B-143462, JUL. 20, 1960

B-143462: Jul 20, 1960

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LABORATORY AND PMR SUPPLY: REFERENCE IS MADE TO YOUR LETTER DATED JULY 7. EXCEPT THOSE THAT WERE EXEMPT. TOGETHER WITH THE FACT THAT A DISTRIBUTOR FOR LOWREY WAS BIDDING ON THE SAME MODEL AT A MUCH HIGHER PRICE. VIEW THEREOF AND SINCE THE EXCISE TAX IS REQUIRED BY LAW TO BE PAID AT THE TIME OF SALE.

B-143462, JUL. 20, 1960

TO MR. C. S. KOONS, CHIEF, MARKETING DIVISION, LABORATORY AND PMR SUPPLY:

REFERENCE IS MADE TO YOUR LETTER DATED JULY 7, 1960, WITH ENCLOSURES, FILE NO. 134P, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN IN CONNECTION WITH THE BID OF THE LOWREY ORGAN COMPANY OPENED JUNE 29, 1960.

BY INVITATION NO. M7-34-61, THE VETERANS ADMINISTRATION SUPPLY, DEPOT, HINES, ILLINOIS, REQUESTED BIDS FOR THE FURNISHING OF SMALL PORTABLE ELECTRONIC ORGANS. ATTACHMENT A OF THE SPECIFICATIONS PROVIDED, IN EFFECT, THAT EXCEPT AS MIGHT BE OTHERWISE PROVIDED IN THE CONTRACT, THE CONTRACT PRICE INCLUDED ALL FEDERAL, STATE, AND LOCAL TAXES AND DUTIES IN EFFECT AND APPLICABLE TO THE CONTRACT, EXCEPT THOSE THAT WERE EXEMPT. LOWREY BID $556 EACH FOR WALNUT, $561 EACH FOR OAK ORGANS WITH ASTERISKS REFERENCING THE STATEMENT "EXCISE EXEMPTION CERTIFICATE MUST BE SUPPLIED BY BUYER.'

YOU STATE THAT IN VIEW OF THIS STATEMENT AND THE FACT THAT LOWREY'S BID DID NOT LIST THE EXCISE TAX SEPARATELY, TOGETHER WITH THE FACT THAT A DISTRIBUTOR FOR LOWREY WAS BIDDING ON THE SAME MODEL AT A MUCH HIGHER PRICE, YOU SUSPECTED THAT LOWREY'S BID PRICE DID NOT INCLUDE THE EXCISE TAX AND REQUESTED THE COMPANY TO VERIFY SUCH FACT. LOWREY IN ITS LETTER OF JULY 1, 1960, TO THE DEPOT STATED THAT ITS BID PRICE DID NOT INCLUDE THE FEDERAL EXCISE TAX AND THAT THE SUM OF $51.08 SHOULD BE ADDED TO ITS BID PRICE.

UNDER THE CIRCUMSTANCES THERE CAN BE LITTLE DOUBT THAT THE COMPANY DID NOT INCLUDE THE AMOUNT OF THE FEDERAL EXCISE TAX IN ITS BID PRICE. VIEW THEREOF AND SINCE THE EXCISE TAX IS REQUIRED BY LAW TO BE PAID AT THE TIME OF SALE, THE AMOUNT OF THE TAX PROPERLY APPLICABLE MAY BE ADDED TO THE COMPANY'S BID FOR EVALUATION PURPOSES.