B-33469, APRIL 21, 1943, 22 COMP. GEN. 982

B-33469, APRIL 21, 1943, 22 COMP. GEN. 982

CONTRACTS - IMPOSSIBILITY OF PERFORMANCE BECAUSE OF CONTRACTOR'S INTERNMENT AS ENEMY ALIEN - EXCESS COST LIABILITY WHERE, PURSUANT TO THE ENEMY ALIEN ACT OF APRIL 16, 1918, THE GOVERNMENT INTERNED A CONTRACTOR OF JAPANESE NATIONALITY, NOT BECAUSE OF ANY PARTICULAR ACTS COMMITTED BY HIM AS AN INDIVIDUAL BUT BECAUSE SUCH ACTION AS TO JAPANESE ALIENS WAS DEEMED DESIRABLE AS A PRECAUTIONARY MEASURE IN THE PROSECUTION OF THE WAR, AND THEREBY PLACED HIM IN A POSITION WHERE HE WAS UNABLE EITHER TO DIRECT OR TO CARRY OUT PERSONALLY THE PERFORMANCE OF THE CONTRACT WORK, THERE IS NO LEGAL BASIS FOR HOLDING THE CONTRACTOR RESPONSIBLE FOR ANY EXCESS COSTS INCURRED BY THE GOVERNMENT IN PROCURING THE CONTRACT SERVICES ELSEWHERE AS A RESULT OF HIS DEFAULT.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF THE INTERIOR, APRIL 21, 1943:

I HAVE YOUR LETTER OF MARCH 27, 1943, AS FOLLOWS:

SUPERINTENDENT CLAUDE M. HIRST, UNITED STATES INDIAN SERVICE, JUNEAU, ALASKA, HAS ASKED IN HIS LETTER DATED APRIL 15, 1942, TO BE ADVISED AS TO WHETHER A DEFAULTING CONTRACTOR IS RESPONSIBLE FOR EXCESS COSTS IN THE FOLLOWING CIRCUMSTANCES:

JULY 1, 1941, THE OFFICE OF INDIAN AFFAIRS ENTERED INTO A CONTRACT NO. I- 141-IND-1947, WITH W. H. FUKUYAMA, DOING BUSINESS UNDER THE TRADE NAME OF JUNEAU LAUNDRY, FOR CERTAIN LAUNDRY SERVICES TO BE PERFORMED DURING THE FISCAL YEAR JULY 1, 1941 TO JUNE 30, 1942. ON OR ABOUT JANUARY 1, 1942, MR. FUKUYAMA WAS INTERNED BY THE UNITED STATES GOVERNMENT UNDER THE ENEMY ALIEN ACT. HIS WIFE, MRS. MUNE FUKUYAMA CONTINUED TO PERFORM THE SERVICES CONTRACTED FOR UNTIL MARCH 31, 1942, WHEN, ACCORDING TO THE INDIAN SERVICE SUPERINTENDENT THE JUNEAU LAUNDRY HAD TO DISCONTINUE BUSINESS BECAUSE THE UNITED STATES GOVERNMENT HAD DECREED THAT ALL JAPANESE MUST BE EVACUATED FROM THE TERRITORY OF ALASKA AS OF APRIL 20, 1942.

BIDS WERE INVITED FOR THE LAUNDRY SERVICES IN QUESTION DURING THE BALANCE OF THE FISCAL YEAR AND CONTRACT NO. I-141-IND-2112, WAS ENTERED INTO FOR SUCH PERIOD WITH THE LOW BIDDER, THE ALASKA LAUNDRY. THE SUPERINTENDENT ESTIMATES THAT THE EXCESS COSTS FOR THE LAUNDRY SERVICES UNDER THE NEW CONTRACT WILL BE ABOUT $50, AND HE IS WITHHOLDING PAYMENT ON THE LAST CLAIM SUBMITTED BY THE JUNEAU LAUNDRY, UNTIL THE QUESTION OF RESPONSIBILITY FOR THE EXCESS COSTS IS DETERMINED.

IN A LETTER DATED FEBRUARY 24, 1943, THE TREASURY DEPARTMENT AUTHORIZED THIS DEPARTMENT TO MAKE PAYMENT BY A CHECK IN FAVOR OF W. H. FUKUYAMA, INTO HIS BLOCKED ACCOUNT WITH THE FIRST NATIONAL BANK, JUNEAU, ALASKA.

