D & L interim and long term financing on this project. Since D & L did not submit in writing with its bid a statement of the source of its financing, the District Engineer on May 8, 1959, determined that the bid of D & L was nonresponsive. The District Engineer further determined that the letter from Bateson indicating the source of financing and attaching a list of Capehart projects awarded to it met the requirements of paragraph 4. Thereupon, D & L protested against any award to Bateson.

It is reported that the instant invitation was the second invitation covering the Fort Leonard Wood project. The first invitation, opened on April 1, 1959, contained the identical paragraph 4. Of the five bids received one quoted a base bid price above the statutory maximum, and none of the other four bidders, including D & L and Bateson, furnished with their bids any indication of its source of financing. A dispute arose as to the method of determining which bidder, D & L or Bateson, offered the maximum usable construction. Each of the three low bidders was requested to furnish the source of its financing but it is reported that no bidder was advised, or any implication made, that its bid was unacceptable because of its failure to furnish with its bid the information required by paragraph 4 of the invitation. D & L furnished the name of the Pringle Company as its source of financing, which company although not the actual source of funds, agreed to obtain the funds for D & L. This information was satisfactory to the District Engineer as being in compliance with paragraph 4. While Bateson was reluctant to indicate its source of financing prior to receipt of a Letter of Acceptability, the District Engineer required that such information be furnished as a prerequisite to consideration of its bid.

The bids of both D & L and Bateson were administratively considered as responsive even though the source of financing was not submitted initially with their bids. Hence, the only matter remaining for determination was which bidder was entitled to award, and such determination did not relate to the source of financing. The Chief of Engineers determined that the invitation did not clearly express the basis for determining the lowest bidder and, therefore, directed that all bids be rejected and the project readvertised.

The project was readvertised by Addendum No. 4 but no change was made in paragraph 4 other than to change the number of days allowed for closing.

It is your contention that the failure of D & L to furnish the information under paragraph 4 was a substantial deviation prejudicial to the rights of other bidders; that consequently its low bid was not

responsive; and that award should be made to the lowest responsible bidder, the Bateson Company. In that connection, it is pointed out that the information required by paragraph 4 affected the price which prospective bidders could submit under the invitation; that it required bidders to make arrangements for financing prior to submitting bids; and that a bidder who ignores the requirement is free after bid opening to shop for financing thereby gaining a monetary advantage over other bidders. You further point out that, in complying with paragraph 4, Bateson was forced to increase its bid price by about $28,000 which represented the going rate of brokers' commissions for arranging financing.

The term "eligible bidder" as used in 42 U.S.C. 1594 (a) is defined in subsection (b) as meaning "a person, partnership, firm, or corporation determined by the Secretary after consultation with the Commissioner (1) to be qualified by experience and financial responsibility to construct housing of the type described in subsection (a) of this section, and (2) to have submitted the lowest acceptable bid." The question for consideration here is whether, under the terms of the invitation, the failure of a bidder to submit with its bid information regarding the source of its financing may be waived by the Government as an informality and the bid evaluated on the basis of such information submitted after the opening of bids. The invitation for bids read as a whole imposes additional requirements after the submission and opening of bids on the three lowest bidders to furnish information and data respecting its organization, experience in constructing housing of the type called for, evidence of financial responsibility, evidence that bonds can be obtained, and affidavits of participation with respect to itself or a general contractor. Moreover, the invitation contemplates an "award" to the eligible builder provided it meets the requisites of the Letter of Acceptability, including arrangements for the financing of the total cost of the project. The invitation envisages a most complex and unique procedure before an eligible builder is finally awarded the contract. The eligible builder to whom a Letter of Acceptability is issued must take the following actions-acceptable to the Government-before the housing contract is executed.

1. A corporation called the "mortgagor-builder" must be organized;

2. Financing for the total cost of the project, including profit, must be arranged through a building loan agreement between the mortgagor-builder and a mortgagee lender;

3. Require the mortgagee to obtain FHA mortgage insurance and take all necessary action to obtain an FHA commitment for insurance during and after construction; and

4. Execute a lease of the project site to the mortgagor-builder.

Thereafter, a tripartite contract which defines the rights and obligations of the Government, the eligible builder and the mortgagorbuilder is executed. Hence, it will be seen that the financial arrangements and commitments are conditions precedent to "award" as distinguished from the issuance of a Letter of Acceptability. The information required by paragraph 4 is solely for the benefit of the Government and forms a basis for determining, prior to the issuance of the Letter of Acceptability, that an eligible bidder will be able to complete the financing arrangements and effect a closing within the time specified in the invitation for bids. The paragraph does not specify that bidders obtain advance commitments for their financing. On the contrary, paragraph 1 of the invitation clearly indicates that financing was to be arranged for after the bid opening and the issuance of the Letter of Acceptability. Basically this paragraph is for the purpose of enabling the Government to determine the bidders' responsibility. It has been recognized that the contracting agency has the duty of determining whether a particular bidder is a responsible bidder and it is to facilitate that determination that provisions such as the one here involved are included in the invitation for bids. Obviously, the determination may be made on the basis of information and data elicited after bids are opened as well as on the basis of information and data submitted with the bid. We do not agree that, in this particular case, the failure to furnish such preliminary financial information went to the substance of the bid so as to render it legally defective and subject to rejection. In the circumstances, we think it proper to conclude that the failure so to furnish was an informality which may be waived under paragraph 3 of the invitation. That this is true is clearly evidenced by the very character of the project undertaken by issuing the invitation and by providing procedures therein for the determination of the eligible builder.

