a power of attorney authorizes the 
agent to act for the principal and only a valid power of attorney 
would indicate that the surety expressly agreed to be bound to pay the 
bond signed by the attorney-in-fact.  See Fred Winegar, B-243557, Aug. 
1, 1991, 91-2 CPD  para.  111.  

Accordingly, a bid must be rejected as nonresponsive where there is 
some ambiguity about the authority of the person signing the bond on 
behalf of the surety.  Thus, the issue here is whether the bid 
documents provided any reasonable basis to doubt the validity of the 
power of attorney which is executed by a facsimile signature.  Where 
there is evidence submitted with the bid which unequivocally 
demonstrates the surety's intent to be bound by a facsimile or 
photocopy version, such a bid bond is acceptable.  See Services 
Alliance Sys., Inc., B-255361, Feb. 22, 1994, 94-1 CPD  para.  137.

In this case, the power of attorney submitted by Daley-CCAC with its 
bid bond is comprised of three parts.  The first part authorizes the 
named individual to act as attorney-in-fact for the surety; it is 
attested to by a secretary and signed by an executive vice president 
of the surety and affixed with a raised original corporate seal.  The 
second part is a notary public certification of the corporate 
officers' signatures on the first part.  The third part, captioned 
"CERTIFICATION," is signed by another secretary of the surety who 
certifies that the "attached" power of attorney dated July 26, 1993, 
is a full, true, and correct copy and is in full force and effect.   

The agency views the naming of three different secretaries in 
different parts of the power of attorney as an irregularity that casts 
doubt upon the validity of the secretarial certifications and, 
therefore, the validity of the power of attorney.  We think the 
agency's concern is misplaced.  While three different secretaries were 
identified in different sections of the power of attorney, N. J. 
Zarada certified that he was the secretary on July 30, 1996.  
Moreover, the agency had information in its possession that identified 
N. J. Zarada as AMIC's current secretary.[1]  Thus, there should have 
been no question that N. J. Zarada was the Secretary at the time the 
bond was executed.  Zarada certified that W. A. Grauzas and J.S. 
Kemper, III were the Secretary and Executive Vice President on the 
date of execution of the power of attorney.  The certification also 
refers to an "attached" July 26, 1993  power of attorney.  Since the 
"attached" power of attorney was essentially a reproduced form that 
had the date of July 30, 1996 typed in, it appears that the typist 
simply made a clerical error, which would explain why both Grauzas and 
Zarada were identified as the secretary as of the same date.  Of most 
importance, however, the Zarada certification serves to validate the 
authenticity and current validity of the Viodes appointment since 
Zarada, as the current secretary, certified that K.R. Viodes was 
properly appointed attorney-in-fact on July 26, 1993, and that this 
appointment was still in effect.  

Further, Zarada's certification is accompanied by an authorized 
facsimile seal.  The power of attorney specifically provides that the 
surety fully intended to be bound by the facsimile signatures of its 
corporate officers, and by a facsimile seal.  In addition, the raised 
corporate seal was affixed to the document.  The corporate seal 
establishes prima facie that an instrument is the duly authorized act 
of the corporation and is not easily overcome.  Fletcher Cyc. Corp.,  sec.  
2470-2473 (Perm. Ed.); 18A Am. Jur. 2d 214, Corporations Sec. 304; 
H.G. Hill Co. v. Taylor, 232 Ala. 471, 168 So. 693 (1936).  

While as a general rule a contracting officer should not accept a bid 
bond unless it is clear that the surety on the bond is obligated, 
Quantum Constr., Inc., supra, in light of the certification by the 
current secretary, we fail to see as a matter of law how the surety 
would not be bound to the obligations of the bond.  In these 
circumstances, the agency's determination reflects concern with 
technical deficiencies rather than any that would call into question 
whether the surety was actually bound.  See Hancon Assocs.--Recon., 
B-209446.2, Apr. 29, 1983, 83-1 CPD  para.  460. 
 
Accordingly, we conclude that the protester's bid should not have been 
rejected, and we sustain the protest.  Contract award has been 
withheld pending resolution of this protest.  We recommend that award 
be made to the protester if it is otherwise eligible.  We also 
recommend that the protester be reimbursed its costs of filing and 
pursuing its protest.  Bid Protest Regulations, section 21.8(d)(1), 
61 Fed. Reg. 39,039, 39,046, (July 26, 1996) (to be codified at 4 
C.F.R.  sec.  21.8(d)(1)).  The protester should submit its certified claim 
for costs to the contracting agency within 60 days of receiving this 
decision.  Section 21.8(f)(1), 61 Fed. Reg. supra.

The protest is sustained.

Comptroller General 
of the United States  

1. The agency provided what it considers to be a properly executed 
AMIC power of attorney with the agency report.  This power of attorney 
was certified and executed by the facsimile signature of W. A. 
Grauzas, Secretary, and J. S. Kemper III, Executive Vice President, 
and was signed by N. J. Zarada, Secretary, in July 1996.  An agency 
should consider evidence, such as previously submitted bid bonds which 
are in its possession at the time of bid opening, which serve to 
establish the authority of the individual executing a bid bond.  
Danish Arctic Contractors,
B-225807, June 12, 1987, 87-1 CPD  para.  590.