Attachment_9_-_RFI_60_0003.pdf
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- Solicitation number
- 140P4326R0013
About this file
This is a Questions and Answers document from a Request for Information (RFI) for federal contract 140P4326R0013 regarding GEWA Replace HVAC Equipment.
RFI 60 addresses a contractor's concern regarding sales and use tax obligations under Virginia State Code 23VAC10-210-693 for government construction contracts. The inquiring contractor raised the issue that while Virginia law exempts direct government purchases from sales tax, contractors performing construction work on real property must pay sales and use tax on tangible personal property furnished for real estate construction—unlike some other states. The contractor expressed concern that competing bidders unfamiliar with Virginia tax requirements might exclude these taxes from their proposals, potentially creating pricing disparities. The Government's response clarified that this is a firm-fixed-price contract, and offerors are responsible for accounting for all expenses in their pricing. The Government stated that an offeror's failure to include necessary expenses, including applicable taxes, will not be grounds for a contract modification post-award. This response places the burden on all bidders to thoroughly understand and incorporate all applicable costs, including state and local taxes, into their firm-fixed-price proposals.
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140P4326R0013 – GEWA Replace HVAC Equpment
RFI 60
RFI 60 - We did want to point out a concern we have with RFI #55, based on 23VAC10-210-
693. Government contractors in the Virginia State Code:
“H. Real property contracts with government entities. If a contractor contracts with a governmental entity to perform construction or reconstruction with respect to real property, and in connection with this real property contract, agrees to furnish tangible personal property for use in real estate construction, the contractor shall be deemed to have purchased this tangible personal property for use and consumption and shall be liable for the sales and use tax on this tangible personal property.“
Typically, when the government makes the purchase direct the sales tax can be exempt, but not when a contractor is making the purchase. This does vary state to state, but with our experience with Government contracting in VA and MD, these states do not honor a tax exemption for us as the contractor.
Our concern lies with the fact that while we understand the Virginia state code, other bidder may not, and they may exclude the required taxes and cause a hardship on the Government post award.
Answer - it's a firm-fixed-price and an offeror's failure to account for any expenses will not cause a hardship on the Government as it will not be justification for a modification.
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