B-141258, FEB. 7, 1961

B-141258, FEB. 7, 1961

TO AKROS DYNAMICS CORPORATION:

REFERENCE IS MADE TO YOUR PETITION, WITH RELATED ENCLOSURES, ADDRESSED TO AND FILED WITH OUR OFFICE UNDER DATE OF NOVEMBER 16, 1959, WHEREIN YOU CONTEND THAT THE GOVERNMENT BREACHED ITS CONTRACT BY FAILING TO INCLUDE CERTAIN ELECTRONIC EQUIPMENT WITH FOUR C-74 "GLOBEMASTER I" AIRCRAFT DELIVERED TO YOU UNDER SALES CONTRACT NO. AF 04/607/S-1221 (RFQ-PPRS-3-S- 58-5), DATED NOVEMBER 27, 1957, NEGOTIATED BY THE SAN BERNARDINO AIR MATERIEL AREA, NORTON AIR FORCE BASE, SAN BERNARDINO, CALIFORNIA.

BY INVITATION NO. 04-607-S-57-21, DATED MAY 10, 1957, THE CONTRACTING OFFICER, NORTON AIR FORCE BASE, SAN BERNARDINO, CALIFORNIA, OFFERED FOR SALE BIDS TO BE OPENED JULY 19, 1957, SUBJECT TO THE GENERAL SALE TERMS AND CONDITIONS APPEARING ON PAGE 2 OF THE INVITATION (REFERRED TO HEREAFTER AS THE SALES CATALOG) AND THE ADDITIONAL SPECIAL SALE TERMS AND CONDITIONS, APPEARING AT PAGES (3) AND (11) THEREOF, CERTAIN GOVERNMENT- OWNED SURPLUS PROPERTY DESCRIBED ON CONTINUATION SHEETS NOS. 16 THROUGH 76 OF THE INVITATION. ITEM NOS. 1 THROUGH 11 OF THE PROPERTY OFFERED FOR SALE, WHICH WERE DESCRIBED AT CONTINUATION SHEETS NOS. 16 AND 38, CONSISTED OF 11 6-74 "GLOBEMASTER I" AIRCRAFT AND RELATED "KITS.' TYPICAL OF THE MANNER IN WHICH THE AIRCRAFT AND THESE ITEMS WERE DESCRIBED IN THE SALES CATALOG IS THE DESCRIPTION PERTAINING TO ITEM NO. 1, WHICH IS AS FOLLOWS:

"1. A. AIRCRAFT LOCATED AT DAVIS-MONTHAN AFB, TUCSON, ARIZONA.

(1) C174 ACFT NO. 26-5409 TOTAL AIRFRAME HOURS: 9509:35 W/4 PRATT AND WHITNEY R-4360-49 ENGS. AS FOLLOWS: * * *

CONDITION-GENERAL:USED, MINOR REPAIRS AND USUAL WORK REQUIRED TO PROCESS AIRCRAFT FOR FLIGHT FROM STORAGE. ACQ COST $1,278,548.00.

CONDITION--- T.O. COMPLIANCE: THE FOLLOWING LISTED T.O. OR EGP KITS, LISTED ELSEWHERE, ARE BELIEVED TO HAVE BEEN COMPLIED WITH ON THIS ACFT, HOWEVER, CERTAIN COMPONENTS MAY HAVE BEEN REMOVED. TECHNICAL INSPECTION IS RECOMMENDED.

1ADF-1C-74-21

ADF-TO-1C-74-37

1ADF-TO-1C-74139

1ADF-TO-1C-74-45

1ADF-ECP-C-74-376

1ADF-ECP-C-74-394

"B. PROPERTY LOCATED AT BROOKLEY AFB, MOBILE, ALABAMA.

(1) 1ADF-TO-1C-74-30 KIT INSTALLATION OF TWO-SHOT FIRE EXTINGUISHER SYSTEM, C-74 SERIES ACFT. WT 176 CU 16 COST $3865.30.

(2) 1ADF-TO-1C-74-33 KIT A REPLACEMENT OF PROPELLER HARNESS ASSY, C-74 ACFT. WT 180 CU 8 COST $250.00 EST

(3) 1ADF-TP-1C-74-41 KIT INSTALLATION OF INDIVIDUALLY LIGHTED INSTRUMENTS, C-74 ACFT. WT 20 CU 2 COST $4075.62.

(4) 1ADF-TO-1C-74-44 KIT INSTALLATION OF ULTRA HIGH FREQUENCY COMMUNICATIONS EQUIPMENT AND NAVIGATIONAL AIDS, C-7R ACFT. WT 4972 CU 296 COST $24,627.56.

(5) 1ADF-TO-1C-74-46 KIT B INSTALLATION OF OVER-VOLTAGE PROTECTION SYSTEM FOR LH AND RH AUX POWER PLANTS, C174 SERIES ACFT. WT 163 CU 7 COST $677.85.

(6) 1ADF-TO-1C-74-48 KIT REPLACEMENT OF ELEVATOR FLYING TAB PUSH ROD, C- 74 SERIES ACFT. WT 25 CU 8 BY 8 BY 30 INCHES COST $863.64.

(7) 1ADF-KCP-C-74-377 KIT REVISION TO GUST SNUBBER SYSTEM. WT 12 CU 1 COST $1000.00 EST

(8) 1ADF-TO-1C-74-207 KIT INSTALLATION OF COLLINS 618S-1 EQUIPMENT, C-74 ACFT. WT 75 CU 6 COST $3031.46

"C. PROPERTY LOCATED AT NORTON AFB SAN BERNARDINO; CALIFORNIA:

(1) 1ADF-TO-1C-74-49 KIT INSTALLATION OF AN-ARA-25 RADIO HOMING ADAPTER, C-74 ACFT. WT 67 CU 3 COST $1551.00 EST

(2) 1ADF-TO-1C-74-204 KIT INSTALLATION OF DUAL AUTOMATIC RADIO COMPRESS, C-74 ACFT. WT 167 CU 12 COST $4,348.19.

(3) 1 ADF-TO-1C-74-509 KIT INSTALLATION OF BENDIX ENGINE ANALYZER, C-74 ACFT. WT 60 CU 4 COST $210.00 EST TOTAL COST W/KITS $1,323,048.53.'

IN EACH INSTANCE, THE DESCRIPTIONS OF ITEMS NOS. 1 THROUGH 11 SHOWED THAT THE PARTICULAR AIRCRAFT WAS LOCATED AT DAVIS-MONTHAN AFB, TUCSON, ARIZONA; THAT THE PROPERTY LISTED UNDER SUB-ITEM B WAS LOCATED AT BROOKLEY AFB, MOBILE, ALABAMA; AND THAT THE PROPERTY LISTED UNDER SUB-ITEM C WAS LOCATED AT NORTON AFB, SAN BERNARDINO, CALIFORNIA.

AT PAGES II AND III OF THE SALES CATALOG WERE PHOTOGRAPHIC VIEWS OF THE PILOT'S COMPARTMENT, RADIO OPERATOR'S STATION, FLIGHT ENGINEER'S STATION AND NAVIGATOR'S STATION. WITH RESPECT TO THOSE VIEWS, IT WAS STATED ON PAGE 8 OF THE SALES CATALOG:

THESE VIEWS PRESENTED FOR INFORMATION ONLY ON THE GENERAL INTERNAL CONFIGURATION OF THE AIRCRAFT. ELECTRONIC AND SOME INSTRUMENTATION CONFIGURATIONS SHOWN MAY NOT BE IDENTICAL IN AIRCRAFT, DUE TO PARTIAL COMPLETION OF UHF MODERNIZATION PROGRAM AND OR REMOVAL OF SOME OPERATING COMPONENTS FOR AIR FORCE USE.'

UNDER THE GENERAL TITLE "GLOBEMASTER I C-74," AND SUBHEADINGS "ELECTRONICS CONFIGURATION," AND ,GROUP A COMPONENTS ONLY," THE FOLLOWING ITEMS OF EQUIPMENT WERE LISTED ON PAGE XII OF THE SALES CATALOG: 1 A-12 AUTO PILOT 2 AN/ARC-3 VHF COMMAND 3 AN/ARC-8 HF LIAISON 4 AN/AIC-3 INTERPHONE 5 AN/ARN-7 RADIO COMPASS 6 SCR-718 RADIO ALTIMETER-HIGH 7 RC- 193 MARKER BEACON 8 AN-APN-9 LORAN 9 AN/ARN 11 RADIO COMPASS 10 RC-193 LOCALIZER RECEIVER 11 AN/ARN-5A GLIDE PATH 12 AN/ARA-19 CONTROL SYSTEM 13 AN/ART-13 COMMAND RECEIVER 14 SCR-695 IFF 15 DOUGLAS PUBLIC ADDRESS SYSTEM 16 AN/API-10 SEARCH RADAR 17 AN/APH-1 RADIO ALTIMETER 18 PU-16 INVERTERS (750 VA) 19 BC-348 COMMAND RECEIVER 20 AN/ARC-27 UHF COMMAND 21 COLLINS 18S-4 HHF COMMAND 22 BC-4538 RANGE RECEIVER 23 AN/ARA-26 KEYER 24 AN/ARN- 14 OMNI RANGE 25 AN/ARN-5B GLYDE PATH 26 BENDIX MI-36A PUBLIC ADDRESS 27 AN/APS-42 SEARCH RADAR 28 AN/3515-1 INVERTERS (1500 VA) 29 ARA-25 RADIO HOMING ADAPTER 30 DUAL AN/ARN-6 AUTOMATIC RADIO COMPASS 31 AN/APX-6 IFF 32 COLLINS 618S MSF COMMAND

OPPOSITE IN POSITION TO EACH INDIVIDUAL ITEM ENUMERATED ABOVE, AND AT THE SAME TIME BELOW THE NUMBERED DESIGNATION OF THE PARTICULAR AIRCRAFT (THE NUMBERS OF WHICH WERE PROJECTED IN PARALLEL SEQUENCE) TO WHICH IN EACH INSTANCE THE SYMBOL WAS DESIGNED TO RELATE, WERE THE LETTER SYMBOLS " "K," AND "X.' IN A FOOTNOTE, IT WAS EXPLAINED THAT THE LETTER P REPRESENTED "PRESENT CONFIGURATION; " THE LETTER K REPRESENTED "KITS FURNISHED BUT NOT INSTALLED"; AND THE LETTER X MEANT "REMOVED AND REPLACED IN MODERNIZATION PROGRAM.'

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

IT APPEARS THAT YOU ELECTED THE THIRD ALTERNATE BID AND SUBMITTED A TOTAL PRICE OF $1,500,000 FOR THE ABOVE ITEMS, WHICH WAS THE HIGHEST BID RECEIVED. APPARENTLY BECAUSE IT WAS FELT THAT THE PRICES OFFERED WERE TOO LOW, IT WAS DETERMINED TO BE IN THE BEST INTEREST OF THE GOVERNMENT TO REJECT ALL BIDS AND SELL ALL THE PROPERTY DESCRIBED IN THE SALES CATALOG BY NEGOTIATION. THIS ALSO INCLUDED ITEMS 46 THROUGH 49, CONSISTING OF CERTAIN AIRCRAFT ELECTRICAL EQUIPMENT AND MAINTENANCE PARTS, A "STARTER ASSY-ELECTRICAL INERTIA," A MOTOR FUEL PUMP, AND "ACTUATOR ASSY, COWL FLAP" AND A "MOTOR ASSY, PUMP AILERON BOOSTER; " AND ITEMS 79 THROUGH 104, CONSISTING OF 26 SEPARATELY DESCRIBED PRATT AND WHITNEY WASP MAJOR ENGINES. IN A LETTER DATED AUGUST 12, 1957, W. S. HALTERMAN, CONTRACTING OFFICER, SAN BERNARDINO AIR MATERIEL AREA, NORTON AIR FORCE BASE, INFORMED YOUR MR. WILLIAM STEINER OF THIS DECISION AND ENCLOSED A FORMAL REQUEST FOR QUOTATION NO. RFQ-PPR3-3-S-58-5 DATED AUGUST 12, 1957, WHICH WILL BE REFERRED TO HEREAFTER AS THE RFQ. IN THE RFQ, BIDDERS WERE ADVISED THAT ALL OF THE ITEMS OF PROPERTY DESCRIBED IN INVITATION NO. 04-706-S-57-21, DATED MAY 19, 1957 (THE SALES CATALOG), EXCLUDING ITEMS 79 THROUGH 104, WERE THEREBY OFFERED FOR SALE ON AN ALL-OR-NONE BASIS, AND ITEMS 79 THROUGH 104 (THE AIRCRAFT ENGINES) WERE ALSO OFFERED FOR SALE, WITH THE PROVISION THAT PRICES FOR THE INDIVIDUAL ENGINES, WHICH WERE DESIGNATED ACCORDING TO ITEM NUMBER, WERE TO BE SUBMITTED SEPARATELY AND THE SALE THEREOF WAS TO BE RESTRICTED TO THE SUCCESSFUL BIDDER WITH RESPECT TO ALL OF THE OTHER ITEMS OF PROPERTY DESCRIBED IN THE SALES CATALOG, WHICH WERE COLLECTIVELY DESIGNATED IN THE RFQ AS ITEM NO. 1. ITEMS NOS. 79 THROUGH 104 WERE COLLECTIVELY DESIGNATED THEREIN AS ITEM NO. 2.

BIDDERS WERE ADVISED IN THE RFQ THAT THE PROPERTY WAS BEING OFFERED FOR SALE SUBJECT TO THE GENERAL SALE TERMS AND CONDITIONS APPEARING ON PAGE 2 THEREOF, WHICH ARE IDENTICAL WITH THESE SET FORTH ON PAGE 2 OF THE SALES CATALOG. ALSO, THEY WERE ADVISED THEREIN AS FOLLOWS:

"* * * THE SALES TERMS, PROVISIONS AND INSTRUCTIONS EMBODIED IN IFB 04- 607-S-57-21, ARE ATTACHED HERETO AND ARE HEREBY MADE A PART HEREOF EXCEPT AS THEY MAY BE DELETED AND AMENDED BY THIS REQUEST FOR QUOTATION.'

