B-144826, APR. 17, 1961

B-144826: Apr 17, 1961

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TO WESTINGHOUSE ELECTRIC CORPORATION: REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 22. THE REACTORS FURNISHED UNDER THE CONTRACT WERE MANUFACTURED IN YOUR SHARON. IT TOOK A CONSIDERABLE TIME TO INSTALL THE REACTORS AND THEY WERE ENERGIZED ON JUNE 25. ONE OF THE REACTORS FAILED WITHIN TWO TO FIVE SECONDS AND THE FAILURE WAS EVIDENCED BY A FLASH OF FIRE AND SMOKE. THERE WAS FOUND A BURNED OUT AREA ABOUT HALFWAY UP THE REACTOR WHICH CUT OUT FOUR TURNS OF THE INTERIOR WINDINGS AND DAMAGED EIGHT OTHERS. MOST OF THE INSTALLATION COVERING WAS BURNED OFF. WHEN THE REACTOR FAILED YOU WERE REQUESTED TO SEND A REPRESENTATIVE TO INSPECT THE REACTOR AND TO NOTIFY THE CONTRACTING OFFICER AS TO WHAT CORRECTIVE ACTION YOU PROPOSED TO TAKE.

B-144826, APR. 17, 1961

TO WESTINGHOUSE ELECTRIC CORPORATION:

REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 22, 1960, REQUESTING REVIEW OF SETTLEMENT DATED DECEMBER 9, 1960, WHICH DISALLOWED YOUR CLAIM FOR $7,143.67 AS THE COST OF REPLACING ONE OF THE THREE SHUNT REACTORS DELIVERED TO THE GRANITE FALLS SUBSTATION, MISSOURI RIVER BASIN PROJECT, UNDER DEPARTMENT OF THE INTERIOR, BUREAU OF RECLAMATION, CONTRACT NO. 14- 06-D-2664, DATED MAY 6, 1957.

THE REACTORS FURNISHED UNDER THE CONTRACT WERE MANUFACTURED IN YOUR SHARON, PENNSYLVANIA, PLANT, INSPECTED AND TESTED THERE ON NOVEMBER 4 AND 5, 1957, AND CRATED AND SHIPPED ON DECEMBER 10, 1957. IT TOOK A CONSIDERABLE TIME TO INSTALL THE REACTORS AND THEY WERE ENERGIZED ON JUNE 25, 1958. UPON BEING ENERGIZED, ONE OF THE REACTORS FAILED WITHIN TWO TO FIVE SECONDS AND THE FAILURE WAS EVIDENCED BY A FLASH OF FIRE AND SMOKE. THERE WAS FOUND A BURNED OUT AREA ABOUT HALFWAY UP THE REACTOR WHICH CUT OUT FOUR TURNS OF THE INTERIOR WINDINGS AND DAMAGED EIGHT OTHERS. MOST OF THE INSTALLATION COVERING WAS BURNED OFF. YOU REPLACED THE REACTOR AND CLAIMED THE SUM OF $7,143.67 WHICH APPEARS TO COVER MANUFACTURING COSTS OF $6,593.33, PLUS REMOVAL AND REINSTALLATION COSTS OF $550.34.

WHEN THE REACTOR FAILED YOU WERE REQUESTED TO SEND A REPRESENTATIVE TO INSPECT THE REACTOR AND TO NOTIFY THE CONTRACTING OFFICER AS TO WHAT CORRECTIVE ACTION YOU PROPOSED TO TAKE. IN A LETTER DATED AUGUST 7, 1958, YOU QUOTED COMMENTS OF YOUR ENGINEERING DEPARTMENT IN SHARON BUT DID NOT OFFER TO REPAIR OR REPLACE THE DAMAGED REACTOR. IN A LETTER DATED SEPTEMBER 4, 1958, THE CONTRACTING OFFICER QUESTIONED YOUR ENGINEERING DEPARTMENT'S SUGGESTION THAT ONLY ONE OF TWO POSSIBLE CONDITIONS COULD HAVE CAUSED THE REACTOR TO FAIL WHEN ENERGIZED. IN YOUR REPLY OF SEPTEMBER 23, 1958, YOU REFERRED TO THE FAILURE AS A CUSTOMER RESPONSIBILITY. THE CONTRACTING OFFICER, THEN, BY LETTER DATED OCTOBER 9, 1958, DEMANDED THAT YOU EITHER REPLACE OR REPAIR THE EQUIPMENT.

