B-139285, MAR. 10, 1964

B-139285, MAR. 10, 1964

TO CUMMINGS AND SELLERS:

REFERENCE IS MADE TO YOUR LETTER OF APRIL 23, 1963, PRESENTING A CLAIM ON BEHALF OF LEVIN BROTHERS, INCORPORATED, IN THE AMOUNT OF $21,441.43 UNDER CONTRACT NO. DA 11-009-QM-24951 AND CONTRACT NO. DA 11-009-QM-24959, BOTH DATED JUNE 30, 1955.

YOU CLAIM THAT THE CONTRACTOR IS ENTITLED TO RECOVER AN INCREASED COST OF $16,263.06 DUE TO THE FAILURE OF THE GOVERNMENT TO DELIVER GOVERNMENT- FURNISHED PROPERTY WITHIN A REASONABLE TIME, AND DUE TO THE GOVERNMENT'S ACTION IN DELIVERING MATERIALS WHICH WERE NOT SUITABLE FOR USE. ADDITION, YOU CLAIM THE CONTRACTOR IS ENTITLED TO RECOVER $5,178.37, REPRESENTING THE COST OF TRANSPORTING MATERIAL FROM THE PLANT OF RELIANCE MANUFACTURING COMPANY IN COLUMBUS, MISSISSIPPI, TO THE PLANT OF RANKIN MANUFACTURING COMPANY IN CEDAR FALLS, IOWA.

YOU CONTEND THAT THE INCREASED COST OF $16,263.06 WAS DIRECTLY DUE TO THE BREACH OF THE GOVERNMENT'S IMPLIED AS WELL AS SPECIFIC WARRANTIES UNDER THE CONTRACT. ADDITIONALLY, YOU CLAIM BREACH OF THE GOVERNMENT'S IMPLIED WARRANTY NOT TO HINDER THE CONTRACTOR IN THE PERFORMANCE OF WORK UNDER THE CONTRACT, AND YOU CONTEND THAT THE GOVERNMENT'S ACTION ALSO CONSTITUTED A BREACH OF ITS OBLIGATION TO DELIVER CERTAIN GOVERNMENT-FURNISHED PROPERTY WITHIN A REASONABLE TIME. IN ADDITION, YOU SAY THAT THE GOVERNMENT'S ACTION IN DELIVERING MATERIALS WHICH WERE NOT SUITABLE FOR THE USE INTENDED CONSTITUTES A BREACH OF THE SPECIFIC CLAUSE IN THE CONTRACT (ARTICLE 41 OF THE GENERAL PROVISIONS) WHICH STATES THAT THE GOVERNMENT SHALL FURNISH TO THE CONTRACTOR MATERIAL SUITABLE FOR USE. IN CONNECTION WITH THE LATTER CONTENTION YOU CITE TOPKIS BROTHERS CO. V. UNITED STATES, CT.CL. 391-57, DECIDED DECEMBER 6, 1961, IN WHICH IT WAS HELD UNDER THE CONTRACT THERE INVOLVED THAT GOVERNMENT-FURNISHED PROPERTY WAS NOT SUITABLE FOR USE.

