DENIED: February 6, 2012 
CBCA 2317 
HILLCREST AIRCRAFT COMPANY, 
Appellant, 
v. 
DEPARTMENT OF AGRICULTURE, 
Respondent. 
Leslie H. Wiesenfelder of Dow Lohnes PLLC, Washington, DC, counsel for 
Appellant. 
Heather M. Self, Office of the General Counsel, Department of Agriculture, 
Washington, DC, counsel for Respondent. 
Before Board Judges BORWICK , GOODMAN , and DRUMMOND . 
BORWICK , Board Judge. 
Background 
In this appeal, appellant, Hillcrest Aircraft Company, seeks payment from 
respondent, the Department of Agriculture, of appellant’s invoices totaling $118,702.05 
for federal excise taxes (FET) it paid during performance of its commercial item contract 
with respondent for helicopter fire fighting services. In a contracting officer’s decision, 
respondent refused to pay the invoices, maintaining that under the unique commercial 
item tax clause at 48 CFR 52.212-4(k), all federal, state, and local taxes were included in 
the basic contract rates and that additional payments were not warranted under the 
contract. In its timely appeal from that decision, appellant presents a number of 

 
              
           
      
  
    
           
          
          
           
             
          
 
           
            
               
 
     
         
              
          
              
 
          
          
           
            
     
2 CBCA 2317 
arguments why the FET invoices are reimbursable. 1 For the reasons set forth below, we 
find appellant’s arguments unpersuasive. Consequently, we sustain the decision of the 
contracting officer and deny the appeal. 
Findings of Fact 
Pertinent contract terms and conditions 
This appeal involves a contract for helicopter services for the Department of 
Agriculture, National Interagency Fire Center, Boise, Idaho. The solicitation and 
resulting contract incorporated clauses of the Federal Acquisition Regulation (FAR), 48 
CFR 52.212-1, 52.212-3, 52.212-4, and 52.212-5. The procurement was designated a 
commercial item procurement, and subject to the special clauses for commercial items. 
FAR 52.212-4(k) (the Commercial Item Tax clause) provides in one short 
sentence: 
Taxes . 
The contract price includes all applicable Federal, State, and local taxes and 
duties. 
This clause contrasts with the more complex Standard Tax clause at FAR 52.229-3(b) 
(the standard tax clause), which was not included in the contract. This clause provides in 
pertinent part: 
(a) As used in this clause­
“After-imposed Federal tax,” means any new or increased Federal excise 
tax or duty, or tax that was exempted or excluded on the contract date but 
whose exemption was later revoked or reduced during the contract period, 
1 The parties submitted their dispute on the record, pursuant to Board Rules 18 and 
19 (48 CFR 6101.18, .19 (2011)).  The record consists of the appeal file (submitted in PDF 
format on CD-ROM), the parties’ record submission and reply record submission 
memoranda, exhibits attached to those memoranda, and supplemental memoranda. The 
record submission exhibits include, but are not limited to, affidavits and supplemental 
affidavits of Mr. Gale Wilson, appellant’s president, and the declaration of the contracting 
officer, Mr. Frank Gomez. 

 
           
            
           
       
    
            
            
          
           
 
            
           
            
         
           
           
            
              
     
          
           
                  
             
           
               
             
            
              
         
           
              
