B-171668, FEB 17, 1971

B-171668, FEB 17, 1971

CONTRACTS - MISTAKE IN BID DECISION DENYING MIL-PAK, INCORPORATED A MODIFICATION OF ITS BID PRICE ON WHICH A CONTRACT FOR TIE ROD END ASSEMBLIES WAS AWARDED BY THE DEFENSE CONSTRUCTION SUPPLY CENTER, COLUMBUS, OHIO. IN VIEW OF THE INCORPORATION OF ASPR 7-103.10 (A), (WHICH PROVIDES THAT THE CONTRACT PRICE INCLUDES ALL APPLICABLE FEDERAL, STATE, AND LOCAL TAXES) INTO THE INITIAL REQUEST FOR PROPOSALS AND SUBSEQUENT CONTRACT, KNOWLEDGE OF THE POSSIBILITY OF APPLICATION OF THE FEDERAL EXCISE TAXES MAY BE FAIRLY IMPUTED TO THE CONTRACTOR. THEREFORE THE REQUEST FOR BID MODIFICATION BASED ON THE IMPOSITION OF THE FEDERAL EXCISE TAX MUST BE DENIED.

TO MIL-PAK, INCORPORATED:

REFERENCE IS MADE TO YOUR LETTER OF JANUARY 6, 1971, REQUESTING A $1,326 INCREASE IN THE PRICE OF CONTRACT NO. DSA700-71-C-1721, COVERING THE PURCHASE OF 7,800 TIE ROD END ASSEMBLIES, WHICH WAS AWARDED TO YOU ON OCTOBER 6, 1970, BY THE DEFENSE CONSTRUCTION SUPPLY CENTER (DCSC), COLUMBUS, OHIO. THE INCREASE REFLECTS THE IMPOSITION OF A $0.17 PER UNIT FEDERAL EXCISE TAX WHICH YOU CONTEND YOU WERE UNAWARE OF AT THE TIME YOU SUBMITTED YOUR OFFER AND ALL TIMES THEREAFTER UNTIL YOU RECEIVED AN ORDER UNDER THE CONTRACT.

PART III, SECTION "L," OF DCSC CONTRACT PROVISIONS BOOKLET (JULY 1970), WHICH FORMED A PART OF THE SOLICITATION AND YOUR CONTRACT AWARDED THEREUNDER, INCORPORATED BY REFERENCE PARAGRAPH 7-103.10(A) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR), "FEDERAL, STATE, & LOCAL TAXES." THAT ASPR PROVISION PROVIDES, IN GENERAL, THAT THE CONTRACT PRICE INCLUDES ALL APPLICABLE FEDERAL, STATE, AND LOCAL TAXES. IN VIEW OF THE INCORPORATION OF ASPR 7-103.10(A) INTO THE INITIAL REQUEST FOR PROPOSALS AND SUBSEQUENT CONTRACT, AND THE SPECIFIC MENTION OF "ANY FEDERAL EXCISE TAX OR DUTY" BY THAT PROVISION, WE BELIEVE THAT KNOWLEDGE OF THE POSSIBILITY OF APPLICATION OF THE FEDERAL EXCISE TAXES MAY BE FAIRLY IMPUTED TO YOU. HENCE, IT WAS INCUMBENT UPON THE OFFEROR TO ASCERTAIN THE APPLICABILITY OF THE VARIOUS TAXES AND TO SUBMIT HIS OFFER ACCORDINGLY.

IN B-169810, JULY 8, 1970, WE STATED:

"IN CASES INVOLVING MISTAKES IN BIDS OR PROPOSALS ALLEGED AFTER AWARD, AS IN THIS CASE, RELIEF CAN BE GRANTED ONLY IF THE MISTAKE WAS MUTUAL OR THE CONTRACTING OFFICER WAS ON ACTUAL OR CONSTRUCTIVE NOTICE OF THE ERROR PRIOR TO AWARD. B-163970, MAY 7, 1968, AND DECISIONS CITED THEREIN. *** THE ACCEPTANCE OF THE CONTRACTOR'S OFFER BY THE GOVERNMENT WITHOUT ACTUAL OR CONSTRUCTIVE NOTICE OF ERROR CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS OF THE PARTIES. SEE OGDEN AND DOUGHERTY V UNITED STATES, 102 CT. CL. 249 (1944), AND SALIGMAN ET AL. V UNITED STATES, 56 F. SUPP. 505 (1944)."

NOTHING ON THE FACE OF YOUR PROPOSAL INDICATES THAT AN ERROR IN PRICE HAS BEEN MADE. IN ADDITION, WHILE YOUR OFFERED PRICE WAS $2.57 PER UNIT, THE NEXT THREE LOWEST NET PRICED OFFERS WERE $2.787, $2.795, AND $2.815, RESPECTIVELY. WE DO NOT BELIEVE THAT THE DIFFERENCE BETWEEN THESE PRICE OFFERS AND YOURS IS SO GREAT AS TO WARRANT THE CONCLUSION THAT THE CONTRACTING OFFICER WAS ON ACTUAL OR CONSTRUCTIVE NOTICE OF ERROR. SEE 49 COMP. GEN. 272 (1969).

ACCORDINGLY, YOUR REQUEST FOR RELIEF IS DENIED.