THE INVITATIONS FOR BIDS UNDER WHICH THE CONTRACTS WERE AWARDED INCLUDED DAVENPORTS, CHAIRS, AND SLIP COVERS TO ACCOMPANY BOTH. SINCE THE INVITATIONS WERE CONCERNED WITH "PATTERNED" SLIP COVERS AND BECAUSE THE REQUIREMENT WAS NOT CONSIDERED TO BE CLEAR IN THE INVITATION, LEVIN BROTHERS WROTE TO THE CONTRACTING OFFICER ON APRIL 27, 1955, A MONTH BEFORE BID OPENING, AND REQUESTED INFORMATION AS TO WHETHER MATCHING PATTERNS WOULD BE REQUIRED. YOU ALLEGE THAT IN ANSWER TO SUCH LETTER THE CONTRACTING OFFICER REPLIED THAT MATCHING PATTERNS WOULD NOT BE REQUIRED. CONTRARY TO THOSE STATEMENTS THE RECORD SHOWS THAT IN ITS LETTER OF APRIL 27, 1955, LEVIN BROTHERS DID NOT ASK WHETHER THE MATCHING OF PATTERNS WOULD BE REQUIRED IN PRODUCING THE SLIP COVERS. INSTEAD, IT ASKED FOR ADDITIONAL COPIES OF THE INVITATIONS, HAND SAMPLES OF THE FABRICS AND THE WIDTH OF THE FABRICS. BY LETTER OF MAY 5, 1955, THE CONTRACTING OFFICER REPLIED BY SENDING EXTRA COPIES OF THE BIDS AND BY ADVISING THE CONTRACTOR THAT SAMPLES OF THE MATERIALS WERE NOT AVAILABLE BECAUSE THE CONTRACT FOR THE MATERIALS HAD NOT BEEN MADE. THE CONTRACTING OFFICER ALSO ADVISED THE CONTRACTOR THAT THE MATERIAL WOULD BE 48 INCHES WIDE PLUS OR MINUS 1/2 INCH AND INCLUDED THE STATEMENT "THE PATTERN OF THE SLIP COVER MATERIAL WILL BE SUCH THAT IT WILL NOT REQUIRE A CUTTING THAT WOULD MEAN THE CENTERING OF THE PRINT, SINCE IT IS A REPEAT PATTERN.' THE CONTRACTING OFFICER'S LETTER DID NOT STATE THAT MATCHING OF PATTERNS WOULD NOT BE REQUIRED.

CONTRACT NO. DA 11-009-24951 REQUIRED THE CONTRACTOR TO SUPPLY 1,406 DAVENPORTS AND 3,933 CHAIRS, WITH ONE SUMMER AND ONE WINTER SLIP COVER FOR EACH. YOUR CLAIM IS CONCERNED ONLY WITH THE SLIP COVER REQUIREMENTS.

DELIVERIES WERE REQUIRED IN SUBSTANTIALLY EQUAL INSTALLMENTS IN SEPTEMBER, OCTOBER, NOVEMBER AND DECEMBER 1955. THE CLOTH FOR THE SLIP COVERS AND DENIM UPHOLSTERY WAS TO BE GOVERNMENT-FURNISHED. THE UNIT ALLOWANCE OF MATERIAL FOR THE SLIP COVERS WAS 14 YARDS PER DAVENPORT AND 8 YARDS PER CHAIR. THE CONTRACT ALSO PROVIDED THAT INITIAL DELIVERY OF GOVERNMENT-FURNISHED PROPERTY WOULD BE MADE AT LEAST 45 CALENDAR DAYS PRIOR TO THE FIRST SCHEDULED DATE OR THE GOVERNMENT WOULD EXTEND EACH PERIOD IN THE DELIVERY SCHEDULE BY THE NUMBER OF CALENDAR DAYS THAT SUCH DELIVERY OF GOVERNMENT-FURNISHED PROPERTY WAS DELAYED. THE CONTRACT CONTAINED, INTER ALIA, A DISPUTES CLAUSE, A CHANGES CLAUSE (SF 32, 1949 EDITION) AND A GOVERNMENT-FURNISHED PROPERTY CLAUSE.

CONTRACT NO. DA 11-009-QM-24959 REQUIRED THE DELIVERY OF 4,540 DAVENPORTS AND 9,539 CHAIRS IN APPROXIMATELY EQUAL INSTALLMENTS IN AUGUST, SEPTEMBER AND OCTOBER 1955. THE BASIC ITEM DESCRIPTIONS AND GOVERNMENT-FURNISHED PROPERTY PROVISIONS OF THIS CONTRACT WERE THE SAME AS THOSE IN CONTRACT DA 11-009-QM-24951 EXCEPT THAT THERE WERE ADDITIONAL EXCEPTIONS TO THE BASIC SPECIFICATION (AA-F-00381A/QMC) ).

LEVIN BROS., INC., HAD SHOWN IN ITS BIDS FOR BOTH CONTRACTS THAT ITS OWN PLANT WAS THE ONLY MANUFACTURING FACILITY AND SHIPPING POINT.