Accordingly, no legal basis is apparent to question the administrative action taken in this matter.

[B-137597]

Transportation-Tariff Construction-Rules and Regulations-Routing Instructions

Under a basic freight tariff referring to the use of lower maximum rates in a transcontinental tariff which specifies that before the rates may be applied the "rules and regulations" in the tariff must be observed, such rules and regulations are construed to be separate and distinct from the routing instructions and not to be regarded as including routing instructions; therefore, the use of the routing provisions in the basic tariff and the lower maximum transcontinental rates were properly applied in the computation of freight charges for a Government shipment.

To the Louisville and Nashville Railroad Company, August 3, 1959: Reference is made to your letter written under file No. 1-11798, with memorandum attached, in which you request a review of the settlement of February 11, 1958 (claim No. TK 597465), which disallowed your claim on supplemental bill No. 3548-32A for an additional allowance of $439.70.

Your claim involves an Army shipment of 548 boxes of ammunition for cannon with explosive projectiles, weighing 63,568 pounds, which was transported from Panhandle, Nebraska, to Theodore, Alabama, under Government bill of lading WV-9438944. The goods were tendered to the origin carrier, the Chicago, Burlington & Quincy Railroad Company, on December 8, 1951, and the goods were received in Theodore, Alabama, on December 19, 1951. The routing on the bill of lading was "CB&Q-NC&STL-L&N."

On the date of movement, class rates which applied between Panhandle, Nebraska, and Theodore, Alabama, via the bill of lading route, were published in Western Trunk Line Tariff No. 385, I.C.C. No. A-3020. Item 10-L in supplement 246 to Tariff No. 385 is captioned "Application of Maximum Rates" and lists various Western stations, including Panhandle, and various Southern stations, including Theodore. Item 10-L makes reference to item 11, and item 11–K, in supplement 199 to Tariff No. 385, under Note A, reads, in pertinent part:

Apply rates (class or commodity) named in tariffs, specified in Note B, shown below *** from *** the following points, when the charges accruing under such rates are lower than the charges accruing under the rates named in this tariff on the same commodity * * *

Note B in item 11-K lists a number of tariffs, one of which is Trans-Continental Freight Bureau East-Bound Tariff No. 2-R, I.C.C. No. 1547. This tariff is shown in Note B-for the purpose of maximum rate application—as naming rates "From La Grande, Ore., or Spokane, Wash."

Note C in item 11-K provides as follows:

In the application of the maximum rates provided for by this item, the rules and regulations as provided or referred to in the tariffs specified in Note B above, must be fully observed.

Thus, Western Trunk Line Tariff No. 385 publishes joint through class rates from Panhandle, Nebraska, to Theodore, Alabama, but provides that if the rates published in Trans-Continental Tariff No. 2-R produce a lower charge on the same commodity from the specified points to the destination of the shipment, the lower rates in Tariff No. 2-R will apply. However, Note C in item 11-K of supplement 199 to Tariff No. 385 provides that in applying the maximum rate published in Tariff No. 2-R the "rules and regulations" in Tariff No. 2-R must be observed. You contend that the term "rules and regulations" includes "Routing Instructions," while the contention of our Office is to the contrary.

The index on page 2 of Western Trunk Line Tariff No. 385 lists "Routing Instructions" and "Rules and Regulations" as entirely separate and distinct subjects, the former being found on pages "336 to 344," and the latter on pages "205 and 206." In a similar manner, Trans-Continental Tariff No. 2-R lists "Routing Instructions" on page 863, and "Rules, General," and "Rules, Special," as starting at pages 146 and 148, respectively. In Tariff No. 2-R, certain "Regulations" are shown as a subordinate item under the "Rules." This seems to be a strong indication that the "Rules and Regulations" and the "Routing Instructions" are regarded as separate and distinct subjects in tariff publishing circles. Also for consideration are the rules and regulations of the Interstate Commerce Commission, as published in the Code of Federal Regulations.

Section 141.0 (a) of Chapter I, Title 49 of the Code of Federal Regulations reads:

General provisions: definitions-(a) Conformation to rules; reissue. All tariffs filed on or after October 1, 1928, except as otherwise provided in this part or unless otherwise authorized by special permission of the Commission, must conform to the rules in this part. *

Section 141.4 of Chapter I, Title 49 of the Code of Federal Regulations reads in pertinent part:

Content of tariffs. Tariffs shall contain in the order named:

(a) Table of contents. **

(b) Names of participating carriers. ***

(c) Index of commodities. ***

(d) Index of stations. *

(e) [Reserved]

(f) List of exceptions. *

(g) Explanatory statements. *

(h) Rules governing the tariffs. (1) Rules and regulations which govern the tariff, the title of the subject of each rule or regulation to be shown in distinctive type. Under this head all of the rules, regulations, or conditions which in any way affect the rates named in the tariff shall be entered, except as otherwise provided in this part. A special rule affecting a particular item or rate must be specifically referred to in such item or in connection with such rate.

(i) Rutes. ***

(j) State grouping. *

(k) Routing. (1) Routing over which the rates apply, stated in such manner that such routes may be definitely ascertained.

(1) [Reserved.]

(m) Explanation of abbreviations and reference marks. ***