BY LETTER OF NOVEMBER 7, 1958, YOU MADE A TIMELY APPEAL FROM THE CONTRACTING OFFICER'S DECISION TO THE INTERIOR BOARD OF CONTRACT APPEALS. BY DECISION OF MARCH 16, 1960, IBCA-182, THE BOARD AFFIRMED THE CONTRACTING OFFICER'S DECISION AND YOUR REQUEST FOR RECONSIDERATION OF THE CASE WAS DENIED BY DECISION OF THE BOARD RENDERED ON APRIL 20, 1960. THE APPEAL WAS CONSIDERED BY THE BOARD AS THE AUTHORIZED REPRESENTATIVE OF THE SECRETARY OF THE INTERIOR AND, UNDER THE DISPUTES CLAUSE OF THE CONTRACT, ITS DECISION ON ANY DISPUTE CONCERNING A QUESTION OF FACTS IN FINAL AND CONCLUSIVE IN THE ABSENCE OF A DETERMINATION BY OUR OFFICE OR THE COURTS THAT THE DECISION IS FRAUDULENT OR CAPRICIOUS OR ARBITRARY OR SO GROSSLY ERRONEOUS AS NECESSARILY TO IMPLY BAD FAITH, OR IS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE.

IT IS YOUR CONTENTION THAT THE BOARD'S DECISION IS BASED ON AN ERRONEOUS CONCLUSION OF LAW, IS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE AND IS, THEREFORE, NOT CONCLUSIVE.

IT WAS CONTENDED IN YOUR APPEAL LETTER THAT THE FAILURE BETWEEN LAYERS OF THE REACTOR COULD BE CAUSED IN ONLY TWO WAYS, EITHER BY ABNORMAL VOLTAGE ACROSS THE REACTOR OR BY CONDUCTING MATERIAL BETWEEN LAYERS. AT THE HEARING BEFORE THE BOARD YOUR WITNESS SUGGESTED THAT THE CONDUCTING MATERIAL MIGHT HAVE BEEN NAILS OR EVEN A MOUSE OR OTHER RODENT WHICH HAD CHEWED ON AND PUNCTURED THE INSULATION.

THE BOARD ALSO CONSIDERED YOUR SUBSEQUENT CONTENTION THAT THE BURDEN OF PROVING THE CAUSE OF THE REACTOR'S FAILURE WAS ON THE GOVERNMENT. IN THE FIRST PART OF ITS DECISION OF MARCH 16, 1960, THE BOARD REJECTED SUCH CONTENTION AND FOUND THAT, UNDER THE TERMS OF THE CONTRACT, YOU WOULD BE ENTITLED TO PREVAIL ONLY IF YOU COULD SHOW THAT THE REACTOR FAILED BECAUSE OF SOME FAULT ON THE PART OF THE GOVERNMENT; FURTHER, THAT YOU HAD NOT ESTABLISHED THIS TO BE THE CAUSE OF THE REACTOR'S FAILURE WHEN ENERGIZED. BEFORE REACHING THOSE CONCLUSIONS, THE BOARD STATED THAT THE APPELLANT AND THE GOVERNMENT WERE AGREED THAT IT IS NOT POSSIBLE TO ESTABLISH WITH ABSOLUTE CERTAINTY THE CAUSE OF THE FAILURE.

AFTER DISPOSING OF THE BURDEN OF PROOF ISSUE, THE BOARD PROCEEDED WITH A REVIEW OF THE EVIDENCE RELATING TO YOUR CONTENTION THAT THE REACTOR FAILED BECAUSE OF ONLY ONE OF TWO POSSIBLE CONDITIONS AND THE GOVERNMENT'S CONTENTION THAT THE MOST PROBABLE CAUSE OF THE FAILURE WAS A FAULTY WELD.