INITIAL DELIVERY OF GOVERNMENT-FURNISHED PROPERTY SHOULD HAVE BEEN ACCOMPLISHED 45 DAYS PRIOR TO THE FIRST SCHEDULED DELIVERY DATES. INDICATED BELOW, SHIPMENT OF THE SLIP COVER MATERIAL WAS DELAYED.

THE ORIGINAL CONTRACTS PROVIDED FOR DELIVERY OF THE FURNITURE AND SLIP COVERS TOGETHER AND, ACCORDINGLY, HAD NO PACKING FOR THE SLIP COVERS AS SUCH EXCEPT THAT EACH COVER WOULD BE PLACED IN A GROCER'S PAPER BAG. SEPARATE EXPORT PACKING OF THE SLIP COVERS WAS AUTHORIZED AND DIRECTED BY LATER MODIFICATION AFTER NEGOTIATION WITH THE CONTRACTOR ON THE APPROPRIATE PRICE INCREASE. (OD. 7 TO CONTRACT DA 11-009-QM-24959 AND MOD. 5 TO CONTRACT DA 11-009-QM-24951.) IN SUBSEQUENT MODIFICATIONS THE F.O.B. DELIVERY POINT WAS CHANGED TO RANKIN MANUFACTURING COMPANY, CEDAR FALLS, IOWA. (MOD. 8 TO CONTRACT DA 11-009-QM-24959 AND MOD. 6 TO CONTRACT DA 11-009-QM-24951.) THE PRICE OF THE TWO CONTRACTS WAS INCREASED BY A TOTAL OF $48,436.90 TO COMPENSATE THE CONTRACTOR FOR THE SEPARATE PACKING OF THE SLIP COVERS. (MOD. 9 OF CONTRACT DA 11-009-QM- 24959 AND MOD. 7 OF CONTRACT DA 11-009-QM-24951.)

THE WINTER SLIP COVER MATERIAL WAS SHIPPED DIRECTLY FROM TILTON TEXTILE CORPORATION TO RELIANCE MANUFACTURING COMPANY (WITH WHOM LEVIN HAD ENTERED INTO A SUBCONTRACT FOR THE SLIP COVERS) MARKED FOR LEVINBROTHERS. ACCORDING TO THE UNIT ALLOWANCES ESTABLISHED IN THE CONTRACTS 51,148 YARDS SHOULD HAVE BEEN FURNISHED UNDER CONTRACT DA 11 009-QM-24951 AND 139,872 YARDS SHOULD HAVE BEEN FURNISHED UNDER CONTRACT DA 11-009-QM-24959. THE MATERIAL WAS TO BE DELIVERED IN FOUR COLORS, TURQUOISE, GREEN, PETAL PINK AND RUST WITH SUBSTANTIALLY EQUAL QUANTITIES OF EACH COLOR. THE TILTON TEXTILE CONTRACT FILE SHOWS THAT 48,554 1/2 NET YARDS WERE FURNISHED TO RELIANCE MANUFACTURING COMPANY FOR LEVIN BROS., INC., UNDER CONTRACT NO. DA 11-009-QM-24951 AND 137,719 1/4 NET YARDS WERE FURNISHED FOR CONTRACT NO. DA 11-009-QM 24959. THE SHIPMENTS BEGAN SEPTEMBER 26, 1955 AND ENDED JULY 24, 1956.

