A-86795, JUNE 21, 1937, 16 COMP. GEN. 1095

A-86795: Jun 21, 1937

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HAD REFERENCE TO BIDS INDICATING THE INCLUSION OR EXCLUSION OF SAID TAX AND IS NOT FOR APPLICATION TO CONTRACTS AWARDED ON BIDS SUBMITTED WITHOUT REFERENCE TO EXCLUSION OR INCLUSION OF SAID TAX. BIDS WERE OPENED UNDER DATE OF MAY 5. THE BID OF THE NORTHWEST MOTOR COMPANY IS ATTACHED. IT SHOULD BE NOTED THAT PARAGRAPH 5 UNDER THE HEADING "CONDITIONS" WAS DELETED BEFORE INVITATIONS TO BID WERE ISSUED AND THAT THE SPECIAL PROVISION IN REGARD TO THE EXCISE TAX. WHICH WAS ATTACHED TO THE FACE OF THE INVITATION. WAS RETURNED WITH THE BIDDER'S PROPOSAL WITHOUT ANY DELETIONS OR INDICATIONS AS TO WHETHER THE PRICES QUOTED WERE INCLUSIVE OR EXCLUSIVE OF THE EXCISE TAX. ON WHICH WE HAVE NOT RECEIVED TAX EXEMPTION CERTIFICATE.

A-86795, JUNE 21, 1937, 16 COMP. GEN. 1095

CONTRACTS - PRICE - CONTRACTOR'S INADVERTENCE AS TO FEDERAL EXCISE TAX - TAX EXEMPTION CERTIFICATES THE DECISION OF DECEMBER 15, 1936, 16 COMP. GEN. 583, WITH REFERENCE TO THE ISSUANCE OF FEDERAL EXCISE TAX EXEMPTION CERTIFICATES TO DEALERS OR MANUFACTURERS FURNISHING GOVERNMENT SUPPLIES, HAD REFERENCE TO BIDS INDICATING THE INCLUSION OR EXCLUSION OF SAID TAX AND IS NOT FOR APPLICATION TO CONTRACTS AWARDED ON BIDS SUBMITTED WITHOUT REFERENCE TO EXCLUSION OR INCLUSION OF SAID TAX, AND NO EXEMPTION CERTIFICATES MAY BE ISSUED TO A CONTRACTOR FOR THE PURPOSE OF OBTAINING EXEMPTIONS FROM OR REFUND OF THE TAX IN SUCH CASES.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE ADMINISTRATOR OF VETERANS' AFFAIRS, JUNE 21, 1937:

THERE HAS BEEN RECEIVED YOUR LETTER OF JUNE 8, 1937, WITH INCLOSURES, AS FOLLOWS:

UNDER DATE OF APRIL 23, 1936, THE VETERANS' ADMINISTRATION ADVERTISED FOR BIDS FOR A LIGHT WEIGHT COUPE IN ACCORDANCE WITH VETERANS' ADMINISTRATION SPECIFICATION VA-M-31B, FOR DELIVERY TO VETERANS' ADMINISTRATION FACILITY, SIOUX FALLS, SOUTH DAKOTA. BIDS WERE OPENED UNDER DATE OF MAY 5, 1936, AWARD MADE TO THE NORTHWEST MOTOR COMPANY, CHEVY CHASE, MARYLAND, AND PURCHASE ORDER 6-VA-23141 ISSUED TO COVER PROCUREMENT OF THE VEHICLE. THE BID OF THE NORTHWEST MOTOR COMPANY IS ATTACHED, AND IT SHOULD BE NOTED THAT PARAGRAPH 5 UNDER THE HEADING "CONDITIONS" WAS DELETED BEFORE INVITATIONS TO BID WERE ISSUED AND THAT THE SPECIAL PROVISION IN REGARD TO THE EXCISE TAX, WHICH WAS ATTACHED TO THE FACE OF THE INVITATION, WAS RETURNED WITH THE BIDDER'S PROPOSAL WITHOUT ANY DELETIONS OR INDICATIONS AS TO WHETHER THE PRICES QUOTED WERE INCLUSIVE OR EXCLUSIVE OF THE EXCISE TAX.

UNDER DATE OF OCTOBER 27, 1936, THE NORTHWEST MOTOR COMPANY MADE THE FOLLOWING REQUEST:

"THERE APPEARS BELOW PURCHASE ORDER, ETC., ON WHICH WE HAVE NOT RECEIVED TAX EXEMPTION CERTIFICATE. KINDLY CHECK YOUR FILES AND ARRANGE FOR US TO RECEIVE THIS CERTIFICATE AT YOUR EARLY CONVENIENCE:

TABLE

CONSIGNED TO--- PURCHASE ORDER DATE TYPE AMOUNT MANAGER, VETERANS' 6-VA- 23141 ---- 5-23-36 COUPE ---- $583.68

ADMINISTRATION,

FEDERAL BLDG., SIOUX

FALLS, S.DAK.

