B-182204, DEC 16, 1974
Highlights
THE BASES FOR GENUINE'S REQUEST ARE (1) GENUINE'S SOURCE FOR THE NOZZLES IS THE SOLE MANUFACTURER OF THE ITEM. 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 PROVIDES NO BASIS FOR EQUITABLE PRICE RELIEF. 53 COMP. AS WAS STATED IN PENN BRIDGE CO. 896 (1924): "*** CONTRACTUAL RIGHTS ONCE FIXED IN A PROPER CONTRACT EXECUTED BY AUTHORITY ARE INVIOLATE. CONSTRUCTION IS PERMISSIBLE IF THE TERMS ARE AMBIGUOUS. THERE IS NO LEGAL AUTHORITY FOR OUR OFFICE TO GRANT GENUINE THE RELIEF REQUESTED.
B-182204, DEC 16, 1974
INCREASED COSTS OF PERFORMANCE DUE TO SPIRALING SUPPLIER'S COSTS PROVIDE NO BASIS FOR EQUITABLE PRICE ADJUSTMENT OR CANCELLATION OF FIXED PRICE CONTRACT WHICH CONTAINS NO COST ESCALATION PROVISIONS SINCE THOSE FACTORS DO NOT CONSTITUTE UNDUE INTERFERENCE BY GOVERNMENT AS CONTRACTOR.
GENUINE MOTOR PARTS OF PENNSYLVANIA, INC.:
ON MARCH 19, 1974, GENUINE MOTOR PARTS OF PENNSYLVANIA, INC. (GENUINE), ENTERED INTO NEGOTIATED CONTRACT NO. DSA700-74-C-4924 WITH THE DEFENSE SUPPLY AGENCY (DSA), DEFENSE CONSTRUCTION SUPPLY CENTER, COLUMBUS, OHIO, TO SUPPLY 1149 NOZZLE ASSEMBILIES AT $40.40 PER UNIT FOR A TOTAL FIXED PRICE OF $46,419.60. THE CONTRACT CONTAINS NO COST ESCALATION PROVISIONS.
GENUINE REQUESTS OUR OFFICE TO AUTHORIZE "A PRICE ESCALATION OR THE CANCELLATION OF THE CONTRACT WITHOUT COST" DUE TO ADDITIONAL COSTS UNDER THE CONTRACT. THE BASES FOR GENUINE'S REQUEST ARE (1) GENUINE'S SOURCE FOR THE NOZZLES IS THE SOLE MANUFACTURER OF THE ITEM, AND (2) THIS SOLE MANUFACTURER HAS ALMOST DOUBLED ITS PRICE FOR THE NOZZLES SINCE GENUINE ENTERED INTO THE SUBJECT CONTRACT WITH DSA.
IT ISAWELL-SETTLED PROPOSITION THAT 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 PROVIDES NO BASIS FOR EQUITABLE PRICE RELIEF. 53 COMP. GEN. 157 (1973); MATTER OF AMCA INTERNATIONAL CORPORATION, B-182233, OCTOBER 3, 1974. 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."
IN VIEW OF THE FOREGOING, THERE IS NO LEGAL AUTHORITY FOR OUR OFFICE TO GRANT GENUINE THE RELIEF REQUESTED.