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B-188584 1 (1977-12-23)

handle is hein.gao/gaobadfmz0001 and id is 1 raw text is: C6 UPeWWEWLLUN SENSUAL ASH INUB' ON Q.0 . 305 D43 CF . . - PILE: 2-188584 DATE: DMMin 23P im C> MATTER ECn: Duabar L Sullivan DreatagC. DIGE ST: Where low-bidder alleger after ward that State sales tax and related factorn were mistakenly omitted from bid, and contractikg officer was on constructive notice of mistake because of disparity relative to second low bId 4ad Goverment estimate, no valid con- tract was consummated, notwithstanding mistake was one of 1sv and bidder may in fact have verified bid if requested. Since intended bid is not clear, and reaciseion is not feasible, payment on ustum alabant basis is liited to award price plus actual tax itibility. Invitation for bids (IFS) No. DALV62-74-3-0055, fo:r dredging work In Mississippi, Tennessee, and Alabasa, was issued in March of 1974 by thetUnited States Army Coxps of Engineers (Corps). The five bids received were opened as scheduled on April 10. Dunbar & Sullivan Dredging Co. (Disbar & Sullivan) was the low bidder at $7,199,000. The next low bid was $7,947,500, and the: Government estimate for the project was $8,685,000. The centrac me warded to Dunbar & Sullivan on April 24. On Nay 1, Dunbar & Sullivan advised the contracting officer ofa mistake in its bid. Dunbar & Sullivan alleged the. in preparing its bid it 'had consulted a standard commercial tax service to determine the sales taz liability that-could be antici- pated from 'the required perfo6asnce. The tax service apparently provided that the State of Misissippi Occupational Sales Tax of 2-1/2 perent of grose receipts did not apply to gross receipts from the sale of services to the Federal Government. Diubar & Sullivan alleged-that on the basis of that information no' rovision was.made in itsbidifor the cost of aurtittax. However, after Dunbar & Sullivan was awarded the contract, it took steps to qualify to do business in-Nissiesippi, here it had never worked before, and was-advised by the Missisaippi State Tax Commission that the 2-1/2-percant Occupational Sales Tax did in fact apply to gross receipts from Government contrscts. Dunbar & Sullivan therefore requested that the Corps increase the contract price. In this connection, the Corps states that the subject tax was not included in the Government estimate. -1 -

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