A-99195, NOVEMBER 22, 1938, 18 COMP. GEN. 465

A-99195: Nov 22, 1938

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TAXES - FEDERAL - EXEMPTION CERTIFICATES - BIDDER'S FAILURE TO SHOW EXCLUSION OF TAX FROM BID PRICE WHERE BID FORM FURNISHED PROSPECTIVE BIDDERS INCLUDED AN "EXCISE TAX QUESTIONNAIRE" ON WHICH THE BIDDER WAS DIRECTED TO STATE WHETHER APPLICABLE EXCISE TAXES WERE INCLUDED IN OR EXCLUDED FROM ITS BID PRICE. THE BIDDER FAILED TO SHOW THAT THE AMOUNT OF THE TAX WAS EXCLUDED. THERE IS NO AUTHORITY FOR THE ISSUANCE OF A TAX EXEMPTION CERTIFICATE. NOTWITHSTANDING THE CONTRACTOR'S SUBSEQUENT NOTARIZED LETTER STATING THAT THE GOVERNMENT EXCISE TAX WAS EXCLUDED FROM ITS BID. IS AS FOLLOWS: REFERENCE IS MADE TO CONTRACT I-1-IND-15621 AND PURCHASE ORDER NO. THE ONLY BID RECEIVED ON INVITATION NO. 4060 WAS FROM THE MACK INTERNATIONAL MOTOR TRUCK CORPORATION.

A-99195, NOVEMBER 22, 1938, 18 COMP. GEN. 465

TAXES - FEDERAL - EXEMPTION CERTIFICATES - BIDDER'S FAILURE TO SHOW EXCLUSION OF TAX FROM BID PRICE WHERE BID FORM FURNISHED PROSPECTIVE BIDDERS INCLUDED AN "EXCISE TAX QUESTIONNAIRE" ON WHICH THE BIDDER WAS DIRECTED TO STATE WHETHER APPLICABLE EXCISE TAXES WERE INCLUDED IN OR EXCLUDED FROM ITS BID PRICE, AND THE BIDDER FAILED TO SHOW THAT THE AMOUNT OF THE TAX WAS EXCLUDED, THERE IS NO AUTHORITY FOR THE ISSUANCE OF A TAX EXEMPTION CERTIFICATE, NOTWITHSTANDING THE CONTRACTOR'S SUBSEQUENT NOTARIZED LETTER STATING THAT THE GOVERNMENT EXCISE TAX WAS EXCLUDED FROM ITS BID.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF THE INTERIOR, NOVEMBER 22, 1938:

YOUR LETTER OF NOVEMBER 3, 1938, IS AS FOLLOWS:

REFERENCE IS MADE TO CONTRACT I-1-IND-15621 AND PURCHASE ORDER NO. C 4444, BASED ON INVITATION NO. 4060 FOR ONE DUMP TRUCK PURCHASED FROM MACK INTERNATIONAL MOTOR TRUCK CORPORATION.

THE ONLY BID RECEIVED ON INVITATION NO. 4060 WAS FROM THE MACK INTERNATIONAL MOTOR TRUCK CORPORATION, WHICH WAS ACCEPTED SINCE THE TRUCK OFFERED COMPLIES WITH THE SPECIFICATIONS AND SERVICE REQUIREMENTS AND WAS OFFERED AT A PRICE COMPARABLE TO OTHER PURCHASES MADE FOR SIMILAR TRUCKS. THIS BID WAS FORWARDED ON SEPTEMBER 9, 1938, TO THE GENERAL ACCOUNTING OFFICE, AUDIT DIVISION, AS PART OF THE FILES ON CONTRACT I-1-IND-15621, A COPY OF WHICH CONTRACT IS ENCLOSED.

THE MACK INTERNATIONAL MOTOR TRUCK CORPORATION FAILED TO FILL IN THE EXCISE TAX QUESTIONNAIRE, OR TO INDICATE IN ANY WAY IN ITS BID THAT THE FEDERAL EXCISE TAX WAS EXCLUDED; THEREFORE, THE PURCHASING OFFICE DID NOT ISSUE A TAX EXEMPTION CERTIFICATE. LATER, WHEN THE BIDDER'S REPRESENTATIVE, MR. JOHN A. WHITE, MADE VERBAL REQUEST FOR A TAX EXEMPTION CERTIFICATE UPON THE REPRESENTATION THE FAILURE TO FILL IN THE EXCISE TAX QUESTIONNAIRE WAS A CLERICAL ERROR, IT WAS EXPLAINED TO HIM THAT THE PURCHASING OFFICE, IN COMPLIANCE WITH YOUR DECISION A 93921, CANNOT ISSUE THE REQUESTED CERTIFICATE.

