A-96750, AUGUST 13, 1938, 18 COMP. GEN. 160

A-96750: Aug 13, 1938

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CONTRACTS - COAL - NATIONAL BITUMINOUS COAL COMMISSION MINIMUM PRICE ORDERS - GOVERNMENT LIABILITY THERE IS NO AUTHORITY FOR THE ALLOWANCE OF AN AMOUNT IN ADDITION TO THE CONTRACT PRICE REPRESENTING THE DIFFERENCE BETWEEN THE SAID PRICE AND THE MINIMUM PRICE SUBSEQUENTLY ESTABLISHED FOR COAL BY THE NATIONAL BITUMINOUS COAL COMMISSION. YOUR SALES AGENT WAS REQUIRED TO FURNISH. THERE WAS NO PROVISION FOR AN INCREASE IN THE CONTRACT PRICE OF THE COAL FOR ANY REASON WHATEVER. THE RECORD SHOWS THAT 461.9 TONS OF COAL WERE DELIVERED AND THE CONTRACT PRICE THEREFOR HAS BEEN PAID BY THE UNITED STATES. BEING THE DISTRICT WITHIN WHICH THE COAL HERE INVOLVED WAS PRODUCED. SINCE 256.5 TONS OF THE COAL UNDER THE ACCEPTED PROPOSAL WERE DELIVERED BY YOUR SALES AGENT SUBSEQUENT TO DECEMBER 16.

A-96750, AUGUST 13, 1938, 18 COMP. GEN. 160

CONTRACTS - COAL - NATIONAL BITUMINOUS COAL COMMISSION MINIMUM PRICE ORDERS - GOVERNMENT LIABILITY THERE IS NO AUTHORITY FOR THE ALLOWANCE OF AN AMOUNT IN ADDITION TO THE CONTRACT PRICE REPRESENTING THE DIFFERENCE BETWEEN THE SAID PRICE AND THE MINIMUM PRICE SUBSEQUENTLY ESTABLISHED FOR COAL BY THE NATIONAL BITUMINOUS COAL COMMISSION, THE CONTRACT CONTAINING NO PROVISION FOR SUCH INCREASE IN PRICE; THE ADMINISTRATIVE REQUEST FOR DELIVERY AT THE INCREASED PRICE NOT AFFECTING THE LEGAL RIGHTS AND OBLIGATIONS UNDER THE CONTRACT; AND THE REQUIREMENT OF THE NATIONAL BITUMINOUS COAL COMMISSION AS TO THE PRICES TO BE CHARGED NOT BEING A MATTER IN CONNECTION WITH WHICH THE UNITED STATES AS A CONTRACTOR MAY BE HELD LIABLE.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE BIXLER COAL AND COKE CO., AUGUST 13, 1938:

YOUR LETTER OF JUNE 14, 1938, REQUESTS REVIEW OF SETTLEMENT DATED JUNE 3, 1938, WHICH DISALLOWED THE CLAIM OF YOUR SALES AGENTS, PENNSYLVANIA COAL SALES CO., FOR $100.04, BALANCE ALLEGED TO BE DUE ON 256.5 TONS OF COAL FURNISHED THE VETERANS' ADMINISTRATION FACILITY, CANANDAIGUA, N.Y., UNDER PROPOSAL DATED AND ACCEPTED DECEMBER 13, 1937.

UNDER THE TERMS OF THE ACCEPTED PROPOSAL, YOUR SALES AGENT WAS REQUIRED TO FURNISH, F.O.B. CARS AT MINES, 450 TONS OF BITUMINOUS NUT AND SLACK COAL BY DECEMBER 24, 1937, AND AT THE BID PRICE OF $1.50 PER TON. THE GOVERNMENT RESERVED THE RIGHT TO PURCHASE 50 PERCENT MORE OR LESS THAN THE STATED QUANTITY. THERE WAS NO PROVISION FOR AN INCREASE IN THE CONTRACT PRICE OF THE COAL FOR ANY REASON WHATEVER.

THE RECORD SHOWS THAT 461.9 TONS OF COAL WERE DELIVERED AND THE CONTRACT PRICE THEREFOR HAS BEEN PAID BY THE UNITED STATES. HOWEVER, IT APPEARS THAT THE NATIONAL BITUMINOUS COAL COMMISSION BY ORDER NO. 90, DATED NOVEMBER 30, 1937, HAD PURPORTED TO ESTABLISH EFFECTIVE DECEMBER 16, 1937, MINIMUM PRICES FOR COAL PRODUCED WITHIN DISTRICT NO. 2, BEING THE DISTRICT WITHIN WHICH THE COAL HERE INVOLVED WAS PRODUCED, THE MINIMUM PRICE STATED THEREIN AS APPLICABLE TO THE COAL OF THE KIND HERE INVOLVED BEING $1.89 PER TON. SINCE 256.5 TONS OF THE COAL UNDER THE ACCEPTED PROPOSAL WERE DELIVERED BY YOUR SALES AGENT SUBSEQUENT TO DECEMBER 16, 1937, A CLAIM FOR AN ADDITIONAL AMOUNT OF ?39 PER TON WAS FILED WHICH WAS DISALLOWED IN THE AFORESAID SETTLEMENT.

