B-158311, MAR. 10, 1966

B-158311: Mar 10, 1966

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TO DEL MAR ENGINEERING LABORATORIES: FURTHER REFERENCE IS MADE TO YOUR LETTER OF JANUARY 6. TO DETERMINE IF GAINS SIMILAR TO THOSE OBTAINED BY THE USE OF SYNTHETIC FLIGHT TRAINING DEVICES IN FIXED-WING PILOT TRAINING WERE POSSIBLE. WHICH IS ESSENTIALLY A RUDIMENTARY ONE-MAN HELICOPTER OPERABLE IN ALL PLANES AND MANEUVERABLE OFF THE GROUND. DEL MAR WAS AWARDED A FIXED PRICE CONTRACT NO. THE "WHIRLYMITE" WAS PROVISIONALLY ACCEPTED AT THE DEL MAR PLANT. WHICH TEST CAUSED THE CONTRACTING OFFICER'S REPRESENTATIVE ON THE SITE TO REFUSE ACCEPTANCE UNTIL CERTAIN DISCREPANCIES WERE CORRECT. NO MILITARY MEMBERS WERE NEAR THE MACHINE THE REST OF THE MONTH. THE DEVICE WAS TESTED ON APRIL 30. WAS FINALLY ACCEPTED ON MAY 1 BY THE GOVERNMENT'S EXECUTION OF FORM DD 250.

B-158311, MAR. 10, 1966

TO DEL MAR ENGINEERING LABORATORIES:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JANUARY 6, 1966, WHEREIN YOU REQUESTED THIS OFFICE TO REVIEW THE DECISION OF THE ARMED SERVICES BOARD OF CONTRACT APPEALS OF DECEMBER 13, 1965, ASBCA NO. 10359, WHICH DENIED YOUR CLAIM FOR PAYMENT DUE FOR SERVICES RENDERED DURING MARCH AND APRIL OF 1964 BY YOUR TECHNICAL REPRESENTATIVE PURSUANT TO CONTRACT NO. DA-23-204- AMC-02706/T), AFTER DELIVERY OF THE ITEM ON THE SITE BUT BEFORE ITS ACCEPTANCE BY THE ARMY.

ON JUNE 11, 1963, THE UNITED STATES ARMY AVIATION HUMAN RESEARCH UNIT, FORT RUCKER, ALABAMA, RELEASED A RESEARCH PROPOSAL OUTLINING A PLAN TO INVESTIGATE NEWLY DEVELOPED ROTARY WING SYNTHETIC FLIGHT TRAINING DEVICES, TO DETERMINE IF GAINS SIMILAR TO THOSE OBTAINED BY THE USE OF SYNTHETIC FLIGHT TRAINING DEVICES IN FIXED-WING PILOT TRAINING WERE POSSIBLE. THIS PROPOSAL CONTEMPLATED A TWO-STAGE PROGRAM, THE FIRST TO INVESTIGATE THE VALUE OF THE NEW DEVICES AS TRAINING INSTRUMENTS, AND THE SECOND TO ASCERTAIN THE PREDICTIVE VALUE OF THE DEVICE IN RELATION TO SUBSEQUENT STUDENT PERFORMANCE AS HELICOPTER PILOTS. PURSUANT TO THIS PLAN, THE HUMAN RESEARCH UNIT PERSONNEL INITIATED DISCUSSION IN THE SUMMER OF 1963 WITH REPRESENTATIVES OF DEL MAR ENGINEERING LABORATORIES OF LOS ANGELES, CALIFORNIA, IN REGARD TO THEIR "WHIRLYMITE," A HELICOPTER SELF-TRAINER, WHICH IS ESSENTIALLY A RUDIMENTARY ONE-MAN HELICOPTER OPERABLE IN ALL PLANES AND MANEUVERABLE OFF THE GROUND, BUT RESTRICTED FROM FREE FLIGHT BY AN ARM ATTACHED TO A MOBILE GROUND PLATFORM. FOLLOWING FORMAL NEGOTIATIONS OF DECEMBER 20, 1963, DEL MAR WAS AWARDED A FIXED PRICE CONTRACT NO. DA-23-204-AMC-02706/T), ON JANUARY 24, 1964, FOR ONE "WHIRLYMITE," WITH CERTAIN MODIFICATION, FOR THE FIRST STAGE OF THE TEST, TO BE DELIVERED FEBRUARY 1, 1964, AT FORT RUCKER, ALABAMA, WITH THREE OTHERS SCHEDULED FOR LATER DELIVERY.