THE DECISION SETS FORTH THAT THE FIRST OF THE ALLEGED POSSIBLE CAUSES OF THE FAILURE IS A VOLTAGE SURGE INDUCING A FERRORESONANT CONDITION IN THE POWER SYSTEM AT THE TIME THE REACTOR WAS ENERGIZED; THAT THE CIRCUIT UPON WHICH THE REACTOR THAT FAILED WAS LOCATED TOOK OFF FROM THE TERTIARY WINDING OF AN AUTO-TRANSFORMER BANK; AND THAT THE REACTOR WAS ENERGIZED BY CLOSING THE BREAKER FROM A CONTROL ON THE SWITCHBOARD. THE DECISION STATES THAT ON DECEMBER 9 AND 10, 1958, THE BUREAU CONDUCTED FIELD TESTS IN THE PRESENCE OF YOUR REPRESENTATIVE IN ORDER TO DETERMINE WHETHER A VOLTAGE SURGE COULD HAVE BEEN CAUSED BY A MALFUNCTION OF THE BREAKER OR BY ANY OTHER EQUIPMENT ON THE CIRCUIT. IT WAS POINTED OUT THAT THE BREAKER HAD NOT BEEN MODIFIED IN ANY WAY OR REPAIRED BETWEEN THE TIME OF THE REACTOR'S FAILURE AND THE TIME OF THE TESTS AND SUCH TESTS SHOWED THAT IT WAS EXTREMELY UNLIKELY THAT A SURGE CAUSING A RESONANT CONDITION IN THE CIRCUIT COULD HAVE ENTERED THE BUS, ALTHOUGH THIS WAS THEORETICALLY POSSIBLE. IT WAS STATED AS SIGNIFICANT THAT AT THE TIME THE REACTOR FAILED NO OTHER EQUIPMENT ON THE TERTIARY BUS FAILED, AND THE BUS WAS PROTECTED BY A SET OF 15 KV. A. LIGHTNING ARRESTORS DESIGNED TO CONTROL VOLTAGE SURGES THAT MIGHT ENTER THE BUS; ALSO, THE CLOSEST LIGHTNING ARRESTOR WAS CLOSER TO THE REACTOR THAT FAILED THAN TO ANY OF THE OTHER SHUNT REACTORS. IN COMMENTING ON YOUR ATTEMPT TO DISCREDIT THE OSCILLOGRAPHS TAKEN BY THE BUREAU OF THE VARIOUS CURRENTS AND VOLTAGES WHICH MIGHT HAVE AFFECTED THE REACTOR ON THE GROUND THAT A MAGNETIC RATHER THAN A CATHODE RAY OSCILLOGRAPH WAS USED IN OBTAINING THE DATA, THE BOARD STATED THAT, WHILE A CATHODE RAY OSCILLOGRAPH IS MORE SENSITIVE THAN A MAGNETIC ONE, THE LATTER WAS ENTIRELY ADEQUATE FOR THE PURPOSES FOR WHICH IT WAS USED.

THE BOARD CONSIDERED THE SECOND OF THE ALLEGEDLY POSSIBLE CAUSES OF THE REACTOR'S FAILURE TO BE EVEN LESS CONVINCING THAN THE VOLTAGE SURGE THEORY. SINCE THE FAILURE OCCURRED IN THE INTERIOR WINDINGS OF THE REACTOR, THE DECISION STATES THAT IT IS DIFFICULT TO PERCEIVE HOW FOREIGN MATERIAL COULD HAVE ENTERED THE REACTOR. IT WAS ARGUED THAT THE FOREIGN MATERIAL, IF PRESENT, WOULD HAVE TO PIERCE THE INSULATION AND ESTABLISH A CONDUCTIVE PATH BETWEEN TWO TURNS OF THE REACTOR AND SUCH RESULT WOULD HAVE REQUIRED THE OPERATION OF A SERIES OF UNUSUAL COINCIDENCES. THE BOARD REFERRED TO THE FACT THAT IN HIS LETTER TO YOU OF SEPTEMBER 4, 1958, THE CONTRACTING OFFICER STATED THAT THE REACTOR WAS CAREFULLY EXAMINED BEFORE BEING ENERGIZED, AND THE BOARD CONCLUDED THAT, IF THERE HAD THEN BEEN FOREIGN MATERIAL IN THE REACTOR, IT SHOULD HAVE BEEN DETECTED. CONCERNING THE POSSIBILITY THAT NAILS HAD ENTERED THE REACTOR, THE BOARD SUGGESTED THAT THIS COULD HAVE HAPPENED WHILE THE REACTOR WAS BEING CRATED BY YOU FOR SHIPMENT AND THAT, IN ANY EVENT, IT WAS MOST UNLIKELY THAT NAILS WOULD PUNCTURE THE INSULATION. IN REGARD TO THE MOUSE THEORY, THE BOARD INDICATED THAT THE MOUSE WOULD NOT ONLY HAVE TO PUNCTURE THE INSULATION OF TWO OF THE WINDINGS BUT WOULD ALSO HAVE HAD TO PREPARE ITSELF FOR ITS OWN CREMATION BY DRAPING ITSELF ACROSS THE WINDINGS EXACTLY WHERE THEY WERE BARE.