IN VIEW OF THE FOREGOING, SHOULD MR. FUKUYAMA BE HELD RESPONSIBLE FOR ANY EXCESS COSTS?

WITH RESPECT TO DELAYS AND DAMAGES, CONTRACT NO. I-141-IND-1947 PROVIDED IN PERTINENT PART AS FOLLOWS:

IF THE CONTRACTOR REFUSES OR FAILS TO MAKE DELIVERIES OF THE MATERIALS OR SUPPLIES WITHIN THE TIME SPECIFIED, OR ANY EXTENSION THEREOF, THE GOVERNMENT MAY BY WRITTEN NOTICE TERMINATE THE RIGHT OF THE CONTRACTOR TO PROCEED WITH DELIVERIES OR SUCH PART OR PARTS THEREOF AS TO WHICH THERE HAS BEEN DELAY. IN SUCH EVENT, THE GOVERNMENT MAY PURCHASE SIMILAR MATERIALS OR SUPPLIES IN THE OPEN MARKET OR SECURE THE MANUFACTURE AND DELIVERY OF THE MATERIALS AND SUPPLIES BY CONTRACT OR OTHERWISE, AND THE CONTRACTOR AND HIS SURETIES (IF ANY) SHALL BE LIABLE TO THE GOVERNMENT FOR ANY EXCESS COST OCCASIONED THE GOVERNMENT THEREBY: PROVIDED, THAT THE CONTRACTOR SHALL NOT BE CHARGED WITH ANY EXCESS COST OCCASIONED THE GOVERNMENT BY THE PURCHASE OF MATERIALS OR SUPPLIES IN THE OPEN MARKET OR UNDER OTHER CONTRACTS WHEN THE DELAY OF THE CONTRACTOR IN MAKING DELIVERIES IS DUE TO UNFORESEEABLE CAUSES BEYOND THE CONTROL AND WITHOUT THE FAULT OR NEGLIGENCE OF THE CONTRACTOR, INCLUDING, BUT NOT RESTRICTED TO, ACTS OF GOD OR OF THE PUBLIC ENEMY, ACTS OF THE GOVERNMENT, FIRES, FLOODS, EPIDEMICS, QUARANTINE RESTRICTIONS, STRIKES, FREIGHT EMBARGOES, UNUSUALLY SEVERE WEATHER, AND DELAYS OF A SUBCONTRACTOR DUE TO SUCH CAUSES UNLESS THE CONTRACTING OFFICER SHALL DETERMINE THAT THE MATERIALS OR SUPPLIES TO BE FURNISHED UNDER THE SUBCONTRACT ARE PROCURABLE IN THE OPEN MARKET, IF THE CONTRACTOR SHALL NOTIFY THE CONTRACTING OFFICER IN WRITING OF THE CAUSE OF ANY SUCH DELAY, WITHIN 10 DAYS FROM THE BEGINNING THEREOF, OR WITHIN SUCH FURTHER PERIOD AS THE CONTRACTING OFFICER SHALL, WITH THE APPROVAL OF THE HEAD OF THE DEPARTMENT OR HIS DULY AUTHORIZED REPRESENTATIVE, PRIOR TO THE DATE OF FINAL SETTLEMENT OF THE CONTRACT, GRANT FOR THE GIVING OF SUCH NOTICE. THE CONTRACTING OFFICER SHALL THEN ASCERTAIN THE FACTS AND EXTENT OF DELAY, AND HIS FINDINGS OF FACT THEREON SHALL BE FINAL AND CONCLUSIVE ON THE PARTIES HERETO, SUBJECT ONLY TO APPEAL WITHIN 30 DAYS BY THE CONTRACTOR TO THE HEAD OF THE DEPARTMENT CONCERNED OR HIS DULY AUTHORIZED REPRESENTATIVE, WHOSE DECISION ON SUCH APPEAL AS TO THE FACTS OF DELAY SHALL BE FINAL AND CONCLUSIVE, ON THE PARTIES HERETO. * * *