PARAGRAPHS 2 AND 12, RESPECTIVELY, OF THE GENERAL SALE TERMS AND CONDITIONS, REFERRED TO ABOVE, PROVIDED AS FOLLOWS:

"2. CONDITION OF PROPERTY.--- ALL PROPERTY LISTED HEREIN IS OFFERED FOR SALE "AS IS" AND ,WHERE IS," AND WITHOUT RECOURSE AGAINST THE GOVERNMENT. * * * THE DESCRIPTION IS BASED ON THE BEST AVAILABLE INFORMATION, BUT THE GOVERNMENT MAKES NO GUARANTY, WARRANTY, OR REPRESENTATION, EXPRESSED OR IMPLIED, AS TO QUANTITY, KIND, CHARACTER, QUALITY, WEIGHT, SIZE, OR DESCRIPTION OF ANY OF THE PROPERTY, OR ITS FITNESS FOR ANY USE OR PURPOSE, AND NO CLAIM WILL BE CONSIDERED FOR ALLOWANCE OR ADJUSTMENT OR FOR RESCISSION OF THE SALE BASED UPON FAILURE OF THE PROPERTY TO CORRESPOND WITH THE STANDARD EXPECTED; THIS IS NOT A SALE BY SAMPLE.

"12. VERBAL MODIFICATIONS.--- ANY ORAL STATEMENT BY ANY REPRESENTATIVE OF THE GOVERNMENT, MODIFYING OR CHANGING ANY CONDITIONS OF THIS CONTRACT, IS AN EXPRESSION OF OPINION ONLY AND CONFERS NO RIGHT UPON THE PURCHASER.' ALSO, PARAGRAPH 19 OF THE ADDITIONAL SPECIAL SALE TERMS AND CONDITIONS OF THE SALES CATALOG, AS AMENDED BY THE RFQ, PROVIDED:

"ADJUSTMENT FOR VARIATION IN QUANTITY: IF THE QUANTITIES FOR ITEM NO. 1 ARE NOT AS ADVERTISED IN THE SETS, THE ALL OR NONE PRICE BID WILL BE ADJUSTED, AS FOLLOWS: FIGURE THE PERCENTAGE OF RECOVERY BY DIVIDING THE PRICE BID BY THE TOTAL ACQUISITION COST OF ALL ITEMS. ADJUSTMENTS WILL THEN BE MADE BY MULTIPLYING THIS PERCENTAGE OF RECOVERY BY THE UNIT ACQUISITION COST OF THE INDIVIDUAL SPARE PART, SHORT OR OVER, BY THE QUANTITY, SHORT OR OVER. NO BIDDER WILL BE REQUIRED TO ACCEPT AN OVERAGE IN EXCESS OF 10 PERCENT OF THE PRICE FOR THE SET ESTABLISHED BY THIS FORMULA. ANY ADJUSTMENT UNDER THIS CLAUSE WILL BE MADE FOLLOWING THE FINAL DELIVERY UNDER THE CONTRACT.'

IT APPEARS THAT YOU OFFERED TO PURCHASE ALL OF THE TIMES COMPRISING ITEM 1 OF THE RFQ FOR THE TOTAL AMOUNT OF $1,500,000, AND THAT, IN THE NEGOTIATIONS WHICH TOOK PLACE, YOU ALSO OFFERED TO PURCHASE TWO OF THE ENGINES LISTED IN THE GROUP OF ITEMS 79 THROUGH 104 AT A PRICE OF $27,114 EACH. IN A LETTER DATED NOVEMBER 27, 1957, DONALD L. SCHULTZ, CONTRACTING OFFICER, SAN BERNARDINO AIR MATERIEL AREA, NORTON AIR FORCE BASE, INFORMED YOU THAT THE ITEMS INVOLVED HAD BEEN AWARDED TO YOU FOR THE TOTAL AMOUNT OF $1,554,228, AND THAT A CERTIFIED CHECK, CASHIER'S CHECK, BANK DRAFT, POSTAL OR EXPRESS MONEY ORDER IN THAT AMOUNT SHOULD, THEREFORE, BE REMITTED IN PAYMENT THEREFOR AND THE PROPERTY REMOVED IN ACCORDANCE WITH THE PROVISIONS OF SALE LETTERED D AND F, SET FORTH IN THE SALES CATALOG. IT FURTHER APPEARS THAT YOU WERE UNABLE TO COMPLY WITH THE TERMS OF PAYMENT PROVIDED IN THE CONTRACT AND THAT PROTRACTED NEGOTIATIONS TOOK PLACE BETWEEN YOU AND THE GOVERNMENT RELATIVE TO THE PERFORMANCE THEREOF. FINALLY, SUPPLEMENTAL AGREEMENT NO. 1 THERETO, DATED AUGUST 25, 1958, WAS ENTERED INTO, THE SAME HAVING BEEN EXECUTED BY EARL T. BENJAMIN, AS PRESIDENT OF AKROS DYNAMICS CORPORATION, AND BY DONALD L. SCHULTZ, AS CONTRACTING OFFICER FOR THE GOVERNMENT. BY ITS TERMS, THE EXISTING CONTRACT WAS MODIFIED TO PROVIDE FOR THE PURCHASE BY YOU OF AN ADDITIONAL ENGINE LISTED IN THE GROUP OF ITEMS 79 THROUGH 104 AT THE PRICE OF $27,114, BRINGING THE TOTAL CONTRACT PRICE TO $1,581,342. UNDER THE SUPPLEMENTAL AGREEMENT, $500,000 OF THIS AMOUNT WAS REQUIRED TO BE PAID IMMEDIATELY, AFTER WHICH YOU WERE TO BE ALLOWED TO TAKE POSSESSION OF AIRCRAFT NOS. 26-5404, 26-5408, 26 5409 AND 26-5412, DESIGNATED AS ITEMS NOS. 2, 4, 1 AND 3, RESPECTIVELY, IN THE SALES CATALOG, AND THE ACCOMPANYING PROPERTY LISTED UNDER THOSE ITEM NUMBERS, TOGETHER WITH THE PROPERTY DESCRIBED IN THE SALES CATALOG UNDER ITEMS 26 THROUGH 44 AND ITEMS 46 THROUGH 49; $200,000 WAS REQUIRED TO BE PAID ON NOVEMBER 5, 1958; AND THE BALANCE WAS REQUIRED TO BE PAID IN EIGHT EQUAL MONTHLY INSTALLMENTS OF $110,167.75. THAT PART OF THE PURCHASE PRICE REMAINING AFTER THE $500,000 PAYMENT WAS TO BEAR INTEREST AT ONE HALF OF ONE PERCENT ON THE UNPAID BALANCE, AND YOU WERE TO BE ALLOWED TO TAKE POSSESSION OF THE REMAINING AIRCRAFT AND SPARE PARTS IN THE ORDER PROVIDED IN THE SUPPLEMENTAL AGREEMENT AS THE SUCCESSIVE PAYMENTS WERE MADE. THE SUPPLEMENTAL AGREEMENT ALSO MODIFIED CLAUSE 18 OF THE ADDITIONAL SPECIAL SALE TERMS AND CONDITIONS OF THE SALES CATALOG, ENTITLED "DEPOSIT, BOND, OR LETTER OF CREDIT TO ACCOMPANY BIDS," BY PROVIDING THAT YOU SHOULD PROVIDE A PERFORMANCE BOND ON STANDARD FORM 25 IN THE SUM OF $200,000 AS GUARANTY FOR FAITHFUL PERFORMANCE UNDER THE CONTRACT AS BEING ACCEPTABLE TO THE GOVERNMENT. SUCH A PERFORMANCE BOND WAS EXECUTED BY YOU AND THE AETNA CASUALTY AND SURETY COMPANY UNDER DATE OF AUGUST 25, 1958, AND FURNISHED TO THE GOVERNMENT.

THE PAYMENT OF $500,000, DUE AUGUST 25, 1958, WAS MADE AS PROVIDED, AND BY LETTER OF SEPTEMBER 9, 1958, DONALD L. SCHULTZ, AF CONTRACTING OFFICER, TRANSMITTED TO YOU BILLS OF SALE COVERING THE FOUR AIRCRAFT REFERRED TO ABOVE, TOGETHER WITH A COPY OF HIS TELETYPE DATED SEPTEMBER 9, 1958, TO BROOKLEY AIR FORCE BASE, DIRECTING THE RELEASE TO YOU OF THE OTHER PROPERTY TO WHICH YOU BECAME ENTITLED UPON MAKING THAT PAYMENT.

BY LETTER OF OCTOBER 24, 1958, DONALD L. SCHULTZ, AF CONTRACTING OFFICER, TRANSMITTED TO YOU A DOCUMENT DATED OCTOBER 22, 1958, SHOWING THAT THE ADMINISTRATION OF THE CONTRACT INVOLVED HAD BEEN TRANSFERRED FROM THE CONTRACTING OFFICER, NORTON AIR FORCE BASE, CALIFORNIA, TO THE CHIEF, ARIZONA AIR PROCUREMENT DISTRICT, 2875 SKY HARBOR BOULEVARD, PHOENIX, ARIZONA, AND HE ADVISED THAT, UNTIL SUCH TIME AS AN "ADMINISTRATIVE CONTRACTING OFFICER" HAD BEEN ASSIGNED, ALL CORRESPONDENCE AND PAYMENTS RELATIVE TO THE CONTRACT SHOULD BE DIRECTED TO THAT OFFICIAL.

IN A LETTER DATED OCTOBER 29, 1958 (SIGNED ON BEHALF OF AKROS BY EARL T. BENJAMIN AS PRESIDENT), YOU ADVISE THE CHIEF, ARIZONA AIR PROCUREMENT DISTRICT, THAT ON A RECENT INSPECTION OF THE ELEVEN AIRCRAFT, PREPARATORY TO GETTING THEM READY FOR FLIGHT, YOU FOUND THAT THE 32 ITEMS OF EQUIPMENT LISTED ON PAGE XII OF THE SALES CATALOG, SET OUT ABOVE, WERE MISSING THEREFROM, AS WELL AS THE FOLLOWING EQUIPMENT: "CU-92A ANTENNA COUPLER AN/ARA-25 HOMING ADAPTER DUAL AUTOMATIC RADIO COMPASS AN/ARN-6 RADIO AUTOMATIC COMPASS, WITH AN/ARA/19 ELECTRIC TUNING BENDIX ENGINE ANALYZER EQUIPMENT (MISSING FROM EIGHT AIRCRAFT) STORAGE BATTERIES SPARK PLUGS RADIO CONTROL PANELS" RELATIVE THERETO, YOU STATED:

"ON INSPECTION OF THE AIRCRAFT PRIOR TO PURCHASE, ALL THIS RADIO GEAR WAS INSTALLED IN THE AIRCRAFT, AND WHAT WASN-T INSTALLED IN THE AIRCRAFT WAS IN KIT FORM, AS OUTLINED ON PAGE 12 OF THE CATALOG. SOME OF THIS RADIO GEAR WAS INSTALLED IN THE AIRCRAFT, AND WHAT WASN-T INSTALLED IN THE AIRCRAFT WAS IN KIT FORM, AS OUTLINED ON PAGE 12 OF THE CATALOG. SOME OF THIS RADIO GEAR IS ESSENTIAL IN THE MOVEMENT OF THE AIRCRAFT.

"I HOPE YOU CAN BE OF SOME ASSISTANCE TO US IN GETTING THESE PLANES BACK INTO THE CONDITIONS UNDER WHICH THEY WERE PURCHASED.'

IN A LETTER DATED OCTOBER 31, 1958 (ALSO SIGNED ON BEHALF OF AKROS BY MR. BENJAMIN AS PRESIDENT) YOU ADVISED THE CHIEF, ARIZONA AIR PROCUREMENT DISTRICT, THAT IN VIEW OF THE VALUABLE EQUIPMENT WHICH "HAD BEEN REMOVED FROM THESE AIRCRAFT FOLLOWING THE ACQUISITION BY AKROS DYNAMICS CORPORATION," OF WHICH HE HAD BEEN ADVISED BY THE ABOVE LETTER, YOU FELT THAT AN ADJUSTMENT SHOULD BE MADE AND THAT YOU SHOULD NOT BE REQUIRED TO MAKE THE $200,000 PAYMENT DUE ON NOVEMBER 5, 1958, UNTIL THE MATTER COULD BE SETTLED. REX HALL, CONTRACTING OFFICER, SAN BERNARDINO AIR MATERIEL AREA, NORTON AIR FORCE BASE, REPLIED BY LETTER OF NOVEMBER 19, 1958, STATING THAT ANY ADJUSTMENTS FOR "OVER OR SHORT ITEMS" WOULD BE MADE FOLLOWING FINAL DELIVERY UNDER THE CONTRACT, AS PROVIDED FOR THEREIN, AND THAT PAYMENT OF THE $200,000 DUE ON NOVEMBER 5, 1958, WITH APPLICABLE INTEREST, SHOULD BE MADE IMMEDIATELY, OTHERWISE ACTION MIGHT BE TAKEN BY THE GOVERNMENT TO EXERCISE ITS RIGHTS UNDER THE CONTRACT. IN RESPONDING TO THIS LETTER BY LETTER OF NOVEMBER 19, 1958 (SIGNED ON BEHALF OF AKROS BY THE SECRETARY OF THE CORPORATION) YOU STATED, THAT, WHEN THE AIRCRAFT WERE SOLD TO YOU, THERE WAS "AN EXPRESS WARRANTY ON THE PART OF THE U.S. GOVERNMENT THAT THE PLANES WERE TO BE CERTAIN SIZES AND DIMENSIONS AND WERE TO CONTAIN PARTS AND EQUIPMENT," AND THAT "AT THE TIME THE PURCHASE CONTRACT WAS ENTERED INTO, ALL OF THE EQUIPMENT WAS INSTALLED AND INTACT.' HENCE, YOU CONTENDED THAT THE GOVERNMENT HAD BREACHED ITS PART OF THE CONTRACT IN THAT IT COULD NOT DELIVER THE AIRCRAFT IN THE CONDITION ORIGINALLY AGREED UPON, AND THAT THE CONTRACTING OFFICER SHOULD, THEREFORE, ARRANGE TO MEET WITH YOUR MR. BENJAMIN AND SETTLE THE MATTER.

