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B-179255, SEP 4, 1973, 53 COMP GEN 157

B-179255 Sep 04, 1973
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MEASURING DEVICES AND PRECISION TOOLS TO OBTAIN SUPPLIES FROM ABROAD TO MEET CONTRACTUAL COMMITMENTS TO THE GOVERNMENT MAY NOT BE REIMBURSED TO THE CORPORATION BY INCREASING ANY BID PRICE OPEN FOR ACCEPTANCE OR ANY CONTRACT PRICE SINCE THE DEVALUATION OF THE DOLLAR IS ATTRIBUTABLE TO THE GOVERNMENT ACTING IN ITS SOVEREIGN CAPACITY AND THE GOVERNMENT IS NOT LIABLE FOR THE CONSEQUENCES OF ITS ACTS AS A SOVEREIGN. NO PROVISION WAS MADE FOR A PRICE INCREASE BECAUSE THE COST OF PERFORMANCE MIGHT BE INCREASED. " A BID GENERALLY IS IRREVOCABLE DURING THE TIME PROVIDED IN THE INVITATION FOR BIDS FOR THE ACCEPTANCE OF A BID. THE REMEDY AFFORDED BY THE ACT IS LIMITED TO EXTRAORDINARY CIRCUMSTANCES.

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B-179255, SEP 4, 1973, 53 COMP GEN 157

FUNDS - FOREIGN - EXCHANGE RATE - CONTRACT UNDERPAYMENTS - DOLLAR DEVALUATION THE ADDITIONAL COST DUE TO THE DEVALUATION OF THE DOLLAR TO A CORPORATION IN THE BUSINESS OF PRODUCING DRAFTING AND ENGINEERING INSTRUMENTS, MEASURING DEVICES AND PRECISION TOOLS TO OBTAIN SUPPLIES FROM ABROAD TO MEET CONTRACTUAL COMMITMENTS TO THE GOVERNMENT MAY NOT BE REIMBURSED TO THE CORPORATION BY INCREASING ANY BID PRICE OPEN FOR ACCEPTANCE OR ANY CONTRACT PRICE SINCE THE DEVALUATION OF THE DOLLAR IS ATTRIBUTABLE TO THE GOVERNMENT ACTING IN ITS SOVEREIGN CAPACITY AND THE GOVERNMENT IS NOT LIABLE FOR THE CONSEQUENCES OF ITS ACTS AS A SOVEREIGN; NO PROVISION WAS MADE FOR A PRICE INCREASE BECAUSE THE COST OF PERFORMANCE MIGHT BE INCREASED; AND UNDER THE "FIRM-BID RULE," A BID GENERALLY IS IRREVOCABLE DURING THE TIME PROVIDED IN THE INVITATION FOR BIDS FOR THE ACCEPTANCE OF A BID. CLAIMS - REPORTING TO CONGRESS - LIMITATION ON USE OF ACT OF APRIL 10, 1928 - EXTRAORDINARY CIRCUMSTANCES REPORTING A CLAIM TO THE CONGRESS UNDER THE MERITORIOUS CLAIMS ACT OF 1928 (31 U.S.C. 236) FOR THE ADDITIONAL COST TO A CORPORATION TO MEET ITS CONTRACTUAL COMMITMENTS TO THE GOVERNMENT BY REASON OF THE DEVALUATION OF THE DOLLAR WOULD NOT BE JUSTIFIED BECAUSE THE CLAIM CONTAINS NO ELEMENTS OF UNUSUAL LEGAL LIABILITY OR EQUITY. THE REMEDY AFFORDED BY THE ACT IS LIMITED TO EXTRAORDINARY CIRCUMSTANCES, AND THE CASES REPORTED BY THE GAO TO THE CONGRESS GENERALLY HAVE INVOLVED EQUITABLE CIRCUMSTANCES OF AN UNUSUAL NATURE AND WHICH ARE UNLIKELY TO CONSTITUTE A RECURRING PROBLEM, SINCE TO REPORT TO THE CONGRESS A PARTICULAR CASE WHEN SIMILAR EQUITIES EXIST OR ARE LIKELY TO ARISE WITH RESPECT TO OTHER CLAIMANTS WOULD CONSTITUTE PREFERENTIAL TREATMENT OVER OTHERS IN SIMILAR CIRCUMSTANCES.

