B-176305, AUG 8, 1972

B-176305: Aug 8, 1972

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IT IS CLEAR THAT THE ROEDIGER BID WAS NONRESPONSIVE TO THE MATERIAL REQUIREMENTS BECAUSE IT CONTAINED THE STATEMENT "NO STATE OR LOCAL TAXES INCLUDED" IN CLEAR VIOLATION OF PARAGRAPH 11A. THE PROTEST IS DENIED. COOK & DRAIN: REFERENCE IS MADE TO YOUR LETTER DATED JUNE 26. THE APPARENT LOW BID WAS SUBMITTED BY ROEDIGER. THE CONTRACTING OFFICER NOTIFIED ROEDIGER THAT ITS BID WAS NONRESPONSIVE AND MUST BE REJECTED BECAUSE IT CONTAINED THE STATEMENT "NO STATE OR LOCAL TAXES INCLUDED.". AWARD OF CONTRACT IS BEING HELD UP PENDING OUR DECISION ON THE MERITS OF THE PROTEST. YOU ALLEGE THAT THE INSTRUCTIONS TO BIDDERS ARE CONFUSING AS REGARDS THE TAX CLAUSE (GSA STANDARD FORM 22. TO FURNISH EVIDENCE APPROPRIATE TO ESTABLISH EXEMPTION FROM ANY TAX WHICH THE CONTRACTOR WARRANTS IN WRITING WAS EXCLUDED FROM THE CONTRACT PRICE.

B-176305, AUG 8, 1972

BID PROTEST - NONRESPONSIVE BID - EXCLUDED TAXES DENIAL OF PROTEST ON BEHALF OF ROEDIGER CONSTRUCTION, INC., AGAINST THE REJECTION OF ITS LOW BID UNDER A SOLICITATION ISSUED BY THE VETERANS ADMINISTRATION HOSPITAL, CLEVELAND, OHIO, FOR A RESEARCH ADDITION AT THE HOSPITAL. IT IS CLEAR THAT THE ROEDIGER BID WAS NONRESPONSIVE TO THE MATERIAL REQUIREMENTS BECAUSE IT CONTAINED THE STATEMENT "NO STATE OR LOCAL TAXES INCLUDED" IN CLEAR VIOLATION OF PARAGRAPH 11A, SF 22. A MATERIAL DEVIATION MAY NOT BE CORRECTED AFTER BID OPENING BECAUSE OF PREJUDICE TO THE OTHER BIDDERS. 38 COMP. GEN. 819 (1959). ACCORDINGLY, THE PROTEST IS DENIED.

TO SHEEHAN, COOK & DRAIN:

REFERENCE IS MADE TO YOUR LETTER DATED JUNE 26, 1972, PROTESTING ON BEHALF OF ROEDIGER CONSTRUCTION, INCORPORATED (ROEDIGER), AGAINST THE REJECTION OF ITS BID UNDER PROJECT NO. 34-5269, ISSUED APRIL 19, 1972, BY THE VETERANS ADMINISTRATION HOSPITAL, CLEVELAND, OHIO, FOR A RESEARCH ADDITION AT THE HOSPITAL.

THE APPARENT LOW BID WAS SUBMITTED BY ROEDIGER. HOWEVER, BY LETTER DATED JUNE 14, 1972, THE CONTRACTING OFFICER NOTIFIED ROEDIGER THAT ITS BID WAS NONRESPONSIVE AND MUST BE REJECTED BECAUSE IT CONTAINED THE STATEMENT "NO STATE OR LOCAL TAXES INCLUDED." BY TELEGRAM DATED JUNE 21, 1972, ROEDIGER PROTESTED TO THIS OFFICE AND YOUR LETTER OF JUNE 26, 1972, SET FORTH THE DETAILS OF THE PROTEST. AWARD OF CONTRACT IS BEING HELD UP PENDING OUR DECISION ON THE MERITS OF THE PROTEST.

YOU ALLEGE THAT THE INSTRUCTIONS TO BIDDERS ARE CONFUSING AS REGARDS THE TAX CLAUSE (GSA STANDARD FORM 22, PARAGRAPH 11, 1969 ED.) RELATING TO THE BID PRICE. YOU SPECIFICALLY POINT TO PARAGRAPHS 11A AND 11E AS AUTHORITY FOR ROEDIGER TO SUBMIT A CLARIFYING AFFIDAVIT ON THE TYPE OF TAX EXCLUDED FROM ITS BID PRICE.

PARAGRAPH 11A STATES:

"EXCEPT AS MAY BE OTHERWISE PROVIDED IN THIS CONTRACT, THE CONTRACT PRICE INCLUDES ALL APPLICABLE FEDERAL, STATE, AND LOCAL TAXES AND DUTIES."

