B-183311, APR 2, 1975

B-183311, APR 2, 1975

1. CONTRACTOR CLAIMING PAYMENT FOR INCREASED UTILITY PASS-THROUGH CHARGES WHO HAS BEEN DENIED EXTRAORDINARY CONTRACTUAL RELIEF UNDER PUBLIC LAW 85-804 IS NOT ENTITLED TO REVIEW OF CLAIM BY GAO SINCE THIS OFFICE DOES NOT HAVE JURISDICTION TO CONSIDER SUCH A CLAIM. 2. IN ABSENCE OF ESCALATION CLAUSE IN CONTRACT, NO BASIS EXISTS TO COMPENSATE CONTRACTOR FOR INCREASED ELECTRIC UTILITY FUEL ADJUSTMENT CHARGES BECAUSE VALID CONTRACTS MUST BE ENFORCED AS WRITTEN.

LOOP COLD STORAGE COMPANY:

THIS MATTER CONCERNS A CLAIM FOR PRICE ADJUSTMENT BY LOOP COLD STORAGE COMPANY (LOOP) UNDER CONTRACT NO. DSA 135-72-C-0254 WITH THE DEFENSE SUPPLY AGENCY (DSA).

LOOP STATES THAT SINCE THE SUMMER OF 1973 THE SAN ANTONIO CITY PUBLIC SERVICE BOARD HAS BEEN CHARGING ITS CUSTOMERS FOR INCREASED FUEL COSTS INCURRED IN THE GENERATION OF ELECTRICITY. ACCORDINGLY, BY FEBRUARY 1974, LOOP BEGAN CHARGING ITS CUSTOMERS A PRO RATA SHARE OF THIS FUEL ADJUSTMENT CHARGE. LOOP INDICATES THAT ALL OF ITS CUSTOMERS EXCEPT DSA HAVE PAID THEIR SHARE OF THE INCREASED COSTS. IT IS LOOP'S POSITION THAT AS A COMBINED RESULT OF INFLATION AND THESE UNFORESEEN, "TOTALLY UNPLANNED FOR, UNSCHEDULED AND DISASTROUS" ELECTRICAL PASS-THROUGH CHARGES, ITS ANTICIPATED PROFIT HAS BEEN TURNED INTO A LOSS. ACCORDINGLY, IT SEEKS $12,055.56, REPRESENTING DSA'S PRO RATA SHARE OF THE PASS-THROUGH CHARGES FOR THE MONTHS FEBRUARY THROUGH DECEMBER 1974.

PUBLIC LAW 85-804 PROVIDES THAT THE PRESIDENT MAY AUTHORIZE ANY DEPARTMENT OR AGENCY OF THE GOVERNMENT WHICH EXERCISES FUNCTIONS IN CONNECTION WITH THE NATIONAL DEFENSE, TO ENTER INTO CONTRACTS OR INTO AMENDMENTS OR MODIFICATIONS OF CONTRACTS WITHOUT REGARD TO OTHER PROVISIONS OF LAW RELATING TO THE MAKING, PERFORMANCE, AMENDMENT, OR MODIFICATION OF CONTRACTS, WHENEVER HE DEEMS THAT SUCH ACTION WOULD FACILITATE THE NATIONAL DEFENSE. THIS ACT HAS BEEN IMPLEMENTED BY EXECUTIVE ORDER 10789, OF NOVEMBER 14, 1958, AS AMENDED BY EXECUTIVE ORDER 11051, DATED SEPTEMBER 27, 1962, WHICH GRANTS AUTHORITY TO VARIOUS GOVERNMENT AGENCIES, TO USE THE ACT.

THE RECORD INDICATES THAT PRIOR TO COMING TO THIS OFFICE FOR RELIEF LOOP SOUGHT TO AMEND OR MODIFY ITS EXISTING CONTRACT WITH DSA RETROACTIVE TO MAY 1, 1974, PURSUANT TO ARMED SERVICES PROCUREMENT REGULATION (ASPR) SEC. 17-204.2(B) (1974 ED.), WHICH PROVIDES FOR EXTRAORDINARY CONTRACTUAL RELIEF WHERE A CONTRACTOR SUFFERS A LOSS ON A DEFENSE CONTRACT AS A RESULT OF GOVERNMENT ACTION. IT IS NOT CLEAR FROM THE RECORD BEFORE US WHETHER LOOP HAS EXHAUSTED THE ADMINISTRATIVE REMEDIES AVAILABLE TO IT UNDER PUBLIC LAW 85-804.

IN ANY EVENT, OUR OFFICE IS NOT ONE OF THE GOVERNMENT AGENCIES AUTHORIZED BY PUBLIC LAW 85-804 AND IMPLEMENTING EXECUTIVE ORDERS TO GRANT EXTRAORDINARY CONTRACTUAL RELIEF TO FACILITATE THE NATIONAL DEFENSE. ADDITIONALLY, DENIALS OF CLAIMS BY GOVERNMENT AGENCIES PURSUANT TO THE AUTHORITY OF PUBLIC LAW 85-804 ARE NOT SUBJECT TO REVIEW BY OUR OFFICE SO FAR AS ENTITLEMENT TO THE RELIEF AUTHORIZED BY THE STATUTE IS CONCERNED. B-157845, DECEMBER 10, 1965. THEREFORE, THIS OFFICE DOES NOT HAVE JURISDICTION OVER LOOP'S REQUEST FOR RELIEF UNDER PUBLIC LAW 85-804.

WHILE WE RECOGNIZE THAT LOOP MIGHT WELL SUFFER A FINANCIAL HARDSHIP AS A RESULT OF RISING COSTS, THE COURTS HAVE HELD THAT VALID CONTRACTS ARE TO BE ENFORCED AND PERFORMED AS WRITTEN, AND THE FACT THAT UNFORESEEN DIFFICULTIES ARE ENCOUNTERED WHICH RENDER PERFORMANCE MORE BURDENSOME OR LESS PROFITABLE, OR EVEN OCCASIONALLY A PECUNIARY LOSS, WILL NEITHER EXCUSE A PARTY FROM PERFORMANCE OF AN ABSOLUTE AND UNQUALIFIED UNDERTAKING TO DO A THING THAT IS POSSIBLE AND LAWFUL, NOR ENTITLE HIM TO ADDITIONAL COMPENSATION. SEE SIMPSON V. UNITED STATES, 172 U.S. 372 (1899); DAY V. UNITED STATES, 245 U.S. 159 (1917); COLUMBUS RAILWAY, POWER AND LIGHT COMPANY V. COLUMBUS, 249 U.S. 399, 412 (1919); AND RICHARDS & ASSOCIATES V. UNITED STATES, 177 CT. CL. 1037, 1052 (1966).

IN VIEW OF THE FOREGOING, THERE IS NO LEGAL AUTHORITY FOR OUR OFFICE TO GRANT LOOP THE RELIEF REQUESTED.