B-129845, JAN. 25, 1957

B-129845: Jan 25, 1957

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

INC.: FURTHER REFERENCE IS MADE TO THE MATTER OF YOUR CLAIM FOR $123. RECEIPT IS ACKNOWLEDGED OF A MORE RECENT LETTER FROM CALVERT AND WHITE DATED JANUARY 8. WHICH WAS THE LOWEST OF EIGHT BIDS RECEIVED. AF 33/038/11528 WAS AWARDED TO YOU ON APRIL 3. WHICH PRICE WAS SUBSEQUENTLY REVISED TO A MAXIMUM OF $65. IT IS ALLEGED THAT DURING PERFORMANCE UNDER THE SUBJECT CONTRACT CERTAIN CHANGES WERE MADE. AS A RESULT OF THOSE CHANGES YOU ARE CLAIMING THE ADDITIONAL AMOUNTS OF $112. EXHIBITS SUBMITTED BY CALVERT AND WHITE IT IS NOTED THAT THE REQUEST FOR RELIEF IS MADE UNDER THE GENERAL AUTHORITY EXTENDED TO US BY THE BUDGET AND ACCOUNTING ACT OF 1921. WHILE BOTH THE LETTER AND THE BRIEF OF CALVERT AND WHITE ARE IN CONSIDERABLE DETAIL.

B-129845, JAN. 25, 1957

TO WEBCOR, INC.:

FURTHER REFERENCE IS MADE TO THE MATTER OF YOUR CLAIM FOR $123,504.07, ALLEGED TO BE DUE UNDER CONTRACT NO. AF 33/038/11528, DATED APRIL 3, 1950, WITH THE DEPARTMENT OF THE AIR FORCE AND TO A LETTER DATED MAY 7, 1956, FROM YOUR ATTORNEYS, CALVERT AND WHITE, FORWARDING A BRIEF AND CERTAIN EXHIBITS IN SUPPORT OF THE POSITION TAKEN BY YOU IN THE MATTER. ALSO, RECEIPT IS ACKNOWLEDGED OF A MORE RECENT LETTER FROM CALVERT AND WHITE DATED JANUARY 8, 1957, REGARDING THE CLAIM.

IT APPEARS THAT UPON THE BASIS OF YOUR BID, WHICH WAS THE LOWEST OF EIGHT BIDS RECEIVED, AND UPON THE SUBSEQUENT AGREEMENT OF THE DEPARTMENT OF THE AIR FORCE TO FURNISH CERTAIN MATERIALS AND EQUIPMENT, CONTRACT NO. AF 33/038/11528 WAS AWARDED TO YOU ON APRIL 3, 1950, FOR FURNISHING 14 FLIGHT LOAD RECORDERS, ETC., INCLUDING SUCH ASSOCIATED EQUIPMENT AS A PLAY-BACK SYSTEM, ETC., FOR A FINAL NEGOTIATED PRICE OF $63,727, SUBJECT TO PRICE REVISION UPON COMPLETION OF THE WORK AND NOT TO EXCEED THE MAXIMUM OF $70,099, WHICH PRICE WAS SUBSEQUENTLY REVISED TO A MAXIMUM OF $65,999.95 TO COVER A DECREASE IN THE QUANTITY OF CERTAIN ITEMS. IT IS ALLEGED THAT DURING PERFORMANCE UNDER THE SUBJECT CONTRACT CERTAIN CHANGES WERE MADE, APPARENTLY IN BOTH THE DESIGN AND OPERATING FEATURES OF THE EQUIPMENT, AND AS A RESULT OF THOSE CHANGES YOU ARE CLAIMING THE ADDITIONAL AMOUNTS OF $112,777.43, REPRESENTING ALLEGED LOSSES INVOLVED IN PERFECTING THE CHANGES, AND $10,726.64 COVERING PROFIT, OR A TOTAL CLAIM OF $123,504.07.

IN REVIEWING THE LETTER, BRIEF, AND EXHIBITS SUBMITTED BY CALVERT AND WHITE IT IS NOTED THAT THE REQUEST FOR RELIEF IS MADE UNDER THE GENERAL AUTHORITY EXTENDED TO US BY THE BUDGET AND ACCOUNTING ACT OF 1921, 42 STAT. 20, TO SETTLE AND ADJUST ALL CLAIMS BY, OR AGAINST, THE GOVERNMENT OF THE UNITED STATES; ALSO, UNDER THE ADDITIONAL AUTHORITY CONFERRED UPON OUR OFFICE BY THE MERITORIOUS CLAIMS ACT OF APRIL 10, 1928, 45 STAT. 413. WHILE BOTH THE LETTER AND THE BRIEF OF CALVERT AND WHITE ARE IN CONSIDERABLE DETAIL, IT APPEARS THAT THE ARGUMENTS ADVANCED BY THEM IN SUPPORT OF YOUR POSITION PRIMARILY IS THAT A MUTUAL MISTAKE OF CERTAIN MATERIAL FACTS WAS MADE BY YOU AND THE DEPARTMENT OF THE AIR FORCE AT THE TIME OF EXECUTION OF THE CONTRACT WHICH INVOLVED SPECIFICATIONS THAT WERE VAGUE, AMBIGUOUS, AND IMPOSSIBLE OF PERFORMANCE; ALSO, THAT YOUR LOSSES OCCURRED BY REASON OF CERTAIN UNILATERAL ACTION ON THE PART OF THE AIR FORCE.

WITH RESPECT TO THE CONSIDERATION OF THE LEGAL ASPECTS OF THE CLAIM UNDER THE GENERAL AUTHORITY CONFERRED UPON OUR OFFICE, THERE APPEARS PARTICULARLY RELEVANT THE CONTRACTING OFFICER'S STATEMENT THAT A REVIEW OF THE REPORTS COVERING THE EARLY STAGES OF THE CONTRACT PERFORMANCE-- SEPTEMBER 1950 THROUGH MARCH 1952--- DOES NOT, IN ANY INSTANCE, INDICATE THAT THE CONTRACT WAS VAGUE OR AMBIGUOUS OR THAT THE SPECIFICATIONS WERE IMPOSSIBLE TO MEET, ALTHOUGH IT MAY BE THAT, AS IN ANY KIND OF EXPERIMENTAL WORK, NOT EVERY DETAIL WAS SPELLED OUT. THE CONTRACTING OFFICER STATES FURTHER THAT THE REPORTS DO NOT SHOW THAT YOU WERE ENCOUNTERING INSURMOUNTABLE DIFFICULTIES BUT RATHER REFLECT A CONTINUOUS NOTE OF OPTIMISM, THE PRINCIPAL FACTORS BEING THE UNAVAILABILITY OF MATERIAL, THEREBY INDICATING PROBABLE DIFFICULTY IN THE LATTER MONTHS IN MEETING DELIVERY SCHEDULES. MOREOVER, THERE IS NOTHING IN THE RECORD OTHERWISE TO SUBSTANTIATE YOUR CONTENTION THAT THE CONTRACT SPECIFICATIONS WERE VAGUE, AMBIGUOUS, OR IMPOSSIBLE OF PERFORMANCE.

WHILE CERTAIN CHANGES WERE MADE IN THE FLIGHT LOAD RECORDERS IT IS NOT ESTABLISHED THAT THE CHANGES, WHICH INVOLVED PERHAPS BOTH DESIGN AND OPERATING FEATURES, WERE SUCH AS TO WARRANT THE CONCLUSION THAT AN ENTIRELY DIFFERENT UNIT WAS DELIVERED AND ACCEPTED THAN THAT CALLED FOR BY THE SPECIFICATIONS. RATHER IT APPEARS THAT THE CHANGES INVOLVED MERELY A CORRECTION OF THOSE DIFFICULTIES WHICH REASONABLY MIGHT HAVE BEEN EXPECTED TO BE ENCOUNTERED IN THE MANUFACTURE OF A UNIT OF THIS KIND IN VIEW OF THE LIMITATIONS ON THE THEN KNOWN "STATE OF THE ART.' ALSO, IT IS OF PASSING INTEREST TO NOTE THE REPORTED OPINIONS OF INTERESTED OFFICIALS OF THE DEPARTMENT OF THE AIR FORCE THAT YOU ACCEPTED THE SUBJECT CONTRACT ON A FIXED-PRICE BASIS WITH FULL KNOWLEDGE OF POSSIBLE OVER-RUN AND CONTINUED THE REDESIGN IN 1953, AT WHICH TIME THERE WAS CONSIDERABLE DISCUSSION AMONG DEPARTMENT OF THE AIR FORCE OFFICIALS REGARDING POSSIBLE TERMINATION OF THE CONTRACT; AND WITH KNOWLEDGE THAT ALL EFFORTS FROM THAT POINT COULD VERY WELL COST IN EXCESS OF THE AMOUNT PROVIDED IN THE CONTRACT AND THE FUNDS AVAILABLE FROM THE DEPARTMENT OF THE AIR FORCE TO ACCOMPLISH THE REQUIRED CONTRACT WORK.

IN VIEW OF THE FOREGOING, IT REASONABLY MAY NOT BE CONCLUDED THAT A MUTUAL MISTAKE WAS MADE BY YOU AND THE DEPARTMENT OF THE AIR FORCE AT THE TIME THE CONTRACT WAS ENTERED INTO OR THAT THE AIR FORCE IS CHARGEABLE WITH UNILATERAL ACTION UNDER THE CONTRACT WHICH RESULTED IN THE ALLEGED LOSSES TO YOU. RATHER, THE RECORD STRONGLY INDICATES THAT YOU MERELY EXPERIENCED SUCH DIFFICULTIES AS REASONABLY MIGHT HAVE BEEN EXPECTED DUE TO THE UNIQUE NATURE OF THE INSTRUMENTS TO BE MANUFACTURED AND THE INTERVENING OR UNFORESEEN CAUSES WHICH RENDERED PERFORMANCE OF THE CONTRACT MORE BURDENSOME OR LESS PROFITABLE THAN EXPECTED ARE NOT SUFFICIENT TO ENTITLE YOU TO COMPENSATION IN ADDITION TO THAT PROVIDED IN THE CONTRACT SINCE VALID CONTRACTS ARE TO BE ENFORCED AND PERFORMED AS WRITTEN. COLUMBUS RY. POWER AND LIGHT COMPANY V. COLUMBUS, 249 U.S. 399, 412; BLAUNER CONSTRUCTION COMPANY V. UNITED STATES, 94 C.CLS. 503, 511 AND SATTERLEE ADMX., ET AL. V. UNITED STATES, 30 C.CLS. 31.

ACCORDINGLY, SINCE THE CONTRACT HERE INVOLVED MADE NO PROVISION FOR ANY ADDITIONAL COMPENSATION IN CASE OF INCREASED COSTS OF PERFORMANCE, SUCH AS HERE ALLEGED, THERE APPEARS NO LEGAL BASIS FOR THE ALLOWANCE OF ANY PART OF THE AMOUNT CLAIMED.

WITH RESPECT TO THE CONSIDERATION OF THE MATTER UNDER THE MERITORIOUS CLAIMS ACT OF APRIL 10, 1928, THIS IS TO ADVISE THAT SUCH ACT AUTHORIZES US TO REPORT TO THE CONGRESS OF THE UNITED STATES, WITH OUR RECOMMENDATIONS, CLAIMS WHICH, IN OUR JUDGMENT, CONTAIN SUCH ELEMENTS OF LEGAL LIABILITY OR EQUITY AS TO BE DESERVING OF CONSIDERATION OF THE CONGRESS. ON THE BASIS OF THE CONCLUSION HERETOFORE REACHED IT IS OBVIOUS THAT OUR OFFICE DOES NOT FEEL THAT THERE EXISTS ANY ELEMENTS OF LEGAL LIABILITY IN THE MATTER. MOREOVER, SINCE THE RECORD DOES NOT SHOW THAT THE GOVERNMENT RECEIVED ANY PARTICULAR ADVANTAGES OR BENEFITS, SUCH AS THE RECEIPT OF A MORE SUPERIOR FLIGHT LOAD RECORDER, EARLIER DELIVERIES, ETC., THAN IT REASONABLY WAS ENTITLED TO UNDER THE REQUIREMENTS OF THE CONTRACT OR THAT YOU WERE SUBJECTED TO ANY UNCONSCIONABLE CONDITIONS IN THE OVER ALL PERFORMANCE OF THE WORK UNDER THE CONTRACT, IT MUST BE HELD THAT ON THE PRESENT RECORD THE CLAIM DOES NOT PRESENT SUCH ELEMENTS OF EQUITY AS TO WARRANT ITS BEING REPORTED TO THE CONGRESS FOR CONSIDERATION UNDER THE ACT OF APRIL 10, 1928.