      
3 CBCA 2317 
on the transactions or property covered by this contract that the Contractor 
is required to pay or bear as the result of legislative, judicial, or 
administrative action taking effect after the contract date. It does not 
include social security tax or other employment taxes. 
. . . . 
All applicable Federal, State, and local taxes and duties means all taxes and 
duties, in effect on the contract date, that the taxing authority is imposing 
and collecting on the transactions or property covered by this contract. 
(b) The contract price includes all applicable Federal, State, and local taxes 
and duties. 
(c) The contract price shall be increased by the amount of any after-imposed 
Federal tax, provided the Contractor warrants in writing that no amount for 
such newly imposed Federal excise tax or duty or rate increase was included 
in the contract price, as a contingency reserve or otherwise. 
The objective of the solicitation was to procure one to thirty-three standard 
category, fully operated heavy and medium helicopters, meeting the requirements of the 
solicitation for operation at various host bases around the country, and during certain 
specified periods. Offerors could submit offers on some or all of the thirty-three host 
bases listed as contract line items. 
The solicitation required prospective contractors to bid a fixed price with 
economic price adjustments for the helicopters’ daily availability for fourteen hours per 
day at the host base and a rate for flights. The solicitation stated that since there was no 
guarantee of flight hours given by the Government, this portion of the solicitation and 
resulting contract was to be of the indefinite quantity type. 
The flight rates that could be offered were listed in exhibit 12 to the solicitation. 
Hourly flight rates were stated for each make and model of helicopter listed in the exhibit. 
Also listed were fuel consumption in gallons, and load calculation and weight reduction 
in pounds for listed make and model of helicopter. Respondent states that these rates 
were developed after consultation with the Helicopter Association International (HAI) 
Government Committee (the HAI committee). Respondent states that it made clear 
during its consultation with the HAI committee that the rates in exhibit 12 to the 
solicitation included payment of FET. 

 
           
            
             
         
             
            
           
              
             
             
           
            
              
             
               
          
             
  
     
      
         
    
        
         
          
         
 
      
          
          
         
        
         
4 CBCA 2317 
The solicitation and resulting contract specified that the helicopters were to be 
available for the exclusive use of the Government during a mandatory availability period 
(MAP) of the contract. The helicopters were to be used for incident support, 
administrative flights, and law enforcement, provided that the prospective contractor 
agreed in writing to perform law enforcement. The solicitation and resulting contract also 
provided that respondent could place orders for the helicopters’ optional use outside the 
mandatory availability period, subject to acceptance by the contractor. The contractor 
could agree to provide such service using one of the two payment methods described in 
the solicitation: (1) the daily availability rate and specified flight rate method; or (2) 
payments at an optional use hourly price submitted in the offeror’s proposal. 
The solicitation and resulting contract also provided for payment rates of other 
possible expenses during performance of the contract. For example, overnight hotel and 
other travel expenses of contractor personnel while away from the home base were to be 
paid at the rates established by the Federal Travel Regulation. Transportation costs of 
personnel from the home base were to be paid based on actual costs incurred by the 
individual for airplane tickets and car rentals, itemized with receipts. 
Of importance to this appeal is the Miscellaneous Cost clause, which we set forth 
below: 
C-44 MISCELLANEOUS COSTS TO THE CONTRACTOR 
(a) Housing, subsistence, ground transportation, and other 
expenses will be the responsibility of the Contractor or its 
employees at the Host Base. 
(b) The Government will reimburse the Contractor for any 
airport use costs the Contractor is required to pay when 
ordered to operate from an airport other than the host base 
such as airport landing fees, tie-down charges, or other similar 
type costs. 
(c) Miscellaneous unforeseeable costs not recovered through 
the contract payment rates and are the direct result of ordered 
service may be reimbursed at actual cost if approved by the 
Contracting Officer. Examples of this are truck permits at 
ports-of-entry when the fuel servicing vehicle must cross state 
lines in fulfillment of ordered services or State use taxes 

 
       
       
           
       
              
         
             
      
  
          
           
               
            
            
             
         
          
              
              
             
              
              
                   
             
             
                
                
              
               
               
             
             
               
