B-157039, MAY 16, 1966, 45 COMP. GEN. 693

B-157039: May 16, 1966

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- A SITUATION THAT IS AN EXCEPTION TO THE RULE THAT THE GOVERNMENT MUST STAND BEHIND SPECIFICATIONS. THE GENERAL ACCOUNTING OFFICE IS REQUIRED TO UPHOLD THE DECISION OF THE BOARD. THE EVIDENCE AMPLY SUPPORTING THE CONCLUSION THE CONTRACT WAS NOT AWARDED AS A "BEST EFFORTS" CONTRACT NOR WAS IT IN THE NATURE OF A RESEARCH AND DEVELOPMENT CONTRACT. THAT IS THAT THE EXPENDITURE OF TIME. 1966: REFERENCE IS MADE TO YOUR LETTER DATED JUNE 15. THE BASIS FOR THE REQUEST FOR REVIEW HERE IS THAT THE DECISION IS ALLEGEDLY NOT SUPPORTED BY SUBSTANTIAL EVIDENCE. THE JURISDICTION OF OUR OFFICE TO REVIEW DECISIONS OF CONTRACT APPEAL BOARDS IS FULLY DISCUSSED IN OUR DECISION OF JANUARY 11. WAS ISSUED BY THE AIR FORCE SPECIAL WEAPONS CENTER.

B-157039, MAY 16, 1966, 45 COMP. GEN. 693

CONTRACTS - DISPUTES - CONTRACT APPEALS BOARD DECISION - EVIDENCE SUPPORTS DETERMINATION THE DETERMINATION OF THE ARMY BOARD OF CONTRACT APPEALS TO UPHOLD THE TERMINATION FOR DEFAULT OF A FIXED-PRICE NEGOTIATED SUPPLY CONTRACT FOR FAILURE TO MEET HIGHLY SOPHISTICATED SPECIFICATIONS OF CAPABILITIES NOT PREVIOUSLY ACHIEVED--- A SITUATION THAT IS AN EXCEPTION TO THE RULE THAT THE GOVERNMENT MUST STAND BEHIND SPECIFICATIONS--- HAVING BEEN BASED ON SUBSTANTIVE EVIDENCE THAT SUPPORTS THE RECORD AS A WHOLE, THE GENERAL ACCOUNTING OFFICE IS REQUIRED TO UPHOLD THE DECISION OF THE BOARD, THE EVIDENCE AMPLY SUPPORTING THE CONCLUSION THE CONTRACT WAS NOT AWARDED AS A "BEST EFFORTS" CONTRACT NOR WAS IT IN THE NATURE OF A RESEARCH AND DEVELOPMENT CONTRACT, AND THE BOARD NOT HAVING ACTED ARBITRARILY OR CAPRICIOUSLY, THE CONTRACTOR ASSUMED THE RISK OF INABILITY TO PERFORM, THAT IS THAT THE EXPENDITURE OF TIME, EFFORT, AND MONEY WOULD NOT BE REIMBURSABLE; THEREFORE, THE CIRCUMSTANCES PROVIDING NO EXCUSE FOR DEFAULT, THE BOARD'S DECISION MUST BE ACCEPTED.

TO ELECTRO-NUCLEAR LABORATORIES, INC., MAY 16, 1966:

REFERENCE IS MADE TO YOUR LETTER DATED JUNE 15, 1965, WITH ENCLOSURES, REQUESTING OUR REVIEW OF THE DECISION DATED FEBRUARY 10, 1965, OF THE ARMED SERVICES BOARD OF CONTRACT APPEALS DENYING THE APPEAL IN THE MATTER OF APPEAL OF ELECTRO-NUCLEAR LABORATORIES, INCORPORATED, ASBCA NO. 9863. THE BASIS FOR THE REQUEST FOR REVIEW HERE IS THAT THE DECISION IS ALLEGEDLY NOT SUPPORTED BY SUBSTANTIAL EVIDENCE.

THE JURISDICTION OF OUR OFFICE TO REVIEW DECISIONS OF CONTRACT APPEAL BOARDS IS FULLY DISCUSSED IN OUR DECISION OF JANUARY 11, 1963, 42 COMP. GEN. 357, AND NEED NOT BE DISCUSSED HERE.

