Presentation Products, Inc. dba Spinitar
Docket: ASBCA 61066
Decision date: 2017-06-12

ARMED SERVICES BOARD OF CONTRACT APPEALS 
Appeal of -- ) 
) 
Presentation Products, Inc. dba Spinitar ) 
) 
Under Contract No. W912CN-15-P-0174 ) 
APPEARANCE FOR THE APPELLANT: 
APPEARANCES FOR THE GOVERNMENT: 
ASBCA No. 61066 
Mr. Drake Wayson 
Vice President 
Raymond M. Saunders, Esq. 
Army Chief Trial Attorney 
MAJ Christopher C. Cross, JA 
Trial Attorney 
OPINION BY ADMINISTRATIVE JUDGE O'SULLIVAN 
Appellant Presentation Products, Inc. dba Spinitar (Spinitar) seeks an equitable 
adjustment of $7,624.14 to its contract with the Army to install a video conferencing 
system at Fort Shafter Flats, Hawaii. This amount represents general excise tax that 
Spinitar did not include in its proposed price but was required to pay by the State of 
Hawaii on its revenues under the contract. Spinitar has elected to proceed under Board 
Rule 12.2.1 The government opposes Spinitar's claim and asserts the contract does not 
obligate it to pay state taxes that were not included in the contract price. We agree 
with the government and deny the appeal. 
FINDINGS OF FACT 
1. On 2 June 2015, the Army issued Solicitation No. W912CN-15-T-0187 
requesting proposals to install a video conferencing system for the 18th Medical 
Command Operations Center at Fort Shafter Flats, Hawaii. The solicitation included 
the Federal Acquisition Regulation (FAR) 52.212-4, CONTRACT TERMS AND 
CONDITIONS-COMMERCIAL ITEMS (MA y 2015) clause, which states in subsection (k): 
"'Taxes. The contract price includes all applicable Federal, State, and local taxes and 
duties." (Supp. R4, tab 29 at 1, 15) 
2. Spinitar submitted its proposal on 2 July 2015 (R4, tab 2 at I). Its cost 
proposal contained the following note: "'The above prices do not include any 
1 Under Rule 12.2, Small Claims (Expedited) Procedure, written decisions issued by 
the Board will be short and contain only summary findings of fact and legal 
conclusions. A decision under Rule 12.2 shall have no value as precedent and, 
in the absence of fraud, shall be final and conclusive and may not be appealed 
or set aside. 

applicable sales taxes. Hawaii's GET [general excise tax] tax reimbursement policy 
implemented for federal purchases will be utilized." (Id. at 21) 
3. Contract No. W912CN-15-P-0174 (the contract) was awarded to Spinitar 
effective 11 September 2015 in the amount of $165,417.31. The contract was 
firm-fixed-price and incorporated the Commercial Items clause (FAR 52.212-4 ), 
including its subsection (k). (R4, tab 1 at 1, 16) 
4. On 26 January 2016, Spinitar submitted a change proposal (erroneously 
dated 26 January 2015) that included the following with respect to Hawaii's GET: 
We have spoken extensively with Hawaii's Sales/GET tax 
office. Your indication 
to my prior email that this is not 
subject to such taxes is based on the "Goods Only" 
definition. However, we are informed that "Goods and 
Installation" is subject to the taxes at a rate of 4.5% for 
Oahu. This is a total tax of $7,624.14 including the 
approved Change Proposal 1. 
You will recall that we excluded taxes in our proposal so 
these will need to be added to our contract. 
(R4, tab 4 at 67) The prior communications alluded to above are not included in the 
record. 
5. On 9 August 2016, Spinitar submitted a claim for $7,624.14 which stated, 
in relevant part: 
In the pricing section of the proposal (page 21 of the 
proposal), Spinitar specifically excluded any applicable 
sales taxes including GET tax which is a sales tax imposed 
on goods and services when provided together under a 
single order. 
After numerous conversations with the State of Hawaii, we 
determined that the GET tax would not be waived or 
reimbursed for this project. 
(R4, tab 4 at 2) 
6. On 17 February 2017 the contracting officer issued a final decision denying 
Spinitar's claim. The final decision stated in relevant part: 
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Per the State of Hawaii's Department of Taxation, GET is 
a tax on businesses rather than a sales tax on customers. 
Furthermore, businesses are not required by law to collect 
GET from their customers. Businesses may choose to 
visibly pass on the GET to their customers provided that 
the customer agrees to pay it as part of the sale (Tax Facts 
3 7-1 attached as Exhibit 1 ). 
Under FAR Clause 52.212-4, Contract Terms and 
Conditions, (k) Taxes, states, "The contract price includes 
all applicable Federal, State, and 
local taxes and duties." 
