B-131806, MAY 20, 1957

B-131806: May 20, 1957

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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO YOUR LETTER OF MAY 9. THAT IT BE ALLOWED ADDITIONAL COMPENSATION DUE TO AN ERROR ALLEGED TO HAVE BEEN MADE IN ITS BID ON WHICH CONTRACT NO. DA-151029-CIVENG-57-40 WAS AWARDED. BIDS WERE REQUESTED FOR ONE GASOLINE DRIVEN TRUCK IN ACCORDANCE WITH DESIGNATED SPECIFICATIONS FOR DELIVERY TO THE DISTRICT GARAGE. ONE OTHER BID WAS RECEIVED FROM THE FOUR WHEEL DRIVE AUTO CO. THE BID OF THE BYRNE-GMC TRUCK COMPANY WAS ACCEPTED ON DECEMBER 18. STATING THAT THE ONLY TAX INCLUDED IN THE PRICE WAS THE SURCHARGE OF $43.40 COVERING TEN TIRES. AN EXEMPTION CERTIFICATE COULD NOT BE ISSUED TO CORRECT THE ERROR THAT WAS MADE IN THE PREPARATION OF THE BID. THIS CONTENTION IS BASED ON PARAGRAPH 10/D) OF THE GENERAL PROVISIONS.

B-131806, MAY 20, 1957

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO YOUR LETTER OF MAY 9, 1957, WITH ENCLOSURES, RELATIVE TO THE REQUEST OF BYRNE-GMC TRUCK COMPANY, INC., THAT IT BE ALLOWED ADDITIONAL COMPENSATION DUE TO AN ERROR ALLEGED TO HAVE BEEN MADE IN ITS BID ON WHICH CONTRACT NO. DA-151029-CIVENG-57-40 WAS AWARDED.

BY INVITATION NO. CIVENG-151029-57-37, BIDS WERE REQUESTED FOR ONE GASOLINE DRIVEN TRUCK IN ACCORDANCE WITH DESIGNATED SPECIFICATIONS FOR DELIVERY TO THE DISTRICT GARAGE, CORPS OF ENGINEERS, LOUISVILLE, KENTUCKY. PARAGRAPH 10/B) OF THE GENERAL PROVISIONS OF THE CONTRACT, AS AMENDED (STANDARD FORM 32), PROVIDED THAT "EXCEPT AS MAY BE OTHERWISE PROVIDED IN THIS CONTRACT, THE CONTRACT PRICE INCLUDES ALL APPLICABLE FEDERAL TAXES IN EFFECT ON THE CONTRACT DATE.'

IN RESPONSE TO THE INVITATION, BYRNE-GMC TRUCK COMPANY SUBMITTED A BID IN THE AMOUNT OF $10,485.64. ONE OTHER BID WAS RECEIVED FROM THE FOUR WHEEL DRIVE AUTO CO., IN THE AMOUNT OF $11,600, LESS 1.2 PERCENT, 20 DAYS. THE BID OF THE BYRNE-GMC TRUCK COMPANY WAS ACCEPTED ON DECEMBER 18, 1956.

BY LETTER DATED DECEMBER 21, 1956, THE BYRNE COMPANY ADVISED THAT IT HAD ERRONEOUSLY COMPUTED ITS CONTRACT PRICE BY FAILING TO INCLUDE THEREIN FEDERAL EXCISE TAX IN THE AMOUNT OF $519.75, STATING THAT THE ONLY TAX INCLUDED IN THE PRICE WAS THE SURCHARGE OF $43.40 COVERING TEN TIRES. THE COMPANY STATED FURTHER THAT IT HAD MISINTERPRETED THE MEANING AND INTENT OF PARAGRAPH 10/B), REFERRED TO ABOVE, AND REQUESTED THAT IT BE FURNISHED A FEDERAL EXCISE TAX EXEMPTION CERTIFICATE IN THE AMOUNT OF $519.75. IN A REPLY DATED JANUARY 2, 1957, THE CONTRACTING OFFICER ADVISED THE CONTRACTOR THAT, IN VIEW OF PARAGRAPH 10/B) OF THE GENERAL PROVISIONS OF THE CONTRACT WHICH PROVIDES THAT THE CONTRACT PRICE INCLUDE ALL APPLICABLE FEDERAL TAXES, AN EXEMPTION CERTIFICATE COULD NOT BE ISSUED TO CORRECT THE ERROR THAT WAS MADE IN THE PREPARATION OF THE BID.

