B-125330, NOV. 1, 1955

B-125330: Nov 1, 1955

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TO A AND C ENGINEERING CO.: REFERENCE IS MADE TO YOUR LETTER OF AUGUST 15. WERE NOT ONLY CONSIDERABLY LOWER THAN WAS ECONOMICALLY SOUND BUT THAT YOUR ULTIMATE LOSS IN THE PRODUCTION OF THE CONTRACT ITEMS WAS IN THE AMOUNT CLAIMED. YOU CONTEND THAT THE LOSS INCURRED WAS A DIRECT RESULT OF ADDITIONAL EXPERIMENTAL AND DEVELOPMENT WORK NOT CONSIDERED IN THE SPECIFIED CONTRACT PRICE. YOU INFER THAT AN ERROR WAS MADE IN THE UNIT PRICES STATED UNDER THE CONTRACT. THAT YOUR PROPOSAL WAS THE SOLE OFFER MADE. THE ADMINISTRATIVE REPORTS ALSO DISCLOSE THAT THE AGREEMENT WAS EXECUTED IN GOOD FAITH WITHOUT NOTICE. THE CLAIM WAS DISALLOWED IN THE SETTLEMENT ON THAT BASIS WITH SUPPORTING COURT CASES CITED THEREIN.

B-125330, NOV. 1, 1955

TO A AND C ENGINEERING CO.:

REFERENCE IS MADE TO YOUR LETTER OF AUGUST 15, 1955, REQUESTING REVIEW OF OUR CLAIMS DIVISION SETTLEMENT OF AUGUST 8, 1955, WHICH DISALLOWED YOUR CLAIM FOR $4,142.09, REPRESENTING YOUR ALLEGED LOSS IN FURNISHING CERTAIN HYDRA-LOCK EXPANDING GAGE FIXTURES PURSUANT TO THE TERMS OF CONTRACT NO. DA-20-089-ORD-36942, DATED FEBRUARY 24, 1954.

IT APPEARS THAT FOLLOWING THE COMPLETION OF THE CONTRACT AND YOUR RECEIPT OF PAYMENTS FOR THE SUPPLIES, YOU DISCOVERED THAT THE ESTIMATES UPON WHICH YOU RELIED IN PREPARING THE UNIT PRICES SPECIFIED IN YOUR BID AS ACCEPTED BY THE ORDNANCE CORPS, DETROIT ARSENAL, CENTER LINE, MICHIGAN, WERE NOT ONLY CONSIDERABLY LOWER THAN WAS ECONOMICALLY SOUND BUT THAT YOUR ULTIMATE LOSS IN THE PRODUCTION OF THE CONTRACT ITEMS WAS IN THE AMOUNT CLAIMED, AS REFLECTED IN THE COST STATEMENT APPEARING IN YOUR LETTER DATED MARCH 29, 1955. YOU CONTEND THAT THE LOSS INCURRED WAS A DIRECT RESULT OF ADDITIONAL EXPERIMENTAL AND DEVELOPMENT WORK NOT CONSIDERED IN THE SPECIFIED CONTRACT PRICE. ALSO, YOU INFER THAT AN ERROR WAS MADE IN THE UNIT PRICES STATED UNDER THE CONTRACT.

ASIDE FROM THE FACT THAT THE TRANSACTION CONCERNED THE PROCUREMENT OF A PROPRIETARY ITEM, AND THAT YOUR PROPOSAL WAS THE SOLE OFFER MADE, THE ADMINISTRATIVE REPORTS ALSO DISCLOSE THAT THE AGREEMENT WAS EXECUTED IN GOOD FAITH WITHOUT NOTICE, CONSTRUCTIVE OR OTHERWISE, THAT AN ERROR APPEARED IN YOUR BID. THE CLAIM WAS DISALLOWED IN THE SETTLEMENT ON THAT BASIS WITH SUPPORTING COURT CASES CITED THEREIN. IN ADDITION, AND WHILE IT IS UNFORTUNATE THAT THE ERROR IN YOUR ORIGINAL ESTIMATES WAS NOT DISCOVERED PRIOR TO THE EXECUTION OF THE CONTRACT, IT MUST BE OBSERVED THAT THE PRIME QUESTION HERE IS NOT WHETHER AN ERROR WAS MADE IN THE ESTIMATED PRICES UPON WHICH THE CONTRACT IS BASED BUT WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY THE ACCEPTANCE OF THE PRICES OFFERED BY YOU. THE RESPONSIBILITY FOR THE PREPARATION AND SUBMISSION OF THE PRICES HERE CONCERNED WAS YOURS, AND YOU DO NOT DISPUTE THAT FACT. SEE FRAZIER DAVIS CONSTRUCTION COMPANY V. UNITED STATES, 100 C.CLS. 120, 163. WHILE YOU APPEAR CONVINCED THAT YOU ERRED IN CALCULATING YOUR COSTS TO "OUTSIDE VENDORS" AND FAILED TO CONSIDER OR OVERLOOKED OTHER COST FACTORS NECESSARY TO THE FINAL PRODUCTION OF THE CONTRACT ITEMS, SUCH AS SUGGESTED BY YOUR LETTER OF AUGUST 15, 1955, IT IS CLEAR SUCH ERROR OR FAILURE WAS DUE SOLELY TO YOUR OWN INADVERTENCE OR OVERSIGHT AND WAS IN NOWISE INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT. SUCH ERROR AS MADE WAS UNILATERAL--- NOT MUTUAL--- AND, THEREFORE, DOES NOT ENTITLE YOUR FIRM TO RELIEF. THE CONTRACT HERE INVOLVED VESTED IN THE UNITED STATES THE RIGHT TO HAVE IT PERFORMED STRICTLY IN ACCORDANCE WITH ITS TERMS, AND NO OFFICER OF THE GOVERNMENT HAS AUTHORITY TO DIVEST THE GOVERNMENT OF SUCH VESTED RIGHT OR TO ALLOW COMPENSATION FOR PERFORMANCE IN AN AMOUNT GREATER THAN THAT AGREED UPON IN THE CONTRACT. FURTHERMORE, IT IS A PRINCIPLE OF LAW THAT VALID CONTRACTS ARE TO BE ENFORCED AND PERFORMED AS WRITTEN, AND THE FACT THAT SUPERVENING OR UNFORESEEN CAUSES RENDER PERFORMANCE MORE DIFFICULT OR LESS PROFITABLE, OR EVEN OCCASION A LOSS, IS NOT SUFFICIENT TO EXCUSE PERFORMANCE OR 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; PENN BRIDGE COMPANY V. UNITED STATES, 59 C.CLS. 892 AND DAY V. UNITED STATES, 245 U.S. 159.