B-62314, DECEMBER 19, 1946, 26 COMP. GEN. 423

B-62314, DECEMBER 19, 1946, 26 COMP. GEN. 423

CONTRACTS - PRICE-FIXING ORDERS - CONTRACT PRICE ADJUSTMENT INASMUCH AS GASOLINE WAS NOT RETURNED TO THE PRICE-FIXING CONTROL OF THE OFFICE OF PRICE ADMINISTRATION AFTER JULY 25, 1946, THE DATE OF THE EXTENSION OF THE EMERGENCY PRICE CONTROL ACT OF 1942 WHICH EXPIRED ON JUNE 30, 1946, SO THAT SUCH OFFICE COULD NOT AUTHORIZE A PRICE ADJUSTMENT, A CONTRACTOR FURNISHING GASOLINE UNDER A CONTRACT PROVIDING A FIXED PRICE WHICH WOULD BE SUBJECT TO ADJUSTMENT IN ACCORDANCE WITH ANY INCREASE OR DECREASE IN THE MAXIMUM PRICE ESTABLISHED BY THAT OFFICE, IS NOT ENTITLED, BECAUSE OF A MARKET PRICE ADVANCE, TO ANY AMOUNT IN EXCESS OF THE FIXED PRICE.

COMPTROLLER GENERAL WARREN TO P. F. VON THADEN, DEPARTMENT OF AGRICULTURE, DECEMBER 19, 1946:

REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 27, 1946, IN WHICH YOU REQUEST A DECISION WHETHER PAYMENT IS AUTHORIZED ON BUREAU VOUCHERS NOS. 7464 AND 7465, STATED IN FAVOR OF SMITH MOTOR COMPANY, IN THE AMOUNTS OF $4.36 AND $3.51, RESPECTIVELY, CLAIMED UNDER CONTRACT NO. ASC/NM-O/-6094, DATED AUGUST 2, 1946, FOR GASOLINE FURNISHED THE SOIL CONSERVATION SERVICE, DEPARTMENT OF AGRICULTURE, ALBUQUERQUE, NEW MEXICO.

UNDER THE TERMS OF THE CONTRACT THE CONTRACTOR AGREED TO FURNISH STORAGE, SERVICES, INSPECTION, OVERHAUL AND REPAIRS, AND GASOLINE AND OIL FOR GOVERNMENT-OWNED AUTOMOTIVE VEHICLES FOR A PERIOD OF ONE YEAR FROM THE DATE OF AWARD AT THE PRICES SPECIFIED THEREIN. THE CONTRACT CONTAINED A PROVISION AS FOLLOWS:

THE MAXIMUM PRICE STIPULATED SHALL BE SUBJECT TO INCREASE OR DECREASE BY THE AMOUNT OF ANY INCREASE OR DECREASE IN THE APPLICABLE MAXIMUM PRICE ESTABLISHED BY THE OFFICE OF PRICE ADMINISTRATION BY ADDING TO OR DEDUCTING FROM THE QUOTED PRICE, IN EACH CASE THE DIFFERENCE BETWEEN THE APPLICABLE MAXIMUM PRICE ON THE DATE OF THE PARTICULAR DELIVERY.

WHILE THE CONTRACT PROVIDED FOR THE PAYMENT OF A MAXIMUM PRICE, INCLUDING FEDERAL TAX, OF $0.12 PER GALLON FOR GASOLINE FURNISHED THEREUNDER, THE RECORD INDICATES THAT THE CONTRACTOR FURNISHED 233.9 GALLONS OF GASOLINE DURING THE MONTH OF AUGUST, 1946, AND 290.6 GALLONS DURING THE MONTH OF SEPTEMBER, 1946, FOR WHICH IT SUBMITTED INVOICES AT THE RATE OF $0.13 1/2 PER GALLON, APPARENTLY BECAUSE OF THE ADVANCE IN THE MARKET PRICE OF PETROLEUM PRODUCTS AFTER THE CONTRACT HAD BEEN ENTERED INTO. HOWEVER, IT APPEARS THAT IN MAKING PAYMENT FOR SAID GASOLINE, THE SOIL CONSERVATION SERVICE, DEPARTMENT OF AGRICULTURE, DEDUCTED ON BUREAU VOUCHERS NOS. 4684 AND 6603 THE AMOUNTS OF $3.51 AND $4.36, RESPECTIVELY, REPRESENTING THE EXCESS OF THE PRICES SHOWN ON THE CONTRACTOR'S INVOICES OVER THE PRICES STIPULATED IN THE CONTRACT, AND THE CONTRACTOR NOW CLAIMS THAT IT IS ENTITLED TO A REFUND OF SAID AMOUNTS.

IT IS STATED IN YOUR LETTER THAT, AT THE TIME OF THE ISSUANCE OF THE INVITATION FOR BIDS AND THE AWARD OF THE CONTRACT, IT WAS BELIEVED THAT GASOLINE WOULD BE RETURNED TO THE CONTROL OF THE OFFICE OF PRICE ADMINISTRATION AND YOUR STATEMENT TO THAT EFFECT IS SUBSTANTIATED BY THE CONTRACTING OFFICER.

THE ACT OF JULY 25, 1946, PUBLIC LAW NO. 548, 79TH CONGRESS, 60 STAT. 665 --- EXTENDING THE EMERGENCY PRICE CONTROL ACT OF 1942, 56 STAT. 23, WHICH EXPIRED ON JUNE 30, 1946--- PROVIDES IN PARAGRAPH (4) OF SUBSECTION (D) OF SECTION A THAT:

(4) NOTHING CONTAINED IN THIS ACT SHALL BE CONSTRUED TO AUTHORIZE THE ADMINISTRATOR TO IMPOSE OR MAINTAIN PRICE CONTROLS WITH RESPECT TO PETROLEUM OR PETROLEUM PRODUCTS PROCESSED OR MANUFACTURED IN WHOLE OR SUBSTANTIAL PART FROM PETROLEUM, EXCEPT THAT, AFTER AUGUST 20, 1946, MAXIMUM PRICES WITH RESPECT THERETO MAY BE REESTABLISHED PURSUANT TO THE PROVISIONS OF PARAGRAPH (3) OF THIS SUBSECTION (D), BUT ONLY UNDER THE STANDARDS PRESCRIBED IN PARAGRAPH (8) (C) OF SUBSECTION (E).

WHILE IT WAS PROVIDED IN SAID ACT, THAT AFTER AUGUST 20, 1946, THE MAXIMUM PRICES ON PETROLEUM OR PRODUCTS MANUFACTURED IN WHOLE OR IN PART THEREFROM MIGHT BE REESTABLISHED IN ACCORDANCE WITH THE PROCEDURE PRESCRIBED IN THE ACT, GASOLINE WAS NOT RETURNED TO THE CONTROL OF THE OFFICE OF PRICE ADMINISTRATION.

IT IS A FUNDAMENTAL RULE 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 THAN CONTEMPLATED, OR EVEN OCCASION A PECUNIARY LOSS, WILL NEITHER EXCUSE A PARTY FROM THE PERFORMANCE OF AN ABSOLUTE AND UNQUALIFIED UNDERTAKING TO DO A THING THAT IS POSSIBLE AND LAWFUL, NOR ENTITLE HIM TO ADDITIONAL COMPENSATION, UNLESS OTHERWISE SPECIFICALLY PROVIDED IN THE CONTRACT. COLUMBUS RAILWAY, POWER AND LIGHT COMPANY V. COLUMBUS, 249 U.S. 399; BLAUNER CONSTRUCTION COMPANY V. UNITED STATES, 94 C.1CLS. 503; PENN BRIDGE COMPANY V. UNITED STATES, 59 C.1CLS. 892. ALTHOUGH THE EMERGENCY PRICE CONTROL ACT OF 1942, CREATING THE OFFICE OF PRICE ADMINISTRATION, EMPOWERED THE PRICE ADMINISTRATOR TO ESTABLISH MAXIMUM PRICE FOR VARIOUS COMMODITIES AND PROVIDED PENALTIES FOR THE SALE OF SUCH COMMODITIES AT HIGHER PRICES, THE SAID ACT DID NOT PROHIBIT THE SALE OF COMMODITIES AT PRICES LOWER THAN THE MAXIMUM NOR DID IT PROVIDE FOR THE RESCISSION OR AMENDMENT OF CONTRACTS IN THE EVENT OF THE INCREASE OR REMOVAL OF THE MAXIMUM PRICES ESTABLISHED BY THE ADMINISTRATOR. HENCE, THE MERE FACT THAT GASOLINE WAS NOT RETURNED TO THE CONTROL OF THE OFFICE OF PRICE ADMINISTRATION MAY HAVE OPERATED TO THE CONTRACTOR'S DISADVANTAGE DID NOT VEST ANY ADDITIONAL RIGHTS IN IT AS A CONTRACTOR WITH THE GOVERNMENT. INCREASED COST OF PERFORMANCE, WHETHER FORESEEN OR UNFORESEEN, IS ONE OF THE HAZARDS OF A CONTRACT WHICH NEITHER EXCUSES NONPERFORMANCE NOR ENTITLES THE CONTRACTOR TO ADDITIONAL COMPENSATION. AS WAS OBSERVED BY THE COURT OF CLAIMS OF THE UNITED STATES IN THE CASE OF SATTERLEE ADMX. V. UNITED STATES, 30 C.1CLS. 31," * * * IF A PARTY ENGAGES TO DO SOMETHING AND FAILS TO PROVIDE AGAINST CONTINGENCIES, THE NONPERFORMANCE IS NOT EXCUSED BY A CONTINGENCY NOT FORESEEN AND WHICH BY ITS CONSEQUENCE INCREASES THE COST AND DIFFICULTY OF PERFORMANCE.' IN THIS CONNECTION, IT IS TO BE NOTED THAT THE CONTRACT HERE INVOLVED CONTAINS NO EXPRESS PROVISION FOR AN ADJUSTMENT OF THE PRICES SPECIFIED THEREIN IN THE EVENT MAXIMUM PRICES SHOULD NOT BE REESTABLISHED AND, IN VIEW THEREOF, THERE IS NO AUTHORITY IN THE ADMINISTRATIVE OFFICIALS OF THE GOVERNMENT TO EFFECTUATE PAYMENT FOR THE GASOLINE CONTRACTED FOR IN EXCESS OF THE CONTRACT PRICES, EVEN THOUGH THE CONTRACT PROVIDED FOR AN INCREASE OR DECREASE IN THE MAXIMUM PRICES STIPULATED IN ACCORDANCE WITH ANY INCREASE OR DECREASE THEREIN ESTABLISHED BY THE OFFICE OF PRICE ADMINISTRATION SINCE THE OFFICE OF PRICE ADMINISTRATION AUTHORIZED NO ADJUSTMENT IN SUCH PRICES.

ACCORDINGLY, YOU ARE ADVISED THAT THE VOUCHERS WHICH, TOGETHER WITH SUPPORTING PAPERS, ARE RETURNED HEREWITH, MAY NOT BE CERTIFIED FOR PAYMENT.