IT APPEARS THAT ON NOVEMBER 28 AND DECEMBER 1, 1958, THE CONTRACTING OFFICER (REX HALL) INFORMED OFFICIALS OF AKROS IN TELEPHONE CONVERSATIONS THAT NO EXTENSION OF PAYMENT SCHEDULES COULD BE MADE. HOWEVER, BY LETTER OF DECEMBER 1, 1958 (SIGNED ON BEHALF OF AKROS BY MR. BENJAMIN AS PRESIDENT) YOU ADVISED THE CONTRACTING OFFICER THAT YOU WOULD LIKE TO HAVE THE PAYMENT WHICH WAS DUE NOVEMBER 5, 1958, EXTENDED TO JANUARY 15, 1959, AND THE REMAINING BALANCES MADE PAYABLE IN SIX EQUAL INSTALLMENTS OF $146,890.34 IN A MANNER WHICH WOULD NOT EXTEND THE CONTRACT BEYOND ITS COMPLETION DATE. ALSO, BY LETTER OF DECEMBER 13, 1958 (SIGNED ON BEHALF OF AKROS BY MR. BENJAMIN AND PRESIDENT) YOU ADVISED COLONEL LOREN A. SCOLLAY, HEADQUARTERS, SAN BERNARDINO AIR MATERIEL AREA, IN PERTINENT PART AS FOLLOWS:

"IN REGARDS TO OUR CONTRACT NUMBER AF 04/607/S-1221, AKROS DYNAMICS CORPORATION ENTERED INTO A CONTRACT WITH THE UNITED STATES GOVERNMENT ON AUGUST 25, 1958, AT WHICH TIME WE HAD A BANK COMMITMENT WHICH WOULD COVER AKROS DYNAMICS, ENABLING THEM TO FULFILL THEIR CONTRACT WITH THE UNITED STATES GOVERNMENT.

"FOR REASONS BEYOND OUR CONTROL, THE BANK ADVISED US THEN WE MADE THE DEMAND TO THE BANK FOR NOVEMBER 5, 1958 PAYMENT THAT THEY WERE UNABLE TO GIVE US THE MONEY AT THE TIME. WHEN WE WERE ADVISED OF THIS BY THE BANK, WE IMMEDIATELY STARTED NEW NEGOTIATIONS FOR THE FUNDS NEEDED TO FULFILL OUR CONTRACT, AND WE HAVE BEEN ASSURED THAT WE WILL BE ABLE TO GET THE ADDITIONAL FUNDS NEEDED, AS PER OUR LETTER TO MR. REX HALL OF DECEMBER 1, 1958.

"WE WISH TO ASSURE YOU AT THIS TIME THAT AKRON DYNAMICS CORPORATION WOULD NOT HAVE ENTERED INTO THIS CONTRACT UNLESS WE HAD BEEN ASSURED OF SUFFICIENT FUNDS TO FULFILL THE CONTRACT.

"THE FOLLOWING IS A PROGRESS REPORT TO DATE:

"3. * * * WE HAVE SIGNED A CONTRACT WITH HAMILTON AIRCRAFT, TUCSON, ARIZONA, AND ACCORDING TO OUR PROGRAM, HAMILTON AIRCRAFT WILL START TO MOVE THE AIRPLANES THE WEEK OF DECEMBER 14.

"4. WE HAVE MOVED ALL THE PARTS FROM MOBILE, ALABAMA, WITH THE EXCEPTION OF KITS FOR ITEMS NUMBER 5, 6, 7, 8, 9, 10, AND 11, WHICH CONSISTS OF THREE TRUCK LOADS AND TEN FREIGHT CARS.

"AS YOU CAN SEE, WE HAVE THIS PROGRAM PRETTY MUCH UNDER WAY. HAVING MADE CONSIDERABLE PROGRESS THAT DOES NOT SHOW ON THE SURFACE, WE ANTICIPATE HAVING THE ENTIRE PROGRAM RUNNING SMOOTHLY WITHIN THE NEXT SIXTY DAYS.

"FOR THE ABOVE MENTIONED REASONS, WE ARE ASKING FOR YOUR COOPERATION IN GRANTING US THE DESIRED EXTENSION.'

THE CLAIM WHICH YOU HAD PREVIOUSLY ASSERTED ON ACCOUNT OF THE EQUIPMENT ALLEGED TO HAVE BEEN REMOVED FROM THE AIRCRAFT WAS NOT MENTIONED IN EITHER OF THE ABOVE LETTERS.

BY LETTER OF DECEMBER 18, 1958, JOHN E. NEWKIRK, CONTRACTING OFFICER, SAN BERNARDINO AIR MATERIEL AREA, ADVISED YOU THAT THE CONTRACT WAS THEREBY TERMINATED DUE TO YOUR DEFAULT WITH RESPECT TO MAKING PAYMENTS THEREUNDER. HE FURTHER ADVISED THAT THE GOVERNMENT WOULD RESELL ALL THE AIRCRAFT, SPARE PARTS, ACCESSORIES AND EQUIPMENT REMAINING IN ITS POSSESSION FOR YOUR ACCOUNT AND, AFTER APPLYING THE PROCEEDS TO YOUR INDEBTEDNESS, HOLD YOU LIABLE FOR ANY BALANCE REMAINING DUE. NOTWITHSTANDING THIS OFFICIAL NOTICE OF TERMINATION OF THE CONTRACT, THE CONTRACTING OFFICER CONTINUED TO NEGOTIATE WITH YOU IN AN EFFORT TO ALLOW COMPLETION OF THE CONTRACT, SUCH NEGOTIATIONS BEING CONDUCTED WITHOUT PREJUDICE TO THE GOVERNMENT'S RIGHTS IN THE MATTER. THESE NEGOTIATIONS APPEAR TO HAVE CONTINUED UP UNTIL THE MIDDLE OF MAY, 1959, BUT TO NO AVAIL.

IT APPEARS FROM YOUR LETTER OF DECEMBER 13, 1958, THAT YOU TOOK POSSESSION OF THE PROPERTY DESCRIBED UNDER ITEMS 26 THROUGH 44 AND ITEMS 46 THROUGH 49 PRIOR TO DECEMBER 13, 1958, AND IT IS ACKNOWLEDGED AT PAGE 12 OF YOUR PETITION THAT YOU RECEIVED THE KITS DESCRIBED UNDER ITEMS 1 THROUGH 4 OF THE SALES CATALOG. IT ALSO APPEARS THAT YOU TOOK POSSESSION OF AIRCRAFT NO. 26-5408 SOMETIME DURING THE PERIOD DECEMBER 10, 1958, TO MARCH 21, 1959, AND THAT THE CONTRACTING OFFICER (JOHN E. NEWKIRK) NOTIFIED YOU BY LETTER OF JUNE 17, 1959, TO REMOVE AIRCRAFT NOS. 26-5414, 26-5409 AND 26-5412, TO WHICH YOU HAD TITLE, FROM THE PREMISES OF THE JULY 15, 1959 "IN ACCORDANCE WITH THE TERMS AND PROVISIONS OF CONTRACT 04.607/S -1221, AS AMENDED.' AS A MATTER OF FACT, ALL OF THESE AIRCRAFT WERE REQUIRED BY THE CONTRACT, AS AMENDED, TO BE REMOVED BY DECEMBER 15, 1958. OUR RECORD INDICATES THAT YOU REMOVED ONE OF THE AIRCRAFT IN AUGUST, 1959, AND THE OTHER TWO ON FEBRUARY 18 AND MARCH 29, 1960, RESPECTIVELY.

BY INVITATION NO. 02-617-S-2, DATED SEPTEMBER 9, 1959, THE COMMANDER, 2704TH AF AIRCRAFT STORAGE AND DISPOSITION GROUP, DAVIS MONTHAN AIR FORCE BASE, TUCSON, ARIZONA, OFFERED FOR SALE, STIPULATING OCTOBER 6, 1959, AS THE BID OPENING DATE, WHICH WAS EXTENDED TO OCTOBER 20, 1959, THE REMAINING AIRCRAFT, EQUIPMENT AND SPARE PARTS WHICH YOU HAD PURCHASED, EXCLUDING THE THREE AIRCRAFT ENGINES, ITEMS NOS. 79, 82 AND 83 OF THE SALES CATALOG, WHICH YOU HAD PURCHASED AT THE UPSET PRICE OF $27,114 EACH.

THE ABSTRACT OF BIDS INDICATES THAT YOUR MR. WILLIAM STEINER, IN HIS INDIVIDUAL CAPACITY, SUBMITTED A BID OF $20,089 EACH FOR THE SEVEN AIRCRAFT INVOLVED, TOGETHER WITH APPLICABLE KITS, DESCRIBED UNDER ITEMS NOS. 1 THROUGH 7 OF INVITATION 02-617-S-2, OR THE TOTAL AMOUNT OF $140,613 THEREFOR, AND AN ALTERNATIVE BID IN THE TOTAL AMOUNT OF $150,000 FOR ALL OF THE PROPERTY DESCRIBED IN THE INVITATION. THE AMOUNT BID BY MR. STEINER FOR ALL OF THE PROPERTY WAS THE HIGHEST RECEIVED IN THAT CATEGORY, AND IF MR. STEINER'S BID OF $20,089 EACH FOR THE AIRCRAFT, TOGETHER WITH APPLICABLE KITS, HAD BEEN ACCEPTED ONLY WITH RESPECT TO THE AIRCRAFT DESIGNATED AS ITEMS 1, 2, 3, 4, 6 AND 7 IN THE INVITATION, AND THE OTHER ITEMS AWARDED ON THE BASIS OF THE HIGH BIDS SUBMITTED THEREFOR BY OTHER BIDDERS, THE GOVERNMENT APPARENTLY WOULD HAVE BEEN ABLE TO REALIZE THE TOTAL AMOUNT OF $174,000 FROM THE SALE OF THE PROPERTY. HOWEVER, THIS AMOUNT WAS NOT CONSIDERED TO BE ADEQUATE CONSIDERATION FOR THE PROPERTY, AND NO BIDS WERE ACCEPTED. THE DEPARTMENT OF THE AIR FORCE HAS BEEN GIVING CONSIDERATION TO THE ADVISABILITY OF RETAINING THE PROPERTY FOR PURPOSES OF CANNIBALIZATION AND USE WITHIN THE DEPARTMENT, IN THE BELIEF THAT THIS DISPOSITION WILL BETTER SERVE THE INTERESTS OF THE GOVERNMENT.

IN YOUR PETITION, YOU CONTEND THAT AN EXAMINATION OF THE ENTIRE SALES CATALOG WOULD LEAD ANY REASONABLE PERSON TO BELIEVE THAT ALL OF THE ELECTRONICS CONFIGURATION COMPONENTS SET FORTH ON PAGE XII THEREOF "WERE TO BE INCLUDED IN THE PURCHASE PRICE OF THE ELEVEN (11) C-74 GLOBEMASTERS, SPARE PARTS, AND EQUIPMENT.' IN THIS CONNECTION, YOU REFER PARTICULARLY TO THE PHOTOGRAPHIC VIEWS PF THE PILOT'S COMPARTMENT, RADIO OPERATOR'S STATION, FLIGHT ENGINEER'S STATION AND NAVIGATOR'S STATION, APPEARING AT PAGES II AND III OF THE SALES CATALOG, IN WHICH YOU CONTEND THE RADIO, RADAR EQUIPMENT, AUTOMATIC PILOTS AND OTHER ELECTRONIC EQUIPMENT ARE CLEARLY SHOWN, AND TO THE FACT THAT, IN THE SPACE PROVIDED ON PAGE IV OF THE SALES CATALOG FOR THE INSERTION OF INFORMATION REGARDING ELECTRONICS EQUIPMENT RELATING TO THE AIRCRAFT, INTERESTED PARTIES ARE INSTRUCTED TO ,SEE PAGE XII.' ALSO, YOU ASK:

"* * * IF IT WAS NOT THE INTENT OF THE GOVERNMENT TO DELIVER ALL OF THE ITEMS SHOWN ON PAGE XII, THEN WHY WERE THE ITEMS MARKED "K" DELIVERED TO AKROS? - SAID ITEMS FULLY CONFORMING TO THE ELECTRONIC CONFIGURATION SHOWN THEREON.' MOREOVER, AT PAGES 9 AND 10 OF YOUR PETITION, YOU STATE:

"* * * AT THE TIME OF THE NEGOTIATED SALE, ASSURANCE WAS GIVEN TO AKROS BY ONE MR. SCHULTZ, A CONTRACTING OFFICER, THAT ALL MATERIAL LISTED IN THE CATALOG WAS TO BE INCLUDED.

