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FAR Case on Powers of Attorney for Bid Bonds Released for Public Comment
AGC Leads Charge for Regulatory Clarity
The hard work of AGC, along with its partners in the surety bonding and insurance industries, the Surety Association of America, the National Association of Surety Bond Producers and the American Insurance Association, scored a big win concerning the use powers of attorney accompanying bid bonds when a Notice of Proposed Rule Making (NPRM) was published this week in the Federal Register.
The NPRM would allow a copy of an original power of attorney, including a photocopy or facsimile copy, when submitted in support of a bid bond, to be sufficient evidence of the authority to bind the surety. The Councils took enforcement a step further by adding that the authenticity and enforceability of the power of attorney at the time of the bid opening will be treated as a matter of responsibility on the contracting officer.
Once finalized, this will be a huge victory for construction contractors and sureties, who will have they clarity they need on the important matter. There has been a significant level of controversy surrounding contracting officers’ decisions regarding the evaluation of bid bonds and accompanying powers of attorney. Since 1999, a series of GAO decisions has rejected faxed and photocopied powers of attorney. Once the General Accounting Office (GAO) rejected a contractor’s bid as non-responsive because the signatures on the bid bond’s power of attorney were generated by computer as part of the document. This decision has been interpreted by industry and procuring agencies to require a contracting officer to inspect the power of attorney at bid opening to ascertain that the signatures are original. The requirement for an original power of attorney, combined with the requirement for an original ‘‘wet’’ signature after the generation of the document, has become costly and unworkable for the industry.
AGC of America worked with the Office of Federal Policy Procurement, the U.S. Army Corps of Engineers, the Naval Facilities Engineering Command and the General Services Administration to send the message that this was a problem that needed solving and the Federal Agencies heard us loud and clear. To view a copy of the NPRM, please visit http://www.acqnet.gov/far/ProposedRules/2003-029.pdf.
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