B-160448, JAN. 4, 1967

B-160448: Jan 4, 1967

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INC.: REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 30. CLAUSE 22 OF THE FORM IS ENTITLED "FEDERAL. (1) RESULTS IN THE CONTRACTOR BEING REQUIRED TO PAY OR BEAR THE BURDEN OF ANY SUCH FEDERAL EXCISE TAX OR DUTY OR INCREASE IN THE RATE THEREOF WHICH WOULD NOT OTHERWISE HAVE BEEN PAYABLE ON SUCH TRANSACTION OR PROPERTY. WARRANTS IN WRITING THAT NO AMOUNT FOR SUCH NEWLY IMPOSED FEDERAL EXCISE TAX OR DUTY OR RATE INCREASE WAS INCLUDED IN THE CONTRACT PRICE AS A CONTINGENCY RESERVE OR OTHERWISE. * * *" BIDS WERE OPENED ON OCTOBER 20. THE TWO LOWEST BIDS WERE DETERMINED TO BE NONRESPONSIVE FOR FAILURE TO FURNISH A BID BOND. YOUR BID WAS THIRD LOWEST AND INCLUDED UNDER THE BID AMOUNT. IT IS THE POSITION OF THE CONTRACTING OFFICER THAT YOUR BID SHOULD BE REJECTED AS NONRESPONSIVE DUE TO THE FACT YOU PROVIDED YOURSELF AN OPPORTUNITY TO INSIST THAT YOU COULD ONLY BE BOUND BY A CONTRACT FOR THE PRICE STATED PLUS THE AMOUNT OF ANY FEDERAL EXCISE TAXES APPLICABLE TO THE TRANSACTION.

B-160448, JAN. 4, 1967

TO AMERICAN CRYOGENICS, INC.:

REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 30, 1966, PROTESTING THE PROPOSED REJECTION OF YOUR BID SUBMITTED UNDER INVITATION FOR BIDS NO. 667 -20, ISSUED SEPTEMBER 22, 1966, BY THE BUREAU OF MINES, HELIUM ACTIVITY, AMARILLO, TEXAS.

THE INVITATION, WHICH SOLICITED BIDS FOR 20 SEMITRAILERS INTENDED AND EQUIPPED FOR TRANSPORTATION OF COMPRESSED HELIUM GAS, INCORPORATED IN ITS TERMS AND CONDITIONS, BY REFERENCE, THE ADDITIONAL TERMS AND CONDITIONS OF FORM 6-995. CLAUSE 22 OF THE FORM IS ENTITLED "FEDERAL, STATE AND LOCAL TAXES" AND READS, IN PART, AS FOLLOWS:

"FEDERAL, STATE, AND LOCAL TAXES. (A) EXCEPT AS MAY BE OTHERWISE PROVIDED IN THIS CONTRACT, THE CONTRACT PRICE INCLUDES ALL APPLICABLE FEDERAL, STATE, AND LOCAL TAXES AND DUTIES. (B) NEVERTHELESS, WITH RESPECT TO ANY FEDERAL EXCISE TAX OR DUTY ON THE TRANSACTIONS OR PROPERTY COVERED BY THIS CONTRACT, IF A STATUTE, COURT DECISION, WRITTEN RULING, OR REGULATION TAKES EFFECT AFTER THE CONTRACT DATE, AND (1) RESULTS IN THE CONTRACTOR BEING REQUIRED TO PAY OR BEAR THE BURDEN OF ANY SUCH FEDERAL EXCISE TAX OR DUTY OR INCREASE IN THE RATE THEREOF WHICH WOULD NOT OTHERWISE HAVE BEEN PAYABLE ON SUCH TRANSACTION OR PROPERTY, THE CONTRACT PRICE SHALL BE INCREASED BY THE AMOUNT OF SUCH TAX OR DUTY OR RATE INCREASE: PROVIDED, THAT THE CONTRACTOR IF REQUESTED BY THE CONTRACTING OFFICER, WARRANTS IN WRITING THAT NO AMOUNT FOR SUCH NEWLY IMPOSED FEDERAL EXCISE TAX OR DUTY OR RATE INCREASE WAS INCLUDED IN THE CONTRACT PRICE AS A CONTINGENCY RESERVE OR OTHERWISE; * * *"

BIDS WERE OPENED ON OCTOBER 20, 1966. THE TWO LOWEST BIDS WERE DETERMINED TO BE NONRESPONSIVE FOR FAILURE TO FURNISH A BID BOND. YOUR BID WAS THIRD LOWEST AND INCLUDED UNDER THE BID AMOUNT, ON THE FACE OF STANDARD FORM 32, THE NOTATION "EXCLUDING FED. EXCISE TAX.'

IT IS THE POSITION OF THE CONTRACTING OFFICER THAT YOUR BID SHOULD BE REJECTED AS NONRESPONSIVE DUE TO THE FACT YOU PROVIDED YOURSELF AN OPPORTUNITY TO INSIST THAT YOU COULD ONLY BE BOUND BY A CONTRACT FOR THE PRICE STATED PLUS THE AMOUNT OF ANY FEDERAL EXCISE TAXES APPLICABLE TO THE TRANSACTION.

IT IS YOUR POSITION THE NOTATION DID NOT MEAN THE BID WAS EQUIVOCAL, BUT THAT IT MEANT NO CONTINGENCY AMOUNT FOR "NEW TAXES," SUCH AS CONTEMPLATED BY PARAGRAPH (B) OF CLAUSE 22 ABOVE, HAD BEEN INCLUDED IN THE BID PRICE, AND NOTATION THEREFORE WAS NO MORE THAN A MINOR IRREGULARITY OR CLERICAL MISTAKE.

