B-142762, JUN. 14, 1960

B-142762: Jun 14, 1960

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ESQUIRE: REFERENCE IS MADE TO YOUR LETTER OF JUNE 8. YOUR REQUEST FOR RECONSIDERATION IS PREMISED ON THE THEORY THAT THE STATEMENT: "IT IS OUR UNDERSTANDING THAT THE FEDERAL GOVERNMENT AND ITS AGENCIES ARE EXEMPT WITH RESPECT TO SALES AND USE TAXES IMPOSED ON MATERIALS BY THE STATE OF WASHINGTON. WILL BE FOR THE ACCOUNT OF THE PURCHASER AND WILL BE INVOICED AS ADDITIONS TO THE PRICE QUOTED.'. THE LETTER ACCOMPANYING THE COMPANY BID WAS AN IMMATERIAL DEVIATION WHICH SHOULD HAVE BEEN WAIVED. ESPECIALLY SINCE IT WAS FOLLOWED IMMEDIATELY BY A STATEMENT THAT "OUR PROPOSAL IS SUBMITTED IN STRICT ACCORDANCE WITH YOUR SPECIFICATIONS.'. YOU SUGGEST THAT IF THE TAX PARAGRAPH IS A MATERIAL DEVIATION BECAUSE OF THE CONFLICT BETWEEN IT AND THE TAX CLAUSE INCLUDED IN THE INVITATION.

B-142762, JUN. 14, 1960

TO RICHARD A. BARTON, ESQUIRE:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 8, 1960, REQUESTING RECONSIDERATION OF DECISION B-142762, DATED MAY 17, 1960, TO THE ACTING CHIEF, BRANCH OF PLANT DESIGN AND CONSTRUCTION, BUREAU OF INDIAN AFFAIRS.

YOUR REQUEST FOR RECONSIDERATION IS PREMISED ON THE THEORY THAT THE STATEMENT:

"IT IS OUR UNDERSTANDING THAT THE FEDERAL GOVERNMENT AND ITS AGENCIES ARE EXEMPT WITH RESPECT TO SALES AND USE TAXES IMPOSED ON MATERIALS BY THE STATE OF WASHINGTON. ACCORDINGLY, ANY SALES TAXES, USE TAXES, GROSS RECEIPTS TAXES, AND OTHER SIMILAR TAXES IMPOSED ON THE CHICAGO BRIDGE AND IRON COMPANY OR THE PURCHASER WITH RESPECT TO THE STRUCTURE FURNISHED UNDER THIS PROPOSAL, OR THE MATERIAL THEREFOR, WILL BE FOR THE ACCOUNT OF THE PURCHASER AND WILL BE INVOICED AS ADDITIONS TO THE PRICE QUOTED.' THE LETTER ACCOMPANYING THE COMPANY BID WAS AN IMMATERIAL DEVIATION WHICH SHOULD HAVE BEEN WAIVED, INASMUCH AS IT ALLEGEDLY DID NOT GO TO THE SUBSTANCE OF THE BID, ESPECIALLY SINCE IT WAS FOLLOWED IMMEDIATELY BY A STATEMENT THAT "OUR PROPOSAL IS SUBMITTED IN STRICT ACCORDANCE WITH YOUR SPECIFICATIONS.' IN THE ALTERNATIVE, YOU SUGGEST THAT IF THE TAX PARAGRAPH IS A MATERIAL DEVIATION BECAUSE OF THE CONFLICT BETWEEN IT AND THE TAX CLAUSE INCLUDED IN THE INVITATION, THEN THERE EXISTS AN AMBIGUITY WHICH SHOULD BE RESOLVED IN THE POSITION MOST FAVORABLE TO THE GOVERNMENT IN ACCORDANCE WITH DECISION B-141786, DATED JANUARY 28, 1960, 39 COMP. GEN. 546.

