B-132068, B-121829, JUL. 30, 1957

B-121829,B-132068: Jul 30, 1957

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INC.: FURTHER REFERENCE IS MADE TO YOUR LETTER DATED MAY 20. PARAGRAPH 31A OF THE CONTRACT PROVIDED THAT THE CONTRACT PRICES DID NOT INCLUDE ANY STATE OR LOCAL TAXES FROM WHICH THE CONTRACTOR WAS EXEMPT AND WHILE NOT SO STATED. PROVISION WAS MADE FOR INCREASING OR DECREASING THE CONTRACT PRICE IN THE EVENT OF ANY CHARGES IN LEGAL TAXES. IT APPEARS THAT YOU HAVE PAID. OR ARE OBLIGATED TO PAY. SPECIFIED AMOUNTS REPRESENTING THE NEW YORK CITY SALES TAX WHICH WERE ASSESSED ON MATERIALS SUPPLIED AND USED IN CONNECTION WITH CONTRACT NO. YOU HAVE FILED A CLAIM FOR $2. THE CLAIM WAS DISALLOWED BY OUR SETTLEMENT OF MAY 16. THERE IS SET FORTH AS THE PRIME BASIS FOR A RE-APPRAISAL OF YOUR CLAIM THE FACT THAT THERE IS IN THE RECORD AN AFFIDAVIT OF THE GOVERNMENT CONTRACTING OFFICER TO SUPPORT YOUR CONTENTION THAT YOU AND ALL OTHER BIDDERS WERE ADVISED NOT TO INCLUDE THE NEW YORK CITY SALES TAX IN YOUR BID REGARDLESS OF THE TAX PROVISION IN THE PROPOSED CONTRACT.

B-132068, B-121829, JUL. 30, 1957

TO BONACO CONSTRUCTION COMPANY, INC.:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED MAY 20, 1957, WITH ENCLOSURE, IN REGARD TO YOUR CLAIM FOR $2,470.39 UNDER CONTRACT NO. DA 30- 182-TC-407, DATED MAY 17, 1951, WITH THE DEPARTMENT OF THE ARMY.

UNDER THE CONTRACT YOU AGREED TO FURNISH THE MATERIALS AND PERFORM CERTAIN REHABILITATION WORK IN CONNECTION WITH RAILROAD TRACKS AND SWITCHES IN THE RAILROAD YARD OF THE BROOKLYN ARMY BASE TERMINAL, BROOKLYN, NEW YORK, FOR AN ESTIMATED CONTRACT PRICE OF $60,141. PARAGRAPH 31A OF THE CONTRACT PROVIDED THAT THE CONTRACT PRICES DID NOT INCLUDE ANY STATE OR LOCAL TAXES FROM WHICH THE CONTRACTOR WAS EXEMPT AND WHILE NOT SO STATED, IT MUST BE PRESUMED THAT YOU INCLUDED IN YOUR BID PRICES ANY TAXES WHICH THE LOCAL AUTHORITIES REQUIRED YOU TO PAY. PROVISION WAS MADE FOR INCREASING OR DECREASING THE CONTRACT PRICE IN THE EVENT OF ANY CHARGES IN LEGAL TAXES. THE INVITATION FOR BIDS ISSUED IN THIS CASE, HOWEVER, DID NOT PURPORT TO INFORM PROSPECTIVE BIDDERS AS TO WHAT LOCAL TAXES A CONTRACTOR MIGHT BE REQUIRED TO PAY.

IT APPEARS THAT YOU HAVE PAID, OR ARE OBLIGATED TO PAY, SPECIFIED AMOUNTS REPRESENTING THE NEW YORK CITY SALES TAX WHICH WERE ASSESSED ON MATERIALS SUPPLIED AND USED IN CONNECTION WITH CONTRACT NO. DA-30 182-TC-407. AS A RESULT OF THIS, YOU HAVE FILED A CLAIM FOR $2,470.39 ALLEGEDLY REPRESENTING THE TOTAL AMOUNT OF SUCH TAXES, PENALTIES AND INTEREST. THE CLAIM WAS DISALLOWED BY OUR SETTLEMENT OF MAY 16, 1957, FOR THE REASONS SET FORTH THEREIN.

IN YOUR LETTER OF MAY 20, 1957, THERE IS SET FORTH AS THE PRIME BASIS FOR A RE-APPRAISAL OF YOUR CLAIM THE FACT THAT THERE IS IN THE RECORD AN AFFIDAVIT OF THE GOVERNMENT CONTRACTING OFFICER TO SUPPORT YOUR CONTENTION THAT YOU AND ALL OTHER BIDDERS WERE ADVISED NOT TO INCLUDE THE NEW YORK CITY SALES TAX IN YOUR BID REGARDLESS OF THE TAX PROVISION IN THE PROPOSED CONTRACT.