5 CBCA 2317 
imposed on equipment brought into the state. [Emphasis 
added.] 
(d) Itemized receipts must support claims for reimbursement 
and must be kept on file by the contractor and made available 
to the CO [contracting officer] upon request. 
Under clause E-4 of the solicitation, awards were to be made to those offerors 
whose proposals were technically acceptable and whose technical/price relationships were 
the most advantageous to the Government. Respondent reserved the right to award any 
combination of items or number of items. 
The procurement process 
On October 9, 2009, respondent held a pre-proposal conference, attended by 
appellant’s officials. One prospective offeror asked a question about subsection C-44, 
i.e., whether state use taxes would be reimbursed as other expenses for travel to the host 
base. Respondent’s answer was no, because “all costs should be figured into your 
proposal.” Through amendment one to the solicitation, the closing date for proposal 
submission was made October 30, 2009, and the questions and answers at the pre-
proposal conference were incorporated into the amended solicitation. Prospective 
contractors were to submit both technical and price proposals. 
On or about October 21, 2009, appellant submitted offers on a number of items. 
As allowed by the solicitation, however, appellant stated that it was only willing to accept 
a maximum award of two items. Appellant offered prices on items 28 (Wenatchee, 
Washington) and 32 (Sled Springs, Oregon). For item 28, appellant proposed to use the 
Bell Helicopter 205 A++. For the base option year, appellant offered a daily availability 
rate of $4892 for a MAP of 120 days. For option years 1, 2, and 3, appellant offered a 
daily availability rate of $5064, $5242, and $5504, respectively. For the estimated 400 
hours of flight time for the Bell Helicopter Model 205 A++, appellant offered $626,000, 
which is the product of the estimated 400 hours and the hourly flight rate of $1565, which 
is specified in Exhibit 12 to the solicitation for that make and model of helicopter. For 
item 32 (Sled Springs), appellant again offered the Bell Helicopter Model 205 A++ and a 
daily availability rate of $4900 for the base option year, and $5072, $5250, and $5513 for 
option years 1 through 3, respectively. For the estimated 350 flight hours for this item, 
appellant offered $547,750, which is the specified daily flight rate for the Bell Helicopter 
Model 205 A++ times the estimated hours. Appellant also proposed optional hourly use 
rates for potential optional use outside the MAP that might be ordered by respondent. 

 
            
                 
            
        
        
      
             
           
       
               
          
                
                
              
                  
           
             
            
           
              
            
         
           
           
             
          
        
  
              
              
              
            
               
6 CBCA 2317 
According to Mr. Wilson, the only rates “bid by Hillcrest” were the daily 
availability rate for the MAP and the optional use rate. This is true only in a narrow, 
literal sense, since appellant was required to, and did, offer the solicitation’s specified 
pre-defined flight rates for the estimated flight hours. 
Respondent posed questions about appellant’s technical proposal, which appellant 
answered on November 13, 2009. 
The next activity related to the procurement occurred on or about May 18, 2010, 
when Mr. Wilson requested a meeting with respondent’s contracting officials to discuss 
excise taxes in relation to this contract. 
Mr. Wilson states that two years before, on or about May 13, 2008, in a 
procurement for similar helicopter services, Department of the Interior (DOI) contracting 
officials had informed him that DOI would no longer, as it had in the past, make a 
determination as to the amount of FET owed and add it to a contract invoice. Rather, 
DOI stated it was now the responsibility of the contractor to determine the applicability of 
the tax, calculate the amount of tax due, and add the tax to a contract invoice for payment. 
Also, Mr. Wilson had assumed that firefighting flight services procured under DOI’s 
contracts were exempt from payment of FET as exempt fire fighting services. However, 
the DOI letter informed him that the firefighting services exemption applied only to 
flights when the aircraft were hauling and dropping fire retardant (colloquially called 
“dropping water”), and implied that it did not apply to a broader scope of operations 
necessary to support fire fighting services. In this regard, DOI’s letter states: 
Revenue Rule 76-477 exempts aircraft from passenger and cargo taxes 
under Sections 4261 and 4271 of the IRS [Internal Revenue Service] code 
when if [sic] an aircraft is used with only the Contractor’s employees 
aboard, such as flights to spot fire or drop fire retardant chemicals. This 
exemption would apply to helicopter bucket operations, when the flight is 
conducted with only the Contractor’s employees aboard. 
Immediate pre-award meeting 
After receipt of the May 13, 2008, letter, Mr. Wilson states that he began to 
educate himself with respect to the issue of FET as it impacted appellant’s contracts. 
With respect to the appealed contract, Mr. Wilson states that he requested a meeting on 
May 18, 2010, to advise respondent’s contracting officials that appellant would have to 
bill FET to the Government on a flight-by-flight basis if it received an award. The 

 
              
             
            
              
           
             
           
            
          
      
    
          
            
        
           
           
             
          
                 
          
              
           
               
   
      