ASIDE FROM THE FACT THAT THE CONTRACT SPECIFICALLY PROVIDES THAT THE CONTRACTOR IS NOT TO BE CHARGED WITH ANY EXCESS COST OCCASIONED THE GOVERNMENT BY PROCURING THE SERVICES ELSEWHERE WHEN THE CONTRACTOR'S FAILURE TO FURNISH SUCH SERVICES IS DUE TO CERTAIN SPECIFIED CAUSES, INCLUDING ACTS OF THE GOVERNMENT, IT IS A FUNDAMENTAL RULE OF LAW THAT PERFORMANCE OF A CONTRACT IS EXCUSED WHEN IT IS PREVENTED OR RENDERED IMPOSSIBLE BY ACTS OF THE OTHER PARTY. 17 C.J.S. 966-968.

UNDER THE PROVISIONS OF THE ALIEN ENEMY ACT OF APRIL 16, 1918, 40 STAT. 531, 50 U.S.C. 21, THE PRESIDENT WAS AUTHORIZED TO REGULATE THE CONDUCT OF ALIEN ENEMIES RESIDING WITHIN THE UNITED STATES AND SAID ALIEN ENEMIES WERE TO BE CONSIDERED AS SUBJECT TO APPREHENSION. PURSUANT THERETO, THE PRESIDENT BY PROCLAMATION DATED DECEMBER 8, 1941, OUTLINED THE CONDUCT TO BE OBSERVED BY JAPANESE ALIENS, AND PROVIDED FOR THE APPREHENSION AND CONFINEMENT BY THE ATTORNEY GENERAL OR SECRETARY OF WAR OF ALIEN ENEMIES DEEMED DANGEROUS TO THE PUBLIC SAFETY OF THE UNITED STATES. ALSO, BY EXECUTIVE ORDER 9102, DATED MARCH 18, 1942, THERE WAS ESTABLISHED THE WAR RELOCATION AUTHORITY WHICH WAS CHARGED WITH THE DUTY OF FORMULATING AND EFFECTUATING A PROGRAM FOR THE REMOVAL FROM CERTAIN DESIGNATED AREAS OF SUCH PERSONS OR CLASSES OF PERSONS AS THE APPROPRIATE MILITARY COMMANDER MIGHT DETERMINE TO BE NECESSARY OR DESIRABLE FOR THE SUCCESSFUL PROSECUTION OF THE WAR.

IT IS ASSUMED THAT THE ACTION OF THE GOVERNMENT IN INTERNING THE CONTRACTOR, MR. FUKUYAMA, AS AN ALIEN ENEMY AND IN EVACUATING MRS. FUKUYAMA FROM THE TERRITORY OF ALASKA WAS NOT TAKEN BECAUSE OF ANY PARTICULAR ACTS COMMITTED BY THEM AS INDIVIDUALS BUT RATHER BECAUSE SUCH ACTION AS TO JAPANESE ALIENS OR PERSONS CLOSELY CONNECTED WITH THEM WAS DEEMED DESIRABLE AS A PRECAUTIONARY MEASURE IN THE PROSECUTION OF THE WAR. WHILE IT DOES NOT APPEAR WHETHER THE GOVERNMENT HAS ASSUMED CONTROL OF THE PROPERTY OF THE CONTRACTOR AND WHILE IT IS NOT SHOWN WHETHER THE CONTRACT REQUIRED THE PERSONAL SERVICES OF THE CONTRACTOR, NEVERTHELESS THE GOVERNMENT HAS PLACED THE CONTRACTOR IN A POSITION WHERE HE IS UNABLE EITHER TO DIRECT, OR TO CARRY OUT PERSONALLY, THE PERFORMANCE OF THE CONTRACT WORK. HENCE, SINCE THE GOVERNMENT HAS PREVENTED THE CONTRACTOR FROM PERFORMING HIS CONTRACT IT CANNOT INSIST ON PERFORMANCE BY HIM OR REQUIRE HIM TO RESPOND IN DAMAGES FOR NONPERFORMANCE. SEE IN THIS CONNECTION L.R.A. 1916 F. 66, ET SEQ.

ACCORDINGLY, YOU ARE ADVISED THAT THE FACTS OF RECORD AFFORD NO LEGAL BASIS FOR HOLDING THE CONTRACTOR RESPONSIBLE FOR ANY EXCESS COSTS INCURRED BY THE GOVERNMENT IN THE MATTER.