B-171765, MAR 18, 1971

B-171765, MAR 18, 1971

CONTRACTS - IMPOSSIBILITY OF PERFORMANCE DECISION HOLDING THAT IN VIEW OF THE BENEFITS RECEIVED BY THE GOVERNMENT THERE IS NO OBJECTION TO ALLOWING $1,331.76 ALREADY PAID TO THE UNIVERSITY OF WISCONSIN UNDER A RESEARCH CONTRACT WITH THE BUREAU OF RECLAMATION CONCERNING THE LEGAL BASIS UPON WHICH WEATHER MODIFICATION ACTIVITIES MAY BE DEVELOPED AND ADMINISTERED FOR PUBLIC BENEFIT, BUT VOUCHERS SUBMITTED FOR ADDITIONAL PROGRESS PAYMENTS MAY NOT BE AUTHORIZED. BECAUSE THE CONTINUED EMPLOYMENT OF AN INDIVIDUAL KNOWLEDGEABLE IN THIS FIELD WAS AN IMPLIED CONDITION, BOTH PARTIES ARE EXCUSED IN A CASE, WHERE BEFORE BREACH, PERFORMANCE BECOMES IMPOSSIBLE THROUGH NO FAULT OF EITHER PARTY. THE DEATH OF THE DESIGNATED HEAD OF THE PROJECT AND THE SUBSEQUENT RESIGNATION OF HIS REPLACEMENT IS SUFFICIENT TO EXCUSE BOTH PARTIES FROM THE CONTRACT, AND THE GOVERNMENT IS LIABLE ONLY TO THE EXTENT OF BENEFITS RECEIVED.

TO MR. ORLOVSKI:

REFERENCE IS MADE TO YOUR LETTER OF JANUARY 21, 1971, WITH ENCLOSURES, FORWARDING FOR OUR CONSIDERATION AND DETERMINATION TWO QUESTIONS CONCERNING THE PROPRIETY OF PAYMENTS TO THE UNIVERSITY OF WISCONSIN UNDER A RESEARCH CONTRACT WITH THE BUREAU OF RECLAMATION (NO. 14-06-D-6182 DATED JUNE 1, 1967). THE TWO QUESTIONS RELATE TO THE FOLLOWING:

1. THE PROPRIETY AND DISPOSITION OF A PROGRESS PAYMENT OF $1,331.76 MADE TO THE UNIVERSITY ON OCTOBER 3, 1967.

2. THE DISPOSITION OF UNPAID VOUCHERS FOR FURTHER PROGRESS PAYMENTS RECEIVED FROM THE UNIVERSITY, TOTALING $15,174.49. THE PURPOSE OF THE ABOVE MENTIONED CONTRACT WAS TO "DETERMINE THE LEGAL BASES UPON WHICH WEATHER MODIFICATION ACTIVITIES OF THE BUREAU OF RECLAMATION MAY BE DEVELOPED AND ADMINISTERED FOR PUBLIC BENEFIT." THE CONTRACT WAS A COST REIMBURSABLE CONTRACT WITH AN INITIAL MAXIMUM COST LIMITATION OF $22,189.05, AND WAS TO RUN FROM DATE OF SIGNING, JUNE 1, 1967, TO NOVEMBER 30, 1968.

PARAGRAPH 3 OF THE CONTRACT PROVIDED THAT "THE PERFORMANCE BY THE CONTRACTOR SHALL BE EFFECTED BY A PROFESSOR OF LAW, UNIVERSITY OF WISCONSIN (PRESENTLY PROFESSOR J. H. BEUSCHER), WITH THE ASSISTANCE OF PERSONNEL AVAILABLE TO THE CONTRACTOR, OTHER PERSONNEL AVAILABLE ON A CONSULTING BASIS, AND SUCH OTHER PERSONNEL AS THE AFORESAID PROFESSOR MAY DESIGNATE AND ENGAGE, ALL OF WHOSE PERFORMANCE SHALL BE UNDER HIS SUPERVISION." HOWEVER, SIX WEEKS AFTER THE CONTRACT WAS CONSUMMATED PROFESSOR BEUSCHER DIED. AT THIS POINT NEGOTIATIONS BETWEEN THE GOVERNMENT AND THE UNIVERSITY WERE CARRIED ON AND IT WAS DECIDED THAT THE UNIVERSITY WOULD CONTINUE TO PERFORM THE CONTRACT, BUT NO NEW PERSON WAS NAMED UNDER PARAGRAPH 3 OF THE CONTRACT. BY AMENDMENT DATED NOVEMBER 30, 1967, THE MAXIMUM COST LIMITATION WAS INCREASED TO $30,236.83. PRIOR TO THIS, ON OCTOBER 3, 1967, A PAYMENT IN THE AMOUNT OF $1,331.76, DESIGNATED AS A PROGRESS PAYMENT, WAS MADE TO THE UNIVERSITY. NO FURTHER "PROGRESS PAYMENTS" WERE MADE TO THE UNIVERSITY. AN AMENDMENT PROVIDING FOR PROGRESS PAYMENTS WAS DRAFTED IN MAY 1968. HOWEVER, IT WAS NOT EXECUTED SINCE WILLIAM B. STUKAS, WHO HAD FUNCTIONED AS THE UNIVERSITY'S PRINCIPAL INVESTIGATOR FOLLOWING PROFESSOR BEUSCHER'S DEATH, ADVISED THE GOVERNMENT OF HIS INTENTION TO SEEK NEW EMPLOYMENT, AND THE UNIVERSITY'S ABILITY TO PERFORM THE CONTRACT THEREFORE APPEARED TO BE DOUBTFUL.