            
             
             
          
           
           
               
           
             
7 CBCA 2317 
meeting was scheduled for May 20, 2010. According to Mr. Wilson, upon entering the 
meeting, the contracting officer handed him the notice of award. Mr. Wilson states: 
I had heard that other helicopter companies had been audited [by the IRS], 
and that was simply by way of information for the Forest Service as well as 
additional support for the decision I had made and was then communicating 
to the Forest Service in no uncertain terms that Hillcrest was going to bill 
the Forest Service on a flight-by-flight basis for the [FET] Hillcrest would 
incur in performing the two items it has just been awarded. 
In this regard, he handed respondent’s contracting personnel tax material generated 
by DOI and the IRS. 
Appellant’s prior procurements with respondent 
The appealed contract was not appellant’s first experience with a helicopter 
contract for respondent. The contracting officer for the appealed contract served for 
fifteen years as respondent’s contracting officer administering respondent’s helicopter 
contracts. He is familiar with appellant’s previous experience and performance with 
those contracts. According to the contracting officer, appellant held eight helicopter 
contracts with respondent from 2002 through 2009 for services similar to those in the 
appealed contract. Each of those contracts contained an indefinite delivery/indefinite 
quantity (IDIQ) clause, and the same tax clause as in the appealed contract. To the best of 
this contracting officer’s recollection, appellant did not invoice respondent for excise 
taxes under those contracts. Appellant states that it had, under one of those contracts, 
provided helicopter service from Wenatchee, Washington, one of the awarded items in 
the appealed contract. Appellant also states that it did not pay the Government FET under 
those contracts. 
The awarded contract and appealed contract invoices 
As noted above, on May 20, 2010, respondent awarded appellant the contract for 
items 28 and 32, incorporating the terms and conditions of the solicitation, including the 
clause at FAR 52.212-4(k). Between June 3 and October 6, 2010, appellant submitted 
seventeen invoices requesting reimbursement from respondent of FET that appellant had 
paid to the Government. Appellant states, without contradiction from respondent, that 
appellant invoiced respondent $42,560.40 for FET on the daily availability rate activities 
for item 28 and $44,467.50 for the daily availability rate activities for item 32. Appellant 
invoiced respondent $31,674.15 for FET on non-daily availability rate activities. The 
total of the invoices was $118,702.05. Appellant did not submit invoices to respondent 

 
               
      
           
            
            
            
               
                
            
   
    
             
             
            
              
           
           
   
             
              
              
           
             
               
          
              
               
              
              
                
8 CBCA 2317 
for FET on fuel. Respondent refused to pay the invoices, maintaining that all taxes were 
included in the offered price. 
On February 4, 2011, appellant submitted a certified claim to the contracting 
officer for reimbursement of the FET that appellant had submitted, separately from the 
contract invoices, to respondent. By decision of February 23, 2011, the contracting 
officer denied the claim. The contracting officer stated in pertinent part: 
As we discussed earlier this year . . . we have been operating on the premise 
that all applicable costs were to be included in your proposal. . . . The only 
costs in addition to the firm fixed prices would be costs specifically allowed 
for under the contract. 
. . . . 
Under our rotary wing contracts . . . the contracts are structured as [firm 
fixed-price] and include the . . . FAR tax clause which states that prices 
offered are inclusive of all taxes. I have determined that Taxes, Federal, 
State and Local taxes are not permissible to be paid under the contract as an 
additional cost over and above the Firm Fixed Prices offered. 
From that decision, appellant filed an appeal at this Board. 
Discussion 
Federal excise tax matters 
Statute imposes a FET of 7.5% on the amount paid for taxable transportation of 
any person. 26 U.S.C. § 4261(a) (2006). Statute also imposes a date-dependant sliding-
scale domestic segment tax for each segment of taxable transportation by air. 26 U.S.C. 
§ 4261(b)(1). Statute exempts from those taxes helicopter transportation of individuals, 
equipment, or supplies in the exploration for or development or removal of hard minerals, 
oil, or gas, or by helicopter or fixed wing aircraft for the purpose of the planting, 
cultivation, cutting, transportation of, or caring for trees (including logging operations). 
26 U.S.C. § 4261(f)(1), (2). Statute also exempts from the domestic segment tax any 
domestic segment beginning or ending at a rural airport. 26 U.S.C. § 4261(e)(1)(A). 
Statute imposes a tax of 6.25% upon the amount paid within or without the United 
States for the taxable transportation of property and applies only to amounts paid to a 
person in the business of transporting property by air for hire. 26 U.S.C. § 4271. 