IN THE FIRST INSTANCE, IT IS NOTED THAT THE AFFIDAVIT OF ONE OF YOUR EMPLOYEES, DAVID S. NEWMAN, THE GOVERNMENT CONTRACTING OFFICER AT THE TIME CONTRACT NO. DA-30-182-TC-407 WAS EXECUTED, AND UPON WHICH YOU RELY, WAS NOT EXECUTED ON JULY 28, 1954, AS STATED IN YOUR LETTER OF OCTOBER 4, 1954, TO OUR OFFICE, BUT RATHER WAS SWORN TO ON MAY 14, 1956 WHICH WAS, OF COURSE, SUBSEQUENT TO THE TIME THAT YOU FILED YOUR CLAIM. IN ADDITION, WHILE IT IS EXPRESSLY STATED IN MR. NEWMAN'S AFFIDAVIT THAT HE DID NOTIFY ALL BIDDERS THAT THE NEW YORK CITY SALES TAX SHOULD NOT BE INCLUDED IN THEIR BIDS, HE ALSO STATED THAT THE AUTHORITY FOR, AND SOURCE OF, THIS INFORMATION OR INSTRUCTION WAS C-4, FIRST ARMY, CONTRACT REVIEW BRANCH. IN THIS CONNECTION, THERE ALSO IS CONTAINED IN THE RECORD A STATEMENT FROM ONE DAVID SCHWARTZ WHO DURING THE PERIOD OF THE CONTRACT, OCCUPIED THE POSITION OF CHIEF, PROCUREMENT BRANCH, G-4 SECTION, HEADQUARTERS FIRST ARMY, AND WHO STATES THAT TO THE BEST OF HIS KNOWLEDGE AND BELIEF, THE QUESTION AS TO WHETHER THE NEW YORK CITY SALES TAXES WERE TO BE INCLUDED IN THE CONTRACT PRICE WAS NOT RAISED UNTIL AFTER ALL BIDS WERE RECEIVED, AWARD MADE, AND WORK WAS IN PROGRESS; ALSO, THAT OTHER BIDDERS WERE NOT ADVISED THAT THEIR BIDS WERE TO EXCLUDE THE SALES TAX; AND THAT YOU SHOULD HAVE BEEN AWARE THAT THERE WAS NO EXEMPTION FROM THE NEW YORK CITY SALES TAX SINCE YOU "HAD PERFORMED CONTRACTS FOR THE GOVERNMENT PRIOR TO THIS ONE.' THUS, IT READILY MAY BE SEEN THAT THERE EXISTS A DIRECT CONFLICT BETWEEN THE STATEMENTS OF MR. SCHWARTZ AND MR. NEWMAN AS TO THIS ASPECT OF THE CASE AND WHEN THERE IS A COMPLETE DISAGREEMENT BETWEEN THE FACTS AS ADMINISTRATIVELY REPORTED, AND THOSE STATED BY, OR IN SUPPORT OF, A CLAIMANT, THE FACTS AS ADMINISTRATIVELY REPORTED MUST BE ACCEPTED BY OUR OFFICE AS CONTROLLING THE DISPOSITION OF THE CLAIM IN THE ABSENCE OF EVIDENCE TO OVERCOME THE CORRECTNESS OF SUCH REPORTED FACTS.

MOREOVER, THERE ALSO IS CONSIDERED PERTINENT IN THE CASE, THE FACT THAT EVEN IF THE AFFIDAVIT COULD BE ACCEPTED AS DEFINITELY ESTABLISHING YOUR CONTENTION THAT MR. NEWMAN HAD ADVISED ALL BIDDERS PRIOR TO THE SUBMISSION OF THEIR BIDS THAT THE NEW YORK CITY SALES TAX WAS TO BE EXCLUDED FROM THEIR BIDS, IT WOULD APPEAR THAT SUCH INSTRUCTION OR INFORMATION WOULD BE ACCEPTED BY ANY REASONABLY PRUDENT BIDDER FOR WHAT IT WAS, NAMELY, THE EXPRESSION OF A MERE PERSONAL OPINION. THERE IS NOTHING IN THE RECORD TO SHOW, NOR MAY IT REASONABLY BE CONCLUDED, THAT SUCH INFORMATION OR INSTRUCTION CARRIED WITH IT ANY MANDATORY FEATURES AND WHEN IT IS OBSERVED THAT YOU WERE IN AN EQUALLY, IF NOT AN EVEN MORE, OPPORTUNE POSITION TO ASCERTAIN FOR YOURSELF THE PROPER APPLICABILITY OF THE NEW YORK CITY SALES TAX TO THIS PARTICULAR CONTRACT BY REASONS OF THE FACT THAT YOU CONDUCT YOUR PLACE OF BUSINESS IN NEW YORK CITY AND UNDOUBTEDLY PERFORM CONSIDERABLE WORK THERE, THE FACT THAT YOU ELECTED TO ACCEPT AND RELY UPON THE INFORMATION WHICH YOU ALLEGE YOU RECEIVED WITHOUT MAKING ANY EFFORT ON YOUR OWN TO ASCERTAIN THE CORRECTNESS OF SUCH INFORMATION--- WHICH IN THE FINAL ANALYSIS IS THE SOLE RESPONSIBILITY OF ALL BIDDERS- - SUCH CIRCUMSTANCES MAY NOT BE ACCEPTED AS SHIFTING THE BURDEN OF LIABILITY IN THIS REGARD TO THE GOVERNMENT.

IN VIEW OF THE FOREGOING, AND SINCE THE RECORD ALSO IS LACKING IN PROOF OF THE OMISSION FROM YOUR BID OF THE AMOUNT TO COVER THE NEW YORK CITY SALES TAX, THE SETTLEMENT OF MAY 16, 1957, IS SUSTAINED.