B-140099, SEP. 17, 1959

B-140099, SEP. 17, 1959

TO THE INDUSTRIAL NUCLEONICS CORPORATION:

REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 2, 1959, WITH RESPECT TO A CONTRACT AWARDED TO YOU BY THE POST OFFICE DEPARTMENT FOR THE MANUFACTURE AND INSTALLATION OF A MAIL-FLO SYSTEM IN THE POST OFFICE AT PITTSBURGH, PENNSYLVANIA.

YOU INDICATE IN YOUR LETTER THAT BECAUSE OF THE CURRENT STEEL STRIKE YOUR SUBCONTRACTOR FOR THE CONVEYOR MANUFACTURE AND INSTALLATION HAS FOUND THAT THERE IS INSUFFICIENT MILL STEEL AVAILABLE AND THEREFORE THAT IT WILL BE NECESSARY TO PURCHASE WAREHOUSE STEEL AT ADDED COST IN ORDER TO MEET THE REQUIRED COMPLETION SCHEDULE. IT IS FURTHER INDICATED THAT YOU HAVE SOUGHT AN INCREASE IN THE CONTRACT PRICE TO COMPENSATE FOR SUCH ADDED COST BUT THAT YOUR REQUEST HAS BEEN REFUSED BY THE POST OFFICE DEPARTMENT.

IT APPEARS TO BE YOUR POSITION THAT AN INCREASE IN THE CONTRACT PRICE IS JUSTIFIED UNDER THE PROVISIONS OF PARAGRAPH 11 (C) OF STANDARD FORM 32, INCORPORATED BY REFERENCE IN THE CONTRACT. YOU STATE THAT THE STEEL STRIKE WAS NOT AND COULD NOT HAVE BEEN ANTICIPATED AT THE TIME YOUR BID WAS SUBMITTED AND IT IS UNREALISTIC AND UNFAIR TO REQUIRE YOUR FIRM OR ITS SUBCONTRACTOR TO ASSUME THESE ADDITIONAL COSTS ARISING DUE TO CIRCUMSTANCES BEYOND THE CONTROL AND WITHOUT THE FAULT OR NEGLIGENCE OF EITHER YOUR FIRM OR THE SUBCONTRACTOR.

PARAGRAPH 11 (C) OF STANDARD FORM 32 DEALS SOLELY WITH THE LIABILITY OF THE CONTRACTOR FOR EXCESS COSTS TO THE GOVERNMENT ARISING OUT OF THE NECESSITY TO PROCURE THE SUPPLIES CALLED FOR UNDER THE TERMS OF THE CONTRACT FROM ANOTHER SOURCE UPON TERMINATION OF THE CONTRACT BECAUSE OF THE DEFAULT OF THE CONTRACTOR. YOUR CONTRACT WITH THE POST OFFICE DEPARTMENT IS A FIXED PRICE CONTRACT AND INCLUDES NO PROVISION, SO FAR AS WE ARE AWARE, FOR ANY INCREASE IN THE CONTRACT PRICE EXCEPT TO COMPENSATE FOR CHANGES ORDERED BY THE CONTRACTING OFFICER UNDER PARAGRAPH 2 OF STANDARD FORM 32.

IT IS WELL SETTLED THAT CONTRACTS ARE TO BE ENFORCED AND PERFORMED AS WRITTEN, AND THE MERE FACT THAT PERFORMANCE IS RENDERED MORE BURDENSOME OR COSTLY BY AN INTERVENING OR UNFORESEEN COST IS INSUFFICIENT TO ENTITLE A CONTRACTOR TO COMPENSATION BEYOND THAT PROVIDED FOR IN THE CONTRACT. COLUMBIA RY. POWER AND LIGHT COMPANY V. COLUMBUS, 249 U.S. 399, 412. WHERE A CONTRACT CONTAINS AN EXPRESS STIPULATION AS TO THE PRICE TO BE PAID, SUCH STIPULATION IS CONCLUSIVE ON THE PARTIES. SEE SIMPSON V. UNITED STATES, 172 U.S. 372, 379. FURTHER, A CONTRACT OF THE FEDERAL GOVERNMENT MAY NOT BE MODIFIED OR AMENDED EXCEPT IN THE INTEREST OF THE UNITED STATES AND THE GOVERNMENT'S LIABILITY AS FIXED IN A CONTRACT MAY NOT BE INCREASED BY A SUPPLEMENTAL AGREEMENT WITHOUT A COMPENSATING BENEFIT TO THE GOVERNMENT. CHRISTIE V. UNITED STATES, 237 U.S. 234.

ACCORDINGLY, THERE IS NO LEGAL BASIS FOR AUTHORIZING ANY INCREASE IN THE CONTRACT PRICE.