 
            
               
              
              
                
            
                
                
           
             
             
           
     
           
         
           
         
           
               
              
                 
               
             
  
          
            
           
            
               
                 
             
            
          
      
   
9 CBCA 2317 
The FET on transportation of persons and property does not apply to transportation 
by aircraft having a maximum certified takeoff weight of 6000 lbs or less. 26 U.S.C. 
§ 4281. IRS Revenue Ruling 72-156, 1972 C.B. 331, provided that a helicopter service 
“involving the dispersal of fire retardant” is not transporting persons or property by air for 
hire, and thus not subject to the FET for transportation of persons or property. By that 
revenue ruling, the IRS also concluded that Congress’s intent in enacting the revenue 
statutes was to have one set of taxes (either the transportation or fuel taxes) apply in any 
particular instance. Statute imposes a tax on aviation fuel of $0.193 per gallon. 26 USC 
§§ 4041, 4081(a)(2)(A(ii). Consequently, the IRS advised in that revenue ruling that 
aerial firefighting services involving the dispersal of fire retardant would be subject to the 
fuel tax imposed by 26 U.S.C. § 4041, not the transportation tax. 
The conclusions of Revenue Ruling 72-156 were published in an IRS tax 
information letter on September 30, 2002: 
[Revenue Ruling] 72-156, 1972 C.B. 331, provides that where an air tanker 
company contracts with a government agency to provide aerial firefighting 
protection, specifically the dispersal of fire retardant , neither of the [excise] taxes 
[for transportation of persons or property] is applicable. 
According to IRS Publication 510 (Apr. 2009), taxable transportation is defined as 
transportation that begins and ends in the United States or at any place in Canada or 
Mexico not more than 225 miles form the nearest point on the continental United States 
boundary. The taxes for persons and property are imposed on a trip by trip basis, and a 
round-trip is considered two separate trips for imposition of the taxes. According to that 
publication the tax on the transportation of property does not apply to aerial fire-fighting 
services. 
As noted in appellant’s record submission memorandum, the tax application dates 
for the FET for transportation of property and persons were repeatedly and continually 
extended by Congress, from September 30, 2007, through June 30, 2011. Appellant’s 
Record Submission Memorandum at 37-38 (listing of public laws). There were further 
extensions through July 22, 2011, Pub. L. No. 112-21, § 2(b)(1), (2) (June 29, 2011), and 
then through September 16, 2011. Pub. L. No. 112-27, § 2 (b)(1), (2). The most recent 
version extends the tax applicability to January 31, 2012. Pub. L. No. 112-30, 
§ 202(b)(1),(2)(Sept. 16, 2011); 26 U.S.C.A. § 4261(j)(1)(A(ii)). In short, the record 
shows throughout the procurement process and until recently continual and uninterrupted 
extensions of applicable tax dates. 
Contentions of the Parties 

 
            
            
             
             
                
            
            
          
           
          
           
           
            
         
           
              
            
     
           
            
                
                 
               
            
               
               
           
               
       
             
           
           
               