IT APPEARS THAT FOLLOWING A PERIOD OF PRECONTRACT NEGOTIATIONS, BETWEEN CERTAIN AIR FORCE PROJECT MANAGERS AND ELECTRO-NUCLEAR, A REQUEST FOR PROPOSALS AND PROPOSAL, (NEGOTIATED FIXED-PRICE CONTRACT) NO. JCL/63-29, DATED JUNE 7, 1963, WAS ISSUED BY THE AIR FORCE SPECIAL WEAPONS CENTER, AT KIRTLAND AIR FORCE BASE, NEW MEXICO, FOR THE PROCUREMENT AND DELIVERY OF 26 NUCLEAR RADIATION DETECTORS OF HIGHLY SOPHISTICATED SPECIFICATIONS.

THE ITEMS AND SPECIFICATIONS SET OUT IN THE REQUEST FOR PROPOSALS ARE AS FOLLOWS:

CHART

SUPPLIES OR SERVICES QUANTITY UNIT PART 1--- ITEMS LITHIUM DRIFT AND DIFFUSED PHOSPHORUS DETECTORS IN ACCORDANCE WITH THE SPECIFICATIONS CITED BELOW, AND DRAWINGS ENTITLED FIGURES 1 THROUGH 9 ATTACHED HERETO AND MADE A PART HEREOF: 1. 6665 LITHIUM DRIFT DETECTOR 5MM THICK 2 EA

(7720) 15MM ACTIVE DIAM, MAX. BACK DEAD LAYER

.25MM (V) 2. 6665 LITHIUM DRIFT DETECTOR 5MM THICK 2 EA

(7721) 18MM ACTIVE DIAM, MAX. BACK DEAD LAYER

.25MM (V) 3. 6665 LITHIUM DRIFT DETECTOR 5MM THICK 2 EA

(7722) 22MM ACTIVE DIAM, MAX. BACK DEAD LAYER

.25MM (V) 4. 6665 LITHIUM DRIFT DETECTOR 2MM THICK 2 EA

(7723) 24MM ACTIVE DIAM, BACK DEAD LAYER .2MM

(V) 5. 6665 LITHIUM DRIFT DETECTOR 2MM THICK 2 EA

(7724) 0.8MM ACTIVE DIAM, BACK DEAD LAYER .2MM

(V)6. 6665 DIFFUSED PHOSPHORUS DETECTOR 4EA

(7725) 0.2MM THICK, 5MM ACTIVE DIAM, MAX. BACK

DEAD LAYER .005MM OR LESS. (V) 7. 6665 LITHIUM DRIFT DETECTOR, 5MM THICK, 8 EA

(7726) 10MM ACTIVE DIAM, MAX. BACK DEAD LAYER

.25MM (V) 8. 6665 LITHIUM DRIFT DETECTOR 1MM THICK, 4 EA

(7727) 13MM ACTIVE DIAM, BACK DEAD LAYER, NOT

CRITICAL. (V) SPECIFICATIONS

1. ALL DETECTORS SHALL OPERATE AT 200 VOLT BIAS.

2. ALL DETECTORS SHALL BE MADE INSENSITIVE TO SUNLIGHT.

3.THE ACTIVE THICKNESS MUST BE ACCURATE TO PLUS OR MINUS 10 PERCENT

(DETECTORS 5 AND 8 ARE NOT CRITICAL IN THIS RESPECT).

4. THE SENSITIVE DIAMETER OF DETECTOR 6 SHALL BE 5 MM PLUS OR MINUS

5 PERCENT.

5. ALL DETECTORS SHALL WITHSTAND 100 G SHOCK AND VIBRATION IN THE

NYLON AND KOVAR MOUNTS.

