B-153150, JAN. 20, 1964

B-153150: Jan 20, 1964

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GENERAL SERVICES ADMINISTRATION: WE HAVE YOUR LETTER OF DECEMBER 18. IN THE CASE OF A DEALER WHO IS UNABLE TO QUOTE ON A TAX EXCLUSIVE BASIS. BIDS WILL BE EVALUATED ON BOTH A TAX INCLUSIVE AND A TAX EXCLUSIVE BASIS AND AWARD WILL BE MADE IN THE MANNER MOST ADVANTAGEOUS TO THE GOVERNMENT. WHERE AWARD IS MADE ON A TAX EXCLUSIVE BASIS. PROVIDED SUCH PROOF IS FURNISHED IN SUFFICIENT TIME TO PERMIT OBTAINING A REFUND OR CREDIT AGAINST A SUBSEQUENT RETURN.'. WAS DESCRIBED ON PAGE 6 OF THE INVITATION AS FOLLOWS: "TIRE. THE SPACE PROVIDED TO SHOW THE AMOUNT OF FEDERAL EXCISE TAX EXCLUDED WAS LEFT BLANK. FROM MANSFIELD STATING THAT THE AMOUNT OF TAX EXCLUDED HAD BEEN UNINTENTIONALLY OMITTED AND SHOULD HAVE BEEN SHOWN AS $2.29.

B-153150, JAN. 20, 1964

TO MR. J. E. PAUZE, CHIEF, MOTOR VEHICLE SECTION, GENERAL SERVICES ADMINISTRATION:

WE HAVE YOUR LETTER OF DECEMBER 18, 1963, YOUR REFERENCE FPNMV, FORWARDING FOR ADVANCE DECISION PURSUANT TO 36 COMP. GEN. 513, THE ACCEPTABILITY OF A BID SUBMITTED BY THE MANSFIELD TIRE AND RUBBER COMPANY UNDER INVITATION FOR BIDS NO. FPNMV-F059339-A-12-2-63 ISSUED NOVEMBER 12, 1963, FOR THE PROCUREMENT OF TIRES.

THE INVITATION INCLUDED THE FOLLOWING PROVISION:

"FEDERAL EXCISE TAX (EXPORT): THE BIDDER SHALL QUOTE PRICES BOTH INCLUSIVE AND EXCLUSIVE OF FEDERAL EXCISE TAXES. IN THE CASE OF A DEALER WHO IS UNABLE TO QUOTE ON A TAX EXCLUSIVE BASIS, HE MAY BID ON A TAX INCLUSIVE BASIS ONLY, PROVIDED HE INDICATES IN HIS BID THE AMOUNT OF THE EXCISE TAX SO INCLUDED. FAILURE OF A BIDDER TO QUOTE AS INDICATED ABOVE SHALL REQUIRE THE REJECTION OF THE BID. BIDS WILL BE EVALUATED ON BOTH A TAX INCLUSIVE AND A TAX EXCLUSIVE BASIS AND AWARD WILL BE MADE IN THE MANNER MOST ADVANTAGEOUS TO THE GOVERNMENT. WHERE AWARD IS MADE ON A TAX EXCLUSIVE BASIS, THE GOVERNMENT AGREES TO FURNISH THE SUCCESSFUL BIDDER, WITHIN THE TIME REQUIRED BY THE APPLICABLE TREASURY DEPARTMENT REGULATIONS, PROOF OF EXPORTATION OR SHIPMENT TO A POSSESSION OF THE UNITED STATES, OR FAILING IN THIS, TO PAY SUCH BIDDER FOR THE AMOUNT OF THE TAX SO EXCLUDED. IN THE EVENT OF SUCH PAYMENT, THE BIDDER AGREES TO REPAY TO THE GOVERNMENT THE AMOUNT OF SUCH PAYMENT UPON BEING FURNISHED WITH PROOF OF SUCH EXPORTATION OR SHIPMENT AT A LATER DATE, PROVIDED SUCH PROOF IS FURNISHED IN SUFFICIENT TIME TO PERMIT OBTAINING A REFUND OR CREDIT AGAINST A SUBSEQUENT RETURN.'

