B-150088, DEC. 7, 1962

B-150088: Dec 7, 1962

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TO COLLINS RADIO COMPANY GMBH: FURTHER REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 3. BOTH THE UNIT PRICES AND TOTAL- PRICES WERE STATED IN UNITED STATES CURRENCY. WAS RECEIVED IN THE FINANCE OFFICE ON JANUARY 31. THAT PAYMENT THEREOF IN THE AMOUNT CLAIMED WAS MADE BY DOLLAR CHECK DATED MAY 16. 374.63 DEUTSCHE MARKS COVERS THE LOSS SUSTAINED IN CONVERTING THE CHECK INTO DEUTSCHE MARKS BECAUSE PAYMENT WAS NOT MADE PRIOR TO MARCH 6. THE BASIS FOR THE DISALLOWANCE OF YOUR CLAIM WAS STATED IN THE SETTLEMENT. AS FOLLOWS: "THE PRICE STRUCTURE OF THE CONTRACT WAS BASED ON THE UNITED STATES DOLLAR. THAT MONEY WAS THE MEASURE OF THE QUANTUM OF THE OBLIGATION OF THE GOVERNMENT. THE FLUCTUATION IN THE VALUE OF THE DEUTSCHE MARK IS NOT A BASIS FOR INCREASING.

B-150088, DEC. 7, 1962

TO COLLINS RADIO COMPANY GMBH:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 3, 1962, WITH ENCLOSURES, REQUESTING RECONSIDERATION OF OUR CLAIMS DIVISION SETTLEMENT, DATED AUGUST 10, 1962, WHICH DISALLOWED YOUR CLAIM UNDER CONTRACT NO. AF 61/546/-1147 FOR 8,374.63 DEUTSCHE MARKS, REPRESENTING A LOSS SUSTAINED INCIDENT TO REVALUATION OF THE DEUTSCHE MARK.

UNDER THE TERMS OF THE CITED CONTRACT YOU AGREED TO FURNISH AND DELIVER, F.O.B. RHEIN-MAIN AIR BASE, FRANKFURT/MAIN, GERMANY, DESIGNATED ITEMS OF ELECTRONICS EQUIPMENT AND SPARE PARTS "IN THE QUANTITIES AND AT THE UNIT- AND TOTAL-PRICES" SPECIFIED THEREIN. BOTH THE UNIT PRICES AND TOTAL- PRICES WERE STATED IN UNITED STATES CURRENCY. THE RECORD SHOWS THAT YOUR INVOICE NO. 12-1054, DATED JANUARY 24, 1961, IN THE TOTAL AMOUNT OF $41,561.42, COMPUTED AT THE PRICES STATED IN THE CONTRACT, WAS RECEIVED IN THE FINANCE OFFICE ON JANUARY 31, 1961, AND THAT PAYMENT THEREOF IN THE AMOUNT CLAIMED WAS MADE BY DOLLAR CHECK DATED MAY 16, 1961. YOUR CLAIM FOR 8,374.63 DEUTSCHE MARKS COVERS THE LOSS SUSTAINED IN CONVERTING THE CHECK INTO DEUTSCHE MARKS BECAUSE PAYMENT WAS NOT MADE PRIOR TO MARCH 6, 1961, THE DATE OF REVALUATION UPWARD OF THE DEUTSCHE MARK.

THE BASIS FOR THE DISALLOWANCE OF YOUR CLAIM WAS STATED IN THE SETTLEMENT, AS FOLLOWS:

"THE PRICE STRUCTURE OF THE CONTRACT WAS BASED ON THE UNITED STATES DOLLAR. THAT MONEY WAS THE MEASURE OF THE QUANTUM OF THE OBLIGATION OF THE GOVERNMENT. IN THE ABSENCE OF A PROVISION FOR THE PAYMENT OF THE CONTRACTUAL OBLIGATION IN DEUTSCHE MARKS AT A GIVEN RATE OF EXCHANGE, THE FLUCTUATION IN THE VALUE OF THE DEUTSCHE MARK IS NOT A BASIS FOR INCREASING, IN THE EVENT OF REVALUATION UPWARD, OR OF DECREASING, IN THE EVENT OF REVALUATION DOWNWARD, THE OBLIGATION OF THE GOVERNMENT.'

IN REQUESTING REVIEW OF THE SETTLEMENT, WHILE CONCEDING THAT "THE CONTRACT WAS MADE OUT IN US DOLLARS AND THAT IT WAS PAID IN US DOLLARS," YOU CONTEND THAT, SINCE THE INVOICE WAS RECEIVED ON JANUARY 31, 1961, "IN ACCORDANCE WITH OUR PAYMENT TERMS, IT SHOULD HAVE BEEN PAID PRIOR TO 6 MARCH 1961, THE DATE OF THE DM REVALUATION.'

WHILE PAYMENT OF ALL ACCOUNTS OF THE GOVERNMENT SHOULD BE MADE AS PROMPTLY AS CIRCUMSTANCES WILL PERMIT, THE CONTRACT DID NOT REQUIRE COMPLIANCE WITH YOUR "PAYMENT TERMS," NOR DID IT IMPOSE ANY PENALTY OR AUTHORIZE THE PAYMENT OF ANY ADDITIONAL AMOUNT BY REASON OF A DELAY IN PAYMENT. IT IS A FUNDAMENTAL PRINCIPLE OF CONTRACT LAW THAT VALID CONTRACTS ARE TO BE ENFORCED AND PERFORMED AS WRITTEN. CONSISTENT THEREWITH, THE GOVERNMENT HAS DISCHARGED ITS OBLIGATION BY THE PAYMENT OF THE AMOUNT SPECIFIED IN THE CONTRACT. THE FACT THAT PAYMENT WAS NOT MADE BEFORE MARCH 6, 1961, OR WITHIN 33 DAYS AFTER RECEIPT OF YOUR INVOICE, IMPOSES NO LEGAL LIABILITY ON THE GOVERNMENT TO INCREASE THE AMOUNT FIXED FOR PAYMENT IN THE CONTRACT. NOR DOES THE FACT THAT INTERVENING CIRCUMSTANCES, IN THIS CASE THE REVALUATION OF THE DEUTSCHE MARK, RENDER PERFORMANCE MORE BURDENSOME OR LESS PROFITABLE AFFORD ANY LEGAL JUSTIFICATION FOR INCREASING THE CONTRACT PRICE.