IN KEEPING WITH THE TERMS OF THE CONTRACT, THE "WHIRLYMITE" WAS PROVISIONALLY ACCEPTED AT THE DEL MAR PLANT, BROKEN DOWN AND DELIVERED UNASSEMBLED TO FORT RUCKER ON MARCH 3, 1964. THE NEXT DAY THE DEL MAR TECHNICAL REPRESENTATIVE COMPLETED ASSEMBLY OF THE DEVICE AND ATTEMPTED A FUNCTIONAL TEST, WHICH TEST CAUSED THE CONTRACTING OFFICER'S REPRESENTATIVE ON THE SITE TO REFUSE ACCEPTANCE UNTIL CERTAIN DISCREPANCIES WERE CORRECT. THERE FOLLOWED A LONG SERIES OF DISCREPANCIES, BREAKDOWNS, AND MALFUNCTIONS, WITH THE MACHINE BEING FREQUENTLY TESTED AND FURTHER DEFICIENCIES NOTED. DURING THE FIRST MONTH OF THIS PERIOD, ARMY PERSONNEL ON THE SITE GAVE WHATEVER ASSISTANCE THEY COULD TO THE CONTRACTOR'S TECHNICAL REPRESENTATIVE IN DETECTING AND CORRECTING FAULTS.

ON APRIL 8, 1964, DEL MAR SENT ADDITIONAL TECHNICAL AND ENGINEERING PERSONNEL TO THE SITE TO ATTEMPT TO CORRECT THE DISCREPANCIES, AND REQUESTED THAT GOVERNMENT PERSONNEL REFRAIN FROM WORKING ON THE DEVICE, SO THAT, WITH FEW EXCEPTIONS, NO MILITARY MEMBERS WERE NEAR THE MACHINE THE REST OF THE MONTH. THE CONTRACTING OFFICER, ON APRIL 17, 1964, SENT THE CONTRACTOR A "SHOW-CAUSE" LETTER, GIVING IT 12 DAYS TO MAKE THE "WHIRLYMITE" ACCEPTABLE, OR BE FOUND IN DEFAULT. THUS, AFTER MUCH EFFORT, THE DEVICE WAS TESTED ON APRIL 30, FOUND TO FUNCTION SATISFACTORILY, AND WAS FINALLY ACCEPTED ON MAY 1 BY THE GOVERNMENT'S EXECUTION OF FORM DD 250. AFTER THIS, THE ,WHIRLYMITE," ALONG WITH THE LATER THREE UNITS, PERFORMED THE TESTS FOR WHICH THEY WERE PROCURED WITHOUT FURTHER TROUBLE.

THE STATUS OF THE TECHNICAL REPRESENTATIVE DURING THE TWO-MONTH PERIOD AFTER DELIVERY BUT BEFORE ACCEPTANCE IS THE ISSUE IN DISPUTE. CONTRACT ITEM NO. 3 PROVIDES THE FOLLOWING:

"TECHNICAL REPRESENTATIVE. PROVIDE TECHNICAL REPRESENTATIVE QUALIFIED TO PERFORM, AND WHO WILL PERFORM ALL MAINTENANCE REQUIRED IN SUPPORT OF THE GROUND TRAINING DEVICE/S) AND QUALIFIED TO INSTRUCT MILITARY PERSONNEL IN ITS MAINTENANCE AND OPERATION. THE TECHNICAL REPRESENTATIVE FURNISHED WILL BE AVAILABLE WHEN THE FIRST TRAINER IS DELIVERED AND WILL BE PROVIDED AS REQUIRED DURING THE PERFORMANCE OF THE TEST. THE MINIMUM DURATION OF THE TECHNICAL SERVICES FURNISHED SHALL BE SIX (6) MONTHS, AND SHALL INCLUDE TWO (2) CHANGES OF STATION.'