6. FRONT WINDOW THICKNESS SHALL BE 3 MILLIGRAMS/PER CM SQUARED OR LESS.

7. RESOLUTION SHALL BE 40 KEV OR LESS FOR ELECTRONS ON ALL DETECTORS.

8. RESOLUTION ON DETECTOR NO. 6 SHALL BE 25 KEV OR LESS FOR ELECTRONS.

9. LEAKAGE CURRENT SHALL BE LESS THAN 2 MICROAMPS AT 150 VOLTS BIAS. 10. STABILITY SHALL BE GUARANTEED FOR 6 MONTHS. 11. ALL DETECTORS SHALL BE SURFACE PASSIVATED TO MAKE THEM MORE STABLE. 12. DETECTORS 1 THROUGH 5 WILL BE ENCASED AS SHOWN IN FIGURE 1. 13. DETECTORS 1 THROUGH 5 WILL THEN BE MOUNTED IN A BRASS MOUNT AS

SHOWN IN THE SUGGESTED MOUNT OF FIGURES 3 THROUGH 7. THE OUTER

DIAMETER OF THE BRASS MOUNTS AND THE THICKNESS OF THE SHIELDING

ARE FIXED. THE MOUNTED DETECTORS MUST BE FLUSH WITH THE FACE OF

THE BRASS MOUNT. ANY CHANGES IN THE MOUNTS MUST BE APPROVED BY

PROJECT OFFICER, AFWL (WLRJ), KIRTLAND AIR FORCE BASE, NEW MEXICO. 14. DETECTORS 1 THROUGH 5 WILL BE MOUNTED WITH A NYLON SPACER, FIGURE

2, AS SHOWN IN THE ASSEMBLY DRAWING. (FIG. 8) 15. ALL SCREWS ARE TO HAVE LOCK WASHERS OR A SIMILAR MECHANISM TO

PREVENT LOOSENING ON VIBRATIONS. 16. DETECTORS 6 THROUGH 8 WILL BE ENCASED AND MOUNTED SIMILARLY TO

DETECTORS 1 THROUGH 5. THE ACTUAL DETAILS WILL BE SUGGESTED BY

THE MANUFACTURER AND APPROVED BY THE PROJECT OFFICER, AFWL

(WLRJ), KIRTLAND AIR FORCE BASE, NEW MEXICO, PRIOR TO CONSTRUCTION. CONTRACTOR NOTE:

A SAMPLE BRASS MOUNT WILL BE SENT TO THE PROJECT OFFICER, AFWL (WLRJ), KIRTLAND AIR FORCE BASE, NEW MEXICO, FOR VIBRATION TESTING PRIOR TO DELIVERY OF MOUNTED DETECTORS. INSERT THE NUMBER OF DAYS ---- AFTER RECEIPT OF AWARD SAMPLE CAN BE FURNISHED.

BIDDERS NOTE: TO INSURE PROPER EVALUATION OF PROPOSALS, DESCRIPTIVE LITERATURE MUST BE FURNISHED IN ACCORDANCE WITH PART XVI, PAGE 5. DESCRIPTIVE LITERATURE WILL INCLUDE, BUT NOT BE LIMITED TO, PHYSICAL AND PERFORMANCE SPECIFICATIONS OF THE ITEMS BEING PROCURED.

ELECTRO-NUCLEAR SUBMITTED ITS PROPOSAL ON JUNE 17, 1963, TO SUPPLY THE DESIRED ITEMS. THE PROPOSAL WAS ACCEPTED ON JUNE 26, 1963, BY THE CONTRACTING OFFICER FOR AIR FORCE SPECIAL WEAPONS CENTER. THE RESULTING CONTRACT WAS ASSIGNED NO. AF29/601/-6177. THE CONTRACTING OFFICER TERMINATED THE CONTRACT FOR DEFAULT, BY TELEGRAM DATED MARCH 4, 1964, AS FOLLOWS:

