B-113637, OCT. 20, 1955

B-113637: Oct 20, 1955

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INC.: REFERENCE IS MADE TO YOUR LETTER OF MAY 12. THE PERTINENT FACTS AS SHOWN BY THE RECORD WERE SET OUT IN OFFICE LETTER TO YOU DATED MARCH 13. AS YOU WERE ADVISED BY LETTER OF JUNE 18. A FURTHER REPORT WAS REQUESTED FROM THE SECRETARY OF THE ARMY AFTER RECEIPT OF YOUR LETTER OF MAY 12. THERE HAVE BEEN RECEIVED FROM THE DEPARTMENT OF THE ARMY REPORTS SHOWING THAT THE SUCCESSOR CONTRACTING OFFICER FURNISHED YOU A FINDINGS OF FACT DATED DECEMBER 4. THAT A HEARING ON THE APPEAL WAS HELD BY THE ARMED SERVICES BOARD OF CONTRACT APPEALS. THE APPEAL WAS DENIED ON MAY 18. WITH RESPECT TO YOUR CONTENTION THAT BECAUSE OF THE GOVERNMENT ANNOUNCEMENT OF PENDING CONTROLS AND PRICE CEILINGS YOU WERE UNABLE TO OBTAIN THE NECESSARY MATERIAL.

B-113637, OCT. 20, 1955

TO BILT-MORE FOOD PRODUCTS COMPANY, INC.:

REFERENCE IS MADE TO YOUR LETTER OF MAY 12, 1953, AND PRIOR CORRESPONDENCE, RELATIVE TO YOUR INDEBTEDNESS TO THE UNITED STATES IN THE AMOUNT OF $1,501.97, REPRESENTING EXCESS COST INCURRED BY THE GOVERNMENT BY REASON OF YOUR DEFAULT UNDER DEPARTMENT OF THE ARMY CONTRACT NO. DA 11- 009 QM-4633, DATED DECEMBER 20, 1950.

THE PERTINENT FACTS AS SHOWN BY THE RECORD WERE SET OUT IN OFFICE LETTER TO YOU DATED MARCH 13, 1953, AND NEED NOT BE REPEATED HERE. AS YOU WERE ADVISED BY LETTER OF JUNE 18, 1953, A FURTHER REPORT WAS REQUESTED FROM THE SECRETARY OF THE ARMY AFTER RECEIPT OF YOUR LETTER OF MAY 12, 1953. THERE HAVE BEEN RECEIVED FROM THE DEPARTMENT OF THE ARMY REPORTS SHOWING THAT THE SUCCESSOR CONTRACTING OFFICER FURNISHED YOU A FINDINGS OF FACT DATED DECEMBER 4, 1953, THAT YOU APPEALED THEREFROM, AND THAT A HEARING ON THE APPEAL WAS HELD BY THE ARMED SERVICES BOARD OF CONTRACT APPEALS. THE APPEAL WAS DENIED ON MAY 18, 1955 (ARMED SERVICES BOARD OF CONTRACT APPEALS NO. 2449), ON THE GROUND THAT THE MATTER HAD BEEN DISPOSED OF BY AGREEMENT BETWEEN YOUR CORPORATION AND THE CONTRACTING OFFICER, IT APPEARING FROM THE EVIDENCE THAT THE CONTRACTOR CHOSE TO INCUR EXCESS COST OF APPROXIMATELY $1,500, BY DECLINING TO PERFORM UNDER THE CONTRACT RATHER THAN TO RISK A GREATER LOSS BY PURCHASING THE NECESSARY RAW MATERIAL AT A HIGHER PRICE THAN ANTICIPATED AND FULFILLING THE TERMS OF THE CONTRACT.