IN A LETTER OF JANUARY 31, 1957, DESIGNATED AS AN "APPEAL" TO THE COMPTROLLER GENERAL OF THE UNITED STATES, THE CONTRACTOR PROTESTS THE ACTION PREVIOUSLY TAKEN AND CONTENDS THAT THE CONTRACT SHOULD BE REFORMED SO AS TO INCLUDE THE SUM OF $519.75, REPRESENTING THE FEDERAL TAX ON THE VEHICLE PROPER. THIS CONTENTION IS BASED ON PARAGRAPH 10/D) OF THE GENERAL PROVISIONS, AS AMENDED, WHICH PROVIDES, IN PERTINENT PART, AS FOLLOWS:

"/D) EVIDENCE OF EXEMPTION. THE GOVERNMENT AGREES, UPON REQUEST OF THE CONTRACTOR, UNLESS THERE EXISTS NO LEGAL BASIS TO SUSTAIN AN EXEMPTION TO FURNISH A TAX EXEMPTION CERTIFICATE OR OTHER SIMILAR EVIDENCE OF EXEMPTION WITH RESPECT TO ANY DIRECT TAX NOT INCLUDED IN THE CONTRACT PRICE PURSUANT TO THIS CLAUSE; * * *"

IN ITS LETTER THE CONTRACTOR STATES FURTHER THAT PARAGRAPH 10/D), SUPRA, IS IN NO WAY SUBORDINATE TO PARAGRAPH 10/B); THAT PARAGRAPH 10/D) CONSTITUTES AN ALTERNATIVE METHOD OF HANDLING THE APPLICABLE FEDERAL TAX AND THAT IT DEALS WITH ALL SUCH TAXES NOT INCLUDED IN THE CONTRACT PRICE, REGARDLESS OF THE REASON THEY ARE NOT INCLUDED. WE CANNOT AGREE WITH THIS INTERPRETATION OF THE GENERAL PROVISIONS INVOLVED. PARAGRAPH 10/B) AND 10/D) ARE CLEAR AND UNAMBIGUOUS. THE FIRST PROVIDES SPECIFICALLY THAT, EXCEPT AS MAY BE OTHERWISE PROVIDED IN THIS CONTRACT, THE CONTRACT INCLUDES ALL APPLICABLE FEDERAL TAXES. THERE IS NO OTHER PROVISION IN THE CONTRACT FOR EXCLUSION OF FEDERAL TAXES. THEREFORE, IT SEEMS CLEAR THAT THE AWARD PROPERLY WAS MADE ON THE PREMISE THAT THE BID PRICE INCLUDED AN AMOUNT REPRESENTING THE APPLICABLE FEDERAL TAX ON THE VEHICLE. FOLLOWS, THEREFORE, THAT PARAGRAPH 10/D) MAY NOT BE INTERPRETED AS PROVIDING AN ALTERNATIVE METHOD OF HANDLING THE APPLICABLE FEDERAL TAX IN THIS CASE. READING THE TWO PARAGRAPHS TOGETHER, IT IS OUR VIEW THAT THE PROVISIONS OF PARAGRAPH 10/D) ARE OPERATIVE ONLY IN THOSE INSTANCES WHERE A BIDDER AFFIRMATIVELY SHOWS IN HIS BID THAT HIS QUOTED PRICE IS EXCLUSIVE OF THE APPLICABLE FEDERAL TAXES.

WHILE THE COMPANY HAS FURNISHED CERTAIN DATA IN SUPPORT OF ITS ALLEGATION OF ERROR, IT DOES NOT APPEAR THAT, PRIOR TO AWARD, THE CONTRACTING OFFICER HAD KNOWLEDGE OF THE FACTORS USED BY THE COMPANY IN COMPUTING ITS BID PRICE OR THE PROBABILITY OF ERROR. SO FAR AS THE PRESENT RECORD SHOWS, THE ACCEPTANCE OF THE BID WAS IN GOOD FAITH--- NO ERROR HAVING BEEN ALLEGED BY THE COMPANY UNTIL AFTER AWARD--- AND, THEREFORE, THE ACCEPTANCE OF THE BID CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND THE LIABILITIES OF THE PARTIES.

MOREOVER, AS INDICATED ABOVE, THE INVITATION ISSUED IN THE PRESENT CASE LEFT NO ROOM FOR DOUBT THAT BIDS WERE DESIRED ON THE BASIS OF A PRICE INCLUDING ALL APPLICABLE FEDERAL TAXES IN EFFECT AT THE TIME. THE RESPONSIBILITY FOR THE PREPARATION OF THE BID SUBMITTED IN RESPONSE TO THE INVITATION WAS UPON THE BIDDER. SEE FRAZIER-DAVIS CONSTRUCTION CO. V. UNITED STATES, 100 C.CLS. 120, 163. IT IS CLEAR THAT SUCH ERROR AS WAS MADE IN THE BID OF THE COMPANY WAS DUE SOLELY TO ITS OWN NEGLIGENCE OR OVERSIGHT AND WAS IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT. ANY ERROR THAT WAS MADE IN THE BID OF THE COMPANY WAS UNILATERAL--- NOT MUTUAL--- AND, THEREFORE, DOES NOT ENTITLE THE COMPANY TO RELIEF. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249; AND SALIGMAN ET AL. V. UNITED STATES, 56 F.SUPP. 505. ALSO SEE 26 COMP. GEN. 426.

ACCORDINGLY, ON THE BASIS OF THE PRESENT RECORD, THERE APPEARS TO BE NO LEGAL BASIS FOR INCREASING THE PRICE SPECIFIED IN CONTRACT NO. DA-15-029- CIVENG-57-40, AS REQUESTED BY BYRNE-GMC TRUCK COMPANY, INC. ..END :