B-125794, DEC. 30, 1955

B-125794: Dec 30, 1955

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

G.M.B.H.: REFERENCE IS MADE TO THE LETTER OF NOVEMBER 5. THERE WAS NO STIPULATION IN THE CONTRACT AS TO THE TIME IT WAS TO REMAIN IN EFFECT BUT UNDER ARTICLE XV. THE PARTIES MUTUALLY AGREED THAT WHERE IT WAS NOT POSSIBLE FOR THE GOVERNMENT TO GIVE THE FULL 90 DAYS' ADVANCE NOTICE THE RIGHT TO TERMINATE WAS NEVERTHELESS RESERVED BY THE GOVERNMENT. WERE TO BE CONFINED TO THE PERIOD CONSTITUTING THE DIFFERENCE BETWEEN THE 90 DAYS AND THE ACTUAL NOTICE. THE TERMS OF ARTICLE XVII "BOTH PARTIES TO THIS CONTRACT AGREE THAT NO UNDERSTANDING OR DISCUSSION OF CONTRACT CONDITIONS ARE BINDING ON EITHER SIDE UNLESS THOSE CONDITIONS AND UNDERSTANDINGS HAVE BEEN SPECIFICALLY WRITTEN INTO THIS CONTRACT.'.

B-125794, DEC. 30, 1955

TO VERLAG NEUE PRESSE, G.M.B.H.:

REFERENCE IS MADE TO THE LETTER OF NOVEMBER 5, 1955, WITH ENCLOSURE, FROM YOUR ATTORNEY, REQUESTING REVIEW OF SETTLEMENT DATED JUNE 6, 1955, WHICH DISALLOWED YOUR CLAIM FOR ADDITIONAL COMPENSATION OVER AND ABOVE THAT PAID TO YOU FOLLOWING THE TERMINATION OF CONTRACT NO. S-636-FA-5592, DATED AUGUST 1, 1953.

UNDER THE PROVISIONS OF THE SUBJECT CONTRACT YOU AGREED TO PUBLISH FOR THE UNITED STATES GOVERNMENT THE NEWSPAPER "DIE NEUE ZEITUNG" ONE MANNER STATED THEREIN. THERE WAS NO STIPULATION IN THE CONTRACT AS TO THE TIME IT WAS TO REMAIN IN EFFECT BUT UNDER ARTICLE XV, THE CONTRACTING PARTIES AGREED THAT EITHER PARTY DESIRING TO TERMINATE THE AGREEMENT COULD DO SO BY GIVING 90 DAYS' WRITTEN NOTICE IN ADVANCE, APPARENTLY WITHOUT ANY LIABILITY. IN ADDITION, THE PARTIES MUTUALLY AGREED THAT WHERE IT WAS NOT POSSIBLE FOR THE GOVERNMENT TO GIVE THE FULL 90 DAYS' ADVANCE NOTICE THE RIGHT TO TERMINATE WAS NEVERTHELESS RESERVED BY THE GOVERNMENT, WHICH PARTY AGREED TO REIMBURSE THE CONTRACTOR FOR THE ACTUAL COSTS RESULTING FROM THE FAILURE TO GIVE SUCH NOTICE. THE SAID COSTS, CALCULATED UNDER PART 3 OF THE SAID PROVISIONS, WERE TO BE CONFINED TO THE PERIOD CONSTITUTING THE DIFFERENCE BETWEEN THE 90 DAYS AND THE ACTUAL NOTICE. THE TERMS OF ARTICLE XVII "BOTH PARTIES TO THIS CONTRACT AGREE THAT NO UNDERSTANDING OR DISCUSSION OF CONTRACT CONDITIONS ARE BINDING ON EITHER SIDE UNLESS THOSE CONDITIONS AND UNDERSTANDINGS HAVE BEEN SPECIFICALLY WRITTEN INTO THIS CONTRACT.' AND THAT YOU WERE PAID THE ACTUAL COSTS, FOR THE FULL 90-DAY ADVANCE NOTICE PERIOD, AS SPECIFICALLY PROVIDED BY THE CONTRACT TERMS. THE MATTER TRANSMITTED TO OUR OFFICE FOR FINAL DISPOSITION. YOUR CLAIM WAS DISALLOWED IN THE SETTLEMENT OF JUNE 6, 1955, PRIMARILY FOR THE REASON THE ITEM OF LOST PROFIT WAS NOT PROVIDED FOR UNDER THE TERMS OF THE CONTRACT WHICH INSTRUMENT, PARTICULARLY IN THE LIGHT OF ARTICLE XVII, WAS PRESUMED TO EXPRESS THE ENTIRE UNDERSTANDING OF THE PARTIES.

IN THE REQUEST FOR REVIEW, WHILE PRESENTING NO ADDITIONAL MATERIAL INFORMATION NOT HERETOFORE CONSIDERED BY THE ADMINISTRATIVE AGENCY AND OUR OFFICE, YOU CONTEND THAT THE NOTICE OF TERMINATION GIVEN BY THE GOVERNMENT WAS A BREACH OF THE CONTRACT BECAUSE YOU DID NOT RECEIVE IT UNTIL SUNDAY, SEPTEMBER 13, 1953, ALTHOUGH IT WAS TO BE EFFECTIVE WITH THE COMPLETION OF THE WEEKEND EDITION ON SEPTEMBER 11, 1953. THERE HAS BEEN PRESENTED AN ADDITIONAL COPY OF YOUR ATTORNEY'S OPINION INDICATING THAT THE INCLUSION OF LOST PROFITS AS A PART OF ACTUAL COSTS IN A SITUATION HERE FALLS WITHIN THE PURVIEW OF THE LAWS OF YOUR COUNTRY.

AS INDICATED BY YOU, ANY NOTICE THAT YOU WERE NOT TO PERFORM ANY FURTHER WORK UNDER THE CONTRACT COULD NOT BE EFFECTIVE BEFORE IT WAS RECEIVED BY YOU ON SEPTEMBER 13, 1953. THIS FACT APPEARS TO HAVE BEEN RECOGNIZED BY WHEN YOU PRESENTED YOUR INVOICE NO. 2029/54 ON JANUARY 20, 1954. ON THAT INVOICE YOU BILLED THE GOVERNMENT FOR DIRECT COSTS FOR THE FULL 90-DAY PERIOD FROM SEPTEMBER 14 TO DECEMBER 14, 1953. YOU WERE ENTITLED TO PAYMENT AT THE CONTRACT RATES FOR ANY WORK PERFORMED PRIOR TO SEPTEMBER 13, 1953, AND PRESUMABLY YOU HAVE RECEIVED FULL COMPENSATION FOR SUCH WORK. HOWEVER, THE MAXIMUM NUMBER OF DAYS FOR WHICH YOU WERE ENTITLED TO PAYMENT FOR ACTUAL COSTS UNDER ARTICLE XV OF THE CONTRACT WAS 90 AND, INSOFAR AS THE RECORDS SHOW, PAYMENT HAS BEEN MADE ON THAT BASIS. THUS, THE SETTLEMENT AS CONCLUDED AND PAID TO YOU CONSTITUTED A FULFILLMENT OF THE OBLIGATION ASSUMED BY REASON OF THE TERMINATION.