MOST OF THE MATERIAL FOR THE SUMMER SLIP COVERS WAS SHIPPED DIRECTLY TO RELIANCE MANUFACTURING COMPANY MARKED FOR LEVIN BROTHERS FROM BATAVIA MILLS, INC. THE BATAVIA MILLS CONTRACT FILE SHOWS THAT 146,537 NET YARDS WERE SHIPPED BEGINNING ON SEPTEMBER 30, 1955, AND ENDING ON DECEMBER 7, 1956. SINCE THE QUANTITY SHIPPED FROM BATAVIA MILLS WAS 44,483 YARDS LESS THAN THE QUANTITY THAT WOULD BE REQUIRED BASED ON THE UNIT ALLOWANCE SPECIFIED IN THE CONTRACTS, IT IS APPARENT THAT THE CONTRACTOR WAS ALSO FURNISHED OTHER MATERIAL FROM ANOTHER SOURCE. ONE OF THE SHIPPING DOCUMENTS IN THE FILE THAT WAS ORIGINALLY WRITTEN FOR SHIPMENT TO THE CONTRACTOR'S PLANT AND CANCELLED BY REASON OF THE CHANGE IN DESTINATION WHEN THE GOVERNMENT WAS ADVISED THAT RELIANCE MANUFACTURING COMPANY WAS THE SUBCONTRACTOR AND DIRECT SHIPMENT WAS DESIRED SHOWS THAT 42,424 YARDS WERE SCHEDULED TO BE SHIPPED FROM DELSEY FABRICS TO LEVIN BROS., INC. IT IS ASSUMED THAT THIS SHIPMENT WAS MADE TO RELIANCE MANUFACTURING COMPANY BUT THE TIME OF SHIPMENT AND THE QUALITY OF THE MATERIAL CANNOT BE ESTABLISHED INASMUCH AS THE DELSEY CONTRACT FILE HAS BEEN DESTROYED. BATAVIA MILLS WAS MAKING ONLY THE STRIPED AND PROVINCIAL PRINTS. DELSEY WAS MAKING THE TRADITIONAL, LARGE FLORAL PRINT AND THE CONTRACTOR ALLEGES THAT IT HAD NUMEROUS DIFFICULTIES WITH THE LARGE FLORAL PRINT. HOWEVER, IT APPEARS THAT THE LARGE FLORAL PRINT WOULD ONLY ACCOUNT FOR APPROXIMATELY 11 PERCENT OF THE MATERIAL FURNISHED THE SUBCONTRACTOR FOR THE USE OF LEVIN BROS., INC.

IT THUS APPEARS THAT THE INITIAL SHIPMENTS OF THE WINTER AND SUMMER SLIP COVER MATERIALS WERE EFFECTED APPROXIMATELY SIX AND TEN WEEKS LATER THAN THE RESPECTIVE CONTRACTS HAD ENVISIONED. HOWEVER, THERE IS SOME INDICATION THAT THE INITIAL SHIPMENT OF THE WINTER SLIP COVER MATERIAL WAS ACTUALLY DELAYED FOR THE CONVENIENCE OF THE CONTRACTOR INASMUCH AS THE CONTRACTOR INTENDED TO SUBCONTRACT MANUFACTURE OF THE SLIP COVERS AND DID NOT HAVE A SUBCONTRACT ARRANGEMENT MADE AT THE TIME THE INITIAL SHIPMENT COULD HAVE BEEN MADE.

IT IS STATED IN THE CONTRACTOR'S CLAIM THAT ITS SUBCONTRACTOR DID NOT RECEIVE COLOR SWATCHES SO THAT IT COULD PURCHASE ZIPPERS, THREAD AND OTHER COMPONENTS UNTIL OCTOBER 27, 1955. THE INITIAL SHIPMENTS OF GOVERNMENT- FURNISHED FABRIC HAD BEEN MADE SEPTEMBER 26 AND 30, 1955, AND IT IS APPARENT THAT RELIANCE MANUFACTURING COMPANY WAS NOT DELAYED IN THE PURCHASE OF MATCHING COMPONENTS BEYOND THE RECEIPT OF THE ACTUAL MATERIAL TO BE USED. SINCE CLAIMANT DID NOT ENTER INTO A SUBCONTRACT WITH RELIANCE UNTIL SEPTEMBER 6, 1955, DELAY IN THE CONTRACT COULD NOT BE ATTRIBUTABLE TO GOVERNMENT ACTION OR INACTION FOR A PERIOD OF MORE THAN THREE TO FOUR WEEKS.

