B-107108, JANUARY 4, 1952, 31 COMP. GEN. 251
Highlights
CONTRACTS - DEFAULTING CONTRACTORS - LIABILITY FOR INCREASED COSTS UNDER REPLACEMENT CONTRACT DEFAULTING CONTRACTOR WHOSE FAILURE TO HONOR THE GOVERNMENT'S PURCHASE ORDER FOR QUANTITY OF BATHROBES WAS DUE TO HIS INABILITY TO OBTAIN MATERIALS MAY NOT BE RELIEVED OF EXCESS COSTS INCURRED BY THE GOVERNMENT FOR PURCHASES UNDER A REPLACEMENT CONTRACT. THE PURCHASES ELSEWHERE REQUIRING THE CONCLUSION THAT THE CONTRACT WHILE LESS PROFITABLE OR MORE BURDENSOME WAS NOT IMPOSSIBLE OF PERFORMANCE SO AS TO EXCUSE DEFAULT UNDER THE TERMS OF THE CONTRACT. 1952: REFERENCE IS MADE TO YOUR LETTER DATED DECEMBER 10. WHEREIN YOU WERE CERTIFIED TO BE INDEBTED TO THE UNITED STATES IN THE SUM OF $2. THE RECORD BEFORE THIS OFFICE DISCLOSES THAT PURCHASE ORDER NO. 4303.2-4132 WAS ISSUED MARCH 23.
B-107108, JANUARY 4, 1952, 31 COMP. GEN. 251
CONTRACTS - DEFAULTING CONTRACTORS - LIABILITY FOR INCREASED COSTS UNDER REPLACEMENT CONTRACT DEFAULTING CONTRACTOR WHOSE FAILURE TO HONOR THE GOVERNMENT'S PURCHASE ORDER FOR QUANTITY OF BATHROBES WAS DUE TO HIS INABILITY TO OBTAIN MATERIALS MAY NOT BE RELIEVED OF EXCESS COSTS INCURRED BY THE GOVERNMENT FOR PURCHASES UNDER A REPLACEMENT CONTRACT, THE PURCHASES ELSEWHERE REQUIRING THE CONCLUSION THAT THE CONTRACT WHILE LESS PROFITABLE OR MORE BURDENSOME WAS NOT IMPOSSIBLE OF PERFORMANCE SO AS TO EXCUSE DEFAULT UNDER THE TERMS OF THE CONTRACT.
COMPTROLLER GENERAL WARREN TO THE SUNSHINE GARMENT COMPANY, JANUARY 4, 1952:
REFERENCE IS MADE TO YOUR LETTER DATED DECEMBER 10, 1951, REQUESTING REVIEW OF SETTLEMENT DATED OCTOBER 26, 1951, WHEREIN YOU WERE CERTIFIED TO BE INDEBTED TO THE UNITED STATES IN THE SUM OF $2,292.40, REPRESENTING EXCESS COSTS INCURRED BY THE GOVERNMENT BY REASON OF YOUR DEFAULT UNDER CONTRACT NO. TS-21326, DATED OCTOBER 10, 1949.
UNDER THE TERMS OF THE CONTRACT YOU AGREED TO DELIVER F.O.B. NEW YORK, NEW YORK, THE ORDERED QUANTITY OF MEN'S COTTON CORDUROY BATHROBES. THE RECORD BEFORE THIS OFFICE DISCLOSES THAT PURCHASE ORDER NO. 4303.2-4132 WAS ISSUED MARCH 23, 1950, CALLING FOR DELIVERY OF 1,000 BATHROBES AT $4.35 EACH, OR A TOTAL CONSIDERATION OF $4,350. THE RECORD FURTHER SHOWS THAT UPON YOUR FAILURE TO FURNISH THE BATHROBES SO ORDERED, THE UNITED STATES HEALTH SERVICE PURCHASED THE REQUIRED BATHROBES FROM THE PROGRESSIVE COAT AND APRON MFG. COMPANY, PHILADELPHIA, PENNSYLVANIA, AT AN EXCESS COST F $2,292.40. BY SETTLEMENT DATED OCTOBER 26, 1951, YOU WERE CERTIFIED TO BE INDEBTED TO THE UNITED STATES IN THAT AMOUNT.
