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B-143250, NOV. 21, 1961

B-143250 Nov 21, 1961
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MONTEREY CAMPBELL: REFERENCE IS MADE TO YOUR LETTER DATED FEBRUARY 5. A CLAIM WAS PRESENTED FOR $29. 531.53 WAS PRESENTED TO THE NAVY WITH A VIEW TOWARD RECOVERY OF ALL COSTS ALLEGEDLY INCURRED IN THE PERFORMANCE OF THE CONTRACT. WERE STILL IN EFFECT. THE CLAIM WAS CONSIDERED UNDER SUCCESSOR LEGISLATION. THE FOUR MAJOR ELEMENTS OF THE CLAIM ARE AS FOLLOWS: (1) THAT THE CONTRACTOR MADE A MISTAKE IN BID OF APPROXIMATELY $27. 955.17 WERE INCURRED AS THE RESULT OF FOUR WORK STOPPAGES. (3) THAT THE CONTRACT DRAWINGS WERE INADEQUATE AND. (4) THAT THE COST OF NECESSARY MATERIALS INCREASED DURING THE LIFE OF THE CONTRACT AND THERE WERE DELAYS IN OBTAINING MATERIALS WHICH WERE NOT DUE TO ANY FAULT ON THE PART OF THE CONTRACTOR.

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B-143250, NOV. 21, 1961

TO MR. MONTEREY CAMPBELL:

REFERENCE IS MADE TO YOUR LETTER DATED FEBRUARY 5, 1960, AND TO SUBSEQUENT LETTERS AND CONFERENCES CONCERNING A CLAIM OF THE WINDER AIRCRAFT CORPORATION OF FLORIDA AND ITS ASSIGNEE, THE SEMINOLE BANK OF TAMPA, TAMPA, FLORIDA, FOR $50,531.53, UNDER NAVY CONTRACT NO. NORD 17005, AWARDED ON MARCH 28, 1956, TO THE WINDER AIRCRAFT CORPORATION OF FLORIDA FOR THE PRODUCTION AND DELIVERY OF 55 STEEL QUADPAK MISSILE CRADLES AND 115 STEEL BOOSTER MISSILE CRADLES AT UNIT PRICES OF $110.31 AND $96.40, RESPECTIVELY, OR FOR A TOTAL CONTRACT PRICE OF $17,153.05.

ON SEPTEMBER 28, 1956, THE CONTRACTOR REQUESTED THAT THE CONTRACT PRICE BE INCREASED BY THE AMOUNT OF $27,260.65 ON ACCOUNT OF AN ALLEGED ERROR IN BID, INVOLVING ESTIMATES AS TO THE NUMBER OF LABOR HOURS WHICH WOULD BE PERFORMED ON UNITS OF THE TWO TYPES OF CRADLES.

ON OCTOBER 29, 1956, A CLAIM WAS PRESENTED FOR $29,215.82 IN THE FORM OF AN APPLICATION FOR RELIEF UNDER THE PROVISIONS OF TITLE II OF THE FIRST WAR POWERS ACT, 1941, AS AMENDED, WHICH CLAIM COVERED THE ALLEGED BIDDING MISTAKE OF $27,260.65, PLUS $1,955.17 AS INCREASED COSTS INCURRED AS THE RESULT OF INSPECTION AND OTHER DIFFICULTIES. ON MARCH 8, 1957, AN AMENDED CLAIM FOR $50,531.53 WAS PRESENTED TO THE NAVY WITH A VIEW TOWARD RECOVERY OF ALL COSTS ALLEGEDLY INCURRED IN THE PERFORMANCE OF THE CONTRACT, PLUS A PROFIT ALLOWANCE OF 10 PERCENT. THE CONTRACTING OFFICER REJECTED THE CLAIM BY LETTER DATED AUGUST 2, 1957, INDICATING THAT IN HIS OPINION THE CLAIM COULD NOT BE ALLOWED EVEN IF THE PROVISIONS OF TITLE II OF THE FIRST WAR POWERS ACT, 1941, AS AMENDED AND EXTENDED FROM TIME TO TIME, WERE STILL IN EFFECT. ON MAY 27, 1958, YOU REQUESTED A REVIEW OF THE CLAIM ON BEHALF OF THE CONTRACTOR AND ITS ASSIGNEE, THE SEMINOLE BANK OF TAMPA, AND THE CLAIM WAS CONSIDERED UNDER SUCCESSOR LEGISLATION, PUBLIC LAW 85-804, APPROVED AUGUST 28, 1958, ENTITLED ,AN ACT TO AUTHORIZE THE MAKING, AMENDMENT, AND MODIFICATION OF CONTRACTS TO FACILITATE THE NATIONAL DEFENSE.' THE CONTRACTING OFFICER AGAIN REJECTED THE CLAIM BY LETTER DATED SEPTEMBER 2, 1959.

THE FOUR MAJOR ELEMENTS OF THE CLAIM ARE AS FOLLOWS: (1) THAT THE CONTRACTOR MADE A MISTAKE IN BID OF APPROXIMATELY $27,000; (2) THAT DIRECT COSTS OF $1,955.17 WERE INCURRED AS THE RESULT OF FOUR WORK STOPPAGES, THE SPECIAL TESTING OF ONE OF THE QUADPAK CRADLES AND A NECESSITY TO QUALIFY WELDERS; (3) THAT THE CONTRACT DRAWINGS WERE INADEQUATE AND, AS SUCH, CAUSED ADDITIONAL COSTS AND DELAYS IN PRODUCTION; AND (4) THAT THE COST OF NECESSARY MATERIALS INCREASED DURING THE LIFE OF THE CONTRACT AND THERE WERE DELAYS IN OBTAINING MATERIALS WHICH WERE NOT DUE TO ANY FAULT ON THE PART OF THE CONTRACTOR.

THE CONTRACT WAS AWARDED TO THE WINDER AIRCRAFT CORPORATION OF FLORIDA AS THE LOWEST RESPONSIBLE BIDDER UNDER INVITATION FOR BIDS NO. 600-846-56-0, ISSUED JANUARY 31, 1956, AS AMENDED. AT THE TIME OF THE ISSUANCE OF THE INVITATION, IT WAS ESTIMATED THAT THE PROCUREMENT WOULD RESULT IN A COST TO THE GOVERNMENT OF $42,000. THE INVITATION SPECIFIED THAT THE QUADPAK AND BOOSTER CRADLES BE IN ACCORDANCE WITH DRAWINGS NOS. LB-108 AND LB-109, RESPECTIVELY. THE INVITATION ALSO SET FORTH A DESIRED DELIVERY SCHEDULE UNDER WHICH 25 QUADPAKS AND 50 BOOSTERS WOULD BE DUE FOR DELIVERY BY MAY 20, 1956; AND 30 QUADPAKS AND 65 BOOSTER CRADLES WOULD BE DUE FOR DELIVERY BY JUNE 15, 1956. IT WAS CONTEMPLATED THAT INSPECTION AND ACCEPTANCE WOULD BE AT THE CONTRACTOR'S PLANT OR POINT OF ORIGIN AND THAT SHIPMENT OF THE QUADPAK AND BOOSTER CRADLES WOULD BE MADE ON GOVERNMENT BILLS OF LADING TO BE FURNISHED BY THE COGNIZANT INSPECTOR OF NAVAL MATERIAL. AMENDED, THE INVITATION INCORPORATED CERTAIN GENERAL PROVISIONS INCLUDING AN INSPECTION AND A GUARANTY CLAUSE. THE SUCCESSFUL BIDDER PROPOSED TO MAKE DELIVERIES AT OR NEAR ITS PLANT AT LAKELAND, FLORIDA, AND TOOK NO EXCEPTION TO THE DELIVERY SCHEDULE INCLUDED IN THE INVITATION.