10 CBCA 2317 
To understand the contentions of the party it is necessary to compare the 
Commercial Item Tax clause with the Standard Tax clause. The Commercial Item Tax 
clause contains the same requirement as the Standard Tax clause that “the contract price 
includes all applicable Federal, State and local taxes.” The Standard Tax clause contains 
a definition of “applicable taxes” that is not included in the Commercial Item Tax clause: 
All applicable Federal, State, and local taxes and duties means all taxes and 
duties, in effect on the contract date, that the taxing authority is imposing 
and collecting on the transactions or property covered by this contract. 
The Standard Tax clause also contains an adjustment provision for any after-
imposed federal tax, not contained in the Commercial Item Tax clause: 
The contract price shall be increased by the amount of any after-imposed 
Federal tax, provided the Contractor warrants in writing that no amount for 
such newly imposed Federal excise tax or duty or rate increase was included 
in the contract price, as a contingency reserve or otherwise. 
An after-imposed Federal tax is defined in the standard tax clause as: 
any new or increased Federal excise tax . . . that the Contractor is required 
to pay or bear as the result of legislative, judicial, or administrative action 
taking effect after the contract date. 
Appellant argues that the amounts of the invoiced FETs were unforeseeable, thus 
compensable under the Miscellaneous Cost clause of the contract. Beyond having crews 
staffed and ready to fly from the home base, appellant argues it could not foresee where it 
would be ordered to fly, how long a distance it would be ordered to fly, or whether it 
would be ordered to fly from a home base or an alternate base. Appellant’s Record 
Submission Memorandum at 15-20. Furthermore, appellant argues that at the time of 
submitting its proposal on October 21, 2009, Congress had not set the FET tax rates for 
2010. Those rates were not set until December 16, 2009. Respondent argues that the 
Commercial Item tax clause of FAR 52.212-4(k) unambiguously states that all contract 
payments include all federal, state, and local taxes, and that there is no contractual right to 
further reimbursement for the invoiced FET. 
The case law construing the Standard Tax clause, FAR 52.229-3(b), holds that the 
phrase “the contract price includes all applicable Federal, State and local taxes” 
unambiguously requires that bidders or offerors include all applicable state and local 
taxes in their bids or offers. Hunt Construction Group v. United States , 281 F.3d 1369, 

 
              
               
               
             
               
          
           
              
              
             
             
              
            
              
              
            
                
              
              
            
              
           
              
               
               
            
         
             
                  
            
     
                 
                
11 CBCA 2317 
1372 (Fed. Cir. 2002); B & M Cillessen Construction Co. v. Department of Health and 
Human Services , CBCA 1110, 09-1 BCA ¶ 34,069, at 168,460. In the context of this 
case, the same phrase in the Commercial Item Tax clause is also applied to the pre­
defined flight prices in the contract that prospective contractors were required to offer in 
the IDIQ portion of the contract, since, ipso facto , taxes were already included in the pre­
defined prices stated in exhibit 12 to the solicitation. 
Appellant argues that the Miscellaneous Cost clause in C-44(c) allows for recovery 
of the invoiced FET. Appellant is wrong. The Miscellaneous Cost clause is not 
comparable to the after-imposed tax provision in the Standard Tax clause. This is the 
case for three reasons: (1) The Miscellaneous Cost clause, although referencing state use 
taxes as an example of a possible unforeseen cost, makes no mention of after-imposed 
federal taxes. (2) The clause, by its terms, applies to unforeseen costs “not recovered 
through the contract payment rates.” The meaning of “unforeseeable” is “unexpected.” 
United States v. Brooks-Callaway Co. , 318 U.S. 120, 122 (1943). In this case, the 
existence of the FET cannot be deemed unexpected or unforeseeable, since the FET is a 
statutory requirement, which has been extended for many years, including the years of 
performance of this contract. It is true, as appellant states, that the precise amount of FET 
that appellant would have to pay on behalf of respondent could not be determined until 
the flight services were rendered and the FET were levied. However, as an experienced 
helicopter services contractor, appellant knew before it submitted an offer that the precise 
amount of tax would vary, depending on the number and distance of flights ordered. 
Appellant possessed eight years of contract experience with respondent and could have 
made reasonable estimates as to the likely FET appellant would have to include in its 
proposal to cover the FET. 
2 The terms and conditions of the contract placed a tax 
variance risk on appellant. (3) The contract required that the FET were to be recovered 
through the specified contract rates, but the Miscellaneous Cost clause only applies to 
those costs explicitly not recovered through those rates 
2 Appellant argues it assumed until May 2008 that fire fighting services were broadly 
exempt from the FET. If it was not clear in the IRS’s Revenue Ruling 72-156 that any FET 
exemption for fire-fighting services would apply only to “dropping water,” the narrow scope 
of the FET exemption was made explicit in the IRS tax information letter of September 30, 
2002, and again in DOI’s letter in May of 2008. Appellant was well informed of the narrow 
scope of the FET exemption before it submitted an offer on the procurement for this contract. 