"FROM AS FAR BACK AS NOVEMBER OF 1956, THE INTEREST OF AKROS PERTAINING TO THE ELEVEN (11) C-74 GLOBEMASTERS RESULTED IN MANY MEETINGS AND DISCUSSIONS CONCERNING THE OVER-ALL PROJECT, WITH MAJOR MCCAMPBELL, CHIEF DISPOSAL OFFICER OF THE NORTON AIR FORCE BASE, SAN BERNARDINO, CALIFORNIA. MAJOR MCCAMPBELL WAS THE INDIVIDUAL WHO HAD VISITED ALL THE AIR FORCE BASES AND DEPOTS WHERE THE ELEVEN (11) C-74 GLOBEMASTERS, TOGETHER WITH THE PARTS AND EQUIPMENT, HAD BEEN LOCATED, AND WHO WAS PRIMARILY RESPONSIBLE FOR COMPILING THE COMPLETE CATALOG NO. 04-607-S-57- 21, WHICH CATALOG WAS THE BASIS FOR AKROS' BID, AND CONTRACT. EQUIPMENT SHOWN ON PAGE XII OF SAID CATALOG WAS DISCUSSED AT GREAT LENGTH WITH MAJOR MCCAMPBELL, BECAUSE IT WAS ON THE BASIS OF THE EQUIPMENT SHOWN ON SAID PAGE XII THAT AKROS MADE THE BID IT DID, AND EXECUTED THE CONTRACT THAT IT DID. IT WAS ALWAYS MAJOR MCCAMPBELL'S ASSURANCE THAT ALL EQUIPMENT SHOWN,AND PARTICULARLY THAT SHOWN ON PAGE XII, WAS INCLUDED IN THE CONTRACT. THE REASON THAT THE QUESTION OF THE ELECTRONICS CONFIGURATION WAS EVER DISCUSSED WITH MAJOR MCCAMPBELL WAS THAT SAID EQUIPMENT WAS NOT ON THE AIRCRAFT, AND ANY BUYER WOULD OF NECESSITY HAVE TO KNOW WHAT EQUIPMENT WAS TO BE INCLUDED IN ORDER THAT AN INTELLIGENT BID COULD BE MADE ON SAID CATALOG. MAJOR MCCAMPBELL NOT ONLY ASSURED AKROS OF THE FACT THAT THE ITEMS SHOWN ON PAGE XII OF SAID CATALOG WOULD BE INCLUDED, BUT ALSO ASSURED OTHER INTERESTED PROSPECTIVE BIDDERS AS TO THIS FACT.'

IN VIEW OF WHAT YOU CONTEND TO HAVE BEEN THE FACTS AND CIRCUMSTANCES SURROUNDING THE EXECUTION OF THE CONTRACT, YOU REQUEST THAT CONSIDERATION BE GIVEN TO SETTLING THE MATTER IN THE MANNER PROPOSED IN YOUR PETITION, WHICH WOULD ENTAIL TRANSFER OF THE PROPERTY DESCRIBED IN INVITATION 02-617 -S-2 TO WILLIAM STEINER UPON PAYMENT TO THE GOVERNMENT OF THE SUM OF $210,000; PAYMENT BY THE GOVERNMENT TO AKROS OF THE SUM OF $380,000, REPRESENTING THE DIFFERENCE BETWEEN THE AMOUNT OF $500,000 WHICH AKROS HAS PAID UNDER THE CONTRACT AND $120,000, AKROS TO RETAIN POSSESSION OF THE PROPERTY ALREADY TRANSFERRED TO IT; AND CANCELLATION OF THE $200,000 PERFORMANCE BOND EXECUTED BY AKROS AND THE AETNA CASUALTY AND SURETY COMPANY. IN OTHER WORDS, THE GOVERNMENT WOULD PAY THE NET AMOUNT OF $170,000 TO AKROS ON THE THEORY THAT THE ELEVEN AIRCRAFT AND OTHER PROPERTY PURCHASED UNDER THE CONTRACT INVOLVED (EXCLUDING THE AIRCRAFT ENGINES) MUST BE CONSIDERED AS REDUCED IN VALUE BY THE AMOUNT OF $1,170,000 AS A RESULT OF THE GOVERNMENT'S FAILURE TO DELIVER THE REFERRED -TO ELECTRONIC EQUIPMENT TO AKROS. IN CONCLUSION, YOU CONTEND THAT IT WOULD BE UNCONSCIONABLE IN THE LIGHT OF ALL THE FACTORS PRESENT TO ENFORCE THE CONTRACT AND THAT, IF FULL PERFORMANCE THEREOF IS INSISTED UPON BY THE GOVERNMENT, AKROS WOULD HAVE NO OTHER ALTERNATIVE THAN TO FILE A PETITION IN BANKRUPTCY, SINCE IT DOES NOT HAVE SUFFICIENT ASSETS TO MEET SUCH A DEMAND.

ATTACHED TO YOUR PETITION IS A COPY OF YOUR LETTER OF JULY 14, 1959 (SIGNED ON BEHALF OF AKROS BY WILLIAM STEINER AS PRESIDENT) TO THE COMPTROLLER OF THE AIR FORCE, EXHIBIT 34, WHEREIN, FOR THE FIRST TIME, APPARENTLY, AKROS MADE THE CONTENTION THAT DONALD L. SCHULTZ, CONTRACTING OFFICER, AND GERALD NORMAN MCCAMPBELL, THEN MAJOR, USAF, AND CHIEF, REDISTRIBUTION AND MARKETING DIVISION, DIRECTORATE OF SUPPLY AND SERVICES, SAN BERNARDINO AIR MATERIEL AREA, HAD REPRESENTED TO IT ORALLY AT THE TIME THE CONTRACT WAS BEING NEGOTIATED THAT "ALL COMPONENT PARTS, MAINLY RADIO, RADAR AND AUTO PILOTS WHICH WERE INDICATED IN CATALOG 04-607-S-57-21, ON PAGE EIGHT (PAGE XII) OF THE ABOVE MENTIONED CATALOG, WERE PART AND PARCEL OF THE CONTRACT AND WOULD BE DELIVERED TO US AS SUCCESSFUL BIDDERS.' ALSO ATTACHED TO YOUR PETITION IS A LETTER DATED DECEMBER 28, 1958, ADDRESSED TO YOU BY R. LYLE GOLDING, OF GOLDING'S TRUST, LONG BEACH, CALIFORNIA, EXHIBIT 29, WHEREIN THE WRITER STATES THAT HE ACCOMPANIED MR. STEINER TO THE SAN BERNARDINO AIR BASE SEVERAL MONTHS PRIOR TO "THE JULY 1957 SALE" OF THE PROPERTY AND THAT "AT THAT TIME A MAJOR MCCAMPBELL ASSURED THE TWO OF US THAT THE ELECTRONICS WERE A DEFINITE PART OF THE CATALOG.' ALSO ATTACHED IS A LETTER DATED JANUARY 6, 1959, ADDRESSED TO YOU BY P. D. SMITH, OF P. D. SMITH AIRCRAFT ENGINE PARTS, SUN VALLEY, CALIFORNIA, EXHIBIT 30, WHEREIN THE WRITER STATES THAT, AT THE TIME THE AIRCRAFT AND OTHER PROPERTY COVERED BY INVITATION 04-607-S-57-21 WERE OFFERED FOR SALE, HE HAD A LENGTHY DISCUSSION WITH MAJOR MCCAMPBELL CONCERNING THE EQUIPMENT LISTED ON PAGE 12 (XII) OF THE SALES CATALOG, AND MAJOR MCCAMPBELL STATED THAT "ALL EQUIPMENT SO LISTED WAS INCLUDED, ALTHOUGH IT WAS NOT IN THE AIRCRAFT AT THAT TIME.'

BY LETTER OF DECEMBER 7, 1959, WE TRANSMITTED YOUR PETITION, WITH RELATED ENCLOSURES, TO THE SECRETARY OF THE AIR FORCE, WITH THE REQUEST THAT WE BE FURNISHED A FULL REPORT IN THE MATTER, PARTICULARLY WITH RESPECT TO WHETHER THE ELECTRONIC EQUIPMENT HERE IN QUESTION HAD BEEN REMOVED FROM THE AIRCRAFT BEFORE, OR AFTER, INVITATION 04-607-S 57-21 WAS ISSUED, AND THE ORAL REPRESENTATIONS ALLEGED TO HAVE BEEN MADE BY MR. SCHULTZ AND MAJOR MCCAMPBELL.

THE REQUESTED REPORT WAS FURNISHED TO US BY THE DEPUTY FOR PROCUREMENT AND PRODUCTION, OFFICE OF THE ASSISTANT SECRETARY OF THE AIR FORCE, BY LETTER OF AUGUST 29, 1960. FROM THE INFORMATION DISCLOSED IN THE REPORT AND RELATED EXHIBITS, IT APPEARS THAT GROUP "A" PARTS OF AN ELECTRONIC EQUIPMENT IS THE DESIGNATION APPLIED BY THE AIR FORCE (AS EVIDENCED BY THE DEPARTMENT'S TECHNICAL ORDER NO. 12-1 7, DATED NOVEMBER 7, 1950) TO THOSE PARTS OF AN ELECTRONIC EQUIPMENT WHICH NORMALLY ARE PERMANENTLY OR SEMI- PERMANENTLY INSTALLED IN AN AIRCRAFT FOR SUPPORTING, SECURING, OR INTERCONNECTING THE COMPONENTS AND CONTROLS OF THE EQUIPMENT, AND WHICH WILL NOT IN ANY MANNER COMPROMISE THE SECURITY CLASSIFICATION, IF ANY, OF THE EQUIPMENT, WHEREAS THE GROUP (B) DESIGNATION IS APPLIED TO THE OPERATING, OR OPERABLE,COMPONENTS OF THE EQUIPMENT WHICH, WHEN INSTALLED ON OR IN CONNECTION WITH THE GROUP "A" PARTS, CONSTITUTE THE COMPLETE OPERABLE EQUIPMENT. IT FURTHER APPEARS THAT A QUANTITY OF THE ELECTRONIC COMPONENTS IN THE GROUP "B" CATEGORY, THAT IS THE OPERATING UNITS, OR "BLACK BOXES," HAD BEEN REMOVED FROM THE ELECTRONIC CONFIGURATION OF THE AIRCRAFT INVOLVED DURING JULY AND AUGUST, 1956, FOR THE USE OF THE AIR FORCE AS A RESULT OF DEPARTMENTAL "SAVE-LIST" ORDERS, AND, HENCE, THE ITEMS OF EQUIPMENT LISTED ON PAGE XII OF THE SALES CATALOG AS COMPRISING THE ELECTRONICS CONFIGURATION OF THE AIRCRAFT WERE REFERRED TO AS "GROUP A COMPONENTS ONLY.'

RELATIVE TO THE REPRESENTATIONS ALLEGED TO HAVE BEEN MADE BY DONALD L. SCHULTZ, CONTRACTING OFFICER, AT THE TIME THE CONTRACT WAS NEGOTIATED, TO THE EFFECT THAT THE 32 ITEMS OF EQUIPMENT LISTED ON PAGE XII OF THE SALES CATALOG WERE PART AND PARCEL OF THE CONTRACT AND WOULD BE DELIVERED TO AKRON AS THE SUCCESSFUL BIDDER, THE DEPARTMENT OF THE AIR FORCE FURNISHED A STATEMENT PREPARED BY MR. SCHULTZ UNDER DATE OF MAY 5, 1960, WHICH READS IN PERTINENT PART AS FOLLOWS:

"1. THIS IS TO CERTIFY THAT AT NO TIME DURING NEGOTIATIONS OF SUPPLEMENTAL AGREEMENT NUMBER 1 TO CONTRACT NUMBER AF 04/607/S-1221 (ISSUED PURSUANT TO RFQ-PRES-3-S-58-5, AS AMENDED BY ADDENDUM NO. 1 AND INCORPORATING THE PROVISIONS OF INVITATION PER BID NUMBER 04-607-S 57-21) DID I ELABORATE ON THE EQUIPMENT AND MATERIALS TO BE DELIVERED TO THE CONTRACTOR UNDER THE ABOVE REFERENCED CONTRACT. AT NO TIME DID I EVER SAY ANYTHING INCONSISTENT WITH THE EXPRESS TERMS OF THE SALE OR QUALIFY ANY OF THE GENERAL SALES TERMS AND CONDITIONS. I NEVER TOLD ANYONE "ALL MATERIAL LISTED IN THE CATALOGUE IS TO BE INCLUDED.'"

THE DEPARTMENT EXPLAINED THAT A STATEMENT RELATIVE TO HIS ALLEGED REPRESENTATION HAD NOT, HOWEVER, BEEN OBTAINED FROM MAJOR MCCAMPBELL BECAUSE HE WAS BELIEVED TO BE OVERSEAS AND ALSO BECAUSE IT APPEARED FROM A MEMORANDUM DATED DECEMBER 10, 1957, FROM MAJOR MCCAMPBELL TO MR. SCHULTZ, WITH REFERENCE TO THE MATTER, THAT HE WOULD PROBABLY MAKE A STATEMENT SIMILAR TO THAT WHICH HAD BEEN FURNISHED BY MR. SCHULTZ. THE MEMORANDUM IS, IN PERTINENT PART, AS FOLLOWS:

"2. DISCUSSION - FOR PURPOSES OF THIS CATALOG YOU WILL SEE THAT WE DID NOT STATE WHAT WAS IN THE AIRCRAFT IN THE LINE OF GROUP B COMPONENTS AS DEFINED ABOVE. ALSO WE DID NOT STATE WHAT WAS REMOVED FROM THE AIRCRAFT AS A RESULT OF SAVE LIST ACTION. FURTHER, YOU WILL NOTE THAT ON PAGE IV OF THE BROCHURE THAT WE UNDERSCORED A-12 AUTO PILOT, * * * WITH A NOTE "SEE EQUIPMENT EXCEPTIONS NOTED.' UNDER EQUIPMENT EXCEPTIONS NOTED WE STATED THE A-12 AUTO PILOT IS NOT IN AIRCRAFT. * * *

"3. * * * MR. PATTERSON, WHO INSPECTED THESE AIRCRAFT PREVIOUSLY, AND WHO I UNDERSTAND IS A MEMBER OF AKROS DYNAMICS CORPORATION, WAS INFORMED BY MR. SCHELLS, DEPUTY DIRECTOR, ARIZONA AIRCRAFT STORAGE BRANCH, THAT THE SAVE LIST ITEMS REMOVED FROM AIRCRAFT CONSISTED OF ITEMS 1, 2, 4, 6, 8, 11, 13, 19, 20, 21, 24, 25, 27, 31. SUPPOSEDLY, OTHER ITEMS LISTED ARE IN AIRCRAFT.

"4. DURING COURSE OF TELEPHONE CONVERSATION WITH MR. PATTERSON, MR. PATTERSON WAS ADVISED THAT HE WOULD HAVE TO OBTAIN THE AUTO PILOT BOXES, PROBABLY FROM THE SPERRY GYROSCOPE COMPANY.