YOU BELIEVE A REASONABLE INTERPRETATION OF THE PHRASE "EXCEPT AS MAY BE OTHERWISE PROVIDED IN THIS CONTRACT" REFERS DIRECTLY TO PARAGRAPH 11E WHICH PROVIDES:

"UNLESS THERE DOES NOT EXIST ANY REASONABLE BASIS TO SUSTAIN AN EXEMPTION, THE GOVERNMENT, UPON REQUEST OF THE CONTRACTOR, WITHOUT FURTHER LIABILITY, AGREES, EXCEPT AS OTHERWISE PROVIDED IN THIS CONTRACT, TO FURNISH EVIDENCE APPROPRIATE TO ESTABLISH EXEMPTION FROM ANY TAX WHICH THE CONTRACTOR WARRANTS IN WRITING WAS EXCLUDED FROM THE CONTRACT PRICE. ADDITION, THE CONTRACTING OFFICER MAY FURNISH EVIDENCE TO ESTABLISH EXEMPTION FROM ANY TAX THAT MAY, PURSUANT TO THIS CLAUSE, GIVE RISE TO EITHER AN INCREASE OR DECREASE IN THE CONTRACT PRICE. EXCEPT AS OTHERWISE PROVIDED IN THIS CONTRACT, EVIDENCE APPROPRIATE TO ESTABLISH EXEMPTION FROM DUTIES WILL BE FURNISHED ONLY AT THE DISCRETION OF THE CONTRACTING OFFICER."

YOU POINT OUT THAT THE WORD "WARRANTS" IS IN THE PRESENT TENSE AND THE WORD "EXCLUDED" IS IN THE PAST TENSE WHICH WOULD ALLOW A BIDDER AFTER BID OPENING TO SUBMIT AN AFFIDAVIT EXPLAINING WHAT TAX WAS EXCLUDED IN THE BID PRICE. YOU ALSO CONTEND THAT THE WORD "SALES" WAS A CLERICAL OMISSION FROM THE BID STATEMENT "NO STATE OR LOCAL TAXES INCLUDED" AND THAT THIS CONSTITUTES A MINOR INFORMALITY WHICH ROEDIGER SHOULD BE ALLOWED TO CORRECT.

IT IS CLEAR THE ROEDIGER BID AS SUBMITTED WAS NONRESPONSIVE TO THE MATERIAL REQUIREMENTS OF THE SOLICITATION. BIDDERS WERE REQUIRED TO INCLUDE ALL APPLICABLE TAXES IN THEIR BID PRICES. THE ROEDIGER BID STATED THAT STATE AND LOCAL TAXES WERE NOT INCLUDED IN THE BID PRICE. IN THE EVENT OF AN AWARD ON SUCH A BID THE CONTRACTOR WOULD BE IN A POSITION TO INSIST THAT THE CONTRACT PRICE SHOULD BE INCREASED BY THE AMOUNT OF ANY APPLICABLE STATE AND LOCAL TAXES, CONTRARY TO THE TERMS OF THE TAX CLAUSE IN THE INVITATION. SEE 41 COMP. GEN. 289, 292 (1961).

YOU HAVE URGED, HOWEVER, THAT THE LOW BIDDER ONLY INTENDED TO EXCLUDE SALES TAXES FROM THE BID, WHICH TAXES ARE NOT APPLICABLE IN ANY EVENT, AND THAT ANY FAILURE TO MAKE THIS INTENTION CLEAR MAY BE CURED AFTER BID OPENING, AS CONTEMPLATED BY SUBPARAGRAPH E OF THE TAX CLAUSE, QUOTED ABOVE.

IT IS A FUNDAMENTAL RULE OF THE COMPETITIVE BIDDING SYSTEM THAT A BIDDER MAY NOT BE PERMITTED TO VARY HIS BID AFTER BID OPENING IN ORDER TO COMPLY WITH THE REQUIREMENTS OF THE INVITATION FOR BIDS. IT DOES NOT MATTER WHETHER THE BIDDER'S FAILURE TO COMPLY WITH THE BIDDING TERMS WAS DUE TO INADVERTENCE OR MISTAKE, SUCH AS YOU ALLEGE OCCURRED IN THIS CASE, OR OTHERWISE. IN ORDER TO BE CONSIDERED FOR AWARD THE BID AS SUBMITTED MUST COMPLY WITH ALL MATERIAL REQUIREMENTS OF THE INVITATION FOR BIDS AT THE TIME OF BID OPENING. 38 COMP. GEN. 819 (1959); 40 COMP. GEN. 132, 134 (1960).

SUBPARAGRAPH E OF THE TAX CLAUSE WAS NOT INTENDED TO PERMIT BIDDERS TO EXPLAIN, ALTER, OR CORRECT THEIR BIDS AFTER BID OPENING. IT MERELY PROVIDES THAT THE CONTRACTING OFFICER WILL FURNISH EVIDENCE APPROPRIATE TO ESTABLISH EXEMPTION FROM ANY TAX WHICH THE CONTRACTOR WARRANTS WAS EXCLUDED FROM THE CONTRACT (OR BID) PRICE. THE PROVISION DOES NOT AUTHORIZE A BIDDER TO SUBMIT STATEMENTS OR AFFIDAVITS AFTER BID OPENING IN ORDER TO CLARIFY HIS BID. SUCH A PROCEDURE WOULD BE CONTRARY TO THE COMPETITIVE BIDDING RULES. SEE B-160448, JANUARY 4, 1967, COPY ENCLOSED.

ACCORDINGLY, YOUR PROTEST IS DENIED.