THE TAX PARAGRAPH IN THE COMPANY LETTER WOULD, IN ADDITION TO THE CONTRACT PRICE, MAKE THE GOVERNMENT RESPONSIBLE FOR ANY OF THE ENUMERATED TAXES MERELY BECAUSE THEY ARE LEVIED ON THE CONTRACT WORK. THIS IS MATERIALLY DIFFERENT FROM THE INVITATION SPECIFICATION, PARAGRAPH 19, WHICH IMPOSES UPON THE CONTRACTOR ADDITIONAL PREREQUISITES TO ADJUSTMENT OF THE CONTRACT PRICE. REIMBURSEMENT IS NOT TO BE MADE UNDER THE INVITATION TAX CLAUSE UNLESS THE FOLLOWING FACTORS ARE COMPLIED WITH: (1) THE TAX IS $100 OR MORE; (2) THE CONTRACTOR SHOWS THAT THE TAX WAS NOT INCURRED THROUGH ITS FAULT OR NEGLIGENCE OR FAILURE TO FOLLOW THE CONTRACTING OFFICER'S INSTRUCTIONS; (3) THE CONTRACTOR SHOWS THAT AS OF THE SCHEDULED BID OPENING DATE THE TAX WAS NOT TO BE INCLUDED IN THE CONTRACT PRICE; AND (4) THE CONTRACTOR WARRANTS THAT THE TAX WAS NOT SO INCLUDED. UNDER THE COMPANY PROVISION, IF THE COMPANY IS NOT CAREFUL TO SECURE AN EXISTING TAX EXEMPTION, THE GOVERNMENT WOULD STILL BE REQUIRED TO REIMBURSE THE TAX "IMPOSED.' HOWEVER, UNDER THE GOVERNMENT CLAUSE THE TAX IS NOT REIMBURSABLE UNLESS THE CONTRACTOR HAS BEEN CAREFUL TO FOLLOW THE STANDARDS OF DILIGENCE WHICH HAVE BEEN ENUMERATED ABOVE. TO CITE ANOTHER EXAMPLE, UNDER THE COMPANY CLAUSE THE GOVERNMENT WOULD HAVE TO REIMBURSE A TAX EVEN IF IT WERE $99, WHEREAS UNDER THE GOVERNMENT CLAUSE NO ADJUSTMENT WILL BE MADE FOR SO LIMITED AN AMOUNT. CLEARLY, THE COMPANY TAX PROVISION WOULD REQUIRE REIMBURSEMENT SIMPLY UPON IMPOSITION OF THE TAX AND BILLING THEREFOR AND WITHOUT FURTHER DOCUMENTATION OR PROOF AS REQUIRED IN THE GOVERNMENT CLAUSE. THIS WOULD GIVE THE COMPANY AN ADVANTAGE NOT ENJOYED OR CONTEMPLATED BY OTHER BIDDERS. THE COMPANY'S BID IS GROUNDED ON A BASIS AT VARIANCE WITH THE INVITATION, INASMUCH AS IT DOES NOT UNDERTAKE AS GREAT A RESPONSIBILITY AS THE SPECIFICATION CALLS FOR. IT WOULD THEREFORE SEEM TO FOLLOW THAT SINCE THE COMPANY HAS NOT ASSUMED THE SAME BURDEN REQUIRED OF OTHER BIDDERS, ITS PRICE MAY WELL BE CONSIDERED TO REFLECT THIS ADVANTAGE. IT IS GENERALLY UNDERSTOOD THAT BID PRICES ARE COMMENSURATE WITH THE DEGREE OF RESPONSIBILITY IMPOSED BY THE CONTRACT SPECIFICATIONS. THEREFORE, ANY RELAXATION OF LIABILITY IS EXPECTED TO RESULT IN A CONCOMITANT REDUCTION IN PRICE. ACCORDINGLY, THE COMPANY TAX PROVISION MUST BE VIEWED AS HAVING AN EFFECT ON THE BID PRICE AND MATERIALLY AND SUBSTANTIALLY ALTERING THE GOVERNMENT CLAUSE. SINCE THE DEVIATION IS ONE OF SUBSTANCE IT COULD NOT PROPERLY BE WAIVED. COMP. GEN. 554.

THE PARAGRAPH THAT "OUR PROPOSAL IS SUBMITTED IN STRICT ACCORDANCE WITH YOUR SPECIFICATIONS," WHICH IMMEDIATELY FOLLOWS THE TAX PARAGRAPH, DOES NOT ALTER OUR VIEW IN THE CIRCUMSTANCES. THE TAX PARAGRAPH, ALTHOUGH IT DOES NOT SPECIFICALLY REFER TO THE GOVERNMENT TAX CLAUSE, CLEARLY PUTS THE TAX MATTER IN A DIFFERENT POSTURE THAN THE SPECIFICATIONS REQUIRE. WHILE THE LETTER OPINES THAT THE BID IS OFFERED IN STRICT CONFORMANCE WITH THE SPECIFICATIONS, IT DOES NOT INDICATE THAT STRICT COMPLIANCE WITH THE GOVERNMENT PROVISION IS INTENDED. TO THE CONTRARY, THE COMPANY WENT INTO DETAIL TO INDICATE HOW THE TAX FEATURE OF THE CONTRACT WOULD BE TREATED, AND SUCH A SPECIFIC TREATMENT IS NOT CURED BY THE SUBSEQUENT GENERAL STATEMENT.

THIS MATTER IS READILY DISTINGUISHABLE FROM B-141786, JANUARY 28, 1960, 39 COMP. GEN. 546. IN THE LATTER CASE, A BIDDER PUT IN A SINGLE BID PRICE IN RESPONSE TO AN INVITATION INTENDED TO SECURE A PRICE FOR EACH OF THREE BONDS OF DIFFERING LIABILITIES. WE INDICATED THAT INASMUCH AS THE BID WAS CAPABLE OF THREE INTERPRETATIONS AND THE BIDDER CREATED THIS AMBIGUITY, THE BID SHOULD BE CONSTRUED AGAINST THE BIDDER AND THE BEST OFFER ACCEPTED. IN THAT CASE, THERE WAS NOTHING IN THE SUBMITTED BID TO INDICATE THAT THE BIDDER HAD ANY OTHER INTENTION. HOWEVER, IN THIS CASE, THE BIDDER SUBMITTED A DETAILED WRITTEN STATEMENT INCONGRUOUS WITH THE INVITATION TAX PROVISION. IN THE CONSTRUCTION OF INSTRUMENTS THE WRITTEN WORD IS GENERALLY CONSIDERED AS HAVING PRECEDENCE OVER THE PRINTED WORD AND THE SPECIFIC AS HAVING PRECEDENCE OVER THE GENERAL, ALL OF WHICH LEADS TO ONE CONCLUSION; THAT IS, THAT THE COMPANY'S LETTER IS CAPABLE OF ONLY ONE INTERPRETATION WHICH DIFFERS MATERIALLY FROM THE CONTRACT OFFERED ALL BIDDERS.

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