RE CONTRACT AF29/60L/-6177 DOCKET GD104, NOTICE OF TERMINATION FOR DEFAULT. CONTRACT WAS AWARDED 26 JUNE 1963 AND PROVIDED FOR DELIVERY OF 26 LITHIUM DRIFT DETECTORS OF 8 VARYING SPECIFICATIONS. ON OR ABOUT 4 OCT 1963 FINAL SHIPMENT WAS RECEIVED AT KIRTLAND AFB BUT IT WAS FOUND THAT THE 26 DETECTORS FAILED IN SOME WAY TO MEET THE SPECIFICATIONS. ON 14 OCT 1963 YOU PICKED UP AT KIRTLAND AFB THE 26 DETECTORS AND TOOK THEM BACK TO YOUR PLANT FOR THE PURPOSE OF REWORKING IN ORDER TO MAKE THEM MEET SPECIFICATIONS. ON 23 JAN 1964 YOU ADVISED THE GOVERNMENT BY TELEPHONE THAT DELIVERY OF THE DETECTORS WOULD BE MADE IN FOUR TO EIGHT WEEKS. VIEW OF THE ABOVE, THE UNDERSIGNED CONTRACTING OFFICER HEREBY FINDS AND DETERMINES THAT YOU HAVE FAILED TO DELIVER DETECTORS MEETING CONTRACT SPECIFICATIONS WITHIN THE TIME PROVIDED BY CONTRACT AND FURTHER THAT YOUR FAILURE IS NOT THE RESULT OF CAUSES BEYOND YOUR CONTROL AND IS NOT WITHOUT YOUR FAULT OR NEGLIGENCE. THE GOVERNMENT, BY THIS NOTICE, TERMINATES YOUR CONTRACT, AS WELL AS YOUR RIGHT TO PROCEED WITH ITS PERFORMANCE, UNDER GENERAL PROVISION 11, DEFAULT, EFFECTIVE UPON RECEIPT OF THIS NOTICE. YOU ARE ADVISED THAT, IN ADDITION TO ANY OTHER RIGHTS AND REMEDIES UNDER THE CONTRACT OR BY LAW, THE GOVERNMENT MAY PROCURE THE SUPPLIES TERMINATED FROM ANOTHER SOURCE AND YOU SHALL BE HELD LIABLE FOR ANY EXCESS COSTS INCURRED THEREBY. THIS IS THE FINAL DECISION OF THE UNDERSIGNED CONTRACTING OFFICER FROM WHICH YOU MAY APPEAL TO THE SECRETARY OF THE AIR FORCE IN THE MANNER AND WITHIN THE TIME PROVIDED IN GENERAL PROVISION 12, SIGNED: REX HALL, CONTRACTING OFFICER, DIRECTORATE OF TERMINATIONS, WESTERN CONTRACT MANAGEMENT REGION, MIRA LOMA AIR FORCE STATION, MIRA LOMA, CALIFORNIA.

AN APPEAL WAS TAKEN BY ELECTRO-NUCLEAR LABORATORIES, TO THE ARMED SERVICES BOARD OF CONTRACT APPEALS. IN ITS DECISION OF FEBRUARY 10, 1965, DENYING THE APPEAL, THE BOARD HELD THAT ELECTRO-NUCLEAR LABORATORIES HAD ACCEPTED THE RISK OF IMPOSSIBILITY OF PERFORMANCE, STATING IN PART:

BUT PAST DECISIONS HAVE CARVED OUT A FURTHER EXCEPTION FROM THE RULE THAT THE GOVERNMENT MUST STAND BEHIND ITS SPECIFICATIONS, AND THAT IS THE SITUATION CONFRONTING US HERE:BOTH PARTIES KNEW OR SHOULD HAVE KNOWN THAT NO ONE HAD MANUFACTURED DETECTORS TO THE SPECIFICATIONS SET FORTH IN THE CONTRACT AND THAT IT MIGHT NOT BE POSSIBLE TO MANUFACTURE DETECTORS TO THESE REQUIREMENTS. THE GOVERNMENT HAD NO SPECIAL KNOWLEDGE OF MANUFACTURING PROCESSES APPLICABLE TO NUCLEAR DETECTORS OR ANY OTHER SPECIAL KNOWLEDGE SUPERIOR TO THAT OF APPELLANT. APPELLANT, ON THE OTHER HAND, HAD CERTAIN NOVEL TECHNIQUES FOR THE CONSTRUCTION OF NUCLEAR DETECTORS THROUGH WHICH IT BELIEVED IT POSSIBLE, THOUGH BY NO MEANS CERTAIN, TO ATTAIN SPECIFICATION REQUIREMENTS--- AN UNCERTAINTY WHICH IT HAD COMMUNICATED TO THE GOVERNMENT IN THE COURSE OF THE PRE-CONTRACT NEGOTIATIONS. WHEN APPELLANT IN THIS SITUATION DECIDED TO ACCEPT A CONTRACT FOR THE PRODUCTION OF THE DETECTORS, IT CANNOT BE SAID THAT ITS INABILITY THEREAFTER TO PRODUCE THEM WAS THE RESULT OF CIRCUMSTANCES WHICH PROVIDE AN EXCUSE FOR ITS DEFAULT.