WITH RESPECT TO YOUR CONTENTION THAT BECAUSE OF THE GOVERNMENT ANNOUNCEMENT OF PENDING CONTROLS AND PRICE CEILINGS YOU WERE UNABLE TO OBTAIN THE NECESSARY MATERIAL--- OR TO OBTAIN IT AT PRICES THAT YOU COULD AFFORD TO PAY--- IT IS TO BE NOTED THAT THE CONTRACT IS DATED DECEMBER 20, 1950, AND DELIVERY WAS TO BE COMPLETED ON OR BEFORE FEBRUARY 28, 1951. THE GENERAL CEILING PRICE REGULATION INVOLVED WAS ISSUED JANUARY 26, 1951. HOWEVER, IT IS A WELL-ESTABLISHED PRINCIPLE OF LAW THAT VALID CONTRACTS ARE TO BE ENFORCED AND PERFORMED AS WRITTEN AND THAT THE FACT THAT INTERVENING OR UNFORSEEN CAUSES RENDER PERFORMANCE MORE BURDENSOME OR LESS PROFITABLE, OR EVEN OCCASION A LOSS, IS NOT SUFFICIENT TO EXCUSE PERFORMANCE OR TO ENTITLE A CONTRACTOR TO ADDITIONAL COMPENSATION UNLESS OTHERWISE SPECIFICALLY PROVIDED IN THE CONTRACT. COLUMBUS RAILWAY, POWER AND LIGHT COMPANY V. COLUMBUS, 249 U.S. 349; SUN PUBLISHING COMPANY V. MOORE, 183 U.S. 642; PENN BRIDGE COMPANY V. UNITED STATES, 59 C.CLS. 892; PENNSYLVANIA HARDWARE COMPANY V. UNITED STATES, 49 C.CLS. 327; SATTERLEE ADMINISTRATRIX V. UNITED STATES, 30 C.CLS. 31. ALSO, THE COURTS HAVE HELD THAT THE GOVERNMENT IN ITS SOVEREIGN CAPACITY IS SEPARATE AND DISTINCT FROM THE GOVERNMENT IN ITS CAPACITY AS A CONTRACTOR AND IS NOT LIABLE AS A CONTRACTOR FOR ITS ACT AS A SOVEREIGN. HOROWITZ V. UNITED STATES, 267 U.S. 458. IN THE INSTANT MATTER, IT IS CLEAR THAT PERFORMANCE BY YOU WAS NOT IMPOSSIBLE, IT APPEARING ONLY THAT PERFORMANCE WOULD HAVE BEEN MORE BURDENSOME THAN ANTICIPATED. IN THAT CONNECTION, IT IS STATED IN THE OPINION OF THE ARMED SERVICES BOARD OF CONTRACT APPEALS:

"ON THE SAME DAY THAT THE CONTRACT WAS TERMINATED, ALLEGEDLY FOR A DEFAULT, THE GOVERNMENT ENTERED INTO ANOTHER CONTRACT WITH APPELLANT FOR THE SAME CLASS OF GOODS, BUT AT 45 CENTS PER POUND.'

THE PRICE UNDER THE TERMS OF THE CONTRACT WAS $0.3724 PER POUND.

FOR THESE REASONS, THERE IS PERCEIVED NO SOUND BASIS FOR EXCUSING YOU FROM LIABILITY FOR THE AMOUNT OF THE EXCESS COST INCURRED BY THE GOVERNMENT AS A RESULT OF YOUR DEFAULT UNDER THE CONTRACT. THERE HAVE BEEN RECEIVED FOR SETOFF AGAINST YOUR INDEBTEDNESS TWO CHECKS FROM THE DEPARTMENT OF THE ARMY AND ONE CHECK FROM THE DEPARTMENT OF THE NAVY IN THE AMOUNTS OF $53.59, $74.39 AND $83.41 (A TOTAL OF $211.39), LEAVING A BALANCE DUE OF $1,290.58. ACCORDINGLY, IT IS AGAIN REQUESTED THAT YOU MAKE PROMPT PAYMENT OF THE SAID BALANCE BY CHECK OR MONEY ORDERS MADE PAYABLE TO THE TREASURER OF THE UNITED STATES AND SENT TO THE GENERAL ACCOUNTING OFFICE, ADMINISTRATIVE FINANCE SECTION, WASHINGTON 25, D.C.