"5. MR. BENJAMIN, PRESIDENT, AND MR. STEINER, MEMBER OF AKROS, ACCOMPANIED BY FATHER BRADY, ON OR ABOUT 4 SEP 57 WERE ADVISED THAT WE HAD OBTAINED SOME ARG/3 TRANSMITTERS, AND RECEIVERS, AND APX-6 TRANSPONDERS FROM SCRAP COMBAT AIRCRAFT, AND THEY WOULD BE OFFERED FOR SALE AS SOON AS POSSIBLE. THIS MISSING GROUP OF ELECTRONIC GEAR WERE LOTTED IN SUFFICIENT QUANTITIES TO TAKE CARE OF INSTALLATION AND SPARE SUPPORT AS LOTTED ON SPOT BID SALE 58-5X, COPY OF WHICH WAS FURNISHED MR. STEINER ON THIS DATE. THE BID OPENING WILL BE ON 20 DEC 57.

"9. FOR YOUR FURTHER INFORMATION, MR. STEINER IS THE ENGINEER OF THIS CORPORATION. HE ADMITTED IN FRONT OF MR. BENJAMIN AND FATHER BRADY THAT HE HAD NOT COMPLETELY INSPECTED THESE AIRCRAFT. MR. STEINER WAS ALSO WELL AWARE THAT ITEMS ARE MISSING. MR. BENJAMIN AND MR. STEINER WERE ADVISED THAT THE TECHNICAL ORDERS AND REPRODUCIBLE MATERIALS FOR SOME OF THEM WHICH WERE SCHEDULED FOR PAPER SHREDDING WOULD BE TURNED OVER TO THEM. THESE ARE AVAILABLE FOR PICK UP. MOST OF THESE TECHNICAL ORDERS ARE THE ONES LISTED IN THE CATALOG ON PAGES 11 THROUGH 13.'

THE ITEMS 1, 2, 4, 6, 8, 11, 13, 19, 20, 21, 24, 25, 27 AND 31, MENTIONED ABOVE, REFER TO THE ITEMS OF EQUIPMENT LISTED ON PAGE XII OF THE SALES CATALOG THE GROUP "B" PARTS OF WHICH WERE REMOVED BY THE AIR FORCE PURSUANT TO SAVE-LIST ORDERS.

AS FURTHER EVIDENCE THAT REPRESENTATIVES OF THE AIR FORCE CONCERNED WITH THE SALE HAD NOT ASSURED AKROS THAT IT WOULD RECEIVE THE ELECTRONIC EQUIPMENT IN QUESTION, AS REPRESENTING A PART OF THE PROPERTY BEING SOLD, THE DEPARTMENT OF THE AIR FORCE DREW ATTENTION TO A "MEMORANDUM TO FILE," DATED DECEMBER 10, 1958, PREPARED BY JOHN E. NEWKIRK, CONTRACTING OFFICER, IN CONNECTION WITH THE MATTER, WHEREIN IT IS STATED:

"* * * MR. WILKINSON, OF TUCSON AIR PROCUREMENT OFFICE, HAS ADVISED THAT MR. BENJAMIN OF AKROS WAS THOROUGHLY ADVISED PRIOR TO SUBMITTING HIS BID IN AUGUST 1957 THAT THE AIRCRAFT HAD ONLY GROUP COMPONENTS AND THAT THE ITEMS NOW CLAIMED TO BE MISSING WERE SPECIFICALLY POINTED OUT AS NOT INCLUDED IN THE SALE OFFERING. * * *"

THE ADMINISTRATIVE REPORT WAS DISCUSSED HERE WITH REPRESENTATIVES OF AKROS, WHO CONTINUED TO INSIST THAT THE ORAL REPRESENTATIONS, TO THE EFFECT THAT THE ELECTRONIC EQUIPMENT WOULD BE DELIVERED ALONG WITH THE AIRCRAFT AS CONSTITUTING A PART OF THE PROPERTY BEING SOLD, HAD BEEN MADE, AS ALLEGED. IN AN AFFIDAVIT EXECUTED ON OCTOBER 7, 1960, EARL T. BENJAMIN STATED, AMONG OTHER THINGS, THAT IN SEPTEMBER, 1957, FATHER (BERNARD) BRADY, WILLIAM STEINER AND HE WENT TO NORTON AIR FORCE BASE TO LOOK AT THE "EQUIPMENT" ON THE BASE, AT WHICH TIME THEY TALKED IN TURN TO DONALD L. SCHULTZ AND MAJOR G. N. MCCAMPBELL, AND THE LETTER SHOWED THEN "ALL THE ELECTRONIC EQUIPMENT AND RADIO GEAR THAT BELONGED WITH THE C-74 PROGRAM (MOSTLY STORED BEHIND SCREENS); " THAT HE AND FATHER BRADY WENT OUT TO THE BASE THE NEXT DAY AND NEGOTIATED THE CONTRACT WITH MR. SCHULTZ, MR. HALTERMAN, AND "SOME OTHER GENTLEMEN.' THE LAST-MENTIONED MEETING WOULD APPEAR TO BE THAT WHICH IS REFERRED TO AS HAVING TAKEN PLACE ON SEPTEMBER 17, 1957, IN A MEMORANDUM DATED FEBRUARY 21, 1958, PREPARED BY MR. SCHULTZ IN CONNECTION WITH THE MATTER. THE MEMORANDUM STATES THAT MR. SCHULTZ NOTIFIED MR. BENJAMIN, THROUGH FATHER BRADY, THE NEXT DAY THAT AKROS' BID WAS BEING ACCEPTED. ON OCTOBER 19, 1960, MR. BENJAMIN EXECUTED AN ADDENDUM TO THE FOREGOING AFFIDAVIT WHEREIN HE STATED:

"MAJOR MCCAMPBELL SHOWED US AROUND AND SHOWED US PARTS WHICH WERE IN THE STORAGE AREA. HE SAID THAT THOSE CRATES AND SUCH CONTAINED ELECTRONIC EQUIPMENT AND RADIO GEAR THAT BELONGED TO THE ELEVEN C-74 AIRCRAFT THAT WE WERE BIDDING ON. HE VOLUNTEERED THIS INFORMATION ON MY ESTION,"WHAT WAS STORED HERE? " "

BY AFFIDAVIT DATED OCTOBER 7, 1960, AS AMENDED BY TWO ADDENDUMS THERETO EXECUTED ON OCTOBER 12 AND OCTOBER 19, 1960, RESPECTIVELY, BERNARD BRADY MADE THE SAME STATEMENT CONTAINED IN THE ABOVE QUOTE.

IN AN AFFIDAVIT EXECUTED ON SEPTEMBER 28, 1960, ALVIN A. NAIMANSTATED, IN EFFECT, THAT HE WAS PRESENT AT "FURTHER NEGOTIATIONS" WHICH TOOK PLACE BETWEEN AKROS AND THE DEPARTMENT OF THE AIR FORCE, REPRESENTED BY DONALD L. SCHULTZ AND COLONEL DENNIS REDD, RELATIVE TO CONSUMMATION OF THE C-74 CONTRACT (APPARENTLY REFERRING TO THE NEGOTIATIONS WITH RESPECT TO SUPPLEMENTAL AGREEMENT NO. 1 TO THE CONTRACT), AND THAT WHEN THE AIR FORCE REPRESENTATIVES WERE ASKED BY MR. NAIMAN "WHAT HAPPENED TO ALL THE COMMUNICATION EQUIPMENT ON THE C 74 AIRCRAFT THAT WERE PURCHASED BY AKROS? ," COLONEL REDD STATED:

"THE COMMUNICATION EQUIPMENT WENT WITH THE DEAL AND IF IT'S NOT THERE YOU WILL GET A CREDIT FROM THE GOVERNMENT.' MR. NAIMAN FURTHER STATED IN THE AFFIDAVIT THAT HE THEN TOLD MR. SCHULTZ AND COLONEL REDD THAT AKROS WOULD NOT HAVE SUBMITTED ITS BID UNLESS THIS HAD BEEN ITS UNDERSTANDING.

IN VIEW OF THE FOREGOING CONTENTIONS, THE FILE IN THE MATTER, TOGETHER WITH AKROS' PETITION AND RELATED ENCLOSURES AND THE AFFIDAVITS REFERRED TO, WAS RETURNED TO THE SECRETARY OF THE AIR FORCE, WITH THE REQUEST THAT WE BE FURNISHED WITH A STATEMENT FROM MAJOR MCCAMPBELL AND COLONEL REDD, AND A MORE SPECIFIC STATEMENT FROM MR. SCHULTZ, WITH RESPECT TO THE ORAL REPRESENTATIONS WHICH AIR FORCE REPRESENTATIVES ALLEGEDLY MADE TO REPRESENTATIVES OF AKROS REGARDING THE INCLUSION OF THE EQUIPMENT INVOLVED AS A PART OF THE PROPERTY BEING SOLD. WE ALSO REQUESTED THAT WE BE FURNISHED WITH STATEMENTS FROM MR. WILKINSON AND FROM MR. SCHOLLS REGARDING THE SUBJECT MATTER OF THE QUOTES FROM THE MCCAMPBELL MEMORANDUM OF DECEMBER 10, 1957, AND THE NEWKIRK MEMORANDUM OF DECEMBER 10, 1958, SET OUT ABOVE, AND THAT WE BE ADVISED WHETHER THE AIR FORCE HAD ANY INFORMATION REGARDING THE IDENTITY OF MR. PATTERSON, DRAWING ATTENTION TO MR. BENJAMIN'S AFFIDAVIT OF OCTOBER 7, 1960, WHEREIN IT IS STATED THAT MR. PATTERSON WAS AN "INDEPENDENT AGENT" INSOFAR AS HIS AUTHORITY TO ACT FOR AKROS IN THE MATTER OF THE INSPECTION OF THE AIRCRAFT WAS CONCERNED.

SUBSEQUENTLY, THERE WERE FURNISHED TO US BY THE DEPARTMENT OF THE AIR FORCE AN AFFIDAVIT EXECUTED BY DONALD L. SCHULTZ ON DECEMBER 2, 1960; TWO AFFIDAVITS EXECUTED BY COLONEL DENNY L. REDD ON DECEMBER 5 AND DECEMBER 19, 1960, RESPECTIVELY; AN AFFIDAVIT EXECUTED BY LIEUTENANT COLONEL GERALD N. MCCAMPBELL ON DECEMBER 29, 1960; AND AN AFFIDAVIT EXECUTED BY JOHN E. NEWKIRK ON DECEMBER 2, 1960. THE SCHULTZ AFFIDAVIT IS, IN PERTINENT PART, AS FOLLOWS:

"1. IN CONNECTION WITH AFFIDAVIT SIGNED BY EARL T. BENJAMIN AND NOTORIZED BY DANIEL H. O-NEILL, 7 OCTOBER 1960:

"H. RELATING TO PARAGRAPH 3, PAGE 3 STATEMENT (OF THE BENJAMIN AFFIDAVIT) I CERTIFY THAT ANY AND ALL STATEMENTS I MADE AT THIS MEETING WERE IN STRICT ACCORDANCE WITH THE "DESCRIPTION AND LOCATION OF PROPERTY" DATA SET FORTH ON PAGES 1 AND 3 OF RFQ-PPRS-3-S-58-5. * * * I DO NOT RECALL HEARING ANY STATEMENT THAT AKROS DYNAMICS CORP. WAS GETTING THE COMPLETE CATALOG WITHOUT QUALIFICATION AND I DID NOT MAKE ANY STATEMENT WHICH QUALIFIED THE TERMS OF THE RFQ.

"J. THE STATEMENTS CONTAINED IN PARAGRAPH 5, PAGE 3 AND CONTINUED ON PAGE 4 ARE FACTUAL AND INDICATE MR. BENJAMIN'S UNDERSTANDING THAT ANY SHORTAGES OR OVERAGES WOULD BE ADJUSTED AFTER COMPLETION OF THE CONTRACT IN ACCORDANCE WITH THE "ADJUSTMENT FOR VARIATION IN QUANTITY" CLAUSE OF THE RFQ.

