B-158738, APR. 18, 1966

B-158738: Apr 18, 1966

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TO THE CITY DAIRY: REFERENCE IS MADE TO YOUR LETTER OF MARCH 14. WHICH WERE ENTERED INTO WITH THE ORIGINAL CLASS I FORMULA AS A DETERMINANT FOR THE PRICE AGREED TO. IT IS ALLEGED THAT ANY SUSPENSION OF THIS FORMULA WILL CAUSE IRREPARABLE HARM AND FINANCIAL LOSS. IN THE ALTERNATIVE TO OUR INTERVENING IN THE DECISION TO ADJUST THE CLASS I MILK PRICES THE QUESTION WAS RAISED BY YOU AS TO THE POSSIBILITY OF MODIFYING THE CONTRACT PRICE DURING THE PERIOD OF APRIL. THE RULE WAS STATED: "IF THE LAW CASTS A DUTY UPON A PARTY. THE PERFORMANCE WILL BE EXCUSED IF BY THE ACT OF GOD IT BECOMES IMPOSSIBLE. IF A PARTY ENGAGED TO DO SOMETHING AND FAILS TO PROVIDE AGAINST CONTINGENCIES THE NONPERFORMANCE IS NOT EXCUSED BY A CONTINGENCY NOT FORESEEN AND WHICH BY ITS CONSEQUENCE INCREASES THE COST AND DIFFICULTY OF PERFORMANCE.'.

B-158738, APR. 18, 1966

TO THE CITY DAIRY:

REFERENCE IS MADE TO YOUR LETTER OF MARCH 14, 1966, IN WHICH YOU REQUEST OUR INTERVENTION IN A RECENT DECISION BY THE DEPARTMENT OF AGRICULTURE TO ADJUST CLASS I MILK PRICES FOR APRIL, MAY AND JUNE 1966.

BECAUSE YOU CURRENTLY HOLD CONTRACTS FOR SUPPLYING MILK TO FORT DEVENS, WESTOVER AIR FORCE BASE, AND HANSCOM AIR FORCE BASE, ALL IN MASSACHUSETTS, WHICH WERE ENTERED INTO WITH THE ORIGINAL CLASS I FORMULA AS A DETERMINANT FOR THE PRICE AGREED TO, IT IS ALLEGED THAT ANY SUSPENSION OF THIS FORMULA WILL CAUSE IRREPARABLE HARM AND FINANCIAL LOSS. IN THE ALTERNATIVE TO OUR INTERVENING IN THE DECISION TO ADJUST THE CLASS I MILK PRICES THE QUESTION WAS RAISED BY YOU AS TO THE POSSIBILITY OF MODIFYING THE CONTRACT PRICE DURING THE PERIOD OF APRIL, MAY AND JUNE 1966.

IN DECISION, 19 COMP. GEN. 903, OUR OFFICE CONSIDERED A SITUATION SIMILAR TO THE ONE PRESENTED. QUOTING FIRST FROM SATTERLEE ADMX. V. UNITED STATES, 30 CT.CL. 31, THE RULE WAS STATED:

"IF THE LAW CASTS A DUTY UPON A PARTY, THE PERFORMANCE WILL BE EXCUSED IF BY THE ACT OF GOD IT BECOMES IMPOSSIBLE; BUT IF A PARTY ENGAGED TO DO SOMETHING AND FAILS TO PROVIDE AGAINST CONTINGENCIES THE NONPERFORMANCE IS NOT EXCUSED BY A CONTINGENCY NOT FORESEEN AND WHICH BY ITS CONSEQUENCE INCREASES THE COST AND DIFFICULTY OF PERFORMANCE.'

WE WENT ON TO SAY:

"NOR IS THE FACT THAT THE INCREASE IN COST OF MILK TO THE CONTRACTOR IS ATTRIBUTABLE TO THE MILK-MARKETING ORDER ISSUED BY THE SECRETARY OF AGRICULTURE OF AVAIL TO CHANGE THE RULE. IN PROMULGATING SAID ORDER THE SECRETARY ACTED PURSUANT TO AUTHORITY IMPOSED IN HIM BY AN ACT OF CONGRESS AND AS THE ORDAINED REPRESENTATIVE, FOR THE PURPOSE, OF THE GOVERNMENT IN ITS SOVEREIGN CAPACITY. THE COURTS HAVE HELD THAT THE GOVERNMENT IN ITS SOVEREIGN CAPACITY IS SEPARATE AND DISTINCT FROM THE GOVERNMENT IN ITS CAPACITY AS A CONTRACTOR AND IS NOT LIABLE AS A CONTRACTOR FOR ITS ACTS AS A SOVEREIGN.'

THE GENERAL RULE IS THAT OFFICERS OF THE GOVERNMENT HAVE NO AUTHORITY TO AMEND OR MODIFY EXISTING CONTRACTS UNLESS A COMPENSATING BENEFIT RESULTS TO THE UNITED STATES; AND THAT SUPERVENING EVENTS OR UNFORESEEN CAUSES WHICH RENDER CONTRACT PERFORMANCE MORE BURDENSOME, OR LESS PROFITABLE, OR EVEN OCCASION A LOSS, ARE NOT SUFFICIENT TO ENTITLE A CONTRACTOR TO AN ADJUSTMENT IN THE CONTRACT PRICE.

IT SHOULD BE MADE CLEAR THAT THIS OFFICE CANNOT INTERVENE IN ANY DECISION TO FIX PRICES FOR CLASS I MILK. THAT IS A MATTER SOLELY WITHIN THE PROVINCE OF THE DEPARTMENT OF AGRICULTURE.

ACCORDINGLY, THERE IS NO LEGAL BASIS UPON WHICH THIS OFFICE MAY GRANT YOUR REQUESTS.