THERE IS NO EVIDENCE THAT APPELLANT EVEN PROPOSED CONTRACT TERMS WHICH MIGHT HAVE MINIMIZED ITS RISK; RATHER APPELLANT SEEMED TO REASSURE THE GOVERNMENT, WHEN IN ITS TELEGRAM AND LETTER OF 24 JUNE 1964 IT SPOKE OF "STANDARD ITEMS MODIFIED TO SUIT THE REQUIREMENT SET FORTH IN YOUR RFP JCL/63-29.' FOR IT IS MORE THAN DOUBTFUL THAT THE LITHIUM DRIFT DETECTORS OF THE SIZE AND CHARACTERISTICS INVOLVED COULD PROPERLY HAVE BEEN REFERRED TO AS STANDARD ITEMS MODIFIED TO SUIT THE CUSTOMER WITHOUT APPEARING TO DOWNGRADE THE RISK OF FAILURE AND THE LITHIUM DRIFT SURFACE BARRIER DETECTOR INTRODUCED BY APPELLANT INTO THE CONTRACT CLEARLY WERE NOT STANDARD ARTICLES IN ANY SENSE OF THE WORD.

HENCE, THE CONCLUSION IS INESCAPABLE HERE THAT APPELLANT HERE ACCEPTED THE RISK OF NONPERFORMANCE, I.E. OF THE EXPENDITURE OF TIME, EFFORT AND MONEY WHICH WOULD BE UNREIMBURSABLE IN THE EVENT THAT IT FAILED TO PRODUCE ACCEPTABLE DETECTORS.

COUNSEL'S BRIEF, ACCOMPANYING THE LETTER OF JUNE 15, 1965, SETTING FORTH THE BASIS OF THE CONTENTION THAT THE ASBCA DECISION IS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE, PRESENTS ARGUMENTS IN THREE GENERAL AREAS: (1) THAT THE BOARD SHOWED PARTIALITY AND DREW UNWARRANTED CONCLUSIONS; (2) THAT "THE CIRCUMSTANCES LEADING TO THE NEGOTIATION AND AWARD OF THE CONTRACT, THE EXISTING STATE OF TECHNOLOGY, AND THE BEHAVIOR OF BOTH PARTIES THROUGHOUT THE NEGOTIATION AND AWARD OF THE CONTRACT, THE EXISTING STATE OF TECHNOLOGY, AND THE BEHAVIOR OF BOTH PARTIES THROUGHOUT THE NEGOTIATION AND PERIOD OF THE CONTRACT STRONGLY SUPPORT THAT THE REALISTIC NATURE AND INTENT OF THE CONTRACT WAS OTHER THAN THAT OF A STRAIGHT PRODUCTION CONTRACT FOR SUPPLIES; " AND (3) THAT ,THE TEST PROCEDURES USED AT ENL WERE ACCEPTED IN THE TRADE AND SINCE THEY WERE DEMONSTRATED TO AF TECHNICAL STAFF, THEIR CONCURRENCE IMPLIES TO ENL THAT THIS WOULD BE THE BASIS OF ACCEPTANCE.' THE STATEMENTS AND ALLEGATIONS IN THE BRIEF IN SUPPORT OF THE THREE BASIC POINTS INDICATE THAT IT IS ELECTRO-NUCLEAR'S VIEW THAT THE CONTRACT CALLED FOR A "BEST EFFORTS" ATTEMPT ON THEIR PART TO PRODUCE RADIATION DETECTORS WITH CAPABILITIES NOT HERETOFORE ACHIEVED, AND THAT IT PRODUCED DETECTORS WHICH ACTUALLY MET SPECIFICATIONS BUT DID NOT ACHIEVE THE DESIRED RESULT, SINCE THIS WAS BEYOND THE STATE OF THE ART.