"2. I NEVER AT ANY TIME MADE ANY STATEMENT TO ANYONE, INCLUDING MR. NAIMAN, THAT AKROS WAS GETTING THE COMPLETE CATALOG * * *

"4. IN CONNECTION WITH THE SWORN STATEMENT BY ALVIN A. NAIMAN AND NOTORIZED BY PARTICK A. GAREAU, 28 SEPTEMBER 1960:

"A. I HAVE NO RECOLLECTION OF A MEETING ATTENDED BY MR. NAIMAN, COLONEL DENNIS REDD AND MYSELF. THE STATEMENT RELATING TO COMMUNICATION EQUIPMENT CREDITED TO COLONEL REDD BY MR. NAIMAN IF CONFIRMED BY COLONEL REDD MUST HAVE BEEN MADE IN MY ABSENCE. * * *"

IN HIS AFFIDAVIT OF DECEMBER 5, 1960, COLONEL REDD STATES THAT HE DID NOT ATTEND ANY OF THE NEGOTIATION MEETINGS LEADING TO THE CONSUMMATION OF THE CONTRACT INVOLVED AND HAS NO RECOLLECTION OF EVER ATTENDING ANY MEETING WITH MR. SCHULTZ AT WHICH MR. NAIMAN WAS PRESENT. HOWEVER, HE STATES THAT HE DID TALK WITH MR. NAIMAN SEVERAL TIMES REGARDING THE TRANSACTION, BUT NEVER AT ANY TIME MADE THE STATEMENT WITH RESPECT TO THE COMMUNICATION EQUIPMENT ATTRIBUTED TO HIM IN THE NAIMAN AFFIDAVIT, HEREINABOVE QUOTED. HE ALSO STATES THAT HE DOES RECALL TELLING MR. NAIMAN IN SUBSTANCE THAT, IF THE "EQUIPMENT" WAS IN THE CATALOG AS PART OF THE DEAL, IT WOULD BE A COMPLETE PACKAGE DEAL, AND THAT MR. NAIMAN SHOULD GET AN INTERPRETATION FROM THE PEOPLE WHO HANDLED THE PREPARATION OF THE CATALOG; BUT HE STATES THAT HE HAS NO RECOLLECTION OF MR. NAIMAN'S HAVING STATED THAT AKROS WOULD NOT HAVE SUBMITTED ITS BID UNLESS THIS HAD BEEN ITS UNDERSTANDING. HOWEVER, IN HIS AFFIDAVIT OF DECEMBER 19, 1960, IN WHICH COLONEL REDD REQUESTED THAT "THIS BE CONSIDERED BY OFFICIAL STATEMENT OR A SUPPLEMENT TO THE DECEMBER 5, 1960 AFFIDAVIT," HE STATES:

"* * * I DO NOT RECALL SAYING PRECISELY TO MR. NAIMAN "THAT THE COMMUNICATIONS EQUIPMENT WENT WITH THE DEAL AND IF IT IS NOT THERE YOU WILL GET A CREDIT FROM THE GOVERNMENT.' I RECALL DISCUSSING THE COMMUNICATION EQUIPMENT WITH MR. NAIMAN IN THE FALL OF 1958 AND AS I REMEMBER THE DISCUSSION I TOLD HIM WHEN HE RAISED THE QUESTION OF A POSSIBLE SHORTAGE,"THAT IF THE EQUIPMENT IS IN THE INVITATION TO BID (OR CATALOG) IT IS PART OF THE PROGRAM THAT MAKES UP THE COMPLETE PACKAGE DEAL,"OR WORDS TO THAT EFFECT. I AM NOT SURE THAT I TOLD MR. NAIMAN THAT HE SHOULD GET AN INTERPRETATION FROM THE PEOPLE WHO PREPARED THE CATALOG. I RATHER THINK I TOLD MR. BENJAMIN OR STEINER TO DO THIS AND NOT MR. NAIMAN.

"I DO NOT RECALL MR. NAIMAN STATING THAT "AKROS WOULD NOT HAVE SUBMITTED THE BID UNLESS THIS HAD BEEN THE UNDERSTANDING.' AFTER MR. NAIMAN AND BENJAMIN HAD DELIVERED THE $500,000.00 CHECK TO THE AIR FORCE CONTRACTING OFFICER AT NAFB, CALIFORNIA THEY CAME BY TO SEE ME AND TOLD ME THAT THEY HAD MADE THE PAYMENT. AT THIS TIME I ENCOURAGED THEM TO MOVE FORWARD WITH THE PROGRAM. AS RESULT, AS I RECALL THE CONVERSATION GENERALLY MR. NAIMAN AGAIN MENTIONED THE COMMUNICATIONS EQUIPMENT AND AS I REMEMBER IT HE SAID,"IF WE WEREN-T COUNTING ON THE AIR FORCE TO TURN OVER THE EQUIPMENT TO US HE WOULD NOT HAVE PAID OR GIVEN THEM THE $500,000.00,"OR SIMILAR WORDS. I TOLD HIM THAT I WAS CONFIDENT THE AIR FORCE WOULD FULFILL IT'S AGREEMENT OR WORDS TO THAT EFFECT.'

THE MCCAMPBELL AFFIDAVIT IS, IN PERTINENT PART, AS FOLLOWS:

"THAT, COMMENCING IN THE WINTER OF 1956, I BECAME PROJECT OFFICER RELATIVE TO THE SALE OF 11 SURPLUS C-74 GLOBEMASTER I AIRCRAFT, AVAILABLE SPARE PARTS, ACCESSORIES AND EQUIPMENT LOCATED AT VARIOUS DEPOTS AND BASES IN THE UNITED STATES, AND AS SUCH, INITIALLY SUPERVISED COMPILATION OF INVITATION FOR BID 04-607-S-57-21.

"THAT, AFTER REVIEWING THE VARIOUS ALLEGATIONS OF THE PLAINTIFF CORP., AKROS DYNAMICS CORP., AS CONTAINED WITHIN BRIEF AND ADDED AFFIDAVITS, I OBJECT STRENUOUSLY AND DO DENY THAT I EVER, BE IT BEFORE, DURING OR SUBSEQUENT TO THE SALE OF THE SURPLUS C-74 AND RELATED EQUIPMENT, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY GAVE ASSURANCE THAT ALL THE EQUIPMENT SHOWN AND PARTICULARLY THAT SHOWN ON PAGE XII WAS INCLUDED IN THE SALE CONTRACT;

"THAT, NO SUCH ASSURANCES WERE GIVEN TO REPRESENTATIVES OF THE AKROS CORP. OR TO ANY OTHER INTERESTED BIDDERS;

"THAT, CONTRARY TO THE AKROS CORP. BRIEF, THAT I HAD NUMEROUS DISCUSSIONS WITH THEIR REPRESENTATIVES RELATIVE TO THE SALE OF THE SURPLUS C-74-S, I CAN ONLY REMEMBER ONE PERSONAL MEETING WITH MR. BENJAMIN AND A FATHER BRADY, AROMAN CATHOLIC PRIEST. THIS MEETING WAS APPROXIMATELY 20 MINUTES IN DURATION AND TO THE BEST OF MY RECOLLECTION OCCURRED DURING THE MONTH OF SEPTEMBER 1959. THEY VISITED ME AT MY OFFICE AT BUILDING S-645, JUST AT QUITTING TIME WHEN ALL OTHER PERSONNEL WERE LEAVING.

"THAT, PRIOR TO AND AFTER THIS VISIT I HAD ON A FEW OCCASIONS ALSO MET WITH MR. STEINER OF DOWNEY, CALIFORNIA, PURPORTEDLY AN AKROS CORP. REPRESENTATIVE. ANY CONVERSATIONS HAD WITH MR. STEINER ON THESE OCCASIONS WERE GENERAL IN NATURE AND DID ON ONE OCCASION INCLUDE DETAIL DISCUSSION RELATIVE TO THE AVAILABILITY OF ELECTRONIC EQUIPMENT FOR THE C-74'S OTHER THAN THAT ALREADY COVERED BY THE BID.

"THAT, ADDITIONALLY, I RECEIVED A NUMBER OF TELEPHONE CALLS FROM MR. STEINER, NONE OF WHICH DISCUSSED IN DETAIL THE AVAILABILITY OF ELECTRONIC EQUIPMENT NOT ALREADY COVERED BY THE BID, BUT DID, DISCUSS ON ONE OCCASION THE PRICE OF THE ENGINES.

"THAT, SOMETIME PRIOR TO THE BID OPENING DATE OF 10 JULY 1957, I DID RECEIVE A TELEPHONE CALL AT NORTON AFB, CALIFORNIA, FROM MR. PATTERSON ALONG WITH MR. SCHOLLS, DEPUTY DIRECTOR OF THE ARIZONA AIRCRAFT STORAGE BRANCH AT DAVIS-MONTHAN AFB, TUCSON ARIZONA, WHERE THE C-74 AIRCRAFT WERE STORED, WHEREIN, MR. PATTERSON ASKED WHERE THE BLACK BOXES WERE FOR CERTAIN ELECTRONIC CONFIGURATIONS, NAMELY THE AUTO PILOTS AND THE ARC-3 RECEIVERS AND TRANSMITTERS SINCE HE CONSIDERED THEM ESSENTIAL FOR FLYAWAY AND IF I KNEW WHERE HE COULD GET THEM. I SUGGESTED HE CONTACT THE SPERRY GYROSCOPE COMPANY OR OTHER MANUFACTURERS. MR. SCHOLLS, TOLD ME HE HAD INFORMED MR. PATTERSON OF THE ITEMS REMOVED. I REQUESTED MR. SCHOLLS TO LET ME KNOW WHAT CONFIGURATIONS WERE AFFECTED ON PAGE XII OF THE BROCHURE WHICH HE HAD AS HIS WORK COPY, AND TO LET ME KNOW LATER ON SINCE IT WOULD TAKE TOO LONG TO TAKE OVER THE PHONE. HE DID PHONE ME SOME TIME LATER AND CITED THE ITEM NUMBERS OF GROUP B COMPONENTS REMOVED BY SAVE LIST ACTION ON PAGE XII OF THE BROCHURE HEADED "GLOBEMASTER I C-74 ELECTRONICS CONFIGURATION" "GROUP A COMPONENTS NLY" * * *.'

"THAT, THE CLAIMS OF AKROS DYNAMICS REGARDING THE ELECTRONIC EQUIPMENT AND MICRO-FILM RESULTED FROM THE FOLLOWING SITUATION:

"/A) ON THE DATE OF THEIR VISIT TO MY OFFICE WHICH I BELIEVE TO BE ON OR ABOUT THE 2ND DAY OF SEPTEMBER 1957, I WAS PREPARING TO LEAVE MY OFFICE AFTER ALL OF THE OTHER PERSONNEL HAD LEFT OR WERE LEAVING WHEN MR. BENJAMIN AND FATHER BRADY ENTERED AND WE WERE INTRODUCED. DURING THE MEETING AND DISCUSSION IN MY OFFICE, BUILDING S-645, I STATED THAT I HAD MADE A RE-CHECK WITH ALL OF THE DEPOTS CONCERNED IN THE SALE AND SO FAR ONLY TWO ITEMS OF SPARES WERE REPORTED AS SHOWING A DISCREPANCY IN COUNT; ONE REFLECTING A SHORTAGE DUE TO A TYPOGRAPHICAL ERROR AT OGDEN, UTAH AND THE OTHER ON OVERAGE DUE TO A RECENT RECEIPT AT SHELBY, OHIO. I ATTEMPTED TO TELL THEM WHAT THESE ITEMS WERE; HOWEVER, THEY SEEMED MORE INTERESTED IN THE PICTURES OF THE C-74 AIRCRAFT ON THE WALL. THESE PICTURES WERE DUPLICATES OF SOME PICTURES USED IN THE CATALOG (SIZE 8 BY 10 1/2 ). PARTICULAR REFERENCE WAS MADE TO CLOSEUP INTERIOR SHOTS SHOWN ON PAGES 110 AND 115 OF INSERT 2 OF THE INVITATION * * *.

"/C) WE THEN PROCEEDED FROM THE OFFICE TO THE WAREHOUSE PORTION OF BUILDING S-645 WHICH WAS DIVIDED INTO TWO SECTIONS BY A CHICKEN WIRE SCREEN WALL EXTENDING ACROSS THE ENTIRE WAREHOUSE. I SHOWED THEM THE EXTRA COPIES OF TECHNICAL ORDERS AND REPRODUCIBLE MATS STORED IN CARDBOARD AND WOODEN BOXES, SOME ON FLAT PALLETS AND OTHERS IN BOX PALLETS. DURING THE DISCUSSION ON POSSIBLE USES OF THESE "EXTRA COPIES" (APPROXIMATELY ONE TRUCK LOAD), WHICH HAD BEEN SAVED FROM THE PAPER SHREDDER AT MY PERSONAL DIRECTION, PENDING COMPLETION OF SALE AND DELIVERY OF THE AIRCRAFT, MR. BENJAMIN, AS STATED IN HIS AFFIDAVIT POINTED THROUGH THE OPEN BOX PALLETS AND SCREEN AND ASKED ,WHAT WAS STORED HERE? " I REPLIED, IN EFFECT. THAT THE MATERIAL, SOME ON THE FLOOR AND SOME IN BOX PALLETS, WAS ELECTRONIC RESIDUE MATERIAL RECENTLY REMOVED FROM F-84 AIRCRAFT AND SOME WOULD BE APPLICABLE TO THE C-74 AIRCRAFT AS I HAD PREVIOUSLY OBSERVED SOME ARC-3 RECEIVERS AND TRANSMITTERS IN THE LOT. I DID NOT HAVE A KEY TO THE SCREENED ROOM AT THE TIME. I ALSO SAID THAT WE WOULD OFFER THE MATERIAL FOR SALE WHEN WE HAD CHECKED AND LOTTED IT AND WOULD FORWARD A CATALOG TO THEM WHEN IT WAS READY. THEY THEREFORE DEPARTED FROM THE WAREHOUSE AND I LOCKED UP THE OFFICE AND WAREHOUSE AND WENT HOME. * * *

"THAT, THE STATEMENTS CONTAINED IN AFFIDAVITS OF KARL T. BENJAMIN AND BERNARD BRADY, DATED 19 OCTOBER 1960, BOTH ALMOST IDENTICAL AND QUOTED HEREIN FOR CLARITY,

"QUOTE"

" "MAJOR MCCAMPBELL SHOWED US AROUND AND SHOWED US PARTS WHICH WERE IN THE STORAGE AREA. HE SAID THAT THESE CRATES AND SUCH CONTAINED ELECTRONIC EQUIPMENT AND RADIO GEAR THAT BELONGED TO THE ELEVEN C-74 AIRCRAFT THAT WE WERE BIDDING ON. "HE VOLUNTEERED THIS INFORMATION ON MY QUESTION. "WHAT WAS STORED HERE? " " * * *

"* * * IS IN ERROR IN THAT:

"/A) I, AS STATED ABOVE, SPECIFICALLY KNEW THE MATERIAL HE IS REFERRING TO IN HIS STATEMENT WAS VERY RECENTLY SALVAGED FROM 72 F84E COMBAT FIGHTER AIRCRAFT BEING DEMILITARIZED AT ONTARIO INTERNATIONAL AIRPORT, ONTARIO, CALIFORNIA, APPROXIMATELY 20 MILES WEST OF SAN BERNARDINO, CALIFORNIA, ENROUTE TO LOS ANGELES, AND WAS SATELLITED ON MORTON AFB FOR DISPOSAL AND TURN IN OF SALVAGE SINCE WE WERE THE NEAREST AIR FORCE BASE WITH AREA DISPOSAL RESPONSIBILITIES.