IN YOUR LETTER OF JUNE 14, 1938, REQUESTING REVIEW, YOU STATE---

REFERRING TO YOUR LETTER DATED JUNE 3D, ADDRESSED TO THE PENNSYLVANIA COAL SALES COMPANY, 72-90 ST. PAUL STREET, ROCHESTER, NEW YORK, IN REGARD TO CLAIM NO. 0430071 (1), FOR $100.04, THE PENNSYLVANIA COAL SALES COMPANY BEING OUR SALES AGENTS IN THIS TRANSACTION, WE KINDLY ASK THAT YOU REVIEW OUR CLAIM, DUE TO THE FACT THAT THIS WAS AN EMERGENCY COAL ORDER, AND WE HAD PERMISSION FROM THE VETERANS' ADMINISTRATION AT CANANDAIGUA TO MAKE SHIPMENT OF THIS COAL AT THE ADVANCED PRICE. WE ATTACH HERETO A DUPLICATE OF OUR ORIGINAL CLAIM FOR THE ABOVE AMOUNT. SHIPMENT OF THE COAL WAS AUTHORIZED AT THE ADVANCED PRICE BY THE VETERANS' ADMINISTRATION AS PER COPY OF ATTACHED LETTER.

UNDER THE NATIONAL BITUMINOUS COAL COMMISSION RULINGS WE WOULD NOT HAVE BEEN ALLOWED TO INVOICE THIS COAL TO YOU AT ANY OTHER PRICE EXCEPT THE PRICE ESTABLISHED BY THE COMMISSION. YOU UNDERSTAND THAT HAD WE NOT MADE SHIPMENT OF THE COAL THE VETERANS' ADMINISTRATION WOULD HAVE SUFFERED QUITE A LOSS. OUR BID ON THIS COAL READ "ANY PART OF 450 TONS.'

WE HOPE YOU WILL BE IN POSITION TO MAKE PROMPT PAYMENT OF THIS ACCOUNT.

AS TO THE EFFECT OF THE COMMISSION'S ORDER OF NOVEMBER 30, 1937, SEE 17 COMP. GEN. 865.

IT IS A RULE OF LAW THAT WHERE THE CONTRACT CONTAINS AN EXPRESS STIPULATION AS TO THE AMOUNT OF COMPENSATION, AS IN THIS CASE, SUCH STIPULATION IS CONCLUSIVE ON THE PARTIES AND MEASURES THE AMOUNT OF RECOVERY FOR PERFORMANCE, 13 CORPUS JURIS 584-585; BRAWLEY V. UNITED STATES, 96 U.S. 168; SIMPSON V. UNITED STATES, 172 U.S. 372. THE LAW IS WELL SETTLED THAT A GOVERNMENT CONTRACT MAY NOT BE MODIFIED OR SUPPLEMENTED EXCEPT IN THE INTEREST OF THE UNITED STATES NOR MAY THE GOVERNMENT'S LIABILITY AS FIXED IN A CONTRACT BE INCREASED BY SUPPLEMENTAL CONTRACT. CHRISTIE V. UNITED STATES, 237 U.S. 234; SHIPMAN V. DISTRICT OF COLUMBIA, 18 CT.CLS. 291; AND PREIS AND CO. V. UNITED STATES, 58 CT.CLS. 81. SEE ALSO YALE AND TOWNE MANUFACTURING CO. V. UNITED STATES, 67 CT.CLS. 618, AND CASES THERE CITED.

IN THIS CASE THE CONTRACTOR WAS OBLIGATED TO FURNISH APPROXIMATELY 450 TONS OF COAL AT THE BID PRICE OF $1.50 PER TON. THE FACT THAT AN OFFICER OF THE GOVERNMENT ON DECEMBER 17, 1937, URGED YOU TO MAKE EARLY DELIVERY OF THE 256.5 TONS OF COAL PREVIOUSLY ORDERED WITH AN INFERENCE THAT YOU WOULD BE PAID AN INCREASE IN PRICE SO THAT THE PRICE TO BE PAID FOR THE COAL WOULD CONFORM TO THE MINIMUM PRICE ESTABLISHED BY THE NATIONAL BITUMINOUS COAL COMMISSION, AS AFORESAID, DOES NOT AFFECT THE LEGAL RIGHTS AND OBLIGATIONS UNDER THE CONTRACT.

WITH RESPECT TO YOUR STATEMENT THAT YOU WERE NOT ALLOWED TO INVOICE THIS COAL FOR LESS THAN THE ESTABLISHED MINIMUM PRICE, THIS APPEARS TO BE A MATTER WITH WHICH THE UNITED STATES AS A CONTRACTOR WAS NOT CONCERNED NOR MAY THE UNITED STATES AS A CONTRACTOR BE HELD LIABLE FOR ITS ACTS AS A SOVEREIGN IN ESTABLISHING THE NATIONAL BITUMINOUS COAL COMMISSION AND DELEGATING TO THAT COMMISSION AUTHORITY TO FIX MINIMUM PRICES FOR COAL. SEE IN THIS CONNECTION HOROWITZ V. UNITED STATES, 267 U.S. 458 AND MAXWELL V. UNITED STATES, 3 FED.REP./2D) 906.

SINCE THERE WAS NO PROVISION IN THE CONTRACT FOR THE ADJUSTMENT OF THE CONTRACT PRICE FOR ANY REASON WHATEVER, AND IT BEING PRESUMED THAT THE CONTRACT EXPRESSED THE ENTIRE INTENTION OF THE PARTIES THERETO, THERE IS NO LEGAL BASIS FOR THE ALLOWANCE OF AN AMOUNT IN ADDITION TO THE CONTRACT PRICE.