Solicitation W912CN-15-T-0187, and resultant contract 
W912CN-15-P-0174, incorporated the FAR clause 52.212-4 
by reference. The failure of the contractor to incorporate 
applicable taxes in the quote is not a valid basis for a claim 
or equitable adjustment. 
(R4, tab 28 at 1) 
7. Spinitar appealed the final decision and its appeal was docketed by the 
Board on 22 February 2017. 
8. According to its proposal, Spinitar is an experienced firm that over the last 
twenty years has supplied and/or built audio-visual and video conferencing systems 
for numerous government and military facilities (R4, tab 2 at 4-5). 
DISCUSSION 
The Hawaii GET is an excise tax imposed on the gross revenues of 
businesses, including federal government contractors, derived from the privilege of 
doing business in Hawaii. It is not a sales tax paid by the customer. See generally 
HAW. REV. STAT. ANN.§ 237-13 (West 2017). The Board previously decided an 
appeal involving Hawaii's GET in All Star/SAB Pacific, JV., ASBCA No. 50856, 
98-2 BCA ~ 29,958, recon. denied, 99-1BCA~30,214. In that appeal, All Star 
sought to recover from the federal government the additional GET ($34,097) that it 
had to pay as a result of increased revenues resulting from a contract wage rate 
adjustment. The Board denied the appeal, stating: 
It is well-settled that under a firm, fixed-price 
contract, the contractor assumes the risk of all increased 
costs except as specifically provided for in the contract. 
Appellant contends that the Wage Rate adjustment clauses 
provide for reimbursement of the general excise tax levied 
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by the State of Hawaii, and hence the Government should 
assume the risk of this cost. 
We reject appellant's interpretation as unreasonable. 
The clauses could not be more clear. They provide that 
any contract price adjustment for changes in mandated 
wage rates shall be limited to the changes in the wages, 
fringe benefits and accompanying changes in social 
security, unemployment taxes and workmen's 
compensation insurance and shall not include any 
additional amounts for G&A, overhead or profit on these 
costs.... The contract also clearly states that that all 
Federal, state and local taxes shall be included in a 
contractor's bid. This state excise tax and any projected 
increases thereof, should have been included in appellant's 
bid. [Citations omitted] 
All Star, 98-2 BCA ~ 29,958 at 148,234. 
In Robertson & Penn, Inc., ASBCA No. 55622, 08-2 BCA ~ 33,921 at 167,859 
(citing Hunt Construction Corp. v. United States, 281 F .3d 1369, 13 72-73 
(Fed. Cir. 2002)), we denied a contractor's claim for $659,257.71 in assessed 
Tennessee state taxes, holding that the contract to operate laundry facilities at 
Fort Campbell placed squarely upon the contractor the responsibility to include 
all applicable taxes in its bid. And in GarCom, Inc., ASBCA No. 55034, 06-1 BCA 
~ 33,146, we denied a claim for $63,578.28 for Arizona state "transaction privilege 
tax" under a contract for telecommunications work at Yuma Proving Grounds that 
contained the identical contract clause, FAR 52.212-4, Contract Terms and 
Conditions-Commercial Items (although an earlier version), as the applicable clause 
in this appeal. 
Spinitar argues for a different result in this case because it expressly noted in 
its price proposal that it had not included the GET in its price and that "Hawaii's GET 
tax reimbursement policy implemented for federal purchases will be utilized" 
(app. br. at 2). While Spinitar has not further elucidated what it meant by this 
statement, we note that it appeared to be surprised to learn from its conversations with 
the Hawaii Department of Taxation that the GET exemption for goods sold to the 
federal government would not apply to its installation contract (finding 4). From this, 
we infer that Spinitar, in its price proposal, was stating that no GET was included 
because it expected the transaction to be exempt from GET. Regardless, Spinitar did 
nothing more in its proposal than state it had not included GET in its price and why. 
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This statement did nothing to alter the contract's allocation of the risk of state tax cost 
to the contractor. 2 The government is not liable for Spinitar's mistake. 
CONCLUSION 
The contract placed the burden on the contractor to include all applicable taxes in 
its price. The appeal is denied. 
Dated: 12 June 2017 
Administrative Judge 
Armed Services Board 
of Contract Appeals 
I certify that the foregoing is a true copy of the Opinion and Decision of the 
Armed Services Board of Contract Appeals in ASBCA No. 61066, Appeal of 
Presentation Products, Inc. dba Spinitar, rendered in conformance with the Board's 
Charter. 
Dated: 
JEFFREY D. GARDIN 
Recorder, Armed Services 
Board of Contract Appeals 
2 Spinitar avers that its proposal was incorporated by reference into the resulting 
contract (app. br. at 2). We disagree (the cited contract page merely reproduces 
Spinitar's Engineered Materials List). But even if its proposal had been 
incorporated by reference, it would not change the contract's allocation of risk 
on state taxes. 
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