IN ITS REVIEW OF THE GOVERNMENT'S POSITION AS TO THE PROBABLE CAUSE OF THE REACTOR'S FAILURE, THE BOARD DETERMINED THAT THE HELIARC WELDING PROCESS, WHICH WAS USED IN THE MANUFACTURE OF THE REACTORS, IS VERY EXACTING, THAT THERE HAS BEEN LIMITED EXPERIENCE WITH ITS USE, AND THAT IT IS OF SOME SIGNIFICANCE THAT THE FAILURE OF THE REACTOR OCCURRED IN THE VICINITY OF TWO WELDS. IT WAS CONCLUDED BY THE BOARD THAT, IF THE OCCURRENCE OF A HIGH VOLTAGE SURGE AND THE PRESENCE OF FOREIGN MATERIAL SHOULD BE RULED OUT, AS THEY MUST BE, A FAULTY WELD WOULD SEEM TO BE THE ONLY LIKELY CAUSE OF THE REACTOR'S FAILURE. IN THAT CONNECTION, THE BOARD REJECTED THE CONTENTION OF YOUR REPRESENTATIVE THAT RESISTANCE MEASUREMENTS IN THE FACTORY TESTS WOULD HAVE DISCLOSED THE EXISTENCE OF A DEFECTIVE WELD. THIS REJECTION WAS BASED ON THE BOARD'S FINDING OF FACT THAT THE RESISTANCE TESTS AT THE FACTORY WERE MADE AT ONLY ONE-FOURTH RATED CURRENT AND VOLTAGE, AND EVIDENCE INTRODUCED AT THE BOARD HEARING TO SHOW THAT THE REACTOR MIGHT WELL HAVE FAILED WITHIN TWO TO FIVE SECONDS IF THERE HAD BEEN A DEFECTIVE WELD AND FULL CURRENT AND VOLTAGE WERE APPLIED. THAT THEORY WAS SUBSTANTIATED IN THE OPINION OF THE BOARD BY EXPERIMENTS MADE WITH A MODEL CONSTRUCTED UNDER THE SUPERVISION OF ONE OF THE GOVERNMENT'S WITNESSES AND WHICH CONSISTED OF A 90-FOOT COIL OF NICHROME 16-GAGE WIRE WRAPPED AROUND FOUR INSULATORS, A 6-WATT LAMP AND OTHER MATERIAL USED TO SIMULATE A WELD OR JOINT. THE BOARD NOTED YOUR OBJECTION TO THE RESULTS OF THE EXPERIMENTS ON THE GROUND THAT THERE WERE DIFFERENCES BETWEEN THE MODEL AND THE REACTORS, BUT STATED THAT THESE DIFFERENCES WERE STRUCTURAL AND WOULD NOT AFFECT THE ELECTRICAL LAWS WHICH WERE INVOLVED.

IN DENYING YOUR REQUEST FOR A RECONSIDERATION OF THE CASE, THE BOARD REJECTED ANY IMPLICATION THAT IT HAD NOT CONSIDERED CAUSES WHICH MUST HAVE EXISTED PRIOR TO THE FAILURE OF THE REACTOR, INCLUDING CAUSES PRIOR TO DELIVERY. IT REFUSED TO REANALYZE THE COURT DECISIONS CITED IN SUPPORT OF YOUR CONTENTION THAT THE GOVERNMENT HAD THE BURDEN OF PROVING THAT THE REACTOR WAS DEFECTIVE AT THE TIME OF ITS DELIVERY, STATING THAT THE QUESTION OF THE BURDEN OF PROOF, WHICH IS ALWAYS ADMITTEDLY DIFFICULT, MUST BE RESOLVED IN TERMS OF GENERAL PRINCIPLE RATHER THAN BY MATCHING PRECEDENTS, AND THAT ITS DECISION DID NOT REST ONLY ON THE GROUND THAT YOU HAD THE BURDEN OF PROOF. THE BOARD STATED, FURTHER, THAT IT HAD HELD THAT THE GOVERNMENT MUST PREVAIL EVEN IF IT HAD THE BURDEN OF PROOF AND "THUS THE ONLY CRUCIAL QUESTION IS WHETHER THE GOVERNMENT SUSTAINED THE BURDEN OF PROOF, AND THE BOARD HELD IN ITS DECISION THAT IT HAD SUSTAINED THE BURDEN.'