IN RESPONSE THERETO LETTER OF NOVEMBER 11, 1936 WAS WRITTEN TO THE CONTRACTOR AS HEREINAFTER QUOTED:

"REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 27, 1936, RELATING TO FURNISHING TAX EXEMPTION CERTIFICATE PERTAINING TO EXCISE TAX INVOLVED ON OUR PURCHASE ORDER 6-VA-23141, COVERING ONE FORD STANDARD LIGHT WEIGHT COUPE, DELIVERED TO VETERANS' ADMINISTRATION, SIOUX FALLS, SOUTH DAKOTA.

"THE RECORDS OF THIS OFFICE INDICATE THAT THIS VEHICLE WAS DELIVERED IN ACCORDANCE WITH YOUR PROPOSAL OF MAY 5, 1936, WHICH OPENED MAY 5, 1936, AND YOU DID NOT INDICATE IN YOUR BID THAT THE PRICE QUOTED DID NOT INCLUDE FEDERAL TAXES, IN VIEW OF WHICH THE EXEMPTION CERTIFICATE CAN NOT BE FURNISHED.'

ON FEBRUARY 3, 1937, THE NORTHWEST MOTOR COMPANY WROTE AS FOLLOWS, INCLUDING IN THEIR LETTER A NOTARIZED AFFIDAVIT:

"ENCLOSED YOU WILL FIND OUR SWORN AFFIDAVIT ON WHICH WE SHOW THE AMOUNT OF EXCISE TAX WHICH WAS NOT INCLUDED IN OUR BID PRICE ON INVITATION NO. 524-M.

"THIS FORM IS IN COMPLIANCE WITH THE LATEST DECISION OF THE COMPTROLLER GENERAL IN WHICH HE STATES THAT WHERE TAX WAS NOT SHOWN TO BE EXCLUDED ON A BID, A SWORN STATEMENT WAS TO BE FURNISHED ON SAME.

"WE HOPE THAT THIS WILL TAKE CARE OF FURNISHING US WITH A TAX EXEMPTION CERTIFICATE UPON THE ABOVE-MENTIONED INVITATION.'

AS THIS ADMINISTRATION HAD RECORD OF NO COMPTROLLER GENERAL DECISION WHICH WAS CONSIDERED APPLICABLE IN THIS CASE, THE NORTHWEST MOTOR COMPANY WAS ADDRESSED ON MARCH 23, AS FOLLOWS:

"REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 3 RELATIVE TO SUPPLYING YOU WITH U.S. GOVERNMENT TAX EXEMPTION CERTIFICATE IN CONNECTION WITH PURCHASE ORDER 6-VA-23141, COVERING FORD COUPE DELIVERED TO VETERANS' ADMINISTRATION, SIOUX FALLS, SOUTH DAKOTA.

"IT WILL BE APPRECIATED IF YOU WILL CITE THE DECISION OF THE COMPTROLLER GENERAL TO WHICH YOU REFER IN PARAGRAPH 2, WHEREIN YOU STATE THAT WHERE TAX WAS NOT SHOWN TO BE EXCLUDED ON A BID, A SWORN STATEMENT WAS TO BE FURNISHED.' AND ON APRIL 10, 1937, AS FOLLOWS:

"REFERENCE IS MADE TO OUR LETTER OF MARCH 23, REQUESTING THAT YOU CITE THE DECISION OF THE COMPTROLLER GENERAL REFERRED TO IN PARAGRAPH 2 OF YOUR LETTER OF FEBRUARY 3 RELATIVE TO THE MATTER OF FURNISHING EXEMPTION CERTIFICATE IN CONNECTION WITH EXCISE TAX.

"KINDLY FORWARD THIS INFORMATION AT AN EARLY DATE.'

TO THESE REQUESTS THE CONTRACTOR MADE THE FOLLOWING REPLY, APRIL 12, 1937:

"THIS ACKNOWLEDGES YOUR LETTER OF APRIL 10TH, REQUESTING THAT WE CITE THE DECISION OF THE COMPTROLLER GENERAL RELATIVE TO THE MATTER OF FURNISHING EXEMPTION CERTIFICATE IN CONNECTION WITH EXCISE TAX.

