B-132806, NOV. 26, 1957

B-132806: Nov 26, 1957

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TO AKELEY CAMERA AND INSTRUMENT CORPORATION: REFERENCE IS MADE TO LETTER OF OCTOBER 3. WHICH WAS DISALLOWED BY OUR CLAIMS DIVISION SETTLEMENT DATED SEPTEMBER 24. IT IS THE CONTENTION OF YOUR ATTORNEY THAT THE PULSE TESTER MODEL FURNISHED BY THE DEPARTMENT OF THE AIR FORCE WHICH WAS TO BE USED AS A PATTERN IN THE MANUFACTURE OF THE EQUIPMENT CONTRACTED FOR. THAT REPRODUCTION OF THE DEFECTIVE MODEL WOULD HAVE RESULTED IN A PRODUCT INCAPABLE OF ATTAINING THE PERFORMANCE STANDARDS REQUIRED UNDER THE SPECIFICATIONS. IS FURTHER CONTENDED THAT THE PROCUREMENT PERSONNEL OF THE GOVERNMENT. OR SHOULD HAVE KNOWN. THAT UNDER EXISTING TRADE CUSTOM AND USAGE IT WAS OBLIGATED TO APPRISE THE CONTRACTOR OF THOSE FACTS.

B-132806, NOV. 26, 1957

TO AKELEY CAMERA AND INSTRUMENT CORPORATION:

REFERENCE IS MADE TO LETTER OF OCTOBER 3, 1957, WRITTEN IN YOUR BEHALF BY MR. ROBERT J. FLYNN, ATTORNEY, REQUESTING RECONSIDERATION OF YOUR CLAIM FOR $21,747.19, ALLEGED TO BE DUE AS INCREASED COSTS INCURRED IN CONNECTION WITH THE PERFORMANCE OF CONTRACT NO. AF 33 (038) 13738, WHICH WAS DISALLOWED BY OUR CLAIMS DIVISION SETTLEMENT DATED SEPTEMBER 24, 1957.

IT IS THE CONTENTION OF YOUR ATTORNEY THAT THE PULSE TESTER MODEL FURNISHED BY THE DEPARTMENT OF THE AIR FORCE WHICH WAS TO BE USED AS A PATTERN IN THE MANUFACTURE OF THE EQUIPMENT CONTRACTED FOR, DID NOT CONFORM TO THE DRAWINGS MADE A PART OF THE CONTRACT, AND THAT REPRODUCTION OF THE DEFECTIVE MODEL WOULD HAVE RESULTED IN A PRODUCT INCAPABLE OF ATTAINING THE PERFORMANCE STANDARDS REQUIRED UNDER THE SPECIFICATIONS. IS FURTHER CONTENDED THAT THE PROCUREMENT PERSONNEL OF THE GOVERNMENT, KNEW, OR SHOULD HAVE KNOWN, OF SUCH DISCREPANCIES, AND THAT UNDER EXISTING TRADE CUSTOM AND USAGE IT WAS OBLIGATED TO APPRISE THE CONTRACTOR OF THOSE FACTS. IT IS URGED THAT THE GOVERNMENT, HAVING FAILED IN THAT REGARD, IS ESTOPPED FROM DENYING THAT IT DID NOT MAKE ANY CLAIMS AS TO THE QUALITY OF THE MODEL. ALSO, YOUR ATTORNEY STATES, IN EFFECT, THAT THROUGH ERROR ON THE PART OF BOTH PARTIES THE PROCUREMENT WAS MADE ON THE BASIS OF A FIRM PRICE AGREEMENT RATHER THAN COST-PLUS-A-FIXED-FEE CONTRACT WHICH WOULD HAVE BEEN PROPER, SINCE THE TRANSACTION WAS MORE IN THE NATURE OF A RESEARCH AND DEVELOPMENT UNDERSTANDING THAN A PRODUCTION CONTRACT.

IN A COMPREHENSIVE REPORT DATED APRIL 11, 1957, BY THE ASSISTANT CHIEF, CONTROL EQUIPMENT BRANCH, FLIGHT CONTROL LABORATORY AT THE WRIGHT- PATTERSON AIR FORCE BASE, IT IS CATEGORICALLY DENIED, IN OPPOSITION TO YOUR ATTORNEY'S FIRST CONTENTIONS, THAT EITHER A FAULTY MODEL OR INCORRECT DRAWINGS WERE FURNISHED BY THE GOVERNMENT FOR THE CONTRACTOR'S USE AND GUIDANCE, OR THAT THE SPECIFICATIONS MADE A PART OF THE CONTRACT WERE AMBIGUOUS. IT IS STATED FURTHER IN THE SAID REPORT THAT THE MODEL LOANED TO THE CONTRACTOR WAS CAPABLE OF PERFORMING ALL OF THE FUNCTIONS REQUIRED BY THE SPECIFICATIONS, AND THAT A COMPARATIVE TEST BETWEEN THE MODEL AND ONE OF THE UNITS FURNISHED UNDER THE SUBJECT CONTRACT DISCLOSED THAT THE TWO UNITS WERE SIMILAR IF NOT IDENTICAL.

WITH RESPECT TO THE ALLEGATION THAT THERE WAS A VARIANCE BETWEEN THE MODEL AND THE DRAWINGS, IT IS POINTED OUT IN THE REPORT THAT BOTH WERE SATISFACTORY FOR THEIR INTENDED PURPOSES, AND THAT THE CONTRACT MADE NO REPRESENTATIONS AS TO A COMPARISON OF THE TWO. FOR THAT REASON NO DETERMINATION AS TO THE CORRECTNESS OF THAT ALLEGATION WAS UNDERTAKEN.

THE RECORD SHOWS THAT YOUR FIRM OFFER TO FABRICATE THE 20 TESTERS AT $131.98 EACH, OR $2,639.60, WAS ACCEPTED IN GOOD FAITH BY THE CONTRACTING OFFICER, AND THERE IS NOTHING OF RECORD TO SUPPORT THE CONTENTION THAT THE PROCUREMENT SHOULD HAVE BEEN MADE, OR WAS INTENDED TO BE MADE, ON A COST- PLUS-A-FIXED-FEE BASIS. IN ADDITION TO THE CONTRACT CONSIDERATION HERETOFORE PAID CLAIM IS NOW MADE FOR AN ADDED $21,367.80, NOTWITHSTANDING THE GOVERNMENT RECEIVED ONLY THAT FOR WHICH IT BARGAINED. OF COURSE, AFTER NEGOTIATION OF THE CONTRACT IF YOU HAD REASON TO BELIEVE THAT A MISTAKE HAD BEEN MADE BY YOUR EMPLOYEES AND BY THE CONTRACTING OFFICER, WITH THE RESULT THAT THE EXECUTED CONTRACT DID NOT EXPRESS THE REAL AGREEMENT INTENDED, RESCISSION OF THE INSTRUMENT MIGHT HAVE BEEN PROPER. BUT THERE IS NO LEGAL BASIS FOR A PARTY TO CONTRACT, PERFORM, COLLECT THE FULL CONTRACT PRICE, AND THEN REPUDIATE THE CONTRACT AND RECOVER AS IF THERE HAD BEEN NONE. BOARD OF TRUSTEES, ETC., V. O. D. WILSON CO., 133 F.2D. Z 399.

HAVING ELECTED TO PERFORM, THERE WAS PROPER FOR YOUR CONSIDERATION THE PROVISIONS OF ARTICLE 19 OF THE STANDARD CONDITIONS OF THE CONTRACT WHICH, IF INVOKED PROMPTLY BY THE FILING OF THE CLAIM OR CLAIMS IN WRITING, WOULD HAVE AFFORDED THE CONTRACTING OFFICER THE OPPORTUNITY OF ASCERTAINING THE CORRECTNESS OF YOUR CONTENTIONS AND THE EXTENT, IF ANY, OF EXTRA WORK PERFORMED AND THE DAMAGES INCURRED. IT HAS BEEN HELD THAT SUCH A CLAIM AGAINST THE UNITED STATES IS BARRED BY THE FAILURE OF THE CLAIMANT TO EXHAUST THOSE ADMINISTRATIVE REMEDIES AFFORDED BY CONTRACT PROVISIONS SIMILAR TO THOSE PRESCRIBED IN THE DISPUTES CLAUSE OF YOUR CONTRACT. SILAS MASON COMPANY, INC. V. UNITED STATES, 90 C.CLS. 56; UNITED STATES V. CALLAHAN-WALKER COMPANY, 317 U.S. 56; UNITED STATES V. BLAIR, 321 U.S. 730; UNITED STATES V. HOLPUCH CO., 328 U.S. 234.

WITH FURTHER REFERENCE TO THE CONFLICTING STATEMENTS IN THE RECORD, IT SHOULD BE POINTED OUT THAT, WE MUST NECESSARILY RELY UPON THE FACTS REPORTED BY THE ADMINISTRATIVE OFFICERS AND UPON THE INFORMATION FURNISHED BY CLAIMANTS. AND WHERE, AS HERE, THERE IS INVOLVED DISPUTED QUESTIONS OF FACTS, IT HAS BEEN THE UNIFORM RULE OF THE ACCOUNTING OFFICERS OF THE GOVERNMENT TO ACCEPT THE ADMINISTRATIVE REPORT IN THE ABSENCE OF SUFFICIENT EVIDENCE TO OVERCOME THE CORRECTNESS OF SUCH REPORT. WHERE THERE EXISTS A DOUBT AS TO THE REASONABLENESS OR CORRECTNESS OF A CLAIM, THE REFUSAL OF THE ACCOUNTING OFFICERS TO CERTIFY SUCH CLAIM, OR ANY PART THEREOF, FOR PAYMENT IS SUPPORTED BY THE COURTS. LONGWILL V. UNITED STATES, 17 C.CLS. 288; CHARLES V. UNITED STATES, 19 C.CLS. 316.

IN VIEW OF THE FOREGOING, OUR SETTLEMENT OF SEPTEMBER 24, 1957, MUST BE SUSTAINED.