IN ORDER TO OBTAIN RELIEF FROM THE FEDERAL TAX, THE CONTRACTOR HAS SUBMITTED THE ENCLOSED NOTARIZED LETTER, STATING THE GOVERNMENT EXCISE TAX WAS EXCLUDED FROM ITS BID. INFORMATION IS REQUESTED WHETHER OR NOT THE PURCHASING OFFICE MAY ISSUE A CERTIFICATE UPON THE REPRESENTATION MADE IN CONTRACTOR'S LETTER DATED OCTOBER 21, 1938.

IT HAS BEEN HELD IN DECISIONS OF THIS OFFICE THAT UNDER THE PROVISIONS OF THE INTERNAL REVENUE LAW AS IT STANDS, A BIDDER IS FREE TO SUBMIT PRICES EITHER INCLUSIVE OR EXCLUSIVE OF THE EXCISE TAX, 15 COMP. GEN. 588; THAT WHEN A BID AS SUBMITTED DOES NOT AFFIRMATIVELY ASSERT THE EXCLUSION OF EXCISE TAXES, IT IS PRESUMED TO INCLUDE ALL ELEMENTS OF COST AND PROFIT INCLUDING SAID EXCISE TAX, AND NO INQUIRY AS TO INCLUSION OR EXCLUSION OF THE TAX IS NECESSARY, 16 COMP. GEN. 1021; THAT IF, IN ANY INSTANCE, A BID AS SUBMITTED IS IN CONTEMPLATION OF REFUND, CREDIT, OR DRAWBACK OF ANY DESCRIPTION, THE FACT SHOULD APPEAR AFFIRMATIVELY ON THE FACE OF THE BID, 16 COMP. GEN. 1021; ID. 1054; AND THAT WHERE A BID PRICE AS SUBMITTED WITHOUT AFFIRMATIVE SHOWING THAT THE TAX IS EXCLUDED IS ACCEPTED, IT CONSTITUTES A CONTRACT BINDING ALIKE UPON THE CONTRACTOR AND THE GOVERNMENT, AND THAT NO SUBSEQUENT STATEMENT OF A CONTRACTOR THAT THE CONTRACT PRICE ACTUALLY WAS EXCLUSIVE OF THE AMOUNT OF THE TAX MAY BE ACCEPTED TO VARY THE CONTRACT PRICE IN ANY WAY; AND THAT IN SUCH A CASE THERE IS NO AUTHORITY FOR THE ISSUANCE OF A TAX EXEMPTION CERTIFICATE. THE CITED DECISIONS ARE CONTROLLING IN THIS CASE. ALSO, DECISION OF JUNE 1, 1938, 17 COMP. GEN. 1039, WOULD APPEAR TO BE DIRECTLY IN POINT.

THE BID FORM FURNISHED PROSPECTIVE BIDDERS IN THIS INSTANCE INCLUDED AN "EXCISE TAX QUESTIONNAIRE" ON WHICH THE BIDDER WAS DIRECTED TO STATE WHETHER APPLICABLE EXCISE TAXES WERE INCLUDED IN OR EXCLUDED FROM ITS BID PRICE. THE BID OF THE MACK INTERNATIONAL MOTOR TRUCK CORPORATION FAILED TO SHOW AFFIRMATIVELY THAT THE AMOUNT OF THE TAX WAS EXCLUDED. THEREFORE, IT WAS PRESUMED TO BE INCLUDED IN THE BID PRICE AND NO INQUIRY RELATIVE THERETO BY THE CONTRACTING OFFICER WAS REQUIRED OR AUTHORIZED. THE BID WAS ACCEPTED AS SUBMITTED AND CONSTITUTED A CONTRACT AT THE PRICE NAMED, AND NO SUBSEQUENT STATEMENT MADE BY THE CONTRACTOR THAT THE PRICE DID NOT INCLUDE THE EXCISE TAX CAN BE HEARD IN DEROGATION OF THE CONTRACT. IF THE MACK INTERNATIONAL MOTOR TRUCK CORPORATION NEGLIGENTLY OR "INADVERTENTLY," AS STATED, FAILED TO PROTECT ITSELF IN THE SUBMISSION OF ITS BID--- FAILED TO QUALIFY TO RECEIVE TAX EXEMPTION CERTIFICATES IN ACCORDANCE WITH APPLICABLE LAW AND REGULATIONS--- MANIFESTLY ITS FAILURE WAS A UNILATERAL MISTAKE ATTRIBUTABLE SOLELY TO THE NEGLIGENCE OF THE BIDDER, FOR WHICH NO RELIEF MAY BE GRANTED AFTER THE AWARD OF A CONTRACT. GRIFFITH V. UNITED STATES, 22 CT.CLS. 165; ELLICOTT MACHINE COMPANY V. UNITED STATES, 44 CT.CLS. 127.

UPON THE FACTS, THERE WOULD APPEAR TO BE NO LEGAL AUTHORITY FOR ISSUANCE OF AN EXCISE TAX EXEMPTION CERTIFICATE TO THE MACK INTERNATIONAL TRUCK CORPORATION, AND YOUR SUBMISSION IS ANSWERED ACCORDINGLY.