"WE WISH TO CALL YOUR ATTENTION TO THE DECISION OF THE COMPTROLLER GENERAL DATED DECEMBER 15, 1936, AND NUMBERED A-81763. USING THE ABOVE MENTIONED DECISION AS OUR GUIDE, UNDER DATE OF FEBRUARY 3, 1937, WE SENT THE VETERANS' ADMINISTRATION OUR SWORN AFFIDAVIT SHOWING THAT NO EXCISE TAX WAS INCLUDED IN OUR BID PRICE ON INVITATION NO. 524-M. THIS WAS DONE DUE TO THE FACT THAT IN THE MAJORITY OF GOVERNMENT PURCHASING OFFICES INTERPRETATION OF THE COMPTROLLER GENERAL'S DECISION IS AS FOLLOWS:

" "IF THE SUCCESSFUL BIDDER IS A MANUFACTURER AND HIS CERTIFICATE IN THE BID FORM IS TO THE EFFECT THAT HE IS A MANUFACTURER, AND THE TAX IS NOT INCLUDED, THEN AN EXEMPTION CERTIFICATE MAY BE ISSUED TO HIM WITHOUT FURTHER ACTION.

" "IF THE SUCCESSFUL BIDDER IS A DEALER, IN ADDITION TO WHAT IS REQUIRED OF A MANUFACTURER, THE DEALER MUST FILE A STATEMENT INDICATING AS ACCURATELY AS POSSIBLE THE AMOUNT OF THE TAX PER UNIT WHICH HE CLAIMS IS EXCLUDED, OR IN LIEU THEREOF, IN THE EVENT THAT NO SUCH ESTIMATE CAN BE FURNISHED, AN AFFIDAVIT TO THE EFFECT THAT IN SUBMITTING HIS BID NO FEDERAL EXCISE TAX WAS INCLUDED. UPON RECEIPT OF THESE THE TAX EXEMPTION CERTIFICATE MAY BE ISSUED.'

"WE HAVE BEEN CALLED UPON TO FURNISH THESE SWORN AFFIDAVITS AT NUMEROUS TIMES AND UPON RECEIPT OF THE SAME HAVE BEEN SUPPLIED WITH A TAX EXEMPTION CERTIFICATE. WE, THEREFORE, FELT THAT AT THE TIME OF WRITING TO YOU FOR THIS EXEMPTION CERTIFICATE, THAT OUR SWORN STATEMENT WOULD TAKE CARE OF ANY INFORMATION IN SECURING THE TAX EXEMPTION CERTIFICATE.

"AFTER CHECKING ON THE ABOVE FACTS, WE WOULD APPRECIATE YOUR KINDNESS IN INFORMING US AS TO WHETHER THERE IS ANYTHING ELSE WE MAY DO IN HELPING TO SECURE THIS CERTIFICATE.'

IT IS THE OPINION OF THE VETERANS' ADMINISTRATION THAT THE DECISION OF THE COMPTROLLER GENERAL REFERRED TO, A-81763, DOES NOT DEAL WITH THE QUESTION AT ISSUE IN THIS CASE, WHICH IS, AS TO WHETHER AN AUTOMOBILE DEALER, WHOSE BID IS SILENT AS TO THE EXCLUSION OR INCLUSION IN THE PRICES QUOTED OF THE FEDERAL EXCISE TAX ON AUTOMOBILES, IS ENTITLED TO AN EXEMPTION CERTIFICATION, UPON RECEIPT OF AN AFFIDAVIT TESTIFYING THAT THE EXCISE TAX WAS NOT INCLUDED IN THE BID PRICE. IN ACCORDANCE WITH THE DECISION REFERRED TO, EXEMPTION CERTIFICATE WOULD HAVE BEEN ISSUED UPON RECEIPT OF AFFIDAVIT, IF THE BID OF THE NORTHWEST MOTOR COMPANY HAD STATED THAT THE PRICE DID NOT INCLUDE THE EXCISE TAX. HOWEVER, IN THE ABSENCE OF SUCH A STATEMENT IN THE PROPOSAL, IT IS THE OPINION OF THIS ADMINISTRATION THAT THE EXEMPTION CERTIFICATE SHOULD NOT BE FURNISHED, AND INFORMATION IS REQUESTED AS TO WHETHER THIS CONCLUSION IS CORRECT. THE NORTHWEST MOTOR COMPANY IS A DEALER AGENT OF THE FORD MOTOR COMPANY.

ATTACHED IS CORRESPONDENCE REFERRED TO, AND IT IS REQUESTED THAT CORRESPONDENCE AND BID BE RETURNED WITH YOUR REPLY.

