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INC.: REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 19. THE CONTRACT WAS AWARDED BY THE BASE PROCUREMENT OFFICE. THE GOVERNMENT EXERCISED THE OPTION GIVEN TO IT UNDER THE TERMS OF THE AGREEMENT TO REDUCE THE QUANTITY OF SERVICE BY AN AMOUNT NOT TO EXCEED 50 PERCENT AND REQUESTED YOU TO SIGN A SUPPLEMENTAL AGREEMENT WHICH WOULD HAVE ELIMINATED FROM THE CONTRACT TERMS THE NECESSITY FOR THE MAKING OF THE ROUND TRIP DESCRIBED IN THE CONTRACT AS THE "NIGHT SHIFT.'. YOU WOULD HAVE RECOVERED ABOUT $7. THE MATTER WAS SUBSEQUENTLY MADE THE SUBJECT OF A REQUEST FOR RELIEF UNDER THE PROVISIONS OF PUBLIC LAW 85-804. 501.32 WAS INCURRED IN CONTRACT PERFORMANCE. YOU WERE ADVISED THAT THE REQUEST FOR RELIEF HAD BEEN DENIED AND THAT "THIS DECISION WAS RENDERED BY HEADQUARTERS AIR MATERIAL COMMAND 25 AUGUST 1960 UNDER THE AUTHORITY OF PUBLIC LAW 85 804.

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B-144089, OCT. 11, 1960

TO CACTUS TRANSIT COMPANY, INC.:

REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 19, 1960, WITH ENCLOSURES, REQUESTING OUR REVIEW AND FAVORABLE CONSIDERATION OF YOUR APPEAL FOR RELIEF ON ACCOUNT OF AN ALLEGED LOSS SUFFERED IN THE PERFORMANCE OF AIR FORCE CONTRACT NO. AF 02/601/-1608, DATED AUGUST 1, 1959.

THE CONTRACT WAS AWARDED BY THE BASE PROCUREMENT OFFICE, DAVIS MONTHAN AIR FORCE BASE, ARIZONA, AND PROVIDED FOR THE FURNISHING OF CLASS "A" TYPE II, PASSENGER BUS SERVICE, THREE ROUND TRIPS DAILY, FROM A DESIGNATED POINT IN TUCSON, ARIZONA, TO MT. LEMMON AIR FORCE STATION, ARIZONA, DURING THE PERIOD AUGUST 1, 1959, THROUGH JUNE 30, 1960. YOU AGREED TO FURNISH SUCH SERVICE AT A PRICE OF $74.80 PER ROUND TRIP. EFFECTIVE FEBRUARY 1, 1960, THE GOVERNMENT EXERCISED THE OPTION GIVEN TO IT UNDER THE TERMS OF THE AGREEMENT TO REDUCE THE QUANTITY OF SERVICE BY AN AMOUNT NOT TO EXCEED 50 PERCENT AND REQUESTED YOU TO SIGN A SUPPLEMENTAL AGREEMENT WHICH WOULD HAVE ELIMINATED FROM THE CONTRACT TERMS THE NECESSITY FOR THE MAKING OF THE ROUND TRIP DESCRIBED IN THE CONTRACT AS THE "NIGHT SHIFT.' YOU DID NOT QUESTION THE GOVERNMENT'S RIGHT TO REQUIRE THE ELIMINATION OF SUCH ROUND TRIP, EFFECTIVE FEBRUARY 1, 1960, BUT INDICATED THAT THE LOSS OF REVENUE WOULD CAUSE A SERIOUS FINANCIAL HARDSHIP. YOU REQUESTED THAT, DURING THE 33 1/3 PERCENT DELETION PERIOD, YOU BE ALLOWED A ROUND TRIP RATE OF $99.80. ON SUCH BASIS, YOU WOULD HAVE RECOVERED ABOUT $7,500 OF APPROXIMATELY $11,200 IN LOST GROSS REVENUE UNDER THE CONTRACT.

THE MATTER WAS SUBSEQUENTLY MADE THE SUBJECT OF A REQUEST FOR RELIEF UNDER THE PROVISIONS OF PUBLIC LAW 85-804, APPROVED AUGUST 28, 1958, 72 STAT. 972. YOU REQUESTED RELIEF TO THE EXTENT OF THE EXPENSES INCURRED IN THE PERFORMANCE OF THE CONTRACT, LESS PAYMENTS MADE FOR SERVICES RENDERED. IN THAT CONNECTION, YOU SUBMITTED A FINANCIAL STATEMENT PURPORTING TO SHOW THAT A LOSS OF $11,501.32 WAS INCURRED IN CONTRACT PERFORMANCE. BY LETTER DATED AUGUST 30, 1960, FROM CAPTAIN E. R. HUTCHINS, USAF, YOU WERE ADVISED THAT THE REQUEST FOR RELIEF HAD BEEN DENIED AND THAT "THIS DECISION WAS RENDERED BY HEADQUARTERS AIR MATERIAL COMMAND 25 AUGUST 1960 UNDER THE AUTHORITY OF PUBLIC LAW 85 804, AS IMPLEMENTED BY SECTION XVII OF THE ARMED SERVICES PROCUREMENT REGULATION.' FURTHER INFORMATION CONCERNING THE ACTION TAKEN WAS FURNISHED TO YOU IN A LETTER DATED SEPTEMBER 12, 1960,FROM THE CONTRACTING OFFICER, IN RESPONSE TO YOUR LETTER DATED SEPTEMBER 1, 1960, ADDRESSED TO THE SECRETARY OF THE AIR FORCE THROUGH THE CONTRACTING OFFICER.

OUR OFFICE IS NOT ONE OF THE GOVERNMENT AGENCIES AUTHORIZED BY PUBLIC LAW 85-804 AND RELATED EXECUTIVE ORDERS TO AMEND OR MODIFY CONTRACTS WITHOUT CONSIDERATION ON THE BASIS THAT SUCH ACTION WOULD FACILITATE THE NATIONAL DEFENSE. WE ARE REQUIRED TO APPLY THE GENERAL RULES 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 LESS, ARE NOT SUFFICIENT TO ENTITLE A CONTRACTOR TO AN ADJUSTMENT IN THE CONTRACT PRICE. SEE J. J. PREIS AND CO. V. UNITED STATES, 58 CT.CL. 81, 86; VULCANITE CEMENT CO. V. UNITED STATES, 74 CT.CL. 692, 705; CHOUTEAU V. UNITED STATES, 95 U.S. 61, 68; AND DAY V. UNITED STATES, 245 U.S. 159, 161.

ACCORDINGLY, THERE IS NO LEGAL BASIS UPON WHICH WE WOULD BE WARRANTED IN GRANTING ANY RELIEF TO YOUR COMPANY WITH RESPECT TO THE EXERCISE OF THE GOVERNMENT'S OPTION TO REDUCE THE NUMBER OF THE REQUIRED ROUND TRIPS PER DAY UNDER CONTRACT NO. AF 02/601/-1608, DURING THE LAST FIVE MONTHS OF THE CONTRACT PERIOD.

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