IT IS YOUR CONTENTION THAT EXCESS COSTS SHOULD NOT HAVE BEEN CHARGED AGAINST YOUR ACCOUNT BECAUSE YOUR FAILURE TO HONOR THE PURCHASE ORDER INVOLVED WAS DUE TO A SHORTAGE OF CORDUROY AND SINCE YOU WERE NOT A REGULAR USER OF SUCH MATERIAL THE MILLS WOULD NOT HONOR YOUR ORDER THEREFOR.
IT IS A GENERAL RULE OF LAW THAT HARDSHIPS ENCOUNTERED IN THE FULFILLMENT OF A CONTRACT WILL NOT RELIEVE A PARTY FROM PERFORMANCE. INDUSTRIAL ENGINEERING COMPANY V. UNITED STATES, 92 C.1CLS. 54. THE FACT THAT THE BATHROBES WERE DELIVERED PROMPTLY BY ANOTHER SUPPLIER REQUIRES THE CONCLUSION THAT A SHORTAGE OF CORDUROY DID NOT RENDER IT IMPOSSIBLE FOR YOU TO PERFORM UNDER THE CONTRACT, ALTHOUGH IT MAY HAVE OPERATED TO INCREASE YOUR COST OF PERFORMANCE. LUNSERI V. GARCIA AND MAGGINI CO., 67 A.L.R. 1428. IT HAS BEEN HELD REPEATEDLY BY THE COURTS THAT VALID CONTRACTS ARE TO BE ENFORCED AND PERFORMED AS WRITTEN AND THAT THE FACT THAT SUPERVENING OR UNFORESEEN CAUSES RENDER PERFORMANCE MORE BURDENSOME OR LESS PROFITABLE, OR EVEN OCCASION A LOSS, IS NOT SUFFICIENT TO EXCUSE PERFORMANCE. AMONG THE MANY DECISIONS RENDERED, SEE SUN PUBLISHING CO. V. MOORE, 183 U.S. 642; PENN BRIDGE CO. V. UNITED STATES, 31 C.1CLS. 244; PENNSYLVANIA HARDWARE CO. V. UNITED STATES, 49 C.1CLS. 327. IF A PARTY CHARGES HIMSELF WITH AN OBLIGATION WHICH AT THE TIME WAS POSSIBLE OF PERFORMANCE HE MUST ABIDE BY IT UNLESS PERFORMANCE IS RENDERED IMPOSSIBLE BY AN ACT OF GOD, BY THE LAW, OR BY THE OTHER PARTY, OR IS EXCUSED UNDER THE EXPRESS TERMS OF THE CONTRACT. IT CANNOT BE SAID THAT ANY ONE OF THE FIRST-MENTIONED REASONS WAS THE CAUSE OF YOUR DEFAULT NOR DOES IT APPEAR THAT THE BASIS OF YOUR REFUSAL TO PERFORM THE CONTRACT COMES WITHIN ANY EXCUSABLE OR UNFORESEEABLE CAUSES ARISING BEYOND YOUR CONTROL AS SET FORTH IN ARTICLE 21 OF THE CONDITIONS OF THE CONTRACT. SEE, GENERALLY, UNITED STATES V. GLEASON, 175 U.S. 588; CARNEGIE STEEL CO. V. UNITED STATES, 240 U.S. 156; COLUMBIA RY. POWER AND LIGHT CO. V. CITY OF COLUMBUS, 249 U.S. 399.
ACCORDINGLY, THERE EXISTS NO LEGAL BASIS UPON WHICH THIS OFFICE MAY RELIEVE YOU OF THE EXCESS COSTS INCURRED BY THE UNITED STATES PUBLIC HEALTH SERVICE BY REASON OF THE DEFAULT UNDER YOUR CONTRACT, AND THE ACTION TAKEN IN THE SETTLEMENT IS SUSTAINED. ARRANGEMENTS TO SATISFY THE INDEBTEDNESS SHOULD BE MADE PROMPTLY WITH THIS OFFICE IN ORDER THAT FURTHER ACTION TO ENFORCE COLLECTION WILL NOT BE NECESSARY.