IN THE EARLY PART OF THE MONTH OF MAY 1956, THE INSPECTOR OF NAVAL MATERIAL, ATLANTA, GEORGIA, WAS REQUESTED TO ASCERTAIN THE STATUS OF THE CONTRACT WORK. INFORMATION WAS FURNISHED THAT THE CONTRACTOR HAD ALLEGED THAT NO DELIVERY COULD BE MADE BEFORE JUNE 4, 1956, BECAUSE OF A DELAY IN OBTAINING MATERIALS. FROM THAT TIME UNTIL JULY 24, 1956, THE CONTRACTOR MADE CERTAIN PROMISES OR FORECASTS AS TO WHEN DELIVERIES WOULD BE MADE. ON THAT DATE THE BUREAU OF ORDNANCE, PREDECESSOR TO THE BUREAU OF NAVAL WEAPONS, WAS ADVISED THAT 50 PERCENT OF EACH TYPE OF CRADLE WOULD BE DELIVERED BY JULY 31, 1956, AND THAT THE REMAINING 50 PERCENT OF EACH TYPE OF CRADLE WOULD BE DELIVERED NO LATER THAN AUGUST 15, 1956. THE BUREAU DETERMINED THAT SUCH PROPOSED DELIVERY SCHEDULE WOULD BE SATISFACTORY, CONSIDERING THAT THE TIME FOR DEPARTURE OF A PARTICULAR VESSEL FROM YORKTOWN, VIRGINIA, HAD BEEN RESCHEDULED. BY LETTER DATED AUGUST 3, 1956, THE CONTRACTING OFFICER ADVISED THE CONTRACTOR THAT THE GOVERNMENT WOULD ACCEPT DELIVERIES IN ACCORDANCE WITH THE FOLLOWING SCHEDULE: 25 QUADPAK CRADLES BY AUGUST 7; 10 QUADPAKS EACH ON AUGUST 11, 15 AND 18; 25 BOOSTERS BY AUGUST 7 AND DELIVERY THEREAFTER AT THE RATE OF 10 UNITS EVERY TWO DAYS REGARDLESS OF SATURDAYS AND SUNDAYS.

ON THE SAME DATE, AUGUST 3, 1956, MR. R. P. YOUNG OF THE BUREAU OF ORDNANCE VISITED THE CONTRACTOR'S PLANT AND FOUND THAT 25 QUADPAK CRADLES WERE COMPLETED EXCEPT FOR CLEANUP OF WELDS AND PAINTING. HE EXAMINED THREE OF THE CRADLES AND CONSIDERED THEM TO BE OF POOR WORKMANSHIP INSOFAR AS THE WELDING WAS CONCERNED. HOWEVER, IN VIEW OF THE URGENT NEED FOR DELIVERY, HE SUGGESTED THAT THEY MIGHT BE SUITABLE IF CERTAIN REPAIR WORK WERE PERFORMED. THE NAVY INSPECTION OFFICIALS WHO ACCOMPANIED MR. YOUNG AGREED THAT IT WOULD BE A GOOD IDEA TO STATION A NAVY INSPECTOR AT THE PLANT. THE NAVY HAD PREVIOUSLY ARRANGED FOR THE AIR FORCE TO PERFORM INSPECTION OF THE SUPPLIES WHEN READY FOR SHIPMENT BUT ON AUGUST 6, 1956, THIS ARRANGEMENT WAS CANCELED. MR. CHESTER L. DONNELLY, NOW DECEASED, WAS AT THE SAME TIME DIRECTED TO MAKE THE NECESSARY INSPECTIONS AND IT APPEARS THAT MR. DONNELLY WAS TOLD IN A TELEPHONE CONVERSATION WITH MR. YOUNG THAT THE 25 QUADPAK CRADLES COULD BE ACCEPTED IF REPAIRS WERE MADE, ALTHOUGH THE WELDING WOULD NOT BE IN STRICT COMPLIANCE WITH CONTRACT REQUIREMENTS. THE RECORD INDICATES THAT THE DEVIATION INVOLVED PERMITTED TACKING WELD PLACES ON SUPPORTS, DOOR HINGES AND ALONG THE CENTER PIECE WHERE SPOT WELDING HAD FAILED TO HOLD.

ALTHOUGH THE FIRST 25 QUADPAK CRADLES WERE NOT CONSIDERED TO BE OF FIRST- CLASS WORKMANSHIP, MR. DONNELLY APPROVED SHIPMENT OF SAME AFTER SOME REWORKING DURING THE PERIOD AUGUST 7 TO 13, 1956, BECAUSE OF THE URGENT NEED FOR THE QUADPAKS AND MR. YOUNG'S OPINION THAT THEY MIGHT BE SUITABLE IF SOME REWORKING WAS PERFORMED. ON AUGUST 15 MR. DONNELLY REPORTED THAT THERE HAD BEEN NO FURTHER ASSEMBLY OF QUADPAK CRADLES BUT THAT SIX BOOSTER CRADLES WERE SHIPPED ON THAT DATE; ALSO, THAT MR. YOUNG HAD ADVISED HIM THAT AFTER AUGUST 18 THERE WOULD BE NO FURTHER URGENCY. MR. DONNELLY SUBMITTED ADDITIONAL REPORTS ON AUGUST 18, 21 AND 23, INDICATING THAT PROGRESS ON THE PRODUCTION OF BOOSTER CRADLES HAD BEEN SATISFACTORY BUT WOULD BE CURTAILED FOR A LIMITED PERIOD DUE TO THE CONTRACTOR'S INABILITY TO HIRE WELDERS. HE REFERRED TO THE FACT THAT HE WOULD BE ON LEAVE AS OF AUGUST 24 AND STATED THAT THE CONTRACTOR HAD STARTED ASSEMBLY OF QUADPAK CRADLES AS A STOP-GAP UNTIL THE WELDING SITUATION WAS BETTER. ON AUGUST 29 MR. DONNELLY REPORTED THAT HE HAD SET UP A COMPANY INSPECTOR WHO WOULD INSPECT THE ITEMS BEFORE OFFERING SAME TO NAVY INSPECTION; THAT THIS WOULD IMPROVE THE PRODUCT AND THE QUALITY WAS IMPROVING; AND THAT WELDING HAD STEADILY IMPROVED BUT THERE WERE QUITE A FEW SUBASSEMBLIES WHICH WOULD HAVE TO BE USED WITH SOME REWORKING.

SOME DELAY WAS EXPERIENCED BY THE CONTRACTOR IN MAKING DELIVERY OF A QUANTITY OF BOOSTER CRADLES DUE TO AN ALLEGED FAILURE OF A SUPPLIER TO DELIVER PAINT AND IT BECAME NECESSARY TO OBTAIN THE PAINT FROM ANOTHER SOURCE. HOWEVER, 9 QUADPAK CRADLES AND SEVERAL BOOSTER CRADLES WERE SHIPPED DURING THE PERIOD SEPTEMBER 10 THROUGH SEPTEMBER 14, 1956. THERE REMAINED FOR DELIVERY UNDER THE CONTRACT 21 QUADPAK CRADLES AND 32 BOOSTER CRADLES.