THE CONTRACTOR CONTENDS THAT RELIANCE MANUFACTURING COMPANY SUBMITTED ITS FIRST PREPRODUCTION SAMPLES ON NOVEMBER 29, 1955, AND THAT THE CONTRACTOR WAS ADVISED ON JANUARY 27, 1956, THAT THE SAMPLES WERE NOT APPROVED "BECAUSE OF FAILURE TO MATCH DESIGN.' THE CONTRACTOR FURTHER CONTENDS THAT ITS SUBCONTRACTOR SUBMITTED FURTHER SAMPLES ON FEBRUARY 24, 1956, AND THAT ON MARCH 27, 1956, IT WAS ADVISED THAT THE SOLID COLOR SLIP COVERS WERE APPROVED AS TO CONSTRUCTION BUT THE FLORAL COVER WAS REJECTED. CONTRACTOR FURTHER STATES THAT ITS SUBCONTRACTOR SUBMITTED ADDITIONAL FLORAL SAMPLES ON APRIL 17, 1956.

THE REPORT OF THE RESEARCH AND DEVELOPMENT COMMAND (R AND D) TO THE QUARTERMASTER GENERAL ON THE SLIP COVERS SHOWS ONLY THE LARGE FLORAL PATTERNED SLIP COVER AS BEING UNSATISFACTORY. OTHER CORRESPONDENCE INDICATES THAT APPROVAL OF SLIP COVERS WAS GIVEN BY LETTERS DATED JANUARY 26 AND 27, 1956, AND THAT SUPPLIER OF SLIP COVERS WAS ON FEBRUARY 27, 1956, CONSIDERED ABOUT TO COMMENCE PRODUCTION ON ALL COVERS BUT THE FLORAL PRINTED FOR WHICH A FURTHER SAMPLE WAS REQUIRED. FROM THE R AND D REPORT AND THE CORRESPONDENCE IT IS INFERRED THAT ALL PREPRODUCTION SAMPLES EXCEPT THE FLORAL PRINTED ONE WERE ACCEPTED BY JANUARY 27, 1956, ALTHOUGH SOME DEFECTS MAY HAVE BEEN SUBJECT TO CORRECTION IN PRODUCTION. IT IS OBVIOUS THAT THE SOLID COLOR SLIP COVERS WOULD NOT HAVE BEEN REJECTED ON JANUARY 27, 1956, AS CONTENDED BY THE CONTRACTOR FOR FAILURE TO MATCH DESIGN.

THE ARMY REPORTS THAT RELIANCE MANUFACTURING COMPANY HAD GOVERNMENT FURNISHED MATERIAL ON HAND IN THE LATTER PART OF JANUARY 1956 AND HAD HAD SUCH MATERIAL ON HAND FOR APPROXIMATELY FOUR MONTHS DURING WHICH MATCHING ZIPPERS AND OTHER COMPONENTS COULD HAVE BEEN ORDERED. DURING JANUARY AND FEBRUARY OF 1956 THE SHIPPING POINT FOR THE SLIP COVERS HAD NOT BEEN CHANGED AND WAS, ACCORDINGLY, LEVIN BROS., INC. THERE APPEARS TO BE NO REASON WHY THE SUBCONTRACTOR, RELIANCE MANUFACTURING COMPANY, COULD NOT HAVE PRODUCED APPROXIMATELY 89 PERCENT OF THE SLIP COVERS AND SHIPPED THEM TO THE PRIME CONTRACTOR IF IT HAD DESIRED TO DO SO.

HOWEVER, FROM THE R AND D REPORT IT APPEARS THAT CENTERING WITH RESPECT TO THE FLORAL DESIGN ONLY WAS REQUIRED. THIS MAY HAVE BEEN IN EXCESS OF THE CONTRACTOR'S EXPECTATIONS AT THE TIME ITS BID WAS SUBMITTED IN VIEW OF THE CONTRACTING OFFICER'S STATEMENT THAT CENTERING OF A PRINT WOULD NOT BE REQUIRED. HOWEVER, THIS REQUIREMENT COULD ONLY HAVE AFFECTED A SMALL PERCENTAGE OF THE SLIP COVERS PRODUCED AND THE EXTENT TO WHICH IT INCREASED CONTRACTOR'S COST CANNOT BE DETERMINED.

THE TILTON TEXTILE CORPORATION FILE, COVERING APPROXIMATELY ONE-HALF OF THE SLIP COVER MATERIAL FURNISHED RELIANCE MANUFACTURING COMPANY FOR LEVIN BROS., INC., SHOWS THAT THE MATERIAL ACCEPTED WAS SPECIFICATION MATERIAL AND THAT THE ONLY DEVIATION GRANTED WAS PERMISSION TO SHIP 8,462 3/4 YARDS OF SHORT LENGTHS (BETWEEN 20 AND 49 7/8 YARDS) IN EXCESS OF THOSE PERMITTED BY THE CONTRACT.