THE QUESTION PRESENTED CONCERNS PRIMARILY THE EFFECT OF THE ABOVE PROVISION, AS READ TOGETHER WITH THE REST OF THE CONTRACT, ON THE DUTY OF THE GOVERNMENT TO PAY DEL MAR $5,158.50 FOR THE TECHNICAL REPRESENTATIVE'S SERVICE IN THIS PERIOD. DEL MAR PLACES GREAT STRESS ON THE INCLUSION OF THE PHRASE THAT THE TECHNICAL REPRESENTATIVE "WILL BE AVAILABLE WHEN THE FIRST TRAINER IS DELIVERED," AND ALSO MAINTAINS THAT THE TECHNICAL REPRESENTATIVE NECESSARILY MAINTAINED AND SERVICED THE DEVICE EVEN WHILE PREPARING IT FOR ACCEPTANCE AND THAT ON-THE-JOB TRAINING WAS NECESSARILY FURNISHED TO THOSE MILITARY PERSONNEL WHO ASSISTED THE TECHNICAL REPRESENTATIVE IN CORRECTING THE DISCREPANCIES.

DEL MAR FURTHER CONTENDS THAT THE GOVERNMENT IS IRREVOCABLY BOUND BY THE CERTIFICATION OF THE CONTRACTING OFFICER'S REPRESENTATIVE ON DEL MAR'S INVOICE NO. 6927 OF MAY 14, 1964, AS THE CONTRACTING OFFICER HAD DELEGATED FULL AUTHORITY TO HIS REPRESENTATIVE "TO EFFECT CERTIFICATION OF DD 250-S, INVOICES AND VOUCHERS AS TO THE ADEQUACY OF THE TECHNICAL SERVICES PERFORMED" BY LETTER OF FEBRUARY 14, 1964.

ACCORDING TO ARTICLE IIC OF THE SUBJECT CONTRACT, THE GOVERNMENT WAS TO PAY DEL MAR FOR THE TECHNICAL REPRESENTATIVE'S SERVICES ON A MONTHLY BASIS UPON RECEIPT OF INVOICES CERTIFIED BY THE CONTRACTING OFFICER'S REPRESENTATIVE. AFTER AN INITIAL REFUSAL BY THE GOVERNMENT TO HONOR DEL MAR'S INVOICE NO. 6927 FOR THE SERVICES RENDERED BY THE TECHNICAL REPRESENTATIVE FROM MARCH 1, 1964, THROUGH MAY 1, 1964, DEL MAR RESUBMITTED THE INVOICE BY LETTER OF JULY 24, 1964, WITH THE FOLLOWING CERTIFICATION OF THE CONTRACTING OFFICER'S REPRESENTATIVE:

"I CERTIFY THAT DURING THE PERIOD COVERED BY THIS DOCUMENT SERVICES OF A TECHNICAL REPRESENTATIVE WERE AVAILABLE AND UTILIZED TO TRAIN ASSIGNED AND ATTACHED MILITARY AND CIVILIAN PERSONNEL IN MAINTENANCE AND OPERATION OF THE DHT-1 A HELICOPTER TRAINER, AND FURTHER TO MAINTAIN THE TRAINER AS REQUIRED.'

THEREFORE, DEL MAR CONCLUDES THAT THE GOVERNMENT MUST PAY THE SUM SO CERTIFIED.

A THIRD RELATED PROBLEM IS THE FACT THAT THE CONTRACT DID NOT SPELL OUT THE EXTENT OF PRE-ACCEPTANCE TRIALS AFTER DELIVERY TO THE ARMY EXCEPT FOR ARTICLE IVC, WHICH PROVIDES THAT AFTER THE TECHNICAL REPRESENTATIVE HAS ASSEMBLED AND "HAS MADE A FUNCTIONAL CHECK OF THE TRAINING DEVICE," THE CONTRACTING OFFICER'S REPRESENTATIVE SHOULD MAKE FINAL ACCEPTANCE.

THE ARMED SERVICES BOARD OF CONTRACT APPEALS DENIED PAYMENT FOR THE QUESTIONED PERIOD ON THE GROUNDS THAT "THE PRINCIPLE AND EVIDENT PURPOSE OF THE CONTRACT PROVISION (CONTRACT ITEM NO. 3) WAS TO PROCURE TECHNICAL REPRESENTATIVE SERVICES IMPLEMENTING AND SUPPORTING THE GOVERNMENT'S RESEARCH.' THIS WAS BUTTRESSED BY THE OPINION THAT DELIVERY OF AN ASSEMBLED OPERABLE DEVICE ,WOULD BE MERELY EXPECTABLE," AND THEREFORE THE GOVERNMENT SHOULD NOT BE LIABLE FOR LABOR EXPENDED BY THE CONTRACTOR REACHING THIS STATE. THE BOARD FURTHER FOUND THAT THE GOVERNMENT CANNOT BE BOUND "UNDER THE CIRCUMSTANCES ...' BY THE CONTRACTING OFFICER'S REPRESENTATIVE.