"/B)I SPECIFICALLY KNEW THAT THE C-74 AIRCRAFT, LOCATED AT TUSCON, ARIZONA, APPROXIMATELY 500 MILES EAST OF SAN BERNARDINO, WERE MISSING ARC- 3 RECEIVERS AND TRANSMITTERS DUE TO AUTHORIZED SAVE LIST ACTION SOMETIME IN EARLY 1956. (SEE ATTACHMENT D, TAB 12); AND PREVIOUS TELEPHONE CONVERSATION WITH MR. PATTERSON AND MR. SCHOLLS, AND THAT THE C-74 MATERIAL WAS EITHER AT MOBILE OR DAYTON AFB.

"/C) I HAD TAKEN SPECIAL ACTION TO PUT ALL OF THE SALVAGED ELECTRONIC RESIDUE INSIDE, PENDING SORTING OUT SINCE SOME WAS OBVIOUSLY JUNK, AND HAD EVEN CONSIDERED GIVING ELEVEN SETS OF ARC-3 RECEIVERS AND TRANSMITTERS TO WHOEVER PURCHASED THE C-74'S IN ORDER TO ASSIST IN EXPEDITING THEIR REMOVAL FROM TUSCON; HOWEVER, DISCUSSION WITH OTHER INTERESTED PERSONNEL INDICATED THAT SINCE WE DID NOT HAVE ENOUGH OF EVERYTHING ELSE REQUIRED, AND THAT THE ARC-3 SETS HAD NOT BEEN AVAILABLE OR ADVERTISED IN THE ORIGINAL SALE AND NOT AVAILABLE OR ADVERTISED IN THE NEGOTIATED SALE WHICH HAD BEEN PUBLISHED, THEY WOULD HAVE TO BE OFFERED FOR PUBLIC SALE. * * *

"THAT, AFTER PUBLICATION OF THE SPOT BID CATALOG 58-3X DATED 6 DECEMBER 1957, WHICH CONTAINED THE ARC-3 RECEIVERS AND TRANSMITTERS, MR. STEINER OF AKROS WAS GIVEN A COPY AND ESCORTED TO THE MATERIAL IN THE OPEN PORTION OF BUILDING S-645 FOR INSPECTION. (SEE ATTACHMENT C)

"THAT, I SAW TO IT THAT A COPY OF SALE 58-3X WAS MAILED TO AKROS DYNAMICS, INC. CLEVELAND, OHIO ADDRESS, PRIOR TO MR. STEINER'S VISIT ON OR ABOUT 10 DECEMBER 1957.'

IN THE NEWKIRK AFFIDAVIT, WHICH WAS FURNISHED PURSUANT TO OUR REQUEST FOR STATEMENTS FROM MR. WILKINSON AND FROM MR. SCHOLLS REGARDING THE SUBJECT MATTER OF THE QUOTES FROM THE MCCAMPBELL MEMORANDUM OF DECEMBER 10, 1957, IT IS STATED:

"2. SOMETIME IN AUGUST 1958, WHEN I WAS FIRST DIRECTED TO TAKE ANY ACTION PERTAINING TO SUBJECT CONTRACT, I WAS DEPUTY CHIEF, CONTRACT ADMINISTRATION DIVISION, DIRECTORATE OF PROCUREMENT AND PRODUCTION, HEADQUARTERS SSAMA. MY OFFICE WAS CHARGED WITH STAFF SURVEILLANCE OVER THE ARIZONA AIR PROCUREMENT DISTRICT AT TUCSON. MR. ROBERT S. WILKINSON WAS CHIEF OF THE CONTRACT DIVISION IN THAT DISTRICT AND WAS PERSONALLY ASSIGNED THE ADMINISTRATION OF SUBJECT CONTRACT. HIS ADMINISTRATION OF THE NUMEROUS SALES CONTRACTS AT THE ARIZONA AIRCRAFT STORAGE BRANCH, PRESENTLY KNOWN AS THE 2704TH AIRCRAFT DISPOSAL AND STORAGE GROUP, AT ALL TIMES SITUATED ON DAVIS-MONTHAN AIR FORCE BASE, TUCSON, CONSISTED PRIMARILY OF COLLECTING THE CASH PROCEEDS FROM THOSE CONTRACTS FOR THE ACCOUNT OF THE GOVERNMENT. UNTIL ABOUT AUGUST 1959, THAT STORAGE BRANCH NEITHER EXECUTED NOR ADMINISTERED ANY CONTRACTS. MR. WILKINSON WAS THEREFORE FREQUENTLY ON BRANCH PREMISES AND IN GENERAL ASSISTED SAN BERNARDINO AIR MATERIEL AREA IN CONTRACTUAL MATTERS THEREON BECAUSE HIS OFFICE WAS RESPONSIBLE FOR ADMINISTERING ALL AIR FORCE CONTRACTS IN ARIZONA. LATER ON AND IN DECEMBER 1958, I ACTED AS CONTRACTING OFFICER TO TERMINATE SUBJECT CONTRACT FOR DEFAULT BECAUSE OF ITS BREACH OF AKROS DYNAMICS. * * *

"3. FROM AUGUST 1958 UNTIL HIS DEATH ABOUT AUGUST 23, 1960, MR. WILKINSON WAS IN FREQUENT COMMUNICATION AND MANY CONFERENCES WITH ME ABOUT THESE SALES CONTRACTS. * * *

"4. UPON TWO OR THREE DIFFERENT OCCASIONS OVER THOSE TWO YEARS, I VERIFIED MY RECOLLECTION OF MR. WILKINSON'S ORIGINAL ORAL STATEMENT TO ME THAT PERSONNEL OF AKROS DYNAMICS HAD PHYSICALLY INSPECTED THE AIRCRAFT THAT WERE SOLD UNDER SUBJECT CONTRACT PRIOR TO BIDDING UPON THEM. ABOUT AUGUST 1960 HE AGAIN STATED THAT HE KNEW THAT SUCH PERSONNEL WERE FAMILIAR WITH THE CONDITION OF SUCH AIRCRAFT AND WERE THOROUGHLY ADVISED PRIOR TO AUGUST 1957THAT THE AIRCRAFT HAD GROUP "B" COMPONENTS (IN AN AFFIDAVIT EXECUTED ON DECEMBER 16, 1960, JOHN S. NEWKIRK STATES THAT HE INTENDED TO STATE GROUP "A" COMPONENTS) ONLY, THAT IS, ONLY WIRING BRACKETS AND NOT THE "BLACK BOXES.' I FULLY CREDITED THIS STATEMENT, BECAUSE MR. WILKINSON WAS AN ABLE EXPERIENCED CONTRACTING OFFICER OF UNQUESTIONED REPUTATION, CHARACTER AND INTEGRITY. I AM CONFIDENT THAT IF MR. WILKINSON WERE ALIVE, HE WOULD SO SWEAR AND FURTHER THAT WHEN HE RECEIVED THE CONTRACTOR'S LETTER IN OCTOBER 1958 FOR THE FIRST TIME CLAIMING SHORTAGES THAT HE SENT IT TO MR. ED. SCHOLES (NOT SCHULTZ) WHO WAS THEN DEPUTY TO COLONEL ALLEN REED, BRANCH COMMANDER, FOR INFORMATION OF THE ACTUAL CONDITIONS OF THE AIRCRAFT. UNFORTUNATELY, THE LIPS OF MR. SCHOLES WERE ALSO CLOSED BY DEATH, PROBABLY IN 1959.'

IN RESPONSE TO OUR REQUEST FOR INFORMATION REGARDING THE IDENTITY OF MR. PATTERSON, THERE WAS FURNISHED TO US IN THE FORM OF AN EXHIBIT ATTACHED TO THE MCCAMPBELL AFFIDAVIT A TRANSCRIPT OF A TELEPHONE CONVERSATION HELD ON JULY 24, 1957, BETWEEN MAJOR (NOW LIEUTENANT COLONEL) MCCAMPBELL AND A MR. DOUDS (ONE OF THE AIR FORCE REPRESENTATIVES CONCERNED WITH THE SALE OF THE AIRCRAFT), WHICH IS IN PERTINENT PART AS FOLLOWS:

"MR. DOUDS: FOR YOUR INFORMATION, I HAVE BEEN HAVING A LITTLE RESEARCH DONE ON AKROS DYNAMIC CORP. DIDN-T YOU GET ANY INFO ON THEM?

MAJOR: COLONEL REDD KNOWS MR. BENJAMIN.

MR. DOUDS: SIXTY-FIVE PERCENT OF THE STOCK IS DIVIDED BETWEEN MR. GULLEY AND MR. BENJAMIN. THIRTY-FIVE PERCENT IS DIVIDED BETWEEN A MR. PATTERSON AND MR. STEINER. MR. PATTERSON WAS FORMERLY CONNECTED WITH ALLIED AIRLINES. PATTERSON IS ALLEGED TO BE THE SALESMAN. HE IS NOW CONTACTING PROSPECTIVE BUYERS. * * *"

IT WILL BE NOTED THAT MR. SCHULTZ STATES IN PARAGRAPH 1J OF HIS ABOVE- QUOTED AFFIDAVIT THAT THE STATEMENTS CONTAINED IN THE FIFTH PARAGRAPH BEGINNING ON PAGE 3 OF MR. BENJAMIN'S AFFIDAVIT OF OCTOBER 7, 1960,"ARE FACTUAL.' THAT PARAGRAPH OF MR. BENJAMIN'S AFFIDAVIT READS AS FOLLOWS:

"I WENT IN AUGUST OF 1958 TO SET UP A PAYMENT SCHEDULE AND PAY $500,000 - I NEGOTIATED WITH MR. SCHULTZ. THEY WANTED A PERFORMANCE BOND. I WOULD NOT LEAVE THE CHECK WITH THEM AND RETURNED TO CLEVELAND TO PICK UP THE PERFORMANCE BOND AND THEN, ON THE NEXT TRIP OUT THERE, MR. ALVIN NAIMAN AND MYSELF MET WITH MR. SCHULTZ, GAVE HIM THE PERFORMANCE BOND AND GAVE HIM THE $500,000. MR. NAIMAN ASKED MR. SCHULTZ, THE CONTRACTING OFFICER, IF EVERYTHING IN THIS CATALOG WAS WHAT WE WERE BUYING. HE STATED TO MR. NAIMAN THAT WE WERE BUYING THE COMPLETE CATALOG, EVERYTHING IN THE CATALOG. SO MR. NAIMAN AND MYSELF NEGOTIATED OUR BUSINESS THERE WITH HIM, GAVE HIM THE $500,000 AND THE PERFORMANCE BOND AND RETURNED HOME TO CLEVELAND. WE BROUGHT UP THE QUESTION OF WHAT IF PARTS WERE MISSING OF THOSE ADVERTISED IN THE CATALOG AND I SPECIFICALLY STATED THAT WHAT IF SOME OF THE MATERIAL WAS STOLEN, LOST OR MISLAID AND MR. SCHULTZ STATED TO ME THAT IF THERE WAS ANY SHORTAGES IN THE CATALOG THAT THE GOVERNMENT WOULD REIMBURSE US - THE SAME WOULD APPLY AS TO ANY OVERAGES, WE WOULD PAY THE GOVERNMENT.'

MR. SCHULTZ'S STATEMENT THAT THE STATEMENTS CONTAINED IN THE ABOVE PARAGRAPH ARE FACTUAL, INSOFAR AS IT APPLIES TO THE STATEMENT HEREIN THAT MR. SCHULTZ, IN RESPONSE TO MR. NAIMAN'S QUESTION AS TO WHETHER "EVERYTHING IN THIS CATALOG WAS WHAT WE WERE BUYING," STATED THAT "WE WERE BUYING THE COMPLETE CATALOG, EVERYTHING IN THE CATALOG," IS SOMEWHAT INCONSISTENT, IN AND OF ITSELF, WITH PARAGRAPH 2 OF MR. SCHULTZ'S AFFIDAVIT, WHEREIN HE STATES THAT HE NEVER AT ANY TIME MADE ANY STATEMENT TO ANYONE, INCLUDING MR. NAIMAN, THAT AKROS WAS GETTING THE COMPLETE CATALOG. HOWEVER, WE BELIEVE THAT IT IS EVIDENT FROM MR. SCHULTZ'S AFFIDAVIT AS A WHOLE THAT HE CONSIDERED MR. NAIMAN'S QUESTION AS RELATING TO WHETHER OR NOT AKROS WAS BUYING ALL OF THE ITEMS OF PROPERTY OFFERED FOR SALE IN THE CATALOG, WHICH, OF COURSE, IT WAS.

IN VIEW OF THE EVIDENCE CONTAINED IN THE INTERDEPARTMENTAL MEMORANDA PREPARED BY THE REPRESENTATIVES OF THE AIR FORCE CONCERNED WITH THE SALE OF THE AIRCRAFT AND RELATED EQUIPMENT, WHICH WERE MADE AT OR ABOUT THE TIME THE TRANSACTION INVOLVED TOOK PLACE AND ARE, THEREFORE, ENTITLED TO GREAT WEIGHT, AND OF THE STATEMENTS CONTAINED IN THE AFFIDAVITS EXECUTED BY SUCH REPRESENTATIVES, HEREINABOVE QUOTED AND REFERRED TO, WE WOULD NOT BE JUSTIFIED OR WARRANTED IN CONCLUDING THAT REPRESENTATIVES OF AKROS WERE GIVEN ORAL ASSURANCE BY THE AIR FORCE REPRESENTATIVES INVOLVED THAT THE ELECTRONIC EQUIPMENT IN QUESTION "WENT WITH" THE AIRCRAFT AS CONSTITUTING A PART OF THE PROPERTY BEING SOLD. EVEN IF YOUR CONTENTIONS IN THE MATTER HAD NOT BEEN SO EMPHATICALLY DENIED BY THE REPRESENTATIVES OF THE AIR FORCE CONCERNED, THE FACTS AND CIRCUMSTANCES LEADING UP TO YOUR ASSERTION THAT THE ORAL REPRESENTATIONS WERE MADE ARE SUCH AS TO CAST CONSIDERABLE DOUBT UPON THE VALIDITY OF YOUR CONTENTIONS. AS INDICATED ABOVE, YOU DID NOT ASSERT ANY CLAIM THAT YOU WERE ENTITLED TO RECEIVE THE ELECTRONIC EQUIPMENT UNTIL OCTOBER 29, 1958, WHEN IN YOUR LETTER OF THAT DATE YOU STATED THAT THE EQUIPMENT WAS IN THE AIRCRAFT AT THE TIME YOU INSPECTED THEM PRIOR TO PURCHASE. THIS WAS ONE YEAR AFTER YOU HAD PURCHASED THE AIRCRAFT AND RELATED EQUIPMENT. YOU HAD, IN THE MEANTIME, EXECUTED THE SUPPLEMENTAL AGREEMENT OF AUGUST 25, 1958, WHICH AMENDED THE CONTRACT IN MATERIAL PART ONLY WITH RESPECT TO THE MANNER IN WHICH THE PRICE WHICH YOU HAD AGREED TO PAY FOR THE PROPERTY WAS TO BE PAID, WITH THE EXCEPTION THAT THE TOTAL CONTRACT PRICE WAS INCREASED BY THE AMOUNT OF $27,114 TO COVER THE PRICE OF THE ADDITIONAL ENGINE WHICH YOU AGREED TO PURCHASE. YOU REPEATED THE CONTENTION THAT THE ELECTRONIC EQUIPMENT HAD BEEN REMOVED FROM THE AIRCRAFT SUBSEQUENT TO YOUR PURCHASE THEREOF IN YOUR LETTERS OF OCTOBER 31 AND NOVEMBER 19, 1958, STATING IN THE LAST LETTER THAT "AT THE TIME THE PURCHASE CONTRACT WAS ENTERED INTO, ALL OF THE EQUIPMENT WAS INSTALLED AND INTACT.' HOWEVER, IN YOUR PRESENT PETITION YOU HAVE COMPLETELY REVERSED YOUR CONTENTION IN THE PREMISES. IT IS STATED THEREIN THAT THE ONLY REASON THE QUESTION OF THE ELECTRONICS CONFIGURATION WAS EVER DISCUSSED WITH MAJOR MCCAMPBELL WAS THAT THE EQUIPMENT "WAS NOT ON THE AIRCRAFT" AT THE TIME THEY WERE BEING SHOWN TO PROSPECTIVE BIDDERS. AS INDICATED ABOVE, THE RECORD SHOWS THAT THE GROUP "B," OR THE OPERATING COMPONENTS, OF THE EQUIPMENT DESIGNATED ON PAGE XII OF THE SALES CATALOG AS ITEMS NOS. 1, 2, 4, 6, 8, 11, 13, 19, 20, 21, 24, 25, 27 AND 31, WHICH INCLUDED THE AUTOMATIC PILOTS, WERE REMOVED BY THE AIR FORCE IN COMPLIANCE WITH SAVE-LIST ORDERS LONG BEFORE THE AIRCRAFT WERE OFFERED FOR SALE. ALSO, YOUR FIRST CLAIM THAT AKROS HAD BEEN GIVEN ORAL ASSURANCES BY AIR FORCE REPRESENTATIVES THAT IT WOULD RECEIVE THE ELECTRONICS EQUIPMENT AS CONSTITUTING A PART OF THE PROPERTY BEING SOLD APPEARS TO HAVE BEEN MADE IN YOUR REFERRED-TO LETTER OF JULY 14, 1959, OR EIGHT AND ONE-HALF MONTHS AFTER YOU MADE YOUR INITIAL CLAIM WITH RESPECT TO THE MISSING EQUIPMENT.

IN ANY EVENT, IN VIEW OF THE "AS IS" AND "WHERE IS" PROVISIONS OF THE CONTRACT AND OF THE PROVISION IN PARAGRAPH 12 OF THE GENERAL SALE TERMS AND CONDITIONS THAT ANY ORAL STATEMENT BY ANY REPRESENTATIVE OF THE GOVERNMENT, MODIFYING OR CHANGING ANY CONDITIONS OF THE CONTRACT, WAS TO BE CONSIDERED AN EXPRESSION OF OPINION ONLY AND AS CONFERRING NO RIGHT UPON THE PURCHASER, ANY ORAL REPRESENTATIONS OF THE TYPE CONTENDED TO HAVE BEEN MADE, IN ORDER TO ENTITLE AKROS TO SET ASIDE THE CONTRACT, WOULD HAVE HAD TO HAVE BEEN MADE UNDER CIRCUMSTANCES INDICATING FRAUD ON THE PART OF THE REPRESENTATIVES OF THE GOVERNMENT CONCERNED, WHICH CLEARLY ARE ABSENT HERE. SEE 46 AM.JUR., SALES, SEC. 319. IN FACT, THERE IS CONSIDERABLE EVIDENCE INDICATING THAT MR. BENJAMIN AND MR. STEINER, NOT TO MENTION MR. PATTERSON, WHOSE CONNECTION WITH AKROS YOU DENY, WERE ADVISED SPECIFICALLY BY REPRESENTATIVES OF THE AIR FORCE PRIOR TO PURCHASE OF THE AIRCRAFT THAT THE ELECTRONICS EQUIPMENT HERE IN QUESTION WAS NOT INCLUDED IN THE PROPERTY BEING SOLD, AND THAT THEY WERE ADVISED THAT SIMILAR EQUIPMENT REMOVED FROM AIRCRAFT OTHER THAN THOSE HERE INVOLVED WAS TO BE OFFERED FOR SALE BY THE AIR FORCE UNDER ANOTHER INVITATION OF WHICH AKROS WOULD BE FURTHER ADVISED IN ORDER THAT IT MIGHT SUBMIT A BID THEREON. REFERENCES IN THIS CONNECTION IS MADE TO MAJOR MCCAMPBELL'S MEMORANDUM OF DECEMBER 10, 1957, MR. NEWKIRK'S MEMORANDUMS OF DECEMBER 10, 1958, AND DECEMBER 2, 1960, AND THE TRANSCRIPT OF TELEPHONE CONVERSATION BETWEEN MAJOR MCCAMPBELL AND MR. DOUDS, QUOTED ABOVE. ALSO, WE BELIEVE THAT AKROS WOULD BE PRECLUDED FROM SUCCESSFULLY ASSERTING THE RIGHT OF RESCISSION HERE BECAUSE, AFTER LEARNING THAT IT WAS NOT TO RECEIVE THE ELECTRONIC EQUIPMENT IN QUESTION, IT PROCEEDED WITH THE PERFORMANCE OF THE CONTRACT AND RECOGNIZED ITS OBLIGATION TO PAY THE FULL CONTRACT PRICE. PARTICULAR REFERENCE IN THIS CONNECTION IS MADE TO YOUR LETTERS OF DECEMBER 1 AND DECEMBER 13, 1958, REFERRED TO AND QUOTED ABOVE. IT IS WELL SETTLED THAT WHERE A PARTY DESIRES TO RESCIND A CONTRACT UPON THE GROUND OF MISREPRESENTATION OR FRAUD, HE MUST, UPON DISCOVERY OF THE FACTS, ANNOUNCE HIS PURPOSE WITH REASONABLE PROMPTNESS AND ADHERE TO IT. IF HE CONTINUES TO TREAT THE CONTRACT AS IN FORCE, THE RIGHT TO HAVE THE CONTRACT SET ASIDE WILL BE LOST. SEE GRYMES V. SANDERS, ET AL., 93 U.S. 55, 62; MCLEAN V. CLAPP, 141 U.S. 429, 432; SHAPPIRIO V. GOLDBERG, 192 U.S. 232, 242; 24 AM. JUR., FRAUD AND DECEIT, SEC. 210. THERE REMAINS FOR DETERMINATION THE QUESTION AS TO WHETHER AKROS HAS ANY ACTIONABLE CLAIM AGAINST THE GOVERNMENT IN DAMAGES AS FOR BREACH OF CONTRACT.

RELATIVE TO THE ABOVE QUESTION, WE ARE OF THE OPINION THAT THE INVITATION FOR BIDS WAS NOT ENTIRELY CLEAR IN RESPECT TO THE DESCRIPTION OF THE ELECTRONIC EQUIPMENT INCLUDED IN THE AIRCRAFT, SINCE BIDDERS WERE NOT ADVISED THEREIN AS TO THE SPECIAL MEANING WHICH THE DEPARTMENT OF THE AIR FORCE ATTACHED TO THE TERM "GROUP A COMPONENTS," USED IN CONNECTION WITH THE DESCRIPTION OF THE ITEMS OF EQUIPMENT ENUMERATED ON PAGE XII OF THE SALES CATALOG. FROM THE LIST OF EQUIPMENT SET FORTH IN PAGE XII, BIDDERS WHO WERE UNFAMILIAR WITH THE TERM "GROUP A COMPONENTS" MIGHT WELL ASSUME THAT THE OPERATING COMPONENTS OF THE ELECTRONIC EQUIPMENT APPERTAINING TO THE AIRCRAFT--- WITH THE EXCEPTION OF THE AUTOMATIC PILOTS WITH RESPECT TO WHICH IT WAS STATED ON PAGE IV OF THE SALES CATALOG: "A-12 AUTO PILOT--- NOT IN ACFT"--- WERE INSTALLED THEREIN, OR THAT KITS CONTAINING THE NECESSARY PARTS FOR SUCH INSTALLATION WERE TO BE FURNISHED. HOWEVER, AS INDICATED ABOVE, BIDDERS WERE ADVISED WITH RESPECT TO THE PHOTOGRAPHIC VIEWS OF THE PILOT'S COMPARTMENT, RADIO OPERATOR'S STATION, FLIGHT ENGINEER'S STATION AND NAVIGATOR'S STATION, APPEARING AT PAGES II AND III OF THE SALES CATALOG, THAT THE VIEWS WERE PRESENTED FOR INFORMATION ONLY ON THE GENERAL INTERNAL CONFIGURATION OF THE AIRCRAFT, AND THAT ELECTRONIC AND SOME INSTRUMENTATION CONFIGURATIONS SHOWN MIGHT NOT BE IDENTICAL IN THE AIRCRAFT DUE AMONG, OTHER THINGS, TO "REMOVAL OF SOME OPERATING COMPONENTS FOR AIR FORCE USE.' MOREOVER, BIDDERS WERE OTHERWISE PUT ON NOTICE THAT THEY SHOULD NOT RELY UPON THE DESCRIPTION OF THE PROPERTY BEING SOLD. IN THE DESCRIPTION OF THE ENGINEERING CHANGES OR MODIFICATIONS WHICH HAD BEEN MADE TO THE AIRCRAFT, SAMPLE DESCRIPTION ITEM 1A, QUOTED ABOVE, BIDDERS WERE ADVISED THAT CERTAIN TECHNICAL ORDERS LISTED UNDER THE SUBHEAD "CONDITION--- T.O. COMPLIANCE," OR ECP KITS, LISTED ELSEWHERE, WERE BELIEVED TO HAVE BEEN COMPLIED WITH, BUT IT WAS STATED: "HOWEVER, CERTAIN COMPONENTS MAY HAVE BEEN REMOVED. TECHNICAL INSPECTION IS RECOMMENDED.' AT PAGE (11) OF THE SALES CATALOG, BIDDERS WERE ADVISED:

"THE BIDDERS ARE CAUTIONED TO INSPECT THE PROPERTY LISTED HEREIN PRIOR TO SUBMITTING A BID. ALTHOUGH ALL DESCRIPTIONS AND DATA LISTED ARE BELIEVED TO BE CORRECT, THE U.S. GOVERNMENT ASSUMES NO RESPONSIBILITY IF THERE ARE ERRORS OR OMISSIONS CONTAINED IN DESCRIPTIONS OF THE PROPERTY.'

ALSO, IT WAS PROVIDED IN PARAGRAPH 2 OF THE GENERAL SALE TERMS AND CONDITIONS THAT THE GOVERNMENT MADE NO GUARANTY, WARRANTY, OR REPRESENTATION, EXPRESSED OR IMPLIED, AS TO THE CORRECTNESS OF THE DESCRIPTION OF THE PROPERTY, OR ITS FITNESS FOR ANY USE OR PURPOSE, AND THAT NO CLAIM WOULD BE CONSIDERED FOR ALLOWANCE OR ADJUSTMENT OR FOR RESCISSION OF THE SALE BASED UPON FAILURE OF THE PROPERTY TO CORRESPOND WITH THE STANDARD EXPECTED.

WHILE ORDINARILY IN THE SALE OF PERSONAL PROPERTY BY DESCRIPTION, THERE IS AN IMPLIED WARRANTY THAT THE PROPERTY WILL CORRESPOND WITH THE DESCRIPTION, WHERE THERE IS AN EXPRESS DISCLAIMER OF WARRANTY--- AS IN THE INSTANT CASE--- NO SUCH WARRANTY MAY BE IMPLIED FROM THE DESCRIPTION OF THE PROPERTY SOLD AS THE DISCLAIMER OF WARRANTY EXTENDS TO AND INCLUDES THE DESCRIPTION. SEE, IN THIS CONNECTION, 29 COMP. GEN. 310; 30 ID. 188; 32 ID. 181; 36 ID. 612, AND THE COURT CASES CITED THEREIN; ALSO, SEE UNITED STATES V. SABIN METAL CORPORATION, 151 F.SUPP. 683; UNITED STATES V. SILVERTON, 200 F.2D 824.

IN VIEW OF THE FOREGOING, AND SINCE NO SHORTAGE OF ITEMS, OR SETS, ADVERTISED FOR SALE IS INVOLVED SO AS TO ENTITLE AKROS TO AN ADJUSTMENT UNDER PARAGRAPH 19 OF THE ADDITIONAL SPECIAL SALE TERMS AND CONDITIONS, NO LEGAL BASIS EXISTS FOR THE ALLOWANCE OF ANY PART OF YOUR CLAIM, AND THE SAME IS HEREBY DENIED.