WE HAVE VERY CAREFULLY CONSIDERED NOT ONLY THE BRIEF FILED HERE BUT THE SEVERAL BRIEFS FILED WITH THE ASBCA BEFORE AND AFTER THE HEARING, THE TRANSCRIPT OF TESTIMONY TAKEN AT THE HEARING, THE EXHIBITS SUBMITTED IN EVIDENCE AT THE HEARING, AND THE OTHER DOCUMENTS INCORPORATED AS A PART OF THE RECORD, AND WE CANNOT AGREE THAT THE BOARD'S DECISION IS IN ERROR.

IT MUST BE UNDERSTOOD THAT OUR REVIEW IS LIMITED TO A DETERMINATION WHETHER THERE IS SUBSTANTIAL EVIDENCE, BASED ON THE RECORD DEVELOPED BEFORE THE BOARD, TO SUPPORT THE ADMINISTRATIVE CONCLUSION. AS IS STATED IN CARLO BIANCHI AND COMPANY, INC. V. THE UNITED STATES, 167 CT.CL. 364, 368. "* * * EVEN THOUGH WE MIGHT HAVE DECIDED AS AN ORIGINAL MATTER WITH PLAINTIFF ON BALANCE, THE DECISION OF THE SUPREME COURT (IN CARLO BIANCHI AND COMPANY, INC. V. THE UNITED STATES, 373 U.S. 709) REQUIRES US TO GO FURTHER AND UPHOLD THE BOARD'S DECISION IF THERE WAS SUBSTANTIAL EVIDENCE TO SUPPORT THE BOARD'S DECISION ON THE RECORD AS WHOLE.'

WE CANNOT AGREE THAT THE CONTRACT HERE CONCERNED MUST BE CONSIDERED AS A "BEST EFFORTS" CONTRACT. THE VIEW OF THE BOARD THAT THE CONTRACT WAS A FIXED-PRICE SUPPLY CONTRACT, AND NOT IN THE NATURE OF A RESEARCH AND DEVELOPMENT CONTRACT, IS AMPLY SUPPORTED BY THE EVIDENCE CONCERNING PREPROPOSAL NEGOTIATIONS AND THE PROPOSAL ACTUALLY MADE IN YOUR TELEGRAPHIC AND LETTER PROPOSAL.

FURTHERMORE WE CONCLUDE THAT THERE IS SUBSTANTIAL EVIDENCE THAT THE DETECTORS OFFERED FAILED TO MEET THE SPECIFICATIONS OF THE CONTRACT, ASIDE FROM THE QUESTION WHETHER THE DETECTORS DID OR DID NOT IN FACT ACHIEVE THE 40 KEV RESOLUTION REQUIRED OF THE MAJORITY OF DETECTORS.