IN THE MEANTIME, THE BUREAU OF ORDNANCE REQUESTED WASHINGTON TECHNOLOGICAL ASSOCIATES, INC., ROCKVILLE, MARYLAND, TO INSPECT AND REPORT ON THE FIRST 25 QUADPAK CRADLES WHICH HAD BEEN DELIVERED TO THE U.S. NAVAL MINE DEPOT, YORKTOWN, VIRGINIA. THAT FIRM HAD BEEN ENGAGED BY THE NAVY TO DEVELOP DESIGNS FOR QUADPAK AND BOOSTER CRADLES AND IT HAD FURNISHED TO THE NAVY THE DRAWINGS WHICH WERE MADE A PART OF THE CONTRACT WITH THE WINDER AIRCRAFT CORPORATION OF FLORIDA. WASHINGTON TECHNOLOGICAL ASSOCIATES, INC., SUBMITTED A REPORT DATED SEPTEMBER 4, 1956, WHICH STATED THAT 14 CRADLES WERE NOT USABLE AND THAT, IN ADDITION TO POOR WELDING, THE CRADLES DEVIATED FROM THE DRAWINGS IN SEVERAL RESPECTS. INCLUDED IN THE REPORT ARE THE COMMENTS: "THE DENSITY OF THE CUSHIONING MATERIAL AND THE METHOD OF ATTACHING IS NOT IN ACCORDANCE WITH THE DRAWINGS. THE SOFT, SPONGY MATERIAL USED IS NOT CONSIDERED SATISFACTORY FOR THE INTENDED PURPOSE. * * * SOME SIDE RAILS WERE CUT TOO SHORT. TO MAKE UP THE DIFFERENCE AN INSERT OF STEEL PLATE WAS WELDED BETWEEN THE END OF THE RAIL AND THE CORNER POST.'

ON SEPTEMBER 19, 1956, LIEUTENANT COMMANDER R. L. GRAY AND TWO NAVY INSPECTION OFFICIALS, MR. E. C. BRADEN AND MR. D. R. HANSFORD, VISITED THE CONTRACTOR'S PLANT AND IT APPEARS TO HAVE BEEN AGREED THAT UNITS IN PRODUCTION WOULD BE SATISFACTORY BUT THAT THE CONTRACTOR SHOULD OBTAIN WRITTEN AUTHORITY FOR DEVIATIONS FROM THE DRAWINGS. A CONTROVERSY LATER DEVELOPED AS TO WHETHER THE CONTRACTOR WAS AT SUCH TIME ORDERED TO STOP WORK AND TO TEST ONE OF THE ASSEMBLED QUADPAK CRADLES AT THAT PLANT.

REQUESTED WAIVERS FROM SPECIFICATIONS, PARTICULARLY REGARDING THE SIDE RAIL AND STIFFNER REQUIREMENTS, WERE GRANTED BY BUREAU LETTERS DATED OCTOBER 1, 10 AND 31, 1956, RESPECTING 13 QUADPAKS AND 32 BOOSTERS IN PRODUCTION. THE CONTRACTOR SHIPPED 11 QUADPAKS ON OCTOBER 16, 2 QUADPAKS ON OCTOBER 26, 5 QUADPAKS ON NOVEMBER 13, 3 QUADPAKS ON FEBRUARY 1, 1957, 8 BOOSTERS ON OCTOBER 26, 1956, 8 BOOSTERS ON NOVEMBER 29 AND 16 BOOSTERS ON FEBRUARY 1, 1957. FINAL PAYMENT UNDER THE CONTRACT WAS MADE ON FEBRUARY 13, 1957, WITHOUT DEDUCTION OF ANY AMOUNT FROM THE CONTRACT PRICE ON ACCOUNT OF A FAILURE TO COMPLETE THE CONTRACT ON TIME, EXCESS INSPECTION COSTS, OR BY REASON OF THE FACT THAT MOST OF THE QUADPAK AND BOOSTER CRADLES DID NOT CONFORM STRICTLY WITH THE CONTRACT DRAWINGS.

HOWEVER, ON OR ABOUT FEBRUARY 27, 1957, 25 DEFECTIVE QUADPAK CRADLES WERE RETURNED TO THE CONTRACTOR FOR REWORKING IN ACCORDANCE WITH THE GUARANTY CLAUSE OF THE GENERAL PROVISIONS OF THE CONTRACT,GUARANTEEING THE DELIVERED ITEMS AGAINST DEFECTIVE MATERIAL OR WORKMANSHIP, AND THAT THE ITEMS WOULD CONFORM TO THE REQUIREMENTS OF THE CONTRACT, NOTWITHSTANDING THE PROVISIONS OF CLAUSE 5 OF THE GENERAL PROVISIONS ENTITLED "INSPECTION.' THE CONTRACTOR ALLEGED THAT SOME OF THE QUADPAKS WERE MANUFACTURED BY ANOTHER CONCERN AND THAT OTHERS PROBABLY WERE DAMAGED IN TRANSIT. IT THEREFORE REFUSED TO REWORK THE CRADLES OR TO CONSTRUCT NEW CRADLES WITHOUT ADDITIONAL COMPENSATION. THE NAVY EVENTUALLY AUTHORIZED A RESHIPMENT OF THE 25 DEFECTIVE QUADPAK CRADLES AND THE CONTRACTING OFFICER TOOK THE POSITION THAT THE NAVY SHOULD RECEIVE AN ADJUSTMENT IN THE CONTRACT PRICE UNDER THE GUARANTY CLAUSE. THE AMOUNT OF SUCH PRICE ADJUSTMENT WAS NEVER DETERMINED, CONSIDERING THAT THE EVIDENCE SUBSTANTIATED THE CONTRACTOR'S CONTENTION THAT SOME OF THE QUADPAKS WERE DAMAGED IN TRANSIT AND THAT ONE OR TWO OF THE QUADPAKS WERE MANUFACTURED BY ANOTHER CONCERN. IN THE LATTER CONNECTION, WE UNDERSTAND THAT THE RESHIPMENT TO THE CONTRACTOR INCLUDED TWO PROTOTYPES WHICH WERE DEVELOPED AND GIVEN EXTENSIVE TESTING BY THE NAVY DURING THE PERIOD OF A RESEARCH AND DEVELOPMENT CONTRACT WITH WASHINGTON TECHNOLOGICAL ASSOCIATES, INC.

THE CONTRACTOR ALLEGED IN A LETTER DATED OCTOBER 29, 1956, THAT IT WAS NECESSARY TO CLEAR THE MANUFACTURING AREA OF ALL MATERIALS IN PROCESS AND DO A COMPLETE CHANGEOVER IN OPERATIONS EACH TIME WORK ON THE CONTRACT WAS STOPPED OR STARTED; AND THAT IT WAS NOT POSSIBLE TO EVALUATE THE LOSS OF PRODUCTION TIME CAUSED BY INTANGIBLE EFFECTS ON OPERATIONS AND THEREFORE NO VALUES WERE PLACED ON CLAIMS MADE FOR THAT PORTION OF THE LOSS. HOWEVER, IN CONNECTION WITH THE COMPUTATION OF THE DIRECT COSTS AMOUNTING TO $1,955.17, AN EXPENDITURE OF $1,827.04 WAS ALLEGED TO HAVE BEEN CAUSED BY FOUR WORK STOPPAGES ORDERED BY THE GOVERNMENT. THE STOPPAGES WERE, ACCORDING TO THE CONTRACTOR'S STATEMENT OF CLAIM, AS FOLLOWS:

1. A STOPPAGE OF ONE DAY, AUGUST 15 TO AUGUST 16, 1956. WORK STOPPED BY MR. DONNELLY ON THE BASIS OF A STATEMENT THAT THE NAVY HAD NO FURTHER USE FOR THE CONTRACT ITEMS. 2. A STOPPAGE OF FOUR DAYS, SEPTEMBER 6 TO SEPTEMBER 10, 1956. MR. DONNELLY STOPPED WORK ON ORDERS FROM THE OFFICE OF THE INSPECTOR OF NAVAL MATERIAL, JACKSONVILLE, FLORIDA.

3.A STOPPAGE OF 16 DAYS, SEPTEMBER 19 TO OCTOBER 5, 1956. WORK STOPPED BY COMMANDER GRAY AND STARTED AGAIN AS RESULT OF DEVIATION LETTER FROM THE BUREAU OF ORDNANCE.