IN YOUR LETTER OF JUNE 21, 1960, REQUESTING OUR CONSIDERATION OF THE CLAIM, VARIOUS PROVISIONS OF THE CONTRACT WERE CITED IN AN EFFORT TO SHOW THAT, AFTER TESTING AT YOUR FACTORY AND MAKING DELIVERY OF THE REACTORS TO THE GOVERNMENT, YOU WERE NOT RESPONSIBLE FOR ANY DAMAGE TO THE REACTORS. HOWEVER, IT APPEARS THAT THE INTERIOR BOARD OF CONTRACT APPEALS CORRECTLY INTERPRETED THE CONTRACT PROVISIONS AS CONTEMPLATING ADDITIONAL TESTING DURING THE 60-DAY OPERATION PERIOD PROVIDED FOR IN PARAGRAPH B-8 (B) (3) OF THE SPECIAL CONDITIONS OF THE CONTRACT AND THAT DEFECTS IN MATERIALS AND WORKMANSHIP, DISCLOSED BOTH PRIOR TO AND AFTER THE TIME THAT THE REACTORS WERE PLACED IN OPERATION, WOULD BE CORRECTED BY YOUR COMPANY. YOU REFERRED TO THE 60-DAY OPERATION PERIOD AS HAVING BEEN INCLUDED IN THE CONTRACT ONLY FOR THE PURPOSE OF ENABLING THE CONTRACTING OFFICER TO OBSERVE THE ACTUAL OPERATION OF THE REACTORS BUT IT IS APPARENT THAT THE PARTIES MUST HAVE INTENDED ALSO THAT ANY DEFECTS OCCURRING WITHIN THAT PERIOD WOULD BE CORRECTED AT YOUR EXPENSE AND THAT, AS PROVIDED IN PARAGRAPH B-12 (2) OF THE SPECIAL CONDITIONS, YOUR GUARANTEE AGAINST LATENT DEFECTS WOULD EXTEND TO A PERIOD OF ONE YEAR AFTER THE REACTORS WERE PLACED IN USE. WE FIND IT DIFFICULT TO BELIEVE THAT YOU COULD CONTEND SERIOUSLY THAT THE GOVERNMENT WOULD HAVE NO RIGHTS IN THE MATTER IF ANY OF THE REACTORS NOT ONLY FAILED TO GIVE 60 DAYS OF SATISFACTORY OPERATION BUT FAILED TO GIVE EVEN TEN SECONDS OF OPERATION.

YOU SUGGEST THAT THE REACTOR COULD HAVE BEEN DAMAGED WHILE BEING STORED BY THE BUREAU OF RECLAMATION. ON THAT POINT, THE CONTRACTING OFFICER HAS REPORTED THAT THERE IS NO SHOWING WHATSOEVER IN THE RECORD THAT THIS EVER HAPPENED OR WAS EVEN PROBABLE. ALSO, HE HAS INDICATED THAT, IF YOU HAD REQUESTED AN OPPORTUNITY TO QUESTION GOVERNMENT REPRESENTATIVES WHO MIGHT HAVE INFORMATION AS TO THE CARE OF THE REACTORS AFTER THEIR DELIVERY, THE NECESSARY PERSONNEL WOULD HAVE BEEN MADE AVAILABLE TO TESTIFY AT THE BOARD HEARING. HOWEVER, THE BOARD ACCEPTED THE CONTRACTING OFFICER'S STATEMENT THAT THE REACTOR WAS CAREFULLY EXAMINED BEFORE BEING ENERGIZED AND IT IS APPARENT THAT ANY EVIDENCE OF ROUGH HANDLING OR DELIBERATE DAMAGE WOULD HAVE BEEN DISCLOSED AT SUCH TIME.