WE HAVE NOTED YOUR REFERENCE TO AND RELIANCE ON ON THE APPEAL OF E. L. COURNAND AND COMPANY, INC., ASBCA NO. 2955, 60-2BCA, P2840, (1960), DECIDED SEPTEMBER 29, 1960. WE BELIEVE THAT THE COURNAND CASE IS ESSENTIALLY DIFFERENT FROM THE PRESENT MATTER. IN THE COURNAND CASE, THE RECORD SHOWED THAT THE GOVERNMENT HAD EXECUTED A RESEARCH AND DEVELOPMENT CONTRACT WITH COURNAND FOR THE DEVELOPMENT OF A CERTAIN TYPE OF BARREL, AND ACCEPTED THE PROTOTYPE BARREL THUS PRODUCED, AND THEN EXECUTED A SUPPLY CONTRACT FOR A NUMBER OF BARRELS, WHICH THE BOARD FOUND TO BE IN REALITY AN EXTENSION OF THE PRIOR RESEARCH AND DEVELOPMENT CONTRACT, STATING: WITH RESPECT TO DESIGN RESPONSIBILITY, WE CONCLUDE ON THE ENTIRE RECORD THAT FROM THE TIME OF THE LETTER OF 31 DECEMBER 1952 (PARS. 12-13), THE TECHNICAL REPRESENTATIVES OF THE GOVERNMENT ASSUMED PRIMARY RESPONSIBILITY FOR THE BASIC DESIGN CONCEPT AND THE LIMITATIONS THEREON LATER EXPRESSED IN SPECIFICATION OS 6513, AT LEAST TO SUCH EXTENT AS THIS MAY INCLUDE ANY EXTENSION BEYOND THE ACTUAL PERFORMANCE CHARACTERISTICS OF THE UNTESTED BUT ACCEPTED FIRST DEVELOPMENT ITEM WHICH EXTENSIONS IN TURN MAY BE FOUND TO BE FACTORS OF ANY IMPOSSIBILITY OF PERFORMING THAT SPECIFICATION. ON SUCH EVIDENCE AS THERE IS, AND AN ABSENCE OF SUBSTANTIAL EVIDENCE TO THE CONTRARY, WE CONCLUDE FURTHER THAT THE UNEXPLAINED TRANSITION FROM THE EARLIER PROSPECT OF FURTHER DEVELOPMENT WORK TO BE PERFORMED BY APPELLANT TO THE EVENTUAL EXECUTION OF THE SUBJECT PRODUCTION-TYPE CONTRACT WAS A MATTER INITIATED AND ENCOURAGED BY REPRESENTATIVES OF THE GOVERNMENT, AND NOT BY APPELLANT AS A SUPPOSED DOMINANT MEMBER IN THE RELATIONSHIP HAVING ABILITY TO INFLUENCE AND PERSUADE A DECISION OF THAT KIND AGAINST THE BETTER JUDGMENT OF RESPONSIBLE GOVERNMENT REPRESENTATIVES. THE CONDUCT OF THE PARTIES DURING THE PERIOD OF THE PRODUCTION-TYPE CONTRACT ALSO IS MORE CONSISTENT WITH AN UNDERSTANDING BY BOTH PARTIES THAT THE JOINT DEVELOPMENT VENTURE BEGUN UNDER THE EARLIER DEVELOPMENT CONTRACT WOULD CONTINUE THEREUNDER ALONG SIMILAR LINES, AND NOT WITH ANY SUPPOSED UNDERSTANDING BY EITHER PARTY THAT APPELLANT WAS WHOLLY RESPONSIBLE THEREUNDER, FOR A FIXED PRICE AND AT ITS SOLE RISK, TO DEVELOP AND DESIGN A BREAKTHROUGH IN THE ART AND DELIVER CONFORMING SUPPLIES IN PRODUCTION QUANTITIES. THE ACTIONS AND ATTITUDES OF THE GOVERNMENT'S TECHNICAL REPRESENTATIVES IN WHAT APPEARS TO HAVE AMOUNTED TO PLENARY ADMINISTRATION OF THE CONTRACT DURING MOST OF ITS TERM, AND THEIR FULL PARTICIPATION IN APPELLANT'S ATTEMPTS TO PERFORM IT IN EFFECT CONSTITUTED APPELLANT'S PLANT AND STAFF AS A LABORATORY FOR JOINT DESIGN, DEVELOPMENT, AND STUDY EFFORTS INITIATED IN SUBSTANTIAL PART BY THE GOVERNMENT REPRESENTATIVES.

AS INDICATED ABOVE, WE FIND THE CASES READILY DISTINGUISHABLE.

ACCORDINGLY YOU ARE ADVISED THAT WE FIND NO BASIS FOR CONCLUDING THAT THE BOARD'S OPINION WAS NOT FOUNDED ON SUBSTANTIAL EVIDENCE, OR THAT THE BOARD ACTED ARBITRARILY OR CAPRICIOUSLY. WE ALSO MUST CONCLUDE AND AGREE WITH THE BOARD THAT ELECTRO-NUCLEAR LABORATORIES ASSUMED THE RISK OF INABILITY TO PERFORM THE CONTRACT. THEREFORE, WE FIND NO LEGAL BASIS TO QUESTION THE DECISION OF THE ARMED SERVICES BOARD OF CONTRACT APPEALS.