IT IS A FUNDAMENTAL PRINCIPLE OF THE COMPETITIVE BIDDING SYSTEM THAT IN ORDER TO BE CONSIDERED FOR AWARD A BID MUST COMPLY WITH ALL MATERIAL REQUIREMENTS OF THE INVITATION FOR BIDS AT THE TIME OF BID OPENING. SUBPART 1-2.407.1 OF THE FEDERAL PROCUREMENT REGULATIONS (FPR), WHICH IS THE GENERAL PROVISION ON ACCEPTANCE OF BID AND AWARD OF CONTRACT AND IS APPLICABLE TO THIS PROCUREMENT, IS CONSISTENT WITH SUCH PRINCIPLE. ACCORDINGLY, A BIDDER MAY NOT BE PERMITTED TO ADD TO OR MODIFY ITS BID AFTER BID OPENING TO COMPLY WITH THE REQUIREMENTS OF THE INVITATION, AND IT DOES NOT MATTER WHETHER THE FAILURE TO COMPLY WAS DUE TO INADVERTENCE, MISTAKE OR OTHERWISE. 38 COMP. GEN. 819; 40 ID. 132, 134; B-160051 NOVEMBER 22, 1966. SINCE THE NOTATION INCLUDED IN YOUR BID PROVIDED YOU WITH AN OPPORTUNITY TO INSIST, AFTER BID OPENING, THAT YOU COULD ONLY BE BOUND BY A CONTRACT FOR THE BID PRICE STATED PLUS THE AMOUNT OF FEDERAL EXCISE TAXES APPLICABLE TO THE TRANSACTION, THE NOTATION COULD AFFECT THE BID PRICE AND THEREFORE GOES TO THE SUBSTANCE OF THE BID AND CONSTITUTES A MATERIAL DEVIATION WHICH CANNOT BE WAIVED UNDER FPR 1-2.405 AS A MINOR IRREGULARITY OR INFORMALITY. TO DO SO WOULD BE PREJUDICIAL TO THE RIGHTS OF OTHER BIDDERS WHOSE BIDS WERE SUBMITTED IN CONFORMANCE WITH THE INVITATION. SEE 41 COMP. GEN. 289; B-154254, JULY 13, 1964.

IN SPECIFIC REFERENCE TO YOUR CONTENTION THAT THE LETTER AND AFFIDAVIT SUBMITTED BY YOU, SUBSEQUENT TO BID OPENING, CLARIFIED THE INTENT OF THE NOTATION ON YOUR BID, WE HAVE HELD THAT IT IS AN ESSENTIAL ELEMENT OF A VALID BID THAT IT BE SUFFICIENTLY DEFINITE TO ENABLE THE GOVERNMENT TO ACCEPT IT WITH CONFIDENCE THAT THE CONTRACT SO MADE CAN BE INTERPRETED AND ENFORCED WITHOUT RESORT TO EXTRANEOUS MATTER. IT FOLLOWS, THEREFORE, THAT A BIDDER MAY NOT BE PERMITTED, AFTER BIDS ARE OPENED AND DISCLOSED TO OTHER BIDDERS, TO CLARIFY HIS BID BY SELF-SERVING EXPLANATIONS WHEN SUCH BID IS SO UNCLEAR AS TO THE BID PRICE HE INTENDED AS TO LEAVE A SUBSTANTIAL DOUBT AS TO THE RIGHTS AND OBLIGATIONS THAT WOULD ARISE BY ACCEPTING IT. 43 COMP. GEN. 579; B-156145, MARCH 8, 1965. IT IS OUR OPINION THAT THE NOTATION ON YOUR BID RAISES A SUBSTANTIAL DOUBT THAT ACCEPTANCE OF YOUR BID WOULD HAVE RESULTED IN AN OBLIGATION ON YOUR PART TO ASSUME PAYMENT OF FEDERAL EXCISE TAXES AT YOUR BID PRICE. IN VIEW THEREOF, AND SINCE THE AMBIGUITY IN YOUR BID WAS CREATED BY YOU AND COULD HAVE BEEN EASILY AVOIDED BY EITHER OMITTING THE NOTATION OR BY USING MORE PRECISE LANGUAGE TO INDICATE THAT NO CONTINGENCY FOR "NEW TAXES" HAD BEEN ESTABLISHED AND THAT FEDERAL EXCISE TAXES WERE INCLUDED IN YOUR BID, WE MUST CONCLUDE THAT YOUR CLARIFYING STATEMENT SUBMITTED AFTER BID OPENING MAY NOT BE CONSIDERED IN CONSTRUCTING YOUR BID.

WHILE WE ARE ADVISED THAT YOU ORIGINALLY ALLEGED ERROR IN YOUR BID, YOU HAVE SUBMITTED NO EVIDENCE IN SUPPORT THEREOF, AS REQUIRED BY FPR 1-2.406- 3. MOREOVER, CORRECTION MAY NOT BE PERMITTED UNDER FPR 1 2.406-2, SINCE THE PROCEDURE UNDER THAT REGULATION IS APPLICABLE ONLY WHERE THERE IS AN OBVIOUS CLERICAL ERROR APPARENT ON THE FACE OF THE BID, AND IT IS OUR OPINION THAT ANY ERROR YOU MAY HAVE COMMITTED HERE IS NEITHER APPARENT ON THE FACE OF THE BID FORM AND ACCOMPANYING PAPERS, NOR IS IT AN OBVIOUS CLERICAL ERROR. SEE 40 COMP. GEN. 432 AND 39 COMP. GEN. 567.

FOR THE REASONS STATED, WE MUST CONCLUDE THAT THE PROPOSED REJECTION OF YOUR BID WOULD BE PROPER, AND YOUR PROTEST MUST THEREFORE BE DENIED.