B-130189, JAN. 8, 1957

B-130189: Jan 8, 1957

Additional Materials:

Contact:

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

 

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

CROSBY AND FLOWERS: FURTHER REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 27. IN YOUR LETTER YOU STATE THAT THE GARBAGE WAS PURCHASED FOR USE AS HOG FEED. THAT AT THE TIME YOU AGREED TO PAY $5.91 PER TON THE PRICE OF HOGS WAS 19-22 CENTS PER POUND. IT IS A WELL-SETTLED PRINCIPLE OF LAW 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. IS NOT SUFFICIENT TO EXCUSE PERFORMANCE OR TO ENTITLE A CONTRACTOR TO A REDUCTION IN THE CONTRACT PRICE. YOU ARE LEGALLY OBLIGATED TO PERFORM THE CONTRACT IN ACCORDANCE WITH ITS TERMS AND AT THE PRICE STIPULATED IN THE CONTRACT. THIS RULE IS APPLICABLE TO THE ACCOUNTING AS WELL AS THE ADMINISTRATIVE OFFICERS OF THE GOVERNMENT AND CONSIDERATIONS OF SYMPATHY FOR THE POSSIBLE MISFORTUNE OF A CONTRACTOR DO NOT AUTHORIZE ANY EXCEPTION TO THE RULE.

B-130189, JAN. 8, 1957

TO MESSRS. CROSBY AND FLOWERS:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 27, 1956, REQUESTING RELIEF FROM THE TERMS OF CONTRACT AF 01 (600) S-33, DATED OCTOBER 4, 1954.

UNDER THE TERMS OF THE CONTRACT YOU AGREED TO PURCHASE FROM THE GOVERNMENT APPROXIMATELY 1800 NET TONS OF GARBAGE AT A UNIT PRICE OF $5.91 PER NET TON DURING THE PERIOD FROM OCTOBER 7, 1954, THROUGH OCTOBER 6, 1956. PARAGRAPH 25 OF THE CONTRACT PROVIDES THAT THE CONTRACT MAY BE ANNUALLY RENEWED AT THE OPTION OF THE UNITED STATES THROUGH OCTOBER 6, 1959.

IN YOUR LETTER YOU STATE THAT THE GARBAGE WAS PURCHASED FOR USE AS HOG FEED; THAT AT THE TIME YOU AGREED TO PAY $5.91 PER TON THE PRICE OF HOGS WAS 19-22 CENTS PER POUND; AND THAT DURING 1955-56 THE PRICE OF HOGS DROPPED TO 10-11 CENTS PER POUND WHICH RESULTED IN YOUR SUSTAINING A LOSS OF $4.00 TO $7.00 PER HEAD.

IT IS A WELL-SETTLED PRINCIPLE OF LAW 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 OR TO ENTITLE A CONTRACTOR TO A REDUCTION IN THE CONTRACT PRICE. COLUMBUS RY. POWER AND L. CO. V. COLUMBUS, 249 U.S. 399, 412. SINCE THE CONTRACT HERE INVOLVED MAKES NO PROVISION FOR ANY DECREASE IN THE UNIT PRICE FOR ANY CAUSE OR CONTINGENCY, YOU ARE LEGALLY OBLIGATED TO PERFORM THE CONTRACT IN ACCORDANCE WITH ITS TERMS AND AT THE PRICE STIPULATED IN THE CONTRACT. SATTERLEE ADM-X. V. UNITED STATES, 30 C.CLS. 31.

FURTHERMORE, IN THE ABSENCE OF A STATUTE SPECIFICALLY SO PROVIDING, NO OFFICER OF THE GOVERNMENT HAS AUTHORITY TO GIVE AWAY OR SURRENDER A RIGHT VESTED IN OR ACQUIRED BY THE GOVERNMENT UNDER A CONTRACT. SIMPSON V. UNITED STATES, 172 U.S. 372; PACIFIC HARDWARE CO. V. UNITED STATES, 49 C.CLS. 327. THIS RULE IS APPLICABLE TO THE ACCOUNTING AS WELL AS THE ADMINISTRATIVE OFFICERS OF THE GOVERNMENT AND CONSIDERATIONS OF SYMPATHY FOR THE POSSIBLE MISFORTUNE OF A CONTRACTOR DO NOT AUTHORIZE ANY EXCEPTION TO THE RULE.

ACCORDINGLY, WE ARE WITHOUT LEGAL AUTHORITY TO RELIEVE YOU FROM THE TERMS OF YOUR CONTRACT EITHER BY CANCELLATION OF THE CONTRACT OR A REDUCTION IN THE UNIT PRICE.