TO LUTZ SUPERDYNE, INC., SEPTEMBER 4, 1973:

REFERENCE IS MADE TO YOUR LETTERS OF JULY 10 AND AUGUST 7, 1973, REQUESTING ADVICE AS TO WHAT RECOURSE IS AVAILABLE TO AVOID SUBSTANTIAL LOSSES RESULTING FROM THE DEVALUATION OF THE AMERICAN DOLLAR IN THE WORLD MARKETPLACE.

YOU STATE THAT YOUR CORPORATION IS IN THE BUSINESS OF PRODUCING AND IMPORTING DRAFTING AND ENGINEERING INSTRUMENTS, MEASURING DEVICES AND PRECISION TOOLS. FURTHER, YOU STATE THAT CERTAIN SPECIFIC ITEMS ARE NOT PRODUCED IN THIS COUNTRY. THEREFORE, YOU STATE THAT TO MEET YOUR CONTRACTUAL COMMITMENTS TO THE GOVERNMENT IT IS NECESSARY FOR YOU TO PURCHASE SUCH PRODUCTS ABROAD.

IT IS DUE TO THESE FOREIGN PURCHASES THAT YOUR CORPORATION IS EXPERIENCING LOSSES. YOU CLAIM THAT YOU HAVE BID ON GOVERNMENT SOLICITATIONS ON THE BASIS OF THE THEN CURRENT EXCHANGE RATE WITH WEST GERMANY. HOWEVER, SINCE SUBMISSION OF YOUR BIDS (OR AWARD OF THE CONTRACTS INVOLVED), THERE HAS BEEN A 15-TO-20-PERCENT COST INCREASE DUE TO THE DEVALUATION OF THE AMERICAN DOLLAR. IT IS BASED UPON THIS SET OF CIRCUMSTANCES THAT YOU REQUEST ADVICE AS TO RELIEF THAT MAY BE AVAILABLE TO AVOID SUCH UNFORESEEN LOSSES.

THE DEVALUATION OF THE DOLLAR IS ATTRIBUTABLE TO THE GOVERNMENT ACTING IN ITS SOVEREIGN CAPACITY. SEE B-175674, MAY 30, 1972. IT IS WELL SETTLED THAT THE GOVERNMENT IS NOT LIABLE AS A CONTRACTOR FOR THE CONSEQUENCES OF ITS ACTS AS A SOVEREIGN. SEE HOROWITZ V. UNITED STATES, 61 CT. CL. 1025 (1925); THE SUNSWICK CORP. V. UNITED STATES, 75 F. SUPP. 221, 109 CT. CL. 772 (1948). ALSO, WHERE A GOVERNMENT CONTRACT CONTAINS AN EXPRESS STIPULATION AS TO THE AMOUNT OF COMPENSATION TO BE PAID, AND NO PROVISION IS MADE FOR ANY INCREASE IN THE EVENT PERFORMANCE BECOMES MORE EXPENSIVE OR DIFFICULT, THE FACT THAT THE COST OF PERFORMANCE IS INCREASED BY FACTORS WHICH DO NOT CONSTITUTE UNDUE INTERFERENCE BY THE GOVERNMENT AS A CONTRACTOR DOES NOT ENTITLE THE CONTRACTOR TO ADDITIONAL COMPENSATION. SEE B-175674, SUPRA, AND CASES CITED THEREIN. AS WAS STATED IN PENN BRIDGE CO. V. UNITED STATES, 59 CT. CL. 892, 896 (1924) -

*** CONTRACTUAL RIGHTS ONCE FIXED IN A PROPER CONTRACT EXECUTED BY AUTHORITY ARE INVIOLATE. THEY MAY BE FORFEITED BY ONE PARTY OR THE OTHER, CONSTRUCTION IS PERMISSIBLE IF THE TERMS ARE AMBIGUOUS, BUT IN THE ABSENCE OF AMBIGUITY OR FORFEITURE OF RIGHTS BY CONDUCT, SUCH A CONTRACT CANNOT BUT BE ENFORCED AS WRITTEN.