4. A STOPPAGE OF FIVE DAYS, OCTOBER 10 TO OCTOBER 15, 1956, DUE TO AN UNAUTHORIZED REQUIREMENT BY THE JACKSONVILLE INSPECTION OFFICE THAT WELDERS BE QUALIFIED.

THE BALANCE OF $128.13, CLAIMED AS DIRECT COSTS, COVERS $31.50 FOR QUALIFYING WELDERS AND $96.63 FOR SPECIAL TESTING OF ONE OF THE QUADPAK CRADLES AT THE CONTRACTOR'S PLANT. THE CONTRACTOR DESCRIBED THE TEST AS THE HOISTING OF THE CRADLE TO APPROXIMATELY EIGHT FEET LOADED WITH 2,544 POUNDS OF BOXED BALL BEARINGS, AND ALLOWING THE CRADLE TO REMAIN IN THAT POSITION FOR A PERIOD OF THREE HOURS. IN REQUESTING DEVIATIONS FROM THE CONTRACT DRAWINGS, THE CONTRACTOR STATED THAT THE UNIT WAS LOWERED ROUGHLY AND VIOLENTLY SEVERAL TIMES AND THE UNIT SHOWED NO EFFECT OF ANY KIND AS THE RESULT OF THE TEST. THE TEST WAS WITNESSED BY NAVY PERSONNEL AND IT SEEMS TO HAVE INFLUENCED TO A LARGE DEGREE THE NAVY'S DECISION TO GRANT THE REQUESTED DEVIATIONS FROM THE REQUIREMENTS OF THE CONTRACT DRAWING AND SUPPLEMENTS THERETO.

AFTER THE RESHIPMENT OF THE 25 DEFECTIVE QUADPAK CRADLES TO THE NAVY, IT APPEARS THAT THE CONTRACTOR CONSIDERED THE POSSIBILITY THAT ITS CLAIM COULD BE FURTHER SUBSTANTIATED IF IT COULD BE SHOWN THAT THE CONTRACT DRAWINGS WERE DEFECTIVE. A LETTER DATED JANUARY 11, 1958, FROM MR. DONNELL W. DUTTON, PROFESSIONAL ENGINEER, WHO WAS A DIRECTOR OF THE WINDER AIRCRAFT CORPORATION OF FLORIDA AND WHO IS ALSO ASSOCIATED WITH THE DANIEL GUGGENHEIM SCHOOL OF AERONAUTICS, GEORGIA INSTITUTE OF TECHNOLOGY, ATLANTA, GEORGIA, REFERS TO PHOTOGRAPHS OF SOME OF THE QUADPAK AND BOOSTER CRADLES AND THE CONTRACT DRAWINGS; AND SUGGESTS THAT THE DESIGNS COULD BE IMPROVED. A SIMILAR OPINION WAS EXPRESSED BY PROFESSORS WALTER R. CARNES AND JOHN J. HARPER OF THE SAME SCHOOL IN A LETTER DATED MAY 19, 1959. LETTER DATED JUNE 1, 1959, PROFESSORS CARNES AND HARPER FURNISHED A MORE COMPLETE ANALYSIS OF THE CONTRACT DRAWINGS AND ESTIMATED THAT THE QUADPAK CRADLE, IF MANUFACTURED IN ACCORDANCE WITH THE CONTRACT DRAWINGS, WOULD NOT BE CAPABLE OF HANDLING MORE THAN 1,480 POUNDS TO ALLOW FOR "SNATCH" LOADS AND A SAFETY FACTOR. THE EVIDENCE OF THE CASE DISCLOSES THAT THE QUADPAKS WERE DESIGNED TO CARRY LOADS OF ABOUT 2,000 TO 2,200 POUNDS AND THAT THE DESIGNER ESTIMATED THAT THE CONSTRUCTION WOULD, IF NECESSARY, BE CAPABLE OF LIFTING ABOUT FOUR TIMES THOSE WEIGHTS WITHOUT DAMAGING THE EQUIPMENT.

WHEN THE CLAIM HERE INVOLVED WAS PRESENTED TO OUR OFFICE WE REQUESTED AND RECEIVED A REPORT DATED APRIL 13, 1960, FROM THE BUREAU OF NAVAL WEAPONS, RECOMMENDING THAT THE CLAIM BE DENIED. YOU WERE PERMITTED TO EXAMINE THE REPORT AND ITS ACCOMPANYING PAPERS. YOU SUGGESTED THAT WE CONTACT THE NAVY FOR A COPY OF A LETTER WRITTEN BY MR. DONNELLY TO MR. GORDON E. MARKS, PRESIDENT OF THE SEMINOLE BANK OF TAMPA. YOU ALSO MADE CERTAIN GENERAL ALLEGATIONS IN A LETTER DATED JULY 28, 1960, AND FOR THIS AND OTHER REASONS, INCLUDING THE FACT THAT THE FILE DID NOT INCLUDE A COPY OF THE CONTRACTING OFFICER'S DECISION OF SEPTEMBER 2, 1959, WE REQUESTED A SUPPLEMENTAL REPORT FROM THE BUREAU OF NAVAL WEAPONS. THE SUPPLEMENTAL REPORT, REAFFIRMING THE BUREAU'S PREVIOUS RECOMMENDATION OF DENIAL, WAS SUBMITTED BY LETTER DATED JULY 17, 1961, FROM THE ACTING CHIEF OF THE BUREAU, AND YOU WERE FURNISHED A COPY OF THE LETTER, TOGETHER WITH A COPY OF ONE OF ITS ENCLOSURES CONSISTING OF A MEMORANDUM OF LAW PREPARED BY AN ATTORNEY IN THE LEGAL DIVISION OF THE BUREAU. ON OR ABOUT AUGUST 30, 1961, YOU EXAMINED THE FILE OF CORRESPONDENCE AND COPIES OF CONTRACT DOCUMENTS SUBMITTED WITH THE LETTER DATED JULY 17, 1961. YOU CONTENDED IN A LETTER DATED SEPTEMBER 15, 1961, THAT THE FOUR ELEMENTS OF CLAIM STILL STAND UNREFUTED. THE CASE WAS THEREAFTER DISCUSSED IN A BRIEF CONFERENCE HELD AT OUR OFFICE ON SEPTEMBER 26, 1961, ATTENDED BY YOU AND MR. MARKS AND ONE OF OUR REPRESENTATIVES.

THE BUREAU OF NAVAL WEAPONS HAD PREVIOUSLY FURNISHED INFORMATION CONCERNING THE ELEMENT OF AN ALLEGED MISTAKE IN BID AND THE MERITS, IF ANY, OF THE ELEMENT OF CLAIM WHICH INVOLVES THE MATTER OF ALLEGED INCREASED COSTS OF AND DELAYS IN OBTAINING MATERIALS. WITH RESPECT TO THE ALLEGATIONS MADE IN YOUR LETTER OF JULY 28, 1960, THE ACTING CHIEF OF BUREAU'S LETTER DATED JULY 17, 1961, CONTAINS THE FOLLOWING STATEMENTS:

"AMONG THE NEW ALLEGATIONS MADE BY WINDER IS ONE TO THE EFFECT THAT THE SPECIFICATIONS UNDER THEIR CONTRACT NORD-17005 WERE DEFECTIVE. THE FACT OF THE MATTER IS THAT THESE SPECIFICATIONS WERE NOT DEFECTIVE. THE DOCUMENTS TRANSMITTED HEREWITH SHOW THAT IDENTICAL SPECIFICATIONS WERE INCORPORATED IN A SUBSEQUENT CONTRACT, NORD-17766, AND THAT THE CONTRACTOR UNDER THIS SUBSEQUENT CONTRACT DELIVERED QUADPAKS AND BOOSTER CRADLES THAT WERE SATISFACTORY IN ALL RESPECTS.