 
            
            
                   
              
              
                 
            
        
         
                
             
                
            
              
             
             
          
              
               
           
        
         
         
         
            
             
           
            
           
     
                
             
          
12 CBCA 2317 
Appellant argues that the definition of “applicable tax” found in the Standard Tax 
clause should be read in pari materia with FAR 52.212-(k). 3 Appellant’s Supplemental 
Brief at 5. An applicable tax in the Standard Tax clause is defined as a tax in existence as 
of the date of contract award. Applying that definition, appellant argues that the contract 
price could not include FET imposed after the date of contract award, i.e., any FET 
imposed and owing after July 3, 2010. If such were the case, most of the invoiced taxes 
would be respondent’s additional responsibility under 26 U.S.C. § 4261(d) in addition to 
the contract rates respondent has already paid appellant. 
In its supplemental record submission, appellant properly notes that regulations, 
like statutes, are to be construed in pari materia . Roberto v. Department of the Navy , 440 
F.3d 1341, 1350 (Fed. Cir. 2006). Statutes and regulations addressing the same subject 
matter generally should be read as if they were one law. Wachovia Bank v. Schmidt , 546 
U.S. 303, 315-16 (2006); Strategic Housing Finance Corp. of Travis County v. United 
States , 608 F.3d 1317, 1330 (Fed. Cir. 2010). Appellant argues that it makes no 
difference that FAR 52.229-3 is much more detailed than FAR 52.214-4, because it views 
the two sections as a system of related general provisions, citing United States v. 
Jefferson Electric Manufacturing Co ., 291 U.S. 386, 396 (1934). 
The defined term of “applicable tax” in the Standard Tax clause will not be read 
into the Commercial Item Tax clause. This is so because the commercial item clauses at 
FAR 52.212-4 were promulgated to impose simplified and unique provisions dealing with 
government commercial item contracts as distinct from standard non-commercial 
government contracts. The commercial item provisions implement the Federal 
Acquisition Streamlining Act of 1994 (FASA), which “streamline[s] the acquisition 
process and minimize[s] burdensome Government-unique requirements.” 60 Fed. Reg. 
48,231 (Sept. 18, 1995). FASA provides that contract clauses for commercial item 
contracts were be those clauses that were required to implement provisions of law or 
executive orders applicable to acquisitions of commercial items or determined to be 
consistent with standard commercial practices. 41 U.S.C. § 3307(e)(2)(B). 
Towards that end the drafters of the FAR promulgated FAR 52.212-4, which 
contained terms and conditions that were: 
3 By order of October 6, 2011, after a conference call of the same date, the Board 
asked the parties to brief this question. The parties submitted supplemental memoranda in 
addition to their record submissions and reply record submissions. 

 
        
          
          
       
 
              
          
                
               
             
               
                
               
          
          
             
                
                 
            
            
          
           
            
                
              
              
               
            
        
          
                
            
      
            
       
