B-155872, JAN. 28, 1965

B-155872: Jan 28, 1965

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TO WILLIAM ARMSTRONG SMITH COMPANY: REFERENCE IS MADE TO YOUR LETTER DATED DECEMBER 29. YOU STATE THAT YOU HAVE GENERAL SERVICES ADMINISTRATION (GSA) CONTRACT NO. IT IS UPON THIS PRICE RISE FOR COPPER PIGMENT AND MERCURIC OXIDE AND THE RESULTANT HARDSHIP AND FINANCIAL DAMAGE TO YOUR COMPANY THAT YOUR REQUEST FOR RELIEF IS BASED. IT IS WELL SETTLED THAT HARDSHIPS OR INCONVENIENCES INVOLVED IN THE FULFILLMENT OF A CONTRACT WILL NOT RELIEVE A PARTY FROM PERFORMANCE THEREOF AND THAT PERFORMANCE OF A CONTRACT IS NOT EXCUSED BY UNUSUAL OR UNEXPECTED EXPENSES. IT IS A RULE OF LAW THAT WHERE THE CONTRACT CONTAINS AN EXPRESS STIPULATION AS TO THE AMOUNT OF COMPENSATION SUCH STIPULATION IS CONCLUSIVE ON THE PARTIES AND MEASURES THE AMOUNT OF RECOVERY FOR PERFORMANCE.

B-155872, JAN. 28, 1965

TO WILLIAM ARMSTRONG SMITH COMPANY:

REFERENCE IS MADE TO YOUR LETTER DATED DECEMBER 29, 1964, AND ATTACHMENTS, REQUESTING TO BE ADVISED WHAT PROCEDURES AND EVIDENCE SHOULD BE PRESENTED TO ENABLE YOU TO OBTAIN REIMBURSEMENT FOR INCREASES IN THE PRICES OF RAW MATERIALS FOR YOUR PAINTS OVER THE PRICES USED AT THE TIME OF YOUR BIDDING. YOU STATE THAT YOU HAVE GENERAL SERVICES ADMINISTRATION (GSA) CONTRACT NO. GS-00S-51322, COVERING THE PERIOD FROM AUGUST 1, 1964, THROUGH FEBRUARY 28, 1965, TO SUPPLY PAINT FROM YOUR PLANT AT EAST POINT, GEORGIA, TO VARIOUS GENERAL SERVICES ADMINISTRATION REGIONS AND MILITARY INSTALLATIONS, AS WELL AS FROM YOUR PLANT IN RICHMOND, CALIFORNIA, TO WEST COAST GOVERNMENTAL AGENCIES. YOU STATE FURTHER THAT AT THE TIME YOU BID ON THE CONTRACT, THE RAW MATERIAL MARKET FOR THE INGREDIENTS HAD BEEN VERY STABLE FOR MANY MONTHS AND THAT ABOUT THE FIRST OF JUNE THE WORLD MARKETS OF COPPER AND MERCURY BEGAN A SPECTACULAR RISE IN PRICE. IT IS UPON THIS PRICE RISE FOR COPPER PIGMENT AND MERCURIC OXIDE AND THE RESULTANT HARDSHIP AND FINANCIAL DAMAGE TO YOUR COMPANY THAT YOUR REQUEST FOR RELIEF IS BASED.

IN RESPECT TO THIS REQUEST, IT IS WELL SETTLED THAT HARDSHIPS OR INCONVENIENCES INVOLVED IN THE FULFILLMENT OF A CONTRACT WILL NOT RELIEVE A PARTY FROM PERFORMANCE THEREOF AND THAT PERFORMANCE OF A CONTRACT IS NOT EXCUSED BY UNUSUAL OR UNEXPECTED EXPENSES. SEE 22 COMP. GEN. 937 AND CASES CITED THEREIN. IT IS A RULE OF LAW THAT WHERE THE CONTRACT CONTAINS AN EXPRESS STIPULATION AS TO THE AMOUNT OF COMPENSATION SUCH STIPULATION IS CONCLUSIVE ON THE PARTIES AND MEASURES THE AMOUNT OF RECOVERY FOR PERFORMANCE. SEE 18 COMP. GEN. 160 AND CASES CITED THEREIN. GENERALLY, AN ABNORMAL RISE IN THE PRICE OF GOODS, DUE TO UNUSUAL TRADE CONDITIONS, SUCH THAT THE CONTRACTOR COULD NOT PERFORM THE CONTRACT WITHOUT GREATER EXPENSE THAN ANTICIPATED, IS NOT SUCH AN IMPOSSIBILITY AS WILL EXCUSE PERFORMANCE. FARMERS' FERTILIZER COMPANY V. LILLIE, 18 F.2D 197. FURTHER, A RISE IN THE MARKET PRICE OF RAW MATERIALS IS NOT CONSIDERED AN "UNFORSEEABLE CAUSE" SUCH AS OPERATES TO RELIEVE A CONTRACTOR FROM PERFORMANCE UNDER THE CONTRACT.

WITHOUT A COMPENSATING BENEFIT TO THE UNITED STATES, AGENTS AND OFFICERS OF THE GOVERNMENT HAVE NO AUTHORITY TO DISPOSE OF THE MONEY OR PROPERTY OF THE UNITED STATES, TO MODIFY EXISTING CONTRACTS, OR TO SURRENDER OR WAIVE CONTRACT RIGHTS THAT HAVE VESTED IN THE GOVERNMENT. SIMPSON V. UNITED STATES, 172 U.S. 372; UNITED STATES V. AMERICAN SALES CORP., 27 F.2D 389, AFFIRMED 32 F.2D 141, CERTIORARI DENIED 280 U.S. 574; PACIFIC HARDWARE CO. V. UNITED STATES, 49 CT.CL. 327; BAUSCH AND LOMB OPTICAL CO. V. UNITED STATES, 78 CT.CL. 584.

ACCORDINGLY, YOU ARE ADVISED THAT NO LEGAL BASIS EXISTS FOR REIMBURSING YOU ANY INCREASED COSTS INCURRED IN THE PERFORMANCE OF THE CONTRACT.

ATTACHMENTS TO YOUR LETTER REVEAL THAT YOU HAVE CORRESPONDED WITH THE GENERAL SERVICES ADMINISTRATION IN THE MATTER AND HAVE BEEN ADVISED BY THE ADMINISTRATION THAT YOUR CLAIM OF HARDSHIP REGARDING YOUR OBLIGATION TO SUPPLY QUANTITIES IN EXCESS OF ESTIMATED CONTRACT QUANTITIES OR TO SUPPLY QUANTITIES AGAINST "INDEFINITE" ITEMS HAS BEEN REFERRED TO ITS OFFICE OF COUNSEL FOR CONSIDERATION AND THAT YOU WOULD BE ADVISED FURTHER REGARDING THIS MATTER WHEN THAT OFFICE HAS COMPLETED ITS REVIEW. ANY FURTHER INQUIRIES IN THAT RESPECT SHOULD BE ADDRESSED TO ..END :