AT PAGE 10 OF THE JUNE 21, 1960, LETTER YOU STATE THAT EXAMINATION OF THE REACTOR AFTER IT FAILED WAS INCONCLUSIVE ON THE QUESTION AS TO WHETHER FOREIGN MATERIAL CAUSED THE FAILURE, SINCE IT IS LIKELY THAT ANY FOREIGN OBJECT WOULD HAVE BECOME VAPORIZED BY THE HEAT OF THE FIRE AND SINCE IT WAS NOT ESTABLISHED THAT ALL OF THE LOOSE MATERIAL FROM THE AREA WHERE THE DAMAGE OCCURRED HAD BEEN RECOVERED. WE DOUBT THAT THE BOARD OVERLOOKED THE TESTIMONY IN THE CASE TO THE EFFECT THAT ANY FOREIGN MATERIAL MIGHT HAVE BECOME VAPORIZED BY THE HEAT GENERATED AT THE TIME OF THE REACTOR'S FAILURE, ALTHOUGH ITS DECISION OF MARCH 16, 1960, STATES, IN PART, THAT "AFTER THE REACTOR FAILED, IT WAS EXAMINED FOR INDICATIONS OF THE PRESENCE OF FOREIGN MATERIAL, AND NO SUCH INDICATIONS WERE FOUND.' ALSO, YOU CONTEND THAT THE BUREAU TESTS SHOWED THE EXISTENCE OF A FERRORESONANT CONDITION ON THE CIRCUIT TO WHICH THE DAMAGED REACTOR HAD BEEN CONNECTED. THE CONTRACTING OFFICER HAS ADMITTED THAT IN ONE OF THE TESTS A FERRORESONANT CONDITION WAS EXPERIENCED BUT EXPLAINED THAT, WHEN THE DISTRIBUTION TRANSFORMERS WERE WYE CONNECTED, UNGROUNDED, TO SIMULATE ACTUAL OPERATING CONDITIONS OF THE REACTORS, NO FERRORESONANT CONDITIONS WERE EXPERIENCED AND PERFORMANCE WAS IN ALL RESPECTS NORMAL. THE INTERIOR BOARD OF CONTRACT APPEALS MUST BE REGARDED AS HAVING BEEN AWARD OF THE KINDS OF TESTS WHICH WERE MADE AND AS DESCRIBED AT PAGES 118 THROUGH 123 OF THE TRANSCRIPT OF THE BOARD HEARING.

AT PAGE 13 OF THE JUNE 21, 1960, LETTER YOU STATE THAT NEITHER OF THE ELECTRICAL EXPERTS CALLED BY THE BUREAU EXPRESSED AN OPINION AS TO THE MOST PROBABLE CAUSE OF THE ACCIDENT. IN THAT CONNECTION, THE ONLY TESTIMONY IN WHICH ANY GOVERNMENT EXPERT UNEQUIVOCALLY STATES AN OPINION AS TO THE MOST PROBABLE CAUSE OF THE REACTOR'S FAILURE IS THAT GIVEN BY MR. JOHN PARMAKIAN, WHOM YOU DESCRIBE AS THE BUREAU'S WELDING EXPERT. THE RECORD INDICATES THAT MR. PARMAKIAN HAS HAD A CONSIDERABLE AMOUNT OF EXPERIENCE IN ELECTRICAL ENGINEERING AND ITS RELATIONSHIP WITH OTHER WORK, SUCH AS WELDING, ARISING OUT OF HIS POSITION AS CHIEF OF THE TECHNICAL ENGINEERING ANALYSIS BRANCH OF THE DIVISION OF DESIGN, BUREAU OF RECLAMATION. SEE PAGES 76 AND 77 OF THE TRANSCRIPT OF HEARING. MR. PARMAKIAN TESTIFIED THAT "THE MOST PROBABLE CAUSE OF FAILURE WAS THE DEFECTIVE LD," AND HE HAD TESTED THIS THEORY BY CONSTRUCTION OF THE MODEL USED IN THE DEMONSTRATION AT THE HEARING.

YOU QUESTIONED THE FINALITY OF THE BOARD'S DECISION ON THE BASIS THAT ITS REJECTION OF THE THEORIES OF CAUSE ADVANCED BY THE CONTRACTOR IGNORES THE VERY NATURE OF THE BURDEN OF PROOF AND IS CONTRARY TO THE RULE THAT, WHERE FACTS SUPPORT TWO OR MORE INCONSISTENT INFERENCES AND NONE OF THEM IS ESTABLISHED, JUDGMENT MUST BE RENDERED AGAINST THE PARTY HAVING THE BURDEN OF PROOF.