ITEM 2, THE ONLY ITEM IN QUESTION, WAS DESCRIBED ON PAGE 6 OF THE INVITATION AS FOLLOWS:

"TIRE, PNEUMATIC, AUTOMOBILE, REGULAR TREAD, TUBELESS, PER INTERIM FEDERAL SPECIFICATION ZZ-T-00381J, SIZE 7.00-13, 6 PLY RATING (INDEX NO. 44, FS SCHEDULE):

"FILE: 59340 (GSA-NY-E62690)

"FOB BROOKLYN ARMY TERMINAL, BROOKLYN, NEW YORK. . . . . . . . . . . . . . . . . . .1000

"BIDDER SHALL STATE AMOUNT OF FEDERAL EXCISE TAX EXCLUDED FROM UNIT PRICE:

THE MANSFIELD BID SHOWED A UNIT PRICE OF $9.50 FOR THE ITEM BUT, THE SPACE PROVIDED TO SHOW THE AMOUNT OF FEDERAL EXCISE TAX EXCLUDED WAS LEFT BLANK.

THE CONTRACTING OFFICER RECEIVED A LETTER DATED DECEMBER 3, 1963, THE DAY AFTER BID OPENING, FROM MANSFIELD STATING THAT THE AMOUNT OF TAX EXCLUDED HAD BEEN UNINTENTIONALLY OMITTED AND SHOULD HAVE BEEN SHOWN AS $2.29.

IT APPEARS THAT MANSFIELD IS THE LOW BIDDER FOR ITEM 2 ON A TAX EXCLUSIVE BASIS, ASSUMING THAT THE PRICE SHOWN MAY PROPERLY BE INTERPRETED TO HAVE BEEN SUBMITTED ON SUCH BASIS, AND OUR ADVISE IS REQUESTED AS TO WHETHER AWARD TO MANSFIELD THEREON WOULD BE PROPER UNDER THE CIRCUMSTANCES.

THE FEDERAL EXCISE TAX PARAGRAPH OF THE INVITATION QUOTED ABOVE, CLEARLY REQUIRES, EXCEPT IN THE CASE OF SOME DEALERS NOT APPLICABLE HERE, THAT BIDS SHOW PRICES BOTH WITH AND WITHOUT TAXES AND WARNS THAT FAILURE TO CONFORM WILL REQUIRE REJECTION OF THE BID. THE BID FORM ITSELF, HOWEVER, DOES NOT PROVIDE FOR SHOWING PRICES BOTH WITH AND WITHOUT TAXES EXCEPT TO THE EXTENT THAT THE UNIT PRICE PLUS THE AMOUNT OF TAX SHOWN AS EXCLUDED WOULD PRESUMABLY ADD UP TO THE TAX INCLUSIVE UNIT PRICE. IN OUR VIEW IT WOULD BE APPROPRIATE EITHER TO CONFORM THE PARAGRAPH TO THE BID SCHEDULE OR THE SCHEDULE TO THE PARAGRAPH. HOWEVER, WHILE THE INTENT OF THE INVITATION COULD BE EXPRESSED MORE CLEARLY, WE DO NOT REGARD IT AS SO MISLEADING AS TO PRECLUDE A VALID AWARD THEREUNDER.

WHILE THE QUOTED PARAGRAPH MAKES IT CLEAR THAT THE FAILURE TO BID ON BOTH A TAX INCLUSIVE AND EXCLUSIVE BASIS WILL RESULT IN REJECTION OF THE BID, THE FAILURE TO CONFORM THEREWITH SHOULD BE WAIVED AS A MERE INFORMALITY IF THE AWARD TO BE MADE, CONSISTENT WITH THE TERMS OF THE INVITATION, IS NOT AFFECTED BY THE OMISSION. 34 COMP. GEN. 633. THE RULE FOR APPLICATION IS STATED AT 40 COMP. GEN. 321, 324, AS FOLLOWS:

"WHETHER CERTAIN PROVISIONS OF AN INVITATION FOR BIDS ARE TO BE CONSIDERED MANDATORY OR DISCRETIONARY DEPENDS UPON THE MATERIALITY OF SUCH PROVISIONS AND WHETHER THEY WERE INSERTED FOR THE PROTECTION OF THE INTERESTS OF THE GOVERNMENT OR FOR THE PROTECTION OF THE RIGHTS OF BIDDERS. UNDER AN ADVERTISED PROCUREMENT ALL QUALIFIED BIDDERS MUST BE GIVEN AN EQUAL OPPORTUNITY TO SUBMIT BIDS WHICH ARE BASED UPON THE SAME SPECIFICATIONS, AND TO HAVE SUCH BIDS EVALUATED ON THE SAME BASIS. TO THE EXTENT THAT WAIVER OF THE PROVISIONS OF AN INVITATION FOR BIDS MIGHT RESULT IN FAILURE OF ONE OR MORE BIDDERS TO ATTAIN THE EQUAL OPPORTUNITY TO COMPETE ON A COMMON BASIS WITH OTHER BIDDERS, SUCH PROVISION MUST BE CONSIDERED MANDATORY. HOWEVER, THE CONCEPT OF FORMALLY ADVERTISED PROCUREMENT, INSOFAR AS IT RELATES TO THE SUBMISSION AND EVALUATION OF BIDS, GOES NO FURTHER THAN TO GUARANTEE EQUAL OPPORTUNITY TO COMPETE AND EQUAL TREATMENT IN THE EVALUATION OF BIDS. IT DOES NOT CONFER UPON BIDDERS ANY RIGHT TO INSIST UPON THE ENFORCEMENT OF PROVISIONS IN AN INVITATION, THE WAIVER OF WHICH WOULD NOT RESULT IN AN UNFAIR COMPETITIVE ADVANTAGE TO OTHER BIDDERS BY PERMITTING A METHOD OF CONTRACT PERFORMANCE DIFFERENT FROM THAT CONTEMPLATED BY THE INVITATION OR BY PERMITTING THE BID PRICE TO BE EVALUATED UPON A BASIS NOT COMMON TO ALL BIDS. SUCH PROVISIONS MUST THEREFORE BE CONSTRUED TO BE SOLELY FOR THE PROTECTION OF THE INTERESTS OF THE GOVERNMENT AND THEIR ENFORCEMENT OR WAIVER CAN HAVE NO EFFECT UPON THE RIGHTS OF BIDDERS TO WHICH THE RULES AND PRINCIPLES APPLICABLE TO FORMAL ADVERTISING ARE DIRECTED. TO THIS END, THE DECISIONS OF THIS OFFICE HAVE CONSISTENTLY HELD THAT WHERE DEVIATIONS FROM, OR FAILURES TO COMPLY WITH, THE PROVISIONS OF AN INVITATION DO NOT AFFECT THE BID PRICE UPON WHICH A CONTRACT WOULD BE BASED OR THE QUANTITY OR QUALITY OF THE WORK REQUIRED OF THE BIDDER IN THE EVENT HE IS AWARDED A CONTRACT, A FAILURE TO ENFORCE SUCH PROVISION WILL NOT INFRINGE UPON THE RIGHTS OF OTHER BIDDERS AND THE FAILURE OF A BIDDER TO COMPLY WITH THE PROVISION MAY BE CONSIDERED AS A MINOR DEVIATION WHICH CAN BE WAIVED AND THE BID CONSIDERED RESPONSIVE.'

IN VIEW OF THE ABOVE WE THINK THE ONLY SUBSTANTIAL QUESTION REMAINING IS WHETHER THE MANSFIELD BID ON ITEM 2 CAN BE CONSTRUED TO REFLECT THE INTENDED BID PRICE ON OTHER THAN A TAX EXCLUSIVE BASIS. NOTWITHSTANDING THE OMISSION OF THE AMOUNT OF TAX EXCLUDED, THE LANGUAGE OF THE SCHEDULE IS SUCH AS CLEARLY TO CALL FOR A BID EXCLUSIVE OF TAXES. THEREFORE, THE MANSFIELD BID ON ITEM 2 MAY PROPERLY BE CONSIDERED AS RESPONSIVE AND A VALID OFFER TO PERFORM AT THE PRICE INDICATED ON A TAX EXCLUSIVE BASIS.