"THE SECOND NEW ALLEGATION MADE BY WINDER WHICH I SHOULD LIKE TO COMMENT ON HERE IS THAT GOVERNMENT OFFICERS WERE RESPONSIBLE FOR CAUSING UNAUTHORIZED WORK STOPPAGES WHICH DELAYED AND IMPEDED WINDER IN ITS EFFORT TO PERFORM THE CONTRACT. THE FACTS HERE INDICATE THAT THE WORK STOPPAGES WERE VOLUNTARY ON THE PART OF WINDER, IN RESPONSE TO STATEMENTS BY NAVAL INSPECTORS THAT THE SUPPLIES THAT WERE BEING MANUFACTURED WERE NOT IN ACCORDANCE WITH THE SPECIFICATIONS AND HENCE NOT ACCEPTABLE. THIS ACTION BY THE INSPECTORS WAS TAKEN PURSUANT TO RIGHTS RESERVED TO THE GOVERNMENT IN THE INSPECTION CLAUSE OF THE CONTRACT. ACCORDINGLY, THERE IS NO BASIS FOR A CLAIM AGAINST THE GOVERNMENT ON THIS SCORE.'

THE CONTRACTING OFFICER'S DECISION OF SEPTEMBER 2, 1959, WAS DIRECTED TO THE THREE FACTORS OF THE CLAIM AS SET FORTH IN YOUR STATEMENT WHEN REQUESTING REVIEW OF THE ACTION PREVIOUSLY TAKEN ON THE CLAIM. HIS FINDINGS IN THE MATTER WERE BRIEFLY AS FOLLOWS:

1. THE STOPPING OF WORK APPEARED TO BE THE VOLUNTARY ACT OF THE CONTRACTOR AND YOU HAD ADMITTED THAT NO ONE IN THE GOVERNMENT ORDERED THE CONTRACTOR TO STOP WORK UNDER THE CONTRACT.

2. EXERCISE BY THE GOVERNMENT OF A RIGHT TO REJECT NONCONFORMING SUPPLIES DOES NOT FORM A BASIS FOR ANY CLAIM AGAINST THE GOVERNMENT.

3. THE QUESTION AS TO THE ADEQUACY OF THE DRAWINGS HAD BEEN CONSIDERED BY THE NAVY IN 1956 AND IT WAS DETERMINED THAT, IF THE WELDING WORK WERE PERFORMED IN ACCORDANCE WITH CONTRACT REQUIREMENTS, THE REQUIRED OVERLAP FOR CERTAIN FEATURES OF THE CONSTRUCTION WOULD BE SUFFICIENT TO SUPPORT OVER FOUR TIMES THE WEIGHT CONTEMPLATED TO BE HANDLED BY THE CRADLES WHEN IN SERVICE.

4. NO REJECTIONS OR FAILURES WERE DUE TO THE USE OF A QUESTIONED DRIVEN TYPE OF CONNECTION AND NO TROUBLE WAS EXPERIENCED WITH SIMILAR TYPES OF MISSILE CRADLES PURCHASED BY THE NAVY UNDER A SUBSEQUENT CONTRACT.

5. THE CONTRACT DID NOT REQUIRE ANY WEIGHT TEST AND THE ARGUMENT THAT THE CRADLES WERE OF WEAK DESIGN IS NOT GERMANE TO THE QUESTION AS TO WHETHER CONTRACT PERFORMANCE MET SPECIFIED REQUIREMENTS.

6. THE CONTRACT WAS AWARDED ON A FIXED-PRICE BASIS AND DOES NOT PROVIDE FOR ESCALATION TO COVER INCREASED COSTS OF MATERIALS OR PRODUCTION TIME LOST BECAUSE OF DELAYS IN OBTAINING MATERIALS.

THE CONTRACTING OFFICER REFERRED SPECIFICALLY TO THE OPINIONS FURNISHED BY THE THREE ENGINEERS ASSOCIATED WITH THE DANIEL GUGGENHEIM SCHOOL OF AERONAUTICS BUT STATED THAT "THOROUGH INVESTIGATION BY THE BUREAU FAILS TO DISCLOSE ANY DEFECTS IN THE DRAWINGS SUCH AS WOULD IMPOSE ANY LEGAL OR EQUITABLE RESPONSIBILITY ON THE GOVERNMENT FOR LOSS BY THE COMPANY DUE TO DIFFICULTY ENCOUNTERED BY IT IN PERFORMING THE CONTRACT.'

IN A LETTER DATED JUNE 15, 1961, TO THE BUREAU OF NAVAL WEAPONS, PROFESSOR HARPER REFERRED GENERALLY TO HIS PREVIOUS OPINION THAT THE QUADPAK CRADLES, IF PRODUCED IN ACCORDANCE WITH THE CONTRACT DRAWINGS, WOULD NOT HOLD UP AND STATED THAT:

" I WOULD LIKE TO ALSO TAKE THIS OPPORTUNITY TO POINT OUT A FURTHER SERIOUS HANDICAP IMPOSED UPON THE WINDER AIRCRAFT CORPORATION OF FLORIDA, WHEREIN U.S. AIR FORCE QUALITY CONTROL INSPECTORS LAID DOWN THE ORIGINAL INSPECTION REQUIREMENTS WHICH WERE ADHERED TO BY THE COMPANY. LATER ON, THESE REQUIREMENTS WERE COMPLETELY CHANGED BY THE U.S. NAVY QUALITY CONTROL PERSONNEL. ALSO, DURING THE LIFE OF THIS CONTRACT, A LARGE NUMBER OF INDIVIDUAL INSPECTORS WERE ON THE JOB REPRESENTING THE BUREAU OF ORDNANCE AND THERE WERE A NUMBER OF INSTANCES WHEREBY MISUNDERSTANDINGS BETWEEN THESE INDIVIDUALS FURTHER HANDICAPPED THE CONTRACTOR.'

IN YOUR LETTER OF SEPTEMBER 15, 1961, YOU REFER TO THE FACT THAT MR. BRADEN, WHEN COMMENTING ON THE CLAIM SUBMITTED ON OCTOBER 29, 1956, STATED THAT "MOST OF THE WORK STOPPAGES WERE THE CONTRACTOR'S OWN DECISION AND NOT FROM THE ORDER OF THE INSPECTOR. ONCE OR TWICE THE INSPECTOR DID INFORM THE CONTRACTOR TO STOP PRODUCTION ON ADVICE BY THE BUREAU (MR. DEADWYLER WAS IN ON THIS).' THE NAVY REPORTS DO NOT EXPLAIN THOSE WORK STOPPAGES. HOWEVER, THE FILE CONTAINS A MEMORANDUM FROM MR. G. W. MOLESWORTH, INSPECTOR OF NAVAL MATERIAL, ATLANTA, GEORGIA, WHICH REFERS SPECIFICALLY TO MR. BRADEN'S STATEMENT AS RELATING TO ADVICE FURNISHED BY THE BUREAU OF ORDNANCE TO INSPECTION PERSONNEL THAT ACCEPTANCES OF SUPPLIES SHOULD BE DELAYED PENDING CONSIDERATION OF POSSIBLE DEFAULT TERMINATION ACTIONS BASED UPON THE CONTRACTOR'S FAILURES TO MEET REVISED DELIVERY SCHEDULES. MR. MOLESWORTH STATED THAT THE CONTRACT FILE DOES NOT DISCLOSE ANY EVIDENCE THAT THE CONTRACTOR WAS EVER ORDERED TO STOP WORK AND THAT IN THE TWO CITED INSTANCES--- WHICH APPEAR TO HAVE RELATED TO THE ALLEGED STOPPAGES ON AUGUST 15 AND SEPTEMBER 6, 1956--- THE CONTRACTOR APPARENTLY INTERPRETED THE RESULTING INSPECTION DELAYS AS STOP WORK ORDERS. FURTHER, MR. MOLESWORTH STATED THAT THE ALLEGED WORK STOPPAGE CLAIM WHICH HAS REFERENCE TO A QUALIFICATION OF WELDERS IS NOT CONSIDERED FACTUAL INASMUCH AS THE CONTRACTOR "WAS OUT OF MATERIAL AT THAT TIME AND COULD NOT HAVE WORKED IF QUALIFICATIONS HAD NOT BEEN REQUIRED.' MR. BRADEN HAD PREVIOUSLY ESTIMATED THAT LESS THAN ONE DAY OF PRODUCTION TIME WAS LOST DUE TO A QUALIFICATION OF WELDERS, SINCE ADVANTAGE WAS TAKEN OF THE DELAY INVOLVED IN CONNECTION WITH THE NECESSITY TO OBTAIN WAIVERS ON EQUIPMENT IN PRODUCTION AS OF SEPTEMBER 19, 1956. MR. BRADEN HAD ALSO INDICATED THAT AN UNDERSTANDING HAD BEEN REACHED WITH THE CONTRACTOR THAT, IF WELDERS WORKED FOR MORE THAN ONE WEEK ON THE PARTICULAR JOB, THEY SHOULD BE QUALIFIED.

WITH RESPECT TO TWO OF THE FOUR ALLEGED WORK STOPPAGES, THE RECORD SHOWS THAT THE CONTRACTOR WAS DELINQUENT IN MAKING DELIVERIES AS OF AUGUST 15 AND SEPTEMBER 6, 1956. WE DO NOT UNDERTAKE TO STATE THAT THE QUALIFICATION OF WELDERS CAUSED A LOSS IN PRODUCTION TIME OF LESS THAN ONE DAY, AS REPORTED BY MR. BRADEN.

REGARDING THE FOURTH ALLEGED WORK STOPPAGE, YOU EMPHASIZE THE FACT THAT A LETTER WAS WRITTEN BY INSPECTOR DONNELLY TO MR. MARKS ON SEPTEMBER 21, 1956, ADVISING THAT WORK WAS STOPPED THAT WEEK DUE TO A MINOR TECHNICALITY. COMMANDER GRAY AND MR. BRADEN HAVE DENIED THAT THEY ORDERED THE CONTRACTOR TO STOP WORK ON SEPTEMBER 19, 1956, AND WE NOTE THAT THE CONTRACT FILE CONTAINS A LETTER DATED SEPTEMBER 25, 1956, FROM MR. HENRY, ADVISING THE BUREAU OF ORDNANCE THAT: "COMMANDER GRAY WAS INFORMED THAT THIS PLANT WOULD STOP PRODUCTION UNTIL THE MATTER WAS RESOLVED SINCE IF IT WAS HELD THAT SIDE RAILS COULD NOT BE WELDED IN SPITE OF THE MEMORANDUM OF RECORD IN OUR FILES WHICH INDICATED THAT MR. YOUNG HAD APPROVED SUCH CONSTRUCTION ON A VISIT TO THIS PLANT 2 AUGUST 1956.' THAT LETTER AND THE STATEMENTS OF COMMANDER GRAY AND MR. BRADEN APPEAR TO BE CONCLUSIVE ON THE POINT AS TO WHICH OF THE CONTRACTING PARTIES WAS RESPONSIBLE FOR ANY ORDER TO STOP WORK ON SEPTEMBER 19, 1956.

YOU ALSO REFER TO REPORTS OF INSPECTION PREPARED BY THE U.S. NAVAL MINE DEPOT, YORKTOWN, VIRGINIA, AS SUBSTANTIATING THE CONTRACTOR'S CONTENTIONS THAT THERE WERE LAX INSPECTION PRACTICES AND THAT THE CONTRACT DRAWINGS WERE FAULTY. YOU SUGGEST THAT THOSE REPORTS FURTHER SHOW THAT 19 OF THE FIRST 25 QUADPAK CRADLES WERE LOAD TESTED AND 17 OF THOSE CRADLES DID NOT FAIL IN SUCH TESTS.

THE U.S. NAVAL MINE DEPOT'S REPORT OF OCTOBER 22, 1956, CONCLUDED WITH THE STATEMENT THAT ,FAILURES ARE ATTRIBUTABLE TO (1) FAULTY DESIGN AND (2) FAILURE TO ADHERE TO IMPORTANT QUALITY REQUIREMENTS OF THE DESIGN, THEREFORE, REDESIGN AND TIGHTENING UP ON ACCEPTANCE INSPECTION PRACTICE IS STRONGLY RECOMMENDED.' THAT REPORT AND AN ADDITIONAL REPORT FROM THE DEPOT INDICATES THAT ONLY 3 OF THE 25 QUADPAK CRADLES INVOLVED WERE SUBJECTED TO A LOAD TEST. TWO CRADLES REPORTEDLY BROKE AT THE LIFTING EYE AND ONE CRADLE REPORTEDLY REVEALED A BENDING OF THE RAIL IN THE AREA OF THE LIFTING EYE BUT DID NOT BREAK. APPARENTLY, THE BENDING OF THE RAIL OF THE THIRD CRADLE WAS ATTRIBUTED TO THE FACT THAT THE RAIL CONSTRUCTION CONSISTED OF TWO STEEL FORMS WELDED TOGETHER INSTEAD OF A FULL LENGTH STEEL FORM AS REQUIRED BY THE CONTRACT DRAWING. HOWEVER, THE LOAD USED IN THE TEST OF THE THIRD CRADLE WAS ABOUT 1,300 TO 1,500 POUNDS HEAVIER THAN THE WEIGHT WHICH A QUADPAK CRADLE WAS EXPECTED TO HANDLE WHEN IN SERVICE AND IT APPEARS THAT FOR SUCH REASON COMMANDER GRAY AND MR. BRADEN SUGGESTED TO THE CONTRACTOR THAT ABOUT 2,500 POUNDS OF MATERIAL BE USED IN A TEST OF ONE OF THE CRADLES AT THE CONTRACTOR'S PLANT, WHICH LOAD WOULD EXCEED NORMAL HANDLING REQUIREMENTS BY ABOUT 300 TO 500 POUNDS. THE TEST AT THE PLANT PROVED THAT THE CONTRACTOR'S "DESIGN" PROBABLY WOULD MEET SERVICE REQUIREMENTS BUT THE TEST CERTAINLY DID NOT PROVE THAT THE DESIGN WAS SUPERIOR TO THE ONE SHOWN ON THE CONTRACT DRAWING, OR THAT THE CONTRACTOR FOUND THE DRAWING TO BE INADEQUATE AND INCURRED EXCESS COSTS IN MAKING IMPROVEMENTS ON THE GOVERNMENT'S DESIGN. INSPECTION PRACTICES WERE "TIGHTENED UP" AFTER THE ACCEPTANCE OF THE FIRST 25 QUADPAK CRADLES WHICH, HOWEVER, WERE ACCEPTED STRICTLY AS AN EMERGENCY MEASURE. ALSO, THE RECORD APPEARS REASONABLY TO SHOW THAT THE CONTRACTOR'S DIFFICULTIES REGARDING THE REJECTIONS OF UNITS ON ACCOUNT OF POOR WELDING WERE DUE PRIMARILY TO A LACK OF PROPER SUPERVISION OF OR INCOMPETENCY OF ITS EMPLOYEES, RATHER THAN TO ANY FAULT ON THE PART OF INSPECTOR DONNELLY. THE FILE OF THE CASE CONTAINS A LETTER DATED AUGUST 28, 1956, FROM COLONEL O. E. HENDERSON, USAF, RET., THE NEW PLANT MANAGER, STATING IN PART THAT "MR. HENRY WAS THE VICTIM OF AN INCOMPETENT STAFF BOTH IN THE OFFICE AND IN THE PLANT THAT KEPT DELIVERY PROMISES RATHER THAN CONTRACT ITEMS.'

AS EVIDENCED BY MR. DONNELLY'S REPORTS, HE WORKED DILIGENTLY IN EFFORTS TO INSURE THAT SUBSEQUENT DELIVERIES WOULD MEET OR SUBSTANTIALLY MEET THE REQUIREMENTS OF THE CONTRACT. UNDOUBTEDLY HIS EFFORTS RESULTED IN CONSIDERABLE IMPROVEMENTS RELATING TO THE QUALITY OF THE WELDING WORK AND THERE IS NO EVIDENCE TO SHOW THAT MR. DONNELLY ACTED ARBITRARILY WHEN REJECTING SOME OF THE UNITS OR SUBASSEMBLIES AND WHEN REQUESTING THAT SOME REWORKING BE DONE. APPARENTLY NO COMPLAINTS WERE REGISTERED REGARDING MR. DONNELLY'S REJECTIONS DURING THE LIFE OF THE CONTRACT AND WE NOTE THAT THE CONTRACTOR COMPLIED WITH HIS REQUEST THAT A COMPANY EMPLOYEE BE ASSIGNED TO INSPECT THE WORK BEING PERFORMED BEFORE SUBMITTING EQUIPMENT FOR NAVY INSPECTION.

WE ARE NOT CERTAIN WHETHER THE REFERENCE TO "FAULTY DESIGN" IN THE OCTOBER 22, 1956, REPORT FROM THE U.S. NAVAL MINE DEPOT WAS INTENDED AS A CRITICISM OF THE DESIGN OF THE QUADPAK CRADLE FURNISHED BY THE GOVERNMENT TO THE CONTRACTOR. WE BELIEVE THAT THE WRITER OF THE REPORT WAS REFERRING TO THE STRUCTURAL FEATURES OF THE EQUIPMENT MANUFACTURED BY THE WINDER AIRCRAFT CORPORATION OF FLORIDA, WHICH OBVIOUSLY DID NOT MEET THE REQUIREMENTS OF THE GOVERNMENT'S DESIGN IN VARIOUS RESPECTS. WE ALSO BELIEVE THAT THE DEPOT'S OPINION, IF CONSTRUED AS A CRITICISM OF THE GOVERNMENT'S DESIGN WHICH WAS DEVELOPED BY A RESEARCH AND DEVELOPMENT CONTRACTOR, WOULD NOT BE CONTROLLING IN THE MATTER, CONSIDERING THAT PROTOTYPES OF THE DESIGN WERE TESTED BY THE NAVY AND THE DESIGN PROVED TO BE SATISFACTORY WHEN USED BY A SUPPLY CONTRACTOR AFTER THE COMPLETION OF CONTRACT NO. NORD-17005 WITH THE WINDER AIRCRAFT CORPORATION OF FLORIDA.

UPON CONSIDERATION OF ALL OF THE FACTS OF THE CASE, WE DO NOT AGREE WITH YOUR ASSERTION THAT THE CONTRACTING OFFICER'S STATEMENT THAT "THOROUGH INVESTIGATION BY THE BUREAU FAILS TO DISCLOSE ANY DEFECTS IN THE DRAWINGS," ETC., IS OBVIOUSLY INCORRECT.

THERE IS NOTHING IN THE RECORD BEFORE US TO SUPPORT PROFESSOR HARPER'S ALLEGATIONS CONCERNING THE ADMINISTRATION OF THE CONTRACT ALTHOUGH IT IS TRUE THAT REPRESENTATIVES OF THE BUREAU OF ORDNANCE MADE TRIPS TO THE CONTRACTOR'S PLANT IN EFFORTS TO EXPEDITE DELIVERIES, AND COMMANDER GRAY, MR. E. C. BRADEN AND MR. D. R. HANSFORD VISITED THE PLANT ON SEPTEMBER 19, 1956. MR. DONNELLY WAS ON LEAVE FOR ABOUT FOUR DAYS IN THE LATTER PART OF AUGUST 1956, AT WHICH TIME HE WAS RELIEVED BY INSPECTOR JOE MCCURDY. THE CONTRACT REQUIREMENTS WERE NEVER CHANGED, NOTWITHSTANDING THE FACT THAT MR. YOUNG HAD, IN EFFECT, WAIVED CERTAIN OF THE STRUCTURAL REQUIREMENTS FOR THE QUADPAK CRADLES WHICH HAD BEEN NEARLY COMPLETED ON AUGUST 3, 1956. MR. DONNELLY EVIDENTLY CONSIDERED THAT SUCH WAIVER SHOULD ALSO APPLY TO OTHER QUADPAK AND BOOSTER CRADLES IN PRODUCTION AT SUCH TIME BUT THE WAIVER CERTAINLY WAS NOT INTENDED FOR APPLICATION WITH RESPECT TO ALL DELIVERIES TO BE MADE UNDER THE CONTRACT AND IT APPEARS THAT PRODUCTION WAS NOT STARTED AS EARLY AS AUGUST 3, 1956, ON THE CRADLES WHICH WERE IN THE PRODUCTION LINE ON SEPTEMBER 19, 1956.

IN OUR OPINION, THE GOVERNMENT HAD THE RIGHT TO REJECT FURTHER DELIVERIES OF QUADPAK AND BOOSTER CRADLES AT SUCH TIME. ALSO, IT WOULD APPEAR THAT THE ALLEGED LOSSES IN PRODUCTION TIME WERE MORE THAN COMPENSATED BY THE GOVERNMENT THROUGH THE PERMISSION GRANTED TO DEVIATE FROM THE REQUIREMENTS OF THE CONTRACT DRAWINGS WITHIN A REASONABLE TIME AFTER RECEIPT OF THE CONTRACTOR'S WRITTEN REQUESTS FOR SUCH PERMISSION, AS WELL AS THE PRIOR ACCEPTANCES OF CRADLES NOT CONFORMING TO THE REQUIREMENTS OF THE DRAWINGS.

WITH RESPECT TO CERTAIN EXPRESS OR IMPLIED ALLEGATIONS AND CONTENTIONS MADE IN YOUR LETTER OF SEPTEMBER 15, 1961, IT APPEARS THAT THE FOLLOWING COMMENTS SHOULD BE APPROPRIATE:

1. IT APPEARS THAT THE BUREAU OF NAVAL WEAPONS IS SUBSTANTIALLY CORRECT IN STATING THAT AT NO TIME WAS THE CONTRACTOR ORDERED BY A REPRESENTATIVE OF THE GOVERNMENT TO STOP WORK ON THE CONTRACT.

2. THERE IS NO EVIDENCE IN THE ENTIRE FILE TO SUPPORT ANY CONTENTION THAT AN AIR FORCE INSPECTOR ACCEPTED UNITS OFFERED FOR INSPECTION.

3. THE INSPECTION CLAUSE OF THE GENERAL PROVISIONS OF THE CONTRACT WAS SUBJECT TO THE PROVISIONS OF THE GUARANTY CLAUSE RESPECTING NONCONFORMING OR DEFECTIVE EQUIPMENT AND, AS SUCH, DID NOT HAVE THE EFFECT OF MAKING ACCEPTANCE AT THE CONTRACTOR'S PLANT FINAL AND CONCLUSIVE, ABSENT LATENT DEFECTS, FRAUD OR SUCH GROSS MISTAKES AS AMOUNT TO FRAUD. ALSO, PRIOR ACCEPTANCES OF NONCONFORMING MATERIAL DOES NOT, EVEN UNDER THE INSPECTION CLAUSE, REQUIRE FURTHER ACCEPTANCE OF MATERIAL OR SUPPLIES WHICH DO NOT CONFORM WITH CONTRACT REQUIREMENTS.