THE INTERPRETATION PLACED BY THE VETERANS' ADMINISTRATION ON THE DECISION OF DECEMBER 15, 1936, 16 COMP. GEN. 583, AS OUTLINED IN THE PENULTIMATE PARAGRAPH OF THE LETTER, SUPRA, IS CORRECT, AND THE DECISION HAS NO APPLICATION UPON THE FACTS HERE PRESENTED. IN THAT CASE THERE WERE FOR CONSIDERATION CERTAIN BIDS OF THE NORTHWEST MOTOR CO. AND OURISMAN CHEVROLET CO.--- DEALERS, AS DISTINGUISHED FROM MANUFACTURERS--- IN FORD AND CHEVROLET AUTOMOBILES, RESPECTIVELY. THE BIDS OF THE NORTHWEST MOTOR CO. STATED THE AMOUNTS TO BE ADDED TO THE BID PRICES IF TAX EXEMPTION CERTIFICATES WERE NOT FURNISHED. THE OURISMAN CHEVROLET CO. STATED ON ITS BIDS THAT ITS PRICE WAS EXCLUSIVE OF THE FEDERAL EXCISE TAX AND "THAT IT WILL BE NECESSARY THAT EXEMPTION CERTIFICATE BE FURNISHED WITH THE PURCHASE ORDER.' IT THUS WAS PLAIN THAT THE BIDS OF BOTH DEALERS WERE MADE IN CONTEMPLATION OF THE EXCISE TAX AND PRICE ADJUSTMENTS OR TAX EXEMPTIONS IN RELATION THERETO. IT WAS HELD THAT, IN THAT INSTANCE, IF THE BIDS OF EITHER COMPANY WERE OTHERWISE FOR ACCEPTANCE, TAX EXEMPTION CERTIFICATES MIGHT BE FURNISHED UPON A CLEAR SHOWING THAT THE BID PRICES WERE IN FACT EXCLUSIVE OF THE TAX. ALSO, IT WAS SUGGESTED IN THAT DECISION THAT INVITATIONS FOR BIDS THEREAFTER ISSUED REQUEST ALL BIDDERS, MANUFACTURERS AND DEALERS, TO SUBMIT BIDS UPON BOTH TAX INCLUSION AND TAX EXCLUSION BASES, WITH THE UNDERSTANDING THAT EXEMPTION CERTIFICATES WOULD BE ISSUED OR WITHHELD DEPENDENT UPON THE BASIS OF THE ACCEPTED BID. IT IS TO BE OBSERVED THAT THE CITED DECISION WAS RENDERED TO THE SECRETARY OF AGRICULTURE IN ANSWER TO CERTAIN QUESTIONS SUBMITTED BY HIM RELATIVE TO THE PROPER PROCEDURE TO BE FOLLOWED IN CONNECTION WITH SOME BIDS THEN PENDING. IT NOT ONLY CLEARLY HAD NO REFERENCE TO BIDS SUBMITTED WITHOUT REFERENCE TO EXCLUSION OR INCLUSION OF EXCISE TAX, BUT WAS WHOLLY PROSPECTIVE IN ITS APPLICATION. IT HAD NO BEARING UPON A TRANSACTION WHICH HAD BEEN CONSUMMATED SOME SEVEN MONTHS PRIOR TO ITS DATE.

EARLIER AS WELL AS LATER DECISIONS HAVE BEEN TO THE EFFECT THAT UNLESS A BID AS SUBMITTED AFFIRMATIVELY SHOWS THE EXCLUSION OF THE EXCISE TAX THE BID PRICE IS PRESUMED TO BE INCLUSIVE THEREOF AND THAT, THEREFORE, NO EXEMPTION CERTIFICATE IS TO BE ISSUED TO THE CONTRACTOR FOR THE PURPOSE OF OBTAINING EXEMPTIONS FROM OR REFUND OF THE TAX. 15 COMP. GEN. 1030; A- 86269, MAY 21, 1937, 16 COMP. GEN. 1021; A-86472, JUNE 7, 1937, 16 COMP. GEN. 1054, COPY HEREWITH. THESE DECISIONS ARE CONTROLLING HERE. THE NORTHWEST MOTOR CO. SUBMITTED A BID OFFERING A FLAT PRICE OF $583.68 FOR ONE FORD COUPE, SUBJECT TO A TRADE-IN ALLOWANCE OF $20 FOR A USED VEHICLE. THE BID PRICE WAS ACCEPTED ON THAT BASIS AND BECAME THE CONTRACT PRICE AND WAS NOT THEREAFTER SUBJECT TO MODIFICATION, DIRECT OR INDIRECT, TO THE PREJUDICE OF THE GOVERNMENT. IF IT WAS THE PURPOSE OF THE NORTHWEST MOTOR CO. TO CLAIM REFUND OF EXCISE TAX IN ADDITION TO THE BID PRICE, THAT FACT SHOULD HAVE BEEN SHOWN ON THE FACE OF ITS BID WHEN SUBMITTED. HAVING FAILED SO TO INDICATE SUCH PURPOSE THERE IS NO AUTHORITY FOR THE ISSUANCE OF A TAX EXEMPTION CERTIFICATE TO SAID COMPANY UPON REQUEST MADE SEVERAL MONTHS AFTER AWARD OF THE CONTRACT. YOUR SUBMISSION IS ANSWERED ACCORDINGLY.