SINCE PERFORMANCE OF THE CONTRACT BY THE UNIVERSITY APPEARED TO BE IN SERIOUS JEOPARDY DUE TO LACK OF COMPETENT STAFF, THE GOVERNMENT DEMURRED TO THE MAKING OF FURTHER PROGRESS PAYMENTS, AND IN AUGUST 1968 ASKED THE UNIVERSITY TO SUBMIT ITS VIEWS ON CONTINUED CONTRACT PERFORMANCE. THE FINAL REPORT REQUIRED BY THE CONTRACT WAS NOT RECEIVED ON THE CONTRACT DUE DATE OF SEPTEMBER 30, 1968, AND THE CONTRACT EXPIRED BY ITS OWN TERMS ON NOVEMBER 30, 1968, WITHOUT ANY UNIVERSITY ACTION BEING TAKEN. SUBSEQUENT EFFORTS BY THE GOVERNMENT TO RESOLVE THE PROBLEMS CREATED BY THE ABOVE- STATED EVENTS BY NEGOTIATION WERE UNFRUITFUL, APPARENTLY BECAUSE OF THE INABILITY OF THE UNIVERSITY TO MAKE ARRANGEMENTS FOR A SUITABLE REPLACEMENT AS PRINCIPAL INVESTIGATOR. THE PRESENT STATUS THUS IS THAT THE CONTRACT REMAINS UNFULFILLED TWO YEARS AFTER THE DATE FOR FINAL COMPLETION.

IN VIEW OF THE FOREGOING IT APPEARS THAT THE PARTIES TO THE CONTRACT CONTEMPLATED THAT PERFORMANCE OF THE CONTRACT WOULD BE EFFECTED OR SUPERVISED BY AN INDIVIDUAL POSSESSING CERTAIN KNOWLEDGE AND EXPERTISE IN THE AREA COVERED BY THE CONTRACT. THE CONTRACT SPECIFICALLY DESIGNATED PROFESSOR J. H. BEUSCHER AND WHEN HE DIED MR. STUKAS CONTINUED PERFORMANCE OF THE CONTRACT. HOWEVER, THE RECORD INDICATES THAT AFTER MR. STUKAS' DEPARTURE THE UNIVERSITY WAS UNABLE TO OBTAIN A SUITABLE REPLACEMENT. FROM THE CIRCUMSTANCES SURROUNDING THIS CASE, IT CAN ONLY BE ASSUMED THAT FROM THE BEGINNING THE PARTIES TO THE CONTRACT MUST HAVE KNOWN THAT THE CONTRACT COULD NOT BE PERFORMED UNLESS THE UNIVERSITY HAD IN ITS EMPLOY AN INDIVIDUAL POSSESSING CERTAIN KNOWLEDGE AND EXPERTISE, AND THAT THE CONTINUED EMPLOYMENT OF SUCH AN INDIVIDUAL WAS THE BASIS FOR THE PERFORMANCE OF THIS CONTRACT. THUS, IN THE ABSENCE OF A PROVISION IN THE CONTRACT SPECIFICALLY COVERING THIS SITUATION, THIS CONTRACT IS TO BE CONSTRUED AS SUBJECT TO AN IMPLIED CONDITION THAT THE PARTIES SHALL BE EXCUSED IN CASE, BEFORE BREACH, PERFORMANCE BECOMES IMPOSSIBLE OR THE PURPOSE OF THE CONTRACT IS FRUSTRATED, THROUGH NO FAULT OF EITHER PARTY, BY REASON OF THE UNIVERSITY BEING UNABLE TO EMPLOY SUCH AN INDIVIDUAL. SEE STRAUS V KAZEMELSAS, 124 A 234 (1924); 84 A. L. R. 2D 53 (NOTE). ADDITIONALLY, SECTION 460 OF THE RE-STATEMENT OF CONTRACTS STATES, IN PERTINENT PART:

