B-142762, MAY 17, 1960

B-142762: May 17, 1960

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BUREAU OF INDIAN AFFAIRS: REFERENCE IS MADE TO YOUR LETTER OF APRIL 29. OR THE TRANSACTIONS OF PROPERTY COVERED BY THIS CONTRACT ARE THEN EXEMPT. DUTIES ARE INCLUDED IN THE CONTRACT PRICE.'. IN WHICH IT STATED: "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 COMPANY STATED THAT THE TAX PARAGRAPH WAS ERRONEOUSLY INCLUDED IN ITS LETTER. WAS CONTRARY TO A MATERIAL REQUIREMENT OF THE INVITATION FOR BIDS AND. WAS NONRESPONSIVE. WOULD APPEAR TO BE DISPOSITIVE OF THE QUESTION: "THE QUESTION THEN ARISES AS TO WHETHER A BID WHICH IS NOT RESPONSIVE TO THE INVITATION MAY BE CORRECTED ON THE BASIS OF AN ALLEGATION THAT THE REASON FOR THE BID BEING NONRESPONSIVE WAS AN OVERSIGHT OR A MISTAKE.

B-142762, MAY 17, 1960

TO MR. LOUIS H. BRASHEAR, ACTING CHIEF, BRANCH OF PLANT DESIGN AND CONSTRUCTION, BUREAU OF INDIAN AFFAIRS:

REFERENCE IS MADE TO YOUR LETTER OF APRIL 29, 1960, WITH ENCLOSURES, REQUESTING OUR DECISION WITH RESPECT TO THE ACCEPTABILITY OF THE LOW BID SUBMITTED BY THE CHICAGO BRIDGE AND IRON COMPANY PURSUANT TO INVITATION DATED JANUARY 13, 1960.

THE INVITATION REQUESTED BIDS FOR FURNISHING LABOR AND MATERIALS AND PERFORMING THE WORK NECESSARY FOR THE CONSTRUCTION OF WATER STORAGE FACILITIES AT WELLPINIT, WASHINGTON, PROJECT NO. BU 503-446. PARAGRAPH 19,"FEDERAL, STATE, AND LOCAL TAXES," PROVIDES, IN PERTINENT PART, AS FOLLOWS:

"B. EXCEPT AS MAY BE OTHERWISE PROVIDED IN THIS CONTRACT, THE CONTRACT PRICE INCLUDES ALL FEDERAL, STATE, AND LOCAL TAXES AND DUTIES IN EFFECT AND APPLICABLE TO THIS CONTRACT ON THE TAX INCLUSIVE DATE, EXCEPT TAXES FROM WHICH THE GOVERNMENT, THE CONTRACTOR, OR THE TRANSACTIONS OF PROPERTY COVERED BY THIS CONTRACT ARE THEN EXEMPT. UNLESS SPECIFICALLY EXCLUDED, DUTIES ARE INCLUDED IN THE CONTRACT PRICE.'

IN RESPONSE TO THE INVITATION THE CHICAGO BRIDGE AND IRON COMPANY SUBMITTED A BID DATED FEBRUARY 26, 1960, OFFERING TO PERFORM THE WORK FOR THE LUMP SUM OF $28,345. WITH ITS BID THE COMPANY SUBMITTED A LETTER DATED FEBRUARY 26, 1960, IN WHICH IT STATED:

"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.'

IN A LETTER DATED APRIL 18, 1960, THE COMPANY REQUESTED THAT THE PARAGRAPH IN ITS LETTER OF TRANSMITTAL RELATING TO PAYMENT OF TAXES BE DELETED IN ITS ENTIRETY. THE COMPANY STATED THAT THE TAX PARAGRAPH WAS ERRONEOUSLY INCLUDED IN ITS LETTER.

THERE CAN BE NO QUESTION THAT THE BID, CONDITIONED UPON THE EXCLUSION OF TAXES FROM THE BID PRICE, WAS CONTRARY TO A MATERIAL REQUIREMENT OF THE INVITATION FOR BIDS AND, THEREFORE, WAS NONRESPONSIVE. SEE, GENERALLY, 30 COMP. GEN. 179 AND 37 COMP. GEN. 110. IN REGARD TO THE COMPANY'S REQUEST THAT ITS BID BE CORRECTED TO CORRESPOND WITH ITS ALLEGED INTENDED MEANING, THE FOLLOWING QUOTATION FROM OUR DECISION OF JUNE 5, 1959, 38 COMP. GEN. 819, WOULD APPEAR TO BE DISPOSITIVE OF THE QUESTION:

"THE QUESTION THEN ARISES AS TO WHETHER A BID WHICH IS NOT RESPONSIVE TO THE INVITATION MAY BE CORRECTED ON THE BASIS OF AN ALLEGATION THAT THE REASON FOR THE BID BEING NONRESPONSIVE WAS AN OVERSIGHT OR A MISTAKE. OUR DECISION OF JANUARY 30, 1958, B-134931, WHICH INVOLVED A SITUATION WHERE A BIDDER HAD INADVERTENTLY SUBMITTED THE WRONG SAMPLE WITH ITS BID AND ATTEMPTED TO SUBMIT A NEW SAMPLE AFTER THE BID OPENING, IT WAS STATED:

" "THE QUESTION AS TO WHETHER A BID IS RESPONSIVE TO THE INVITATION IS FOR DETERMINATION UPON THE BASIS OF THE BID AS SUBMITTED AND IT IS NOT BELIEVED THAT IT WOULD BE PROPER TO CONSIDER THE REASON FOR THE UNRESPONSIVENESS, WHETHER DUE TO MISTAKE OR OTHERWISE.'

"IT IS PROBABLE THAT THE MAJORITY OF UNRESPONSIVE BIDS ARE DUE TO OVERSIGHT OR ERROR, SUCH AS THE FAILURE TO QUOTE A PRICE, TO SIGN THE BID, TO FURNISH A BID BOND, TO SUBMIT REQUIRED SAMPLES OR DATA, OR THE SUBMISSION OF THE WRONG SAMPLE, INCOMPLETE DATA, OR STATEMENTS THE ACTUAL MEANING OF WHICH WAS NOT INTENDED, ETC. AN UNRESPONSIVE BID DOES NOT CONSTITUTE AN OFFER WHICH MAY PROPERLY BE ACCEPTED, AND TO PERMIT A BIDDER TO MAKE HIS BID RESPONSIVE BY CHANGING, ADDING TO, OR DELETING A MATERIAL PART OF THE BID ON THE BASIS OF AN ERROR ALLEGED AFTER THE OPENING WOULD BE TANTAMOUNT TO PERMITTING A BIDDER TO SUBMIT A NEW BID. IT IS OUR OPINION THAT AN ALLEGATION OF ERROR IS PROPER FOR CONSIDERATION ONLY IN CASES WHERE THE BID IS RESPONSIVE TO THE INVITATION AND IS OTHERWISE PROPER FOR ACCEPTANCE.'

SEE, ALSO, 34 COMP. GEN. 82, 37 ID. 110 AND 39 ID. 259.

FOR THE FOREGOING REASONS YOU ARE ADVISED THAT THE BID OF THE CHICAGO BRIDGE AND IRON COMPANY IS NOT A RESPONSIVE BID, AND THAT IT MAY NOT BE CORRECTED TO MAKE IT A RESPONSIVE BID AND ELIGIBLE FOR AWARD.

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