THERE EXISTS NO BASIS FOR QUESTIONING THE CONCLUSION OF THE BOARD THAT THE CONTRACTING PARTIES INTENDED THAT THE TECHNICAL REPRESENTATIVE SHOULD PERFORM HIS SUPPORT AND TRAINING FUNCTIONS DURING THE SIX-MONTH PERIOD THE HUMAN RESEARCH UNIT WAS EVALUATING THE "WHIRLYMITE" AS A HELICOPTER PILOT TRAINING DEVICE; THIS CONCLUSION FINDS STRONG SUPPORT IN THE RECORD, I.E., THE TRANSCRIPT OF PROCEEDINGS, PAGES 11-15. THIS BEING THE CASE, THE BOARD WAS CORRECT TOO WHEN IT CONCLUDED THAT PAYMENT FOR THE SERVICES OF THE TECHNICAL REPRESENTATIVES SHOULD NOT COMMENCE UNTIL THE RESEARCH PROGRAM COMMENCED, WHICH WAS TWO MONTHS AFTER DELIVERY OF THE "WHIRLYMITE" TO FORT RUCKER, DESPITE THE PRESENCE IN THE CONTRACT OF THE TERM STIPULATING THAT THE TECHNICAL REPRESENTATIVE SHOULD,"BE AVAILABLE WHEN THE FIRST TRAINER IS DELIVERED.'

THE BOARD LABLED THE OPPOSITE INFERENCE AS "OVER MECHANISTIC," AND HELD THAT SUCH AN INTERPRETATION "WOULD ERR BY OVERLOOKING THE REAL CONTRACT PURPOSE FOR TECHNICAL REPRESENTATIVE SERVICE, WHICH, FACTUALLY, DOES APPEAR EXPRESSED.'

NOTHING IN THE REWARD EXPRESSLY CONTRADICTS THE PROPOSITION THAT THE SUBJECT SERVICES WERE INTENDED TO COVER THE DURATION OF THE HUMAN RESEARCH UNIT TEST.

THE CONTENTION OF DEL MAR THAT ON-THE-JOB TRAINING OF MILITARY PERSONNEL AND MAINTENANCE WORK ON THE MACHINE, TASKS SPECIFICALLY ORIENTED TOWARDS SUPPORTING THE RESEARCH PROGRAM, WERE FURNISHED THE GOVERNMENT DURING THE HIATUS BETWEEN DELIVERY AND ACCEPTANCE SIMPLY UNDERLINES THE SOUNDNESS OF THE BOARD'S HOLDING HERE. IT IS A FUNDAMENTAL RULE OF CONSTRUCTION THAT AGREEMENTS MUST RECEIVE A REASONABLE INTERPRETATION ACCORDING TO THE INTENTION OF THE PARTIES AT THE TIME OF EXECUTION, IF SUCH IS POSSIBLE. SEE B-150278 OF DECEMBER 28, 1962.

THE INCIDENTAL BENEFIT OF THE TRAINING RECEIVED BY THE GOVERNMENT PERSONNEL WHO ASSISTED THE CONTRACTOR'S PERSONNEL IN DETECTING AND CORRECTING THE "WHIRLYMITE-S" DEFICIENCIES HAS NO RELEVANCE TO THE SOMEWHAT FORMALIZED INSTRUCTION IN MAINTENANCE TECHNIQUES CONTEMPLATED UNDER CONTRACT ITEM NO. 3.