"WHERE THE EXISTENCE OF A SPECIFIC THING OR PERSON IS, EITHER BY THE TERMS OF A BARGAIN OR IN THE CONTEMPLATION OF BOTH PARTIES, NECESSARY FOR THE PERFORMANCE OF A PROMISE IN THE BARGAIN, A DUTY TO PERFORM THE PROMISE *** (B) IS DISCHARGED IF THE THING OR PERSON SUBSEQUENTLY IS NOT IN EXISTENCE IN TIME FOR SEASONABLE PERFORMANCE, UNLESS A CONTRARY INTENTION IS MANIFESTED, OR THE CONTRIBUTING FAULT OF THE PROMISOR CAUSE THE NONEXISTENCE." ALSO, SEE SECTION 1334 OF CORBIN ON CONTRACTS WHEREIN IT STATES:

"A PROMISE MAY BECOME PHYSICALLY IMPOSSIBLE OF PERFORMANCE BY REASON OF THE DEATH OR DISABLING ILLNESS OF SOME PERSON WHOSE CONTINUED LIFE AND HEALTH ARE NECESSARY BY REASON OF THE CHARACTER OF THE PERFORMANCE TO BE RENDERED. IT IS NOW EVERYWHERE HELD THAT SUCH IMPOSSIBILITY DISCHARGES THE CONTRACTUAL DUTY OF THE PROMISOR. THE PERSON MAY BE EITHER THE PROMISOR OR THE PROMISEE, OR MAY BE BY SOME THIRD PERSON."

SEE GULF & SHIP ISLAND RAILROAD CO. V L. G. HORN, 100 S 381, 34 A. L. R. 814 (1924), WHERE THE NECESSARY INDIVIDUAL WAS AN EMPLOYEE OF THE PROMISOR WHO RETIRED AND THUS WAS UNABLE TO RENDER THE SERVICE CONTEMPLATED BY BOTH PARTIES TO THE CONTRACT. THUS, IT APPEARS THAT AS A RESULT OF THE UNIVERSITY'S INABILITY TO OBTAIN A SUITABLE REPLACEMENT FOR MR. STUKAS, BOTH PARTIES TO THE CONTRACT ARE EXCUSED FROM PERFORMANCE. MOREOVER, WE NOTE THAT THERE IS EVIDENCE OF RECORD THAT THE INFORMATION TO BE OBTAINED UNDER THIS CONTRACT HAS, FOR THE MOST PART, BEEN OBTAINED FROM OTHER SOURCES. CONSEQUENTLY, EVEN IF IT WERE POSSIBLE, PERFORMANCE OF THE CONTRACT WOULD NOT NECESSARILY BE DESIRABLE AT THE PRESENT TIME.

ACCORDING TO THE REGIONAL SOLICITOR, INFORMATION OBTAINED DURING CONFERENCES WITH MR. STUKAS, PLUS INFORMATION CONTAINED IN THE DETAILED WORK PLAN SUBMITTED BY MR. STUKAS, HAS A VALUE EQUAL TO THE $1,331.76 ALREADY PAID TO THE UNIVERSITY. IN VIEW OF THE FACT THAT THE GOVERNMENT HAS RECEIVED THE BENEFIT OF SERVICES IN THE AMOUNT OF $1,331.76, THIS OFFICE WILL INTERPOSE NO OBJECTION TO SUCH PAYMENT. HOWEVER, IN REGARD TO THE PAYMENT OF THE REMAINING VOUCHERS, TOTALING $15,174.49, WHICH HAVE BEEN SUBMITTED BY THE UNIVERSITY, PAYMENT IS NOT AUTHORIZED SINCE THE GOVERNMENT IS LIABLE ONLY TO THE EXTENT OF BENEFITS RECEIVED. 46 COMP. GEN. 348 (1966).

THE FILE FORWARDED WITH YOUR LETTER IS RETURNED.