FURTHER, UNDER THE "FIRM-BID RULE," A BID GENERALLY IS IRREVOCABLE DURING THE TIME PROVIDED IN THE INVITATION FOR BIDS FOR THE ACCEPTANCE OF THE BID. 49 COMP. GEN. 395 (1969).

IN VIEW OF THE FOREGOING, THERE WOULD APPEAR TO BE NO LEGAL AUTHORITY FOR GRANTING YOUR CORPORATION AN INCREASE IN ANY BID PRICE OPEN FOR ACCEPTANCE OR ANY CONTRACT PRICE BECAUSE OF THE EXTRA COST OF CONTRACT PERFORMANCE DUE TO THE DEVALUATION OF THE DOLLAR.

AS YOUR LETTER OF JULY 10, 1973, REQUESTS ADVICE AS TO ANY POSSIBLE AVENUE OF RELIEF, WE HAVE ALSO CONSIDERED WHETHER YOUR CLAIM SHOULD BE REFERRED TO THE CONGRESS PURSUANT TO THE MERITORIOUS CLAIMS ACT OF 1928 (31 U.S.C. 236).

THE MERITORIOUS CLAIMS ACT PROVIDES THAT WHEN A CLAIM IS FILED IN THIS OFFICE THAT MAY NOT BE LAWFULLY ADJUSTED BY USE OF AN APPROPRIATION THERETOFORE MADE, BUT WHICH CLAIM, IN OUR JUDGMENT, CONTAINS SUCH ELEMENTS OF LEGAL LIABILITY OR EQUITY AS TO BE DESERVING OF THE CONSIDERATION OF CONGRESS, IT SHALL BE SUBMITTED TO THE CONGRESS WITH OUR RECOMMENDATIONS. THE REMEDY IS AN EXTRAORDINARY ONE AND ITS USE IS LIMITED TO EXTRAORDINARY CIRCUMSTANCES.

THE CASES WE HAVE REPORTED FOR THE CONSIDERATION OF THE CONGRESS GENERALLY HAVE INVOLVED EQUITABLE CIRCUMSTANCES OF AN UNUSUAL NATURE AND WHICH ARE UNLIKELY TO CONSTITUTE A RECURRING PROBLEM, SINCE TO REPORT TO THE CONGRESS A PARTICULAR CASE WHEN SIMILAR EQUITIES EXIST OR ARE LIKELY TO ARISE WITH RESPECT TO OTHER CLAIMANTS WOULD CONSTITUTE PREFERENTIAL TREATMENT OVER OTHERS IN SIMILAR CIRCUMSTANCES. SEE B 175278, APRIL 12, 1972.

UNDOUBTEDLY OTHER CONTRACTORS WHO DEAL WITH GOVERNMENT HAVE FOUND THEMSELVES IN YOUR SITUATION. ALSO, DEVALUATION OF THE DOLLAR HAS OCCURRED IN THE PAST AND MAY OCCUR AGAIN IN THE FUTURE. THEREFORE, WE FIND YOUR CLAIM TO BE NEITHER UNUSUAL IN NATURE NOR A NONRECURRING SITUATION.

FOR THE REASONS STATED ABOVE, WE FIND NO ELEMENT OF UNUSUAL LEGAL LIABILITY OR EQUITY WHICH WOULD JUSTIFY US IN REPORTING IT TO THE CONGRESS FOR ITS CONSIDERATION UNDER THE MERITORIOUS CLAIMS ACT.

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