THE BATAVIA MILLS CONTRACT FILE SHOWS THAT THE MATERIAL FURNISHED WAS NOT OF PERFECT QUALITY. HOWEVER, THE DEFICIENCIES IN THE MATERIAL WERE PRIMARILY DEFECTS THAT WOULD AFFECT THE CLEANING AND SERVICEABILITY OF THE MATERIALS RATHER THAN ITS USE IN MANUFACTURE OF COVERS. CONTRACTOR'S COMPLAIN CONCERNS THE APPEARANCE OF THE STRIPED OR PRINTED MATERIALS. THE BATAVIA MILLS CONTRACT FILE COVERING 146,537 OF THE 189,961 YARDS OF STRIPPED OR PRINTED MATERIAL NOT ONLY CONTAINS NO INDICATION THAT THE APPEARANCE WAS AFFECTED BY THE DEFECTS FOUND IN TESTING THE MATERIAL BUT STATES IN SEVERAL PLACES THAT VARIOUS YARDAGES OF THE MATERIAL HAD PASSED VISUAL EXAMINATION. THE PAYMENT RECORD SHOWS THAT FINAL PAYMENT WAS MADE UNDER CONTRACT DA 11 009-QM-24959 ON MAY 27, 1957, AND THAT FINAL PAYMENT WAS MADE UNDER CONTRACT DA 11-009-QM-24951 ON APRIL 16, 1957.

LT.COL. W. D. WILLIAMS WAS THE CONTRACTING OFFICER OF THE TWO CONTRACTS INVOLVED IN THIS CLAIM FROM NOVEMBER OR DECEMBER 1955. HE HAS BEEN INTERVIEWED CONCERNING THE CONTENTIONS IN THE CONTRACTOR'S CLAIM. ALTHOUGH HIS MEMORY OF THE EVENTS THAT TRANSPIRED DURING THE COURSE OF THESE TWO CONTRACTS IS NO LONGER DETAILED, HE DOES REMEMBER MAKING TWO VISITS TO THE PLANT OF RELIANCE MANUFACTURING COMPANY. ONE OF THE TRIPS WAS IN JUNE OR JULY 1956. THE PRIME CONTRACTOR WAS ASSURING THE CONTRACTING OFFICER AT THAT TIME THAT THE SLIP COVERS WOULD BE DELIVERED VERY SOON. THE CONTRACTING OFFICER ASKED THE PRIME CONTRACTOR IF THERE WAS AN OBJECTION TO HIS MAKING A TRIP TO RELIANCE TO SEE WHY THE COVERS WEREN-T BEING PRODUCED. THE PRIME CONTRACTOR DID NOT OBJECT. AT THAT TIME THE CONTRACTING OFFICER FOUND THAT RELIANCE HAD PRODUCED ONLY 7 OR 8 COVERS FOR PREPRODUCTION SAMPLES. RELIANCE WAS NOT WORKING ON THE COVERS AT ALL. THEY WERE WORKING EXCLUSIVELY ON OTHER GOVERNMENT AND CIVILIAN BUSINESS. STACKS OF GOVERNMENT-FURNISHED PROPERTY WERE IN THE PLANT BUT NOT BEING USED.

IN SEPTEMBER OF 1956 THE CONTRACTING OFFICER WAS REQUIRED BY HIS SUPERIOR TO GO BACK TO THE RELIANCE PLANT BECAUSE NO SLIP COVERS WERE BEING DELIVERED AND NO KNOWN PROGRESS HAD BEEN MADE. THE CONTRACTING OFFICER FOUND NO EVIDENCE OF ANY PRODUCTION OF THE SLIP COVERS TAKING PLACE. TOLD RELIANCE THAT ACTION WAS GOING TO BE TAKEN WITH THE PRIME CONTRACTOR TO TERMINATE THE SLIP COVER PORTION OF THE CONTRACT. ONE OF THE MEN AT RELIANCE CALLED THE PRIME CONTRACTOR AND TOLD IT TO FIND ANOTHER SUBCONTRACTOR. THE REASON GIVEN THE CONTRACTING OFFICER FOR THE LACK OF PRODUCTION BY PERSONNEL OF RELIANCE MANUFACTURING COMPANY WAS THAT THE PRODUCTION OF THE SLIP COVERS HAD ORIGINALLY BEEN PLANNED TO PHASE IN WITH OTHER WORK BUT THAT DUE TO THE DELAY IN APPROVING THE SAMPLES THE RELIANCE MANUFACTURING COMPANY HAD TAKEN ON OTHER WORK AND DID NOT INTEND TO BREAK DOWN ITS CURRENT MANUFACTURING CHAIN TO WORK IN PRODUCTION OF SLIP COVERS. IT IS THE CONTRACTING OFFICER'S MEMORY THAT RELIANCE DID NOT COMPLAIN ABOUT THE DELAY IN APPROVING PREPRODUCTION SAMPLES UNTIL HIS SECOND TRIP AND THAT THEY NEVER MENTIONED ANY PROBLEM WITH THE QUALITY OF THE GOVERNMENT FURNISHED MATERIALS.

THE CONTRACTING OFFICER REMEMBERS THAT THERE WERE DIFFICULTIES IN REMOVING THE GOVERNMENT-FURNISHED MATERIALS FROM THE PLANT OF RELIANCE MANUFACTURING COMPANY BECAUSE THE COMPANY HAD MADE NO EFFORT TO KEEP THE MATERIALS SEGREGATED BY TYPE OR YARDAGES AND, CONSEQUENTLY, THE MATERIAL WAS IN NO SHAPE TO INVENTORY. AFTER MORE THAN ONE VISIT FROM THE GOVERNMENT-FURNISHED PROPERTY ADMINISTRATOR, RELIANCE MANUFACTURING COMPANY FINALLY GOT THE MATERIAL IN SHAPE TO INVENTORY.

THE CONTRACTING OFFICER ALSO REMEMBERS THAT SUBSEQUENT TO THE TERMINATION FOR DEFAULT OF THE SLIP COVER PORTION OF THE CONTRACTS, WHICH WAS EFFECTED IN SEPTEMBER 1956, MR. SINYKIN OF LEVIN BROS., INC., TOLD HIM THAT RANKIN MANUFACTURING COMPANY WOULD MANUFACTURE THE SLIP COVERS AND PRACTICALLY BEGGED FOR REINSTATEMENT OF THAT PORTION OF ITS CONTRACT. THE GOVERNMENT KNEW OF NO BETTER SOURCE FOR THE COVERS THAN RANKIN MANUFACTURING COMPANY, THE COVERS WERE BADLY NEEDED AND IT WAS RECOGNIZED THAT THE GOVERNMENT- FURNISHED MATERIAL DELIVERIES HAD NOT BEGUN AS CONTEMPLATED IN THE CONTRACTS. THE CONTRACTING OFFICER ALSO REMEMBERS THAT AFTER RANKIN MANUFACTURING COMPANY STARTED PRODUCTION IT COMPLAINED THAT THE INSPECTOR WAS BEING OVERCRITICAL OF ITS INABILITY TO MATCH MATERIALS. RANKIN MANUFACTURING COMPANY WAS FURNISHED ADDITIONAL MATERIAL AS WELL AS THAT ORIGINALLY FURNISHED RELIANCE MANUFACTURING COMPANY. THE SOURCE AND AMOUNT OF THE ADDITIONAL MATERIAL CANNOT BE DETERMINED. HOWEVER, THE CONTRACTING OFFICER REMEMBERS THAT RANKIN WAS TOLD TO DO THE BEST IT COULD WITH THE MATERIAL IT HAD AND THE INSPECTOR WAS ADVISED NOT TO BE OVERCRITICAL ON MATCHING. THE CONTRACTING OFFICER MADE FOUR TRIPS TO RANKIN'S PLANT. THE FIRST WAS TO EXAMINE THE PREPRODUCTION SAMPLE WHICH DIDN-T FIT THE FURNITURE. A SECOND SAMPLE WAS SUBMITTED AND APPROVED PRIOR TO THE CONTRACTING OFFICER'S SECOND VISIT. ON ONE OF THE NEXT THREE TRIPS THE CONTRACTING OFFICER FOUND THAT THE RANKIN MANUFACTURING COMPANY'S PLANT WAS CLOSED AND HAD BEEN CLOSED FOR A WEEK TO TEN DAYS. THE CONTRACTING OFFICER RECEIVED THE IMPRESSION THAT RANKIN MANUFACTURING COMPANY HAD CONTRACTED TO DO MORE THAN IT WAS CAPABLE OF HANDLING. REMEMBERS THAT THE PLANT WAS POORLY OPERATED AND INEFFICIENT AND THAT IT HAD VARIOUS TROUBLE SUCH AS THE DEATH OF ITS OWNER.

THE CONTRACTING OFFICER IS SURE THAT NEITHER HE NOR ANYONE IN HIS PRESENCE ADVISED ANYONE REPRESENTING LEVIN BROS., INC., TO FILE A CLAIM. DURING THE LATTER PART OF THE CONTRACT MR. SINYKIN OF LEVIN BROS., INC., TOLD THE CONTRACTING OFFICER SEVERAL TIMES THAT HE WAS GOING TO FILE A CLAIM VERY SOON. THE CONTRACTING OFFICER HAD THE IMPRESSION THAT MR. SINYKIN INTENDED TO PRESENT FIGURES TO HIM FOR A FINDING BUT EACH TIME MR. SINYKIN WAS ASKED WHAT FIGURE HE HAD IN MIND HE WOULD SAY THAT HE HADN-T WORKED IT OUT YET BUT IT WAS GOING TO BE A LARGE FIGURE. THE CONTRACTOR NEVER REQUESTED THE CONTRACTING OFFICER TO ADJUST THE CONTRACT PRICE TO COMPENSATE IT FOR THE FURNISHING OF DEFECTIVE GOVERNMENT-FURNISHED PROPERTY. THE ONLY REQUEST FOR AN ADJUSTMENT IN CONTRACT PRICE TO COMPENSATE THE CONTRACTOR FOR INCREASED COSTS THAT COULD HAVE BEEN ATTRIBUTABLE TO DELAY IN DELIVERING GOVERNMENT-FURNISHED PROPERTY CONCERNED ONLY INCREASED COSTS DUE TO THE REQUIRED SEPARATE PACKING OF THE SLIP COVERS. WITHOUT EITHER A REQUEST FOR CONTRACT PRICE ADJUSTMENT OR SPECIFIC DETAILS OF THE CONTRACTOR'S COSTS, THE CONTRACTING OFFICER WAS NOT IN A POSITION TO ISSUE A FINDING OF FACT. THE CONTRACTOR DID NOT REQUEST THAT FINAL PAYMENT BE DELAYED.

THE MATERIAL THAT WAS ORIGINALLY FURNISHED TO RELIANCE MANUFACTURING COMPANY WAS LATER USED TO MANUFACTURE MOST OF THE SLIP COVERS.

THE TRANSFER OF THE GOVERNMENT-FURNISHED MATERIAL FROM RELIANCE MANUFACTURING COMPANY TO RANKIN MANUFACTURING COMPANY WAS CONSIDERED BY BOTH THE GOVERNMENT AND THE CONTRACTOR TO BE FOR THE CONVENIENCE OF THE CONTRACTOR. COPIES OF THE CONTRACT SHOW THAT THE CONTRACTOR SIGNED TWO SUPPLEMENTAL AGREEMENTS, MODIFICATION NO. 6 TO CONTRACT NO. DA 11-009-QM- 24951 DATED OCTOBER 29, 1956, AND MODIFICATION NO. 8 TO CONTRACT NO. DA 11 -009-QM-24959 DATED OCTOBER 31, 1956, WHICH PROVIDED THAT THE CONTRACTOR WAS AUTHORIZED TO TRANSFER THE GOVERNMENT-FURNISHED PROPERTY FROM RELIANