B-123298, SEP. 27, 1955

B-123298: Sep 27, 1955

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TO LOFTUS ENGINEERING CORPORATION: REFERENCE IS MADE TO YOUR CLAIM FOR $41. THE RECORD SHOWS THAT THE FURNACE WAS ORIGINALLY DESIGNED. THAT PAYMENT OF THE PRICE STATED IN THAT CONTRACT WAS MADE TO YOU. THE FURNACE WAS NOT ADEQUATE. IT WAS THEN DECIDED THAT IT WOULD BE MODIFIED OR ALTERED TO INCORPORATE THE DESIRED FUNCTIONS THAT WOULD BE ADEQUATE FOR THE REQUIREMENTS. WAS AWARDED TO YOU ON A NEGOTIATED FIXED PRICE BASIS. THE WORK WAS TO BE COMPLETED BY OCTOBER 15. IT APPEARS THAT PERFORMANCE UNDER THE CONTRACT WAS NOT COMPLETED UNTIL THE EARLY PART OF 1954 AT WHICH TIME YOU FILED A REQUEST FOR RELIEF FROM CERTAIN INCREASED COSTS INCURRED IN THE PERFORMANCE OF THE CONTRACTS UNDER TITLE II OF THE FIRST WAR POWERS ACT.

B-123298, SEP. 27, 1955

TO LOFTUS ENGINEERING CORPORATION:

REFERENCE IS MADE TO YOUR CLAIM FOR $41,151.08 INCREASED TO $51,088.33 BY YOUR LETTERS OF JUNE 7 AND JULY 7, 1955, REPRESENTING ADDITIONAL COMPENSATION ALLEGED TO BE DUE INCIDENT TO THE DESIGN, CONSTRUCTION AND ALTERATION OF A LOFTUS FURNACE REFERRED TO AS A FRANKFORD ARSENAL TAC NO. F-982. ALSO, INQUIRY HAS BEEN MADE BY SENATORS JAMES H. DUFF AND HARLEY W. KILGORE CONCERNING THE MATTER.

THE RECORD SHOWS THAT THE FURNACE WAS ORIGINALLY DESIGNED, CONSTRUCTED AND INSTALLED BY YOU AT THE ARSENAL UNDER CONTRACT NO. DA 36-038-ORD-1112, DATED JULY 28, 1950, AND THAT PAYMENT OF THE PRICE STATED IN THAT CONTRACT WAS MADE TO YOU. THE FURNACE WAS NOT ADEQUATE, HOWEVER, TO MEET THE GOVERNMENT'S NEEDS DUE TO INCREASED DEMANDS ON THE ARSENAL FOR SHELL CASES. IT WAS THEN DECIDED THAT IT WOULD BE MODIFIED OR ALTERED TO INCORPORATE THE DESIRED FUNCTIONS THAT WOULD BE ADEQUATE FOR THE REQUIREMENTS. IN ORDER TO ACCOMPLISH THIS PURPOSE, CONTRACT NO. DA-36-038 -ORD-11682, DATED AUGUST 22, 1952, WAS AWARDED TO YOU ON A NEGOTIATED FIXED PRICE BASIS. THIS CONTRACT PROVIDED, IN EFFECT, THAT IN CONSIDERATION OF PAYMENT OF THE LUMP-SUM PRICE OF 12,637 YOU WOULD DESIGN, FURNISH AND INSTALL ALL THE NECESSARY PARTS FOR ALTERATION OF THE FURNACE, PROVIDE FOR A HIGHER PRODUCTION CAPACITY AS THEREIN STATED AND WOULD IMPROVE THE WORK COVEYING AND QUENCHING SYSTEM, ALL IN ACCORDANCE WITH THE GOVERNMENT'S SPECIFICATIONS THEREFOR AS SET OUT IN THE CONTRACT. THE WORK WAS TO BE COMPLETED BY OCTOBER 15, 1952.

IT APPEARS THAT PERFORMANCE UNDER THE CONTRACT WAS NOT COMPLETED UNTIL THE EARLY PART OF 1954 AT WHICH TIME YOU FILED A REQUEST FOR RELIEF FROM CERTAIN INCREASED COSTS INCURRED IN THE PERFORMANCE OF THE CONTRACTS UNDER TITLE II OF THE FIRST WAR POWERS ACT, 1941, AS AMENDED (50 U.S.C. APP. 611). SUCH REQUEST, HOWEVER, WAS DENIED. YOU CONTINUED TO INCREASE YOUR CLAIM FROM TIME TO TIME AS THE WORK PROGRESSED TO COMPLETION. FINALLY, YOUR CLAIM WAS TRANSMITTED TO THE CLAIMS DIVISION OF THE GENERAL ACCOUNTING OFFICE FOR DIRECT SETTLEMENT.

AS YOU WERE ADVISED BY OUR LETTER OF JULY 19, 1955, YOUR LETTERS OF JUNE 7 AND JULY 7, 1955, WERE REFERRED TO THE DEPARTMENT OF THE ARMY WITH THE REQUEST THAT THE MATTER BE GIVEN FURTHER CONSIDERATION IN THE LIGHT OF THE INFORMATION SUPPLIED BY YOU IN THOSE LETTERS AND THAT A DETAILED REPORT BE FURNISHED. THE REPORT REQUESTED, SIGNED BY THE CONTRACTING OFFICER, NOW HAS BEEN RECEIVED AND IS TO THE EFFECT THAT YOUR VARIOUS CONTENTIONS FURNISH NO PROPER BASIS UPON WHICH YOUR CLAIM MAY BE ALLOWED. BASED ON THE INFORMATION FURNISHED BY THE CONTRACTING OFFICER YOUR CONTENTIONS WILL BE ANSWERED IN THE ORDER SET FORTH IN YOUR LETTER OF JUNE 7, 1955.

PAGE 1, PARAGRAPH 3 OF YOUR LETTER---

AFTER ACCEPTANCE OF AND PAYMENT FOR THE FURNACE FURNISHED UNDER CONTRACT NO. DA-36-038-ORD-1112, IT WAS PUT INTO OPERATION BUT FAILED TO HEAT CASE PIECES IN CONTINUOUS OPERATION AS REQUIRED BY THE APPLICABLE SPECIFICATIONS. DESPITE SUCH FAILURE, THE GOVERNMENT FELT ITS INTERESTS WERE PROTECTED UNDER PARAGRAPH 3.2 OF SPECIFICATIONS FED 1437, DATED JUNE 2, 1950, MADE A PART OF THE CONTRACT WHICH, IN EFFECT, PROVIDED FOR A ONE YEAR GUARANTEE AGAINST DEFECTIVE WORKMANSHIP AND MATERIALS. IN ORDER TO COMPLY WITH PARAGRAPH 3.20 OF SUCH SPECIFICATIONS, YOU HAD FURNISHED, PRIOR TO THE AWARD OF THE CONTRACT TO YOU, EXTENSIVE EVIDENCE OF HAVING SUCCESSFULLY DESIGNED AND BUILT EQUIPMENT OF SIMILAR TYPE AND CONSTRUCTION. THEREFORE, THE GOVERNMENT HAD EVERY REASON TO BELIEVE THAT YOU COULD PERFORM THE CONTRACT IN ACCORDANCE WITH ITS TERMS.

PAGE 2, PARAGRAPH 1---

1. THE FEEDING MECHANISM WHICH WAS NOT A PART OF THE EQUIPMENT FURNISHED BY YOU CONSISTED OF A HOPPER FURNISHED BY THE ARSENAL WHICH SUPPLIED CASE PIECES TO THE SYNTRON FEEDER FURNISHED BY YOU. ARSENAL PERSONNEL LOADED ONLY UNDER THE DIRECT INSTRUCTION AND SUPERVISION OF YOUR REPRESENTATIVES. THE ADJUSTMENT AND COMPATIBILITY OF THE SUPPLY HOPPER AND SYNTRON FEEDER WERE UNDER YOUR CONTROL AND WERE YOUR RESPONSIBILITY UNDER THE CONTRACT.

2. LUBRICATION OF THE EQUIPMENT WAS SOLELY UNDER YOUR CONTROL. ALTHOUGH LUBRICATION BY ARSENAL PERSONNEL CANNOT BE RECALLED BY ANY OF THOSE NOW AVAILABLE, IF THEY DID PERFORM SUCH WORK, IT WAS PERFORMED ONLY UNDER THE DIRECT SUPERVISION OF YOUR REPRESENTATIVES, UNDER CIRCUMSTANCES WHICH DID NOT IMPOSE ANY OBLIGATION ON THE GOVERNMENT TO MAKE PAYMENT OF ADDITIONAL COMPENSATION THEREFOR.

3. ARSENAL PERSONNEL HAVE NO KNOWLEDGE OR RECORD OF THE FACT THAT YOU ADDED SIDES AND BACK TO ANY OF THE GOVERNMENT-FURNISHED EQUIPMENT. LETTER DATED MARCH 13, 1952, YOU ADMITTED THAT THE USE OF THE CONVEYOR BELT AND DRUMS FURNISHED BY AN EXPERIENCED SUPPLIER OF SUCH EQUIPMENT WAS THE CAUSE OF FREQUENT SERVICE INTERRUPTIONS AND SHOULD HAVE BEEN REPLACED BY SOME OTHER CONVEYING INSTRUMENT TO PERFORM THE SERVICE OF PASSING .50 CAL. SHELL CASES THROUGH THE HARDENING FURNACE.

PAGE 2, PARAGRAPH 3---

THE MODIFICATION REFERRED TO DID NOT INVOLVE A NEW DESIGN PRINCIPLE. THE PRINCIPLE OF A TUBULAR TYPE FURNACE WAS KNOWN TO ARSENAL PERSONNEL AND PRESUMABLY TO YOU. IN YOUR LETTER OF MARCH 13, 1952, IT WAS STATED THAT YOUR MR. MORTON RECOMMENDED THAT A TUBE TYPE CONVEYOR BE SUBSTITUTED FOR THE ABOVE CAST CHAIN BELT IN THE EXISTING FURNACE. IN THIS CONNECTION CONTRACT NO. DA-36-038-ORD-11682 EXPRESSLY PROVIDED UNDER NOTE ON PAGE 3 AS FOLLOWS:

"1. THE FURNACE DESIGN OFFERED UNDER THE ALTERATIONS MUST EMBODY PROVED PRINCIPLES OF DESIGN. A FURNACE WHICH INCORPORATES UNTRIED OR UNSUCCESSFUL PRINCIPLES OF DESIGN WILL NOT BE CEPTABLE.'

PAGE 2, PARAGRAPH 3---

THE LETTER OF MARCH 13, 1952, CONTAINS THE FOLLOWING STATEMENT:

"THE LOFTUS ENGINEERING CORPORATION IS PROCEEDING WITH THIS WORK IN ITS ENGINEERING DEPARTMENT AND IS PLACING ORDERS FOR THE EQUIPMENT WHICH IT AGREED TO SUPPLY REGARDLESS OF WHETHER THEY EXCEED THE INTENT OF THE CONTRACT OR NOT, AND WILL PURSUE TO NEGOTIATE AN EQUITABLE ADJUSTMENT, BASED UPON SERVICE AND PRODUCTION UPON COMPLETION OF ITS PART OF THE PROGRAM.'

THE UNDERSCORED PORTION OF THE ABOVE-QUOTED SENTENCE IS NOT SYNONYMOUS WITH THE PHRASE "EVEN THOUGH THE WORK INVOLVED WAS BEYOND THE SCOPE OF THE CONTRACT" AT THE BOTTOM OF PAGE 2 OF YOUR LETTER OF JUNE 7, 1955.

REGARDLESS OF THE INTERPRETATION PLACED UPON THE UNDERSCORED PORTION OF THE QUOTATION FROM THE LETTER OF MARCH 13, 1952, NEITHER PARTY ENTERED INTO ANY AGREEMENT FOR PAYMENT PURSUANT TO NEGOTIATION UPON COMPLETION OF THE WORK REQUIRED TO BE DONE. ON THE CONTRARY, NEGOTIATIONS WERE STARTED TO FORMULATE A FIXED PRICE CONTRACT. IN RESPONSE TO THE REQUEST OF THE ARSENAL YOU SUBMITTED YOUR PROPOSAL UNDER DATE OF JUNE 12, 1952, TO PERFORM THE WORK REQUIRED AT A FIXED PRICE OF $12,637, STATING THAT YOU COULD COMPLETE THE WORK WITHIN 6 WEEKS. FURTHER NEGOTIATIONS WERE UNDERTAKEN TO DETERMINE HOW YOU ARRIVED AT YOUR COSTS AND TO CLARIFY AND ESTABLISH DEFINITELY YOUR UNDERTAKINGS. IT IS NOTED FROM YOUR LETTER OF APRIL 30, 1952, THAT YOUR COSTS HAD BEEN DETERMINED AS OF APRIL 7, 1952, AND THAT YOUR COST BREAKDOWN WAS REAFFIRMED IN YOUR LETTER OF JULY 3, 10 AND 25, 1952. THE WORK TO BE PERFORMED WAS NOT OF A RESEARCH AND DEVELOPMENT NATURE AND IT WAS SO UNDERSTOOD BY BOTH PARTIES. PAGE 3, PARAGRAPH 1---

THE ARSENAL DID ISSUE CHANGE ORDER NO. 1, BUT THE WORK COVERED BY THAT CHANGE ORDER WAS ALREADY COVERED BY CONTRACT NO. DA-36-038-ORD 11682. PRIOR TO THE ISSUANCE OF THE CHANGE ORDER A MEETING WAS HELD AT THE ARSENAL WHICH YOUR MR. W. A. MORTON ATTENDED, AND IT WAS AGREED THAT YOU WOULD HAVE UNTIL OCTOBER 15, 1953, TO COMPLETE THE CONTRACT. SUBSEQUENTLY, A REQUEST WAS ISSUED TO THE CONTRACT WRITING SECTION TO PREPARE A SUPPLEMENTAL AGREEMENT PROVIDING FOR AN EXTENSION OF THE TIME FOR COMPLETION TO OCTOBER 15, 1953. DUE TO A MISUNDERSTANDING, HOWEVER, THE CHANGE ORDER WAS ISSUED INSTEAD. THE ALLEGED DIRECT COST, EXCLUSIVE OF OVERHEAD, OF PERFORMING THE WORK COVERED BY THE CHANGE ORDER IS SET FORTH IN EXHIBITS F, G, H, I AND J ATTACHED TO YOUR LETTER OF JUNE 7, 1955. THESE EXHIBITS, EXCEPT EXHIBIT J, ARE EXPLAINED AND ANSWERED BY THE CONTRACTING OFFICER IN THE FOLLOWING WORDS:

"/1) EXHIBIT "F" SPEAKS OF REDESIGNING, MANUFACTURING AND INSTALLING A NEW ALLEY "Y" TO REPLACE THE EXISTING ONE. THIS RESULTED FROM THE EXISTING YOKE NOT WORKING PROPERLY AND THE CONTRACTOR'S HAVING TO REDESIGN ONE WHICH WOULD FUNCTION PROPERLY.

"/2) EXHIBIT "G" SPEAKS OF CHANGING NOZZLE QUENCH TO CURVE ANGLE QUENCH AND USE WASH TANK AS QUENCH TANK. THIS RESULTED FROM THE EXISTING EQUIPMENT NOT PROPERLY QUENCHING THE .50 CAL. CASE PIECE AS REQUIRED UNDER THE CONTRACT.

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

"/4) EXHIBIT "I" SPEAKS OF DESIGNING, MANUFACTURING AND INSTALLING AN AUTOMATIC, MECHANICALLY OPERATED FEEDING MECHANISM FOR THE FURNACE. SUCH A MECHANISM IS EXPRESSLY REQUIRED UNDER ITEM 1/C), PAGE 3 OF THE CONTRACT. MOREOVER, THE HOPPER WAS RAISED BY ARSENAL PERSONNEL, NOT BY CONTRACTOR'S PERSONNEL.'

EXHIBIT J STATES THAT TWO SETS OF TUBES WERE PROVIDED BY YOU WHICH WOULD BE INTERCHANGEABLE FOR LARGE AND SMALL CALIBER SHELLS AT A TOTAL COST OF $5,104.56. THESE TUBES WERE COVERED, HOWEVER, BY ITEMS 1/A) AND 1/B) OF THE CONTRACT. ALSO, SEE ITEM 1/C) ON PAGE 3 OF THE CONTRACT WHICH EXPRESSLY REQUIRED YOU TO INCREASE THE NUMBER OF RADIANT HEATING TUBES TO PROVIDE SUFFICIENT TEMPERATURE WITHIN THE FURNACE TO PROPERLY HEAT TREAT CASE HEAD TURNED PIECES AS REQUIRED BY ITEM 1/C) OF THE CONTRACT.

PAGE 3, PARAGRAPH 2---

THE CONTRACTING OFFICER DENIES THAT YOU PERFORMED WORK BEYOND THE SCOPE OF THE CONTRACT, IT BEING STATED WITH REFERENCE TO EXHIBITS K, L AND M THAT:

"/1) EXHIBIT "K" SPEAKS OF OVERHAULING THE GAS GENERATOR WHICH IS A COMPONENT OF THE FURNACE. THE RECORDS INDICATE THAT THIS WORK WAS DONE IN OCTOBER 1953, AT WHICH TIME THE EQUIPMENT HAD NOT BEEN ACCEPTED BY THE GOVERNMENT AND WAS UNDER THE CONTROL AND JURISDICTION OF THE CONTRACTOR. IT WAS THE CONTRACTOR'S DUTY, AND NOT THE ARSENAL S, TO PROPERLY MAINTAIN THE EQUIPMENT.

"/2) EXHIBIT "L" SPEAKS ONLY OF DESIGNING, PROCURING AND INSTALLING SLEEVES. THERE APPEARS TO BE NO CLAIM FOR AN ALARM SYSTEM. THE INSTALLING OF THE SLEEVES WAS ACCOMPLISHED BY THE CONTRACTOR TO RECTIFY AN EXISTING FAULTY DESIGN IN THAT THE CASES WERE PREVIOUSLY NOT BEING PROPERLY POSITIONED TO ASSURE THEIR DROPPING INTO THE DISCHARGE CHUTE LEADING TO THE QUENCH TANK AS REQUIRED UNDER THE CONTRACT. WITH RESPECT TO THE ALARM SYSTEM, THIS IS CONSIDERED A NORMAL REQUIREMENT IN ANY EQUIPMENT THAT MAY MALFUNCTION SO THAT ATTENTION OF OPERATING PERSONNEL MAY BE CALLED THERETO.

"/3) EXHIBIT "M" SPEAKS OF THE FURNACE BEING JAMMED DUE TO IMPROPER CLEANING BY ARSENAL PERSONNEL. THE RECORDS INDICATE THAT THIS WORK WAS DONE IN JUNE 1954, AT WHICH TIME THE EQUIPMENT HAD NOT BEEN ACCEPTED BY THE GOVERNMENT WHICH WAS, ACCORDINGLY, UNDER NO DUTY TO CLEAN AND MAINTAIN IT. ANY CLEANING DONE BY ARSENAL PERSONNEL WAS ALWAYS PERFORMED UNDER THE DIRECTION AND CONTROL OF THE CONTRACTOR'S REPRESENTATIVES. THE SPECIAL CLEANING TOOL MENTIONED BY THE CONTRACTOR CONSISTED OF A JOINTED STEEL ROD, WHICH COULD ACCOMODATE ONLY ONE TUBE AFTER USE ON WHICH IT BECAME SO HOT AS TO BE UNSAFE FOR FURTHER IMMEDIATE USE.'

PAGE 4, PARAGRAPH 1---

THE LETTER OF NOVEMBER 17, 1954, STATED THAT THERE WAS A POSSIBILITY THAT WORK HAD BEEN PERFORMED WHICH WAS NOT COVERED BY THE CONTRACT AND YOU WERE REQUESTED TO SUBMIT YOUR COST WHICH WOULD BE GIVEN EVERY CONSIDERATION. THE LETTER INDICATED A WILLINGNESS TO PAY YOU FOR WORK NOT COVERED BY THE CONTRACT IN THE EVENT THAT ANY WORK WAS SO FOUND. THE CONTRACTING OFFICER NOW HAS FOUND THAT THE WORK FOR WHICH PAYMENT IS CLAIMED WAS COVERED BY THE CONTRACT.

PAGE 4, PARAGRAPHS 4, 5, 6, AND 7 (EXHIBITS N, O, P, AND Q/---

THE CONTRACTING OFFICER ANSWERS YOUR CONTENTIONS IN THESE PARAGRAPHS AS FOLLOWS:

"/K) PAGE 4, PARAGRAPH NUMBERED 4--- IT IS DENIED THAT CONTRACTOR INSTRUCTED AND TRAINED NEW PERSONNEL. INVESTIGATION SHOWS THAT ONLY ONE MAN RECEIVED TRAINING WHICH WAS GIVEN DURING PERFORMANCE OF THE ORIGINAL CONTRACT DA-36-038-ORD-1112, AND THAT NO RECOGNIZED TRAINING HAS EVER BEEN RECEIVED SINCE THAT TIME. "/1) PAGE 4, PARAGRAPH NUMBERED 5--- THE RECORDS INDICATE THAT THIS WORK WAS DONE IN FEBRUARY 1954, AT WHICH TIME THE EQUIPMENT HAD NOT BEEN ACCEPTED BY THE GOVERNMENT AND WAS UNDER THE CONTROL AND JURISDICTION OF THE CONTRACTOR. IT WAS THE CONTRACTOR'S DUTY, AND NOT THE ARSENAL-S, TO EFFECT STAND-BY MAINTENANCE DURING PERIOD OF NON -OPERATION. FURTHERMORE, THE GOVERNMENT HAS NEVER BEEN FURNISHED WITH ANY STAND-BY MAINTENANCE INSTRUCTIONS BY THE CONTRACTOR.

"/M) PAGE 4, PARAGRAPH NUMBERED 6--- THE RECORDS INDICATE THAT THIS WORK WAS PERFORMED IN AUGUST 1954, AT WHICH TIME THE EQUIPMENT HAD NOT BEEN ACCEPTED BY THE GOVERNMENT. THE CONTRACT PROVIDED THAT THE FURNACE BE ABLE TO PROCESS 20MM CASE HEAD TURNED PIECES. THE CONVERSION WAS PERFORMED BY THE CONTRACTOR TO TEST SUCH PROCESSING TO DETERMINE COMPLIANCE WITH CONTRACT REQUIREMENTS. THE FURNACE WAS THEREAFTER RECONVERTED TO CONTINUE TESTING OF THE .50 CAL. CASE PIECES.

"/N) PAGE 4, PARAGRAPH NUMBERED 7--- THE CONTRACTOR WAS COGNIZANT THAT CUPRODINE COATED STEEL CARTRIDGE CASES WERE THE COMPONENTS TO BE PROCESSED. BASED ON ITS EXPERIENCE WITH HEAT TREATING FURNACES, IT SHOULD HAVE ADVISED THE ARSENAL TO REMOVE THE CURPODINE COATING FROM THE CASES IF PRESENCE OF SUCH COATING WOULD LEAD TO MALFUNCTION OF THE FURNACE. THE ARSENAL IS PRESENTLY NOT USING THE CUPRODINE COATING.'

THE CONTRACTING OFFICER ALSO STATES THAT THE GOVERNMENT'S EMPLOYEES MENTIONED IN YOUR LETTER OF JUNE 7, 1955, AS HAVING BEEN COGNIZANT OF THE ALLEGED ADDITIONAL WORK PERFORMED, WERE INTERVIEWED AND THAT ALL OF THEM STATED THAT THEIR RELATIONS WITH YOU WERE THOSE NORMALLY INCIDENT TO A TECHNICAL ADMINISTRATION OF THE CONTRACT AND THAT AT NO TIME DID ANY OF THEM AUTHORIZE ANY WORK OUTSIDE THE SCOPE OF THE CONTRACT.

IT WOULD APPEAR FROM THE FOREGOING REPORT OF THE CONTRACTING OFFICER THAT THE AMOUNTS CLAIMED COVER WORK REQUIRED BY THE CONTRACTS AND THAT THE LONG DELAY IN COMPLETING PERFORMANCE WAS OCCASIONED BY YOUR INABILITY GENERALLY TO PERFORM THE WORK AS REQUIRED BY THE EXPRESS TERMS OF THE CONTRACTS.

MOREOVER, UNDER PARAGRAPH 3 OF THE GENERAL PROVISIONS OF THE CONTRACTS, ENTITLED EXTRAS, IT IS PROVIDED THAT:

"EXCEPT AS OTHERWISE PROVIDED IN THIS CONTRACT, NO PAYMENT FOR EXTRAS SHALL BE MADE UNLESS SUCH EXTRAS AND THE PRICE THEREFOR HAVE BEEN AUTHORIZED IN WRITING BY THE CONTRACTING OFFICER.'

UNDER THIS CLAUSE IT IS APPARENT THAT THAT PART OF YOUR CLAIM FOR ADDITIONAL COMPENSATION NOT COVERED BY CHANGE ORDER NO. 1, MAY NOT BE ALLOWED EVEN IF EXTRA WORK WAS PERFORMED SINCE IT WAS NOT AUTHORIZED IN WRITING BY THE CONTRACTING OFFICER. IN THE CASE OF HARRY C. KILMER V. UNITED STATES, 48 C.CLS. 180, 193, THE COURT SAID:

"IF IN SUCH CASE THE OFFICER OF THE GOVERNMENT DIRECTING THE WORK REFUSES TO ENTER INTO A WRITTEN AGREEMENT OR TO ORDER THE WORK IN WRITING AS THE CONTRACT MAY REQUIRE, ON THE GROUND THAT THE WORK IS EMBRACED WITHIN THE CONTRACT, THEN THE CONTRACTOR'S REMEDY IS BY APPEAL TO A HIGHER OFFICER, IF THE CONTRACT SO PROVIDES, IN WHICH CASE, UNDER THE RULING IN THE CASES CITED, IF THE DECISION IS AGAINST THE CONTRACTOR HE WOULD, IN THE ABSENCE OF FRAUD OR GROSS ERROR, BE EDILESS.' SEE ALSO THE CASES OF PLUMLEY V. UNITED STATES, 226 U.S. 545, 547; POPE V. UNITED STATES, 76 C.CLS. 64, 97; AND LOUISE HARDWICK, ADMX. V. UNITED STATES, 95 C.CLS. 336, 342 IN WHICH THE COURT SAID:

"* * * IT HAS ALSO BEEN HELD THAT WHERE THE CONTRACT PROVIDES THAT NO PAYMENT SHOULD BE MADE FOR ANY EXTRA WORK OR MATERIAL UNLESS IT IS ORDERED IN THE MANNER PRESCRIBED BY THE CONTRACT, THAT THIS CLAUSE IS FATAL TO ANY RECOVERY BY THE CONTRACTOR FOR THE WORK NOT SO ORDERED.'

OF COURSE, ADDITIONAL COMPENSATION MAY NOT BE ALLOWED FOR THE WORK COVERED BY CHANGE ORDER NO 1 DUE TO THE FACT THAT SUCH WORK WAS INCLUDED IN THE CONTRACT. EVEN IF THE WORK STATED IN THAT CHANGE ORDER WAS NOT COVERED BY THE ORIGINAL CONTRACT THE ADDITIONAL AMOUNT CLAIMED ON ACCOUNT THEREOF PROPERLY COULD NOT BE ALLOWED FOR THE REASON YOU DID NOT ADVISE THE ARSENAL WITHIN 30 DAYS FROM DATE OF RECEIPT OF THE CHANGE ORDER OF ANY CHANGE IN PRICE AND OR DELIVERY SCHEDULE AS REQUIRED.