THE BOARD'S REJECTION OF THE DEL MAR CONTENTIONS IN RESPECT TO THE EFFECT OF THE INVOICE CERTIFICATION IS ALSO UNASSAILABLE, FOR THE GOVERNMENT WOULD NOT BE BOUND EVEN IF THE ERRONEOUSLY CERTIFIED INVOICE HAD BEEN PAID. THEREFORE, THE MERE CERTIFICATION OF A CORPORATION'S INVOICE FOR PAYMENT CREATES NO LIABILITY AGAINST THE GOVERNMENT WHEN, AS HERE, IT HAS BEEN ADMINISTRATIVELY DETERMINED THAT THE CERTIFICATION WAS IN ERROR. LOGIC DICTATES THAT ONCE IT IS CONCLUDED THAT THE SERVICES WERE NOT IN FACT PERFORMED, AN INCORRECT CERTIFICATION BY A FIELD LEVEL GOVERNMENT EMPLOYEE TO THE CONTRARY IS OF NO EFFECT. SEE 39 COMP. GEN. 726, 728, WHERE WE SAID:

"* * * ALSO THE GOVERNMENT, INDEPENDENTLY OF STATUTE, HAS THE RIGHT TO RECOVER FUNDS WHICH ITS AGENTS HAVE WRONGFULLY, ERRONEOUSLY, OR ILLEGALLY PAID. THIS RIGHT EXISTS WHETHER SUCH PAYMENTS WERE MADE UNDER MISTAKE OF LAW OR FACT; WHETHER BECAUSE IN EXCESS OF AUTHORITY OR BASED UPON AN ERRONEOUS INTERPRETATION OF A CONTRACT LATER FOUND TO BE INCORRECT, OR BECAUSE OF THE RELIANCE UPON FACTS FOUND SUBSEQUENTLY NOT TO EXIST. * *

SEE ALSO 35 COMP. GEN. 63, 70.

WE FURTHER FIND THAT THE PRELIMINARY TESTING DEMANDED BY THE GOVERNMENT BEFORE FINAL ACCEPTANCE OF THE DEVICE WAS REASONABLE UNDER THE UNUSUAL CIRCUMSTANCES OF SO MANY OBVIOUS DISCREPANCIES. AS THE CONTRACTING PARTIES HAD NOT ANTICIPATED ANY ACCEPTANCE PROBLEMS, NO PROVISION WAS MADE FOR EXTENSIVE PRE-ACCEPTANCE TESTING AFTER DELIVERY ON THE SITE. SEE TRANSCRIPT OF PROCEEDINGS, PAGE 92.

PART C OF ARTICLE IV OF THE CONTRACT WHICH PROVIDES THAT THE TECHNICAL REPRESENTATIVE, AFTER ASSEMBLING THE "WHIRLYMITE," SHOULD CONDUCT A "FUNCTIONAL CHECK OF THE TRAINING DEVICE," IS THE EXTENT TO WHICH ON-SITE PRE-ACCEPTANCE TESTS ARE COVERED BY THE CONTRACT. HOWEVER, THE GOVERNMENT'S INSISTENCE THAT THE DEVICE BE MADE FULLY OPERABLE AND CAPABLE OF CONTINUED OPERATION FOR A PERIOD OF HOURS WAS AN INTELLIGENT AND SUPPORTABLE CONDITION OF FINAL ACCEPTANCE, IN VIEW OF THE REPEATED BREAKDOWN AND FAILURES EXPERIENCED IN ATTEMPTING TO READY THE MACHINE FOR FINAL ACCEPTANCE. SEE OUR DECISION B-151070 OF SEPTEMBER 27, 1963, WHERE WE HELD THAT "THE GOVERNMENT MUST RETAIN THE RIGHT TO PERFORM ANY REASONABLE AND ACCURATE TEST, WHETHER OR NOT THAT TEST BE SET FORTH IN THE SPECIFICATIONS, TO DETERMINE COMPLIANCE OF THE SAMPLE OR END ITEM WITH A PARTICULAR STANDARD EXPRESSED IN THE SPECIFICATIONS.' WHILE THE ABILITY OF THE "WHIRLYMITE" TO OPERATE WAS NOT EXPRESSED AS A SPECIFICATION IN THE CONTRACT, IT SEEMS CERTAIN THAT A COURT OF LAW WOULD FIND SUCH AN ABILITY AN IMPLIED CONDITION OF THE CONTRACT, THEREBY REACHING THE SAME RESULT.

ACCORDINGLY, WE CAN FIND NO ERROR IN THE DECISION RENDERED BY THE ARMED SERVICES BOARD OF ..END :