4. THE EVIDENCE DOES NOT ESTABLISH THAT INSPECTIONS WERE LAX OR, IF SO, THAT LAX INSPECTIONS CAUSED DAMAGE TO THE CONTRACTOR.

5. THERE IS NO EVIDENCE WHICH REASONABLY COULD BE SAID TO SUBSTANTIATE ANY CONTENTIONS THAT THE NAVY INSPECTOR ARBITRARILY REJECTED OR NEGLIGENTLY APPROVED UNITS OFFERED FOR INSPECTION, OR THAT THE DESIGNS FOR THE QUADPAK CRADLES WERE DEFECTIVE IN ANY RESPECT. POSSIBLY THE DESIGNS COULD BE IMPROVED AND WE DO NOT TAKE THE POSITION THAT THE THREE ENGINEERS CONSULTED BY THE WINDER AIRCRAFT CORPORATION OF FLORIDA COULD NOT DESIGN BETTER CRADLES THAN THE NAVY PROPOSED TO PURCHASE.

6. THE CONTRACTOR MAY HAVE BEEN DELAYED IN PERFORMANCE OF THE CONTRACT BECAUSE OF DEFAULTS ON THE PART OF ITS SUPPLIERS AS RELATED TO PROMISED DELIVERY DATES, BUT THERE HAS BEEN NO ADMINISTRATIVE DECISION MADE UNDER THE CONTRACT TERMS TO THE EFFECT THAT THE DELAYS INVOLVED WERE EXCUSABLE UNDER THE CONTRACT PROVISIONS. WE NOTE THAT THE NAVY ASSISTED THE CONTRACTOR IN AT LEAST ONE INSTANCE BY EXERTING EFFORTS TO EXPEDITE THE DELIVERY FROM A SUPPLIER OF TUBING MATERIAL. AN EXCUSABLE DELAY IN CONTRACT PERFORMANCE DOES NOT, HOWEVER, FORM A LEGAL BASIS FOR A CLAIM AGAINST THE GOVERNMENT FOR ADDITIONAL COMPENSATION UNDER A FIXED-PRICE CONTRACT WHICH DOES NOT PROVIDE FOR AN ADJUSTMENT IN PRICE TO COVER ANY SUCH CONTINGENCY. NOR DOES THE FACT THAT A CONTRACTOR SUFFERS A LOSS IN PERFORMING A GOVERNMENT CONTRACT AFFORD A LEGAL BASIS FOR INCREASING THE CONTRACT PRICE. WE HAVE CONSISTENTLY ADHERED TO THAT PROPOSITION AND WE NOTE THAT THE MEMORANDUM OF LAW SUBMITTED WITH THE SUPPLEMENTAL REPORT OF THE BUREAU OF NAVAL WEAPONS QUOTES FROM ONE OF OUR DECISIONS TO THE EFFECT THAT A CONTRACTOR WILL NOT BE EXCUSED OR BECOME ENTITLED TO ADDITIONAL COMPENSATION BECAUSE UNFORESEEN DIFFICULTIES ARE ENCOUNTERED.

7. THE NAVY DID NOT "SNAP UP" THE OFFER MADE BY THE WINDER AIRCRAFT CORPORATION OF FLORIDA, AS EVIDENCED BY THE FACT THAT THE CORPORATION WAS REQUESTED TO CONFIRM AND DID CONFIRM ITS BID PRICES BOTH IN WRITING AND IN A TELEPHONE CONVERSATION WITH A NAVY REPRESENTATIVE. ALSO, DURING A PREAWARD SURVEY, THE CONTRACTOR REAFFIRMED ITS COST ESTIMATES.

YOU HAVE INVITED ATTENTION TO THE FACT THAT THE ESTIMATED COST OF THE PROCUREMENT WAS $42,000, AS COMPARED WITH THE CONTRACTOR'S TOTAL BID PRICE OF $17,153.05. HOWEVER, THERE IS NO EVIDENCE AVAILABLE TO SHOW THAT THE NAVY WAS AWARE AT THE TIME THE CONTRACT WAS AWARDED THAT IT COULD NOT BE PERFORMED AT THE BID PRICES WITHOUT CAUSING THE CONTRACTOR TO SUFFER A LOSS. NO QUANTITY PURCHASES OF QUADPAK AND BOOSTER CRADLES HAD BEEN MADE BY THE NAVY BEFORE THE CONTRACT AWARD TO THE WINDER AIRCRAFT CORPORATION OF FLORIDA, AND THE ESTIMATE OF $42,000 APPEARS TO HAVE BEEN CONSIDERED ONLY AS A CONSERVATIVE ESTIMATE AS TO THE PROBABLE MAXIMUM AMOUNT WHICH THE NAVY WOULD AGREE TO PAY UNDER ANY CONTRACT TO BE LET BY FORMAL ADVERTISING FOR 55 QUADPAK CRADLES AND 115 BOOSTER CRADLES, PRODUCED IN ACCORDANCE WITH THE DESIGNS WHICH WERE DEVELOPED BY THE RESEARCH AND DEVELOPMENT CONTRACTOR. A MERE COMPARISON OF BIDS WOULD NOT HAVE JUSTIFIED A CONCLUSION THAT THE SUCCESSFUL BIDDER HAD MADE A MISTAKE IN BID AND WE HAVE INDICATED THAT AN ATTEMPT WOULD BE MADE TO SECURE AN ABSTRACT OF THE BIDS ONLY FOR THE PURPOSE OF DETERMINING THE MAXIMUM AMOUNT WHICH COULD BE ALLOWED ON THE CLAIM OF MISTAKE IF CONSIDERED THAT, NOTWITHSTANDING THE BID CONFIRMATIONS, THE CONTRACTING OFFICER WAS NEVERTHELESS ON NOTICE THAT A MISTAKE IN BID HAD BEEN MADE AND SOUGHT TO TAKE ADVANTAGE OF THE MISTAKE. WE HAVE BEEN ADVISED INFORMALLY BY THE BUREAU OF NAVAL WEAPONS THAT A CAREFUL SEARCH FOR THE BIDS OF THE COMPETING CONCERNS HAS BEEN MADE BUT SUCH BIDS CANNOT BE LOCATED. THINK THAT THE NAVY FULFILLED ITS RESPONSIBILITY FOR ASCERTAINMENT OF THE CORRECTNESS OF THE CONTRACTOR'S BID AND THAT THE CONTRACTOR IS NOT IN A POSITION TO CLAIM AN ADJUSTMENT IN THE CONTRACT PRICE BECAUSE OF THE UNILATERAL MISTAKE, IF ANY, MADE IN ITS BID. SEE 39 COMP. GEN. 27.

IT HAS LONG BEEN THE ESTABLISHED RULE THAT THE GOVERNMENT ACCOUNTING AND ADMINISTRATIVE OFFICERS SHOULD REJECT OR DISALLOW ALL CLAIMS AS TO WHICH THEY BELIEVE THERE MAY BE A SUBSTANTIAL DEFENSE IN LAW OR ASTO THE VALIDITY OF WHICH THEY ARE IN DOUBT. LONGWILL V. UNITED STATES, 17 CT.CL. 288, 291; CHARLES V. UNITED STATES, 19 CT.CL. 316, 319. WE BELIEVE THAT THE CLAIM HERE INVOLVED FALLS WITHIN BOTH CATEGORIES AND THE CLAIM IS THEREFORE HEREBY DISALLOWED IN ITS ENTIRETY.

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