13 CBCA 2317 
Consistent with customary commercial practice by addressing general areas 
that previous studies have identified as the “core” areas covered by 
commercial contracts. Several concepts included in the clause at 52.212-4 
represent significant changes from standard Government practices to 
commercial-like practices. 
60 Fed. Reg. 48,232. The commercial item contract clauses are thus intended to be 
significantly different from the standard government contract clauses. Consequently, in 
pari materia treatment is not warranted and we are not at liberty to apply the definition of 
“applicable tax” in the Standard Tax clause to construe the Commercial Item Tax clause. 
Since the term “applicable” in the Commercial Item Tax clause is not defined, and 
is not subject to in pari materia reading with the definition contained in the Standard Tax 
clause, we use the term as it is understood in its ordinary sense of “capable of being 
applied, having relevance, or fit, suitable, or right to be applied.” Ransom v. FIA Card 
Services , ____ U.S._______, 131 S.Ct. 716, 724 (2011) (construing phrase “applicable 
monthly expense” in bankruptcy statute and citing Webster’s Third New International 
Dictionary 105 (2002)). Consequently, the applicable tax to be included in the contract 
prices are those FET that were paid upon provision of the service, not just the FET in 
existence at the time of contract award. Cf. City of New York v. Milhelm Attea & Bros., 
Inc., 550 F. Supp. 2d 332, 346-47 (E.D.N.Y. 2008) (broad construction of phrase 
“applicable tax” in Contraband Cigarette Trafficking Act to apply to New York state 
taxes not enforced by state authorities on Indian reservation).
4 
Appellant’s other arguments are not persuasive. Appellant argues that 26 U.S.C. 
§ 4261(d) trumps the Commercial Item Tax clause. Appellant’s Record Submission at 
34. The statute requires that the taxes shall be “paid by the person making the payment 
subject to the tax,” i.e., the purchaser of the transportation services or respondent in this 
case. 26 U.S.C. § 4261(d). Appellant argues, citing Koshland v. Helvering , 298 U.S. 
441, 447 (1936), and similar cases, that a regulation may not amend a statute. 
4 Appellant’s reliance on BMY, Division of Harsco Corp. , ASBCA 36805, 93-2 BCA 
¶ 25,684, in support of its definition of “applicable tax” is misplaced.  In Harsco , the board 
rejected the Government’s argument that extended FET should be considered applicable 
taxes included in the original bid. It did so because the Standard Tax clause included the 
after-imposed tax provision, provided the contractor warranted that no amount of any after-
imposed federal tax was included in the contract price as a contingency. Id. at 127,782.  In 
our case, the after-imposed tax provision and the accompanying warranty are not included 
in the Commercial Item Tax clause. 

 
            
             
           
            
            
                
               
             
              
                
                
           
              
             
           
              
            
           
             
             
               
            
         
   
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14 CBCA 2317 
The proposition is correct, but simply does not apply here. Appellant’s argument 
presumes that respondent’s reading of FAR 52.212-4(k) means that FET will not be fully 
paid by the responsible party, the Government. Appellant’s argument ignores a 
subsequent section, 26 U.S.C. § 4263(c). If the purchaser of the transportation-­
respondent in this case--does not pay the FET, the carrier--i.e., appellant--is required to 
pay them. 26 U.S.C. § 4263(c). See Temsco Helicopters, Inc. v. United States , 409 F. 
App’x 64 (9 
th Cir. 2010); 106 A.F.T.R. 2d 2010-6564. Respondent argues that it has paid 
the FET through the contract payment rates that include all FET. Respondent’s Reply 
Record Submission at 5. Even if appellant under-estimated the amount of tax it would 
have to factor into its offer, so that its regular contract invoices did not fully capture the 
amount of the FET, appellant paid the taxes as required by 26 U.S.C. § 4263(c), and is 
simply seeking additional contract payments through the additional invoices at issue here. 
There is no violation of statute, since the taxes have been fully reimbursed by either 
respondent, through its payment of appellant’s regular contract invoices, or by appellant. 
Appellant argues that the after-imposed tax provision of the Standard Tax clause 
should be read into the Commercial Item tax clause under the Christian doctrine. That 
doctrine, enunciated in G.L. Christian & Associates v. United States , 312 F.2d 418, 
rehearing denied , 320 F.2d 345 (Ct. Cl. 1963), requires missing mandatory clauses, 
which express a significant or deeply ingrained strand of public procurement policy, to be 
read into contracts. General Engineering & Machine Works v. O’Keefe , 991 F.2d 775, 
779 (Fed. Cir. 1993). The Standard Tax clause, however, is not a mandatory clause for 
commercial item contracts. Rather, the mandatory clause is the Commercial Item Tax 
clause incorporated into the appealed contract. 48 CFR 12.301(b)(3). 
Decision 
The appeal is DENIED . 
ANTHONY S. BORWICK 
Board Judge 
We concur: 

 
    
  
CBCA 2317 15 
ALLAN H. GOODMAN JEROME M. DRUMMOND 
Board Judge Board Judge