WE CANNOT AGREE THAT THE BOARD'S DECISION IGNORES THE BURDEN OF PROOF ISSUE AND THE DECISION ACTUALLY CITES VARIOUS COURT CASES IN SUPPORT OF THE BOARD'S STATEMENT THAT THERE IS AMPLE AUTHORITY FOR THE PROPOSITION THAT, WHILE THE BUYER MUST ESTABLISH THE BREACH OF WARRANTY, OR SHOW THE DEFECT IN THE ARTICLE SOLD, HE NEED NOT SHOW THE SPECIFIC CAUSE OF THE DEFECT, ESPECIALLY WHEN THE SUBJECT OF THE SALE WAS COMPLEX MACHINERY. GIVE EQUAL SUPPORT TO TWO OR MORE INCONSISTENT INFERENCES REGARDING A MATERIAL ISSUE, THE CASE WOULD BE IN EXACTLY THE SAME POSITION AT ITS CONCLUSION AS IT WAS AT ITS BEGINNING AND JUDGMENT WOULD NECESSARILY BE AGAINST THE PARTY WHO HAS THE BURDEN OF PROOF.

HOWEVER, IN THIS CASE, THE INTERIOR BOARD OF CONTRACT APPEALS CAREFULLY CONSIDERED ALL OF THE THEORIES ADVANCED AS TO THE POSSIBLE CAUSE OF THE REACTOR'S FAILURE AND CLEARLY INDICATED THAT THE FACTS DO NOT GIVE EQUAL SUPPORT TO THE THREE THEORIES WHICH WERE ADVANCED. IN OUR OPINION, THE BOARD WAS NOT REQUIRED TO SUSTAIN YOUR APPEAL MERELY BECAUSE IT HAD ADMITTED THAT ONE OF THE ALLEGED CAUSES WAS THEORETICALLY POSSIBLE AND STATED THAT ANOTHER ALLEGED CAUSE WOULD HAVE REQUIRED THE OPERATION OF A SERIES OF UNUSUAL CIRCUMSTANCES.

IN CARRYING OUT ITS FACT-FINDING FUNCTION, THE BOARD HAD THE RIGHT TO DETERMINE ON THE BASIS OF A PREPONDERANCE OF THE EVIDENCE THE MOST PROBABLE CAUSE OF THE FAILURE AND ITS FINDING IN THAT REGARD PROPERLY CANNOT BE CONSIDERED AS A CONCLUSION OF LAW, INSTEAD OF ONE OF FACT. THE RECORD DOES NOT SUPPORT THE SUGGESTION MADE IN YOUR LETTER OF DECEMBER 22, 1960, THAT THE BOARD'S FINDING WAS BASED ON ITS PRIOR DECISION THAT THE BURDEN OF PROOF WAS ON THE CONTRACTOR, TOGETHER WITH THE ASSUMPTION THAT ONE OF THE THREE THEORIES OF CAUSE ADVANCED AT THE HEARING MUST NECESSARILY BE FOUND TO BE SUPPORTED BY THE EVIDENCE. IT MUST BE ASSUMED THAT, IF CONVINCING EVIDENCE HAD NOT BEEN PRESENTED IN SUPPORT OF THE GOVERNMENT'S CONTENTION THAT A DEFECTIVE WELD WAS THE MOST PROBABLE CAUSE OF THE REACTOR'S FAILURE, THE BOARD WOULD NOT HAVE ACCEPTED SUCH THEORY TO THE EXCLUSION OF THE OTHER THEORIES ADVANCED AS TO WHAT CAUSED THE REACTOR TO FAIL WHEN ENERGIZED.

IN THE CIRCUMSTANCES, THERE APPEARS TO BE NO LEGAL BASIS UPON WHICH WE WOULD BE JUSTIFIED IN REFUSING TO REGARD THE BOARD'S DECISION AS FINAL AND CONCLUSIVE ON THE PRIMARY FACTUAL ISSUE AS TO WHAT WAS THE MOST PROBABLE CAUSE OF THE REACTOR'S FAILURE. IT IS OUR VIEW THAT THE BOARD'S FINDING IS SUPPORTED BY SUBSTANTIAL EVIDENCE AND DOES NOT PURPORT IN ANY MANNER TO BE DEPENDENT UPON THE BOARD'S LEGAL CONCLUSION THAT YOU WOULD BE ENTITLED TO PREVAIL ONLY IF YOU COULD SHOW THAT THE REACTOR FAILED BECAUSE OF SOME FAULT ON THE PART OF THE GOVERNMENT.

ACCORDINGLY, THE SETTLEMENT OF DECEMBER 9, 1960, WHICH DISALLOWED YOUR CLAIM FOR $7,143.67, IS SUSTAINED.