B-125338, SEP. 27, 1955

B-125338: Sep 27, 1955

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TO FENTON INDUSTRIES: REFERENCE IS MADE TO YOUR LETTER OF AUGUST 4. REQUESTING ACTION BY THIS OFFICE TO EFFECT AN INCREASE IN THE PRICE OF MATERIALS YOU ARE REQUIRED TO FURNISH UNDER UNNUMBERED CONTRACT. THE ESTABLISHED RULE IS THAT WHERE A CONTRACT CONTAINS AN EXPRESS STIPULATION AS TO THE AMOUNT OF COMPENSATION OR PRICE TO BE PAID. SUCH STIPULATION IS CONCLUSIVE ON THE PARTIES AND MEASURES THE AMOUNT OF RECOVERY FOR PERFORMANCE. THE LAW IS WELL SETTLED THAT A GOVERNMENT CONTRACT MAY NOT. NOTWITHSTANDING THE FACT THAT YOU MAY HAVE HAD SOME DIFFERENT ARRANGEMENT WITH YOUR SUPPLIERS. WE ARE WITHOUT AUTHORITY TO AMEND THE CONTRACT OR TO AUTHORIZE YOU TO BILL THE GOVERNMENT AT A PRICE IN EXCESS OF THAT SPECIFIED IN THE CONTRACT.

B-125338, SEP. 27, 1955

TO FENTON INDUSTRIES:

REFERENCE IS MADE TO YOUR LETTER OF AUGUST 4, 1955, WITH ENCLOSURES, REQUESTING ACTION BY THIS OFFICE TO EFFECT AN INCREASE IN THE PRICE OF MATERIALS YOU ARE REQUIRED TO FURNISH UNDER UNNUMBERED CONTRACT, PURCHASE ORDER NO. 16120-PHILA-55-58-/51), ISSUED BY THE SIGNAL CORPS SUPPLY AGENCY, PHILADELPHIA, PENNSYLVANIA.

THE CONTRACT CALLS FOR DELIVERY OF 6,825 UNITS AT A PRICE OF $4.26 EACH. IT CONTAINS NO PROVISION FOR A PRICE REDETERMINATION OR PRICE ESCALATION. NOTWITHSTANDING THIS FACT, YOU NOW REQUEST AN INCREASE IN THE CONTRACT UNIT PRICE BECAUSE OF A GENERAL PRICE INCREASE PUT INTO EFFECT BY YOUR SUPPLIERS.

THE ESTABLISHED RULE IS THAT WHERE A CONTRACT CONTAINS AN EXPRESS STIPULATION AS TO THE AMOUNT OF COMPENSATION OR PRICE TO BE PAID, SUCH STIPULATION IS CONCLUSIVE ON THE PARTIES AND MEASURES THE AMOUNT OF RECOVERY FOR PERFORMANCE. SEE BRAWLEY V. UNITED STATES, 96 U.S. 168; SIMPSON V. UNITED STATES, 172 U.S. 372. ALSO, THE LAW IS WELL SETTLED THAT A GOVERNMENT CONTRACT MAY NOT, IN THE ABSENCE OF STATUTORY AUTHORIZATION, BE INCREASED WITHOUT A COMPENSATING BENEFIT TO THE GOVERNMENT. CHRISTIE V. UNITED STATES, 237 U.S. 234; J. J. PREIS AND CO. V. UNITED STATES, 58 C.CLS. 81.

YOUR CONTRACT FIXED THE RIGHTS AND LIABILITIES OF THE GOVERNMENT SO FAR AS CONCERNS PAYMENTS TO BE MADE, NOTWITHSTANDING THE FACT THAT YOU MAY HAVE HAD SOME DIFFERENT ARRANGEMENT WITH YOUR SUPPLIERS.

IN VIEW OF THE ABOVE, WE ARE WITHOUT AUTHORITY TO AMEND THE CONTRACT OR TO AUTHORIZE YOU TO BILL THE GOVERNMENT AT A PRICE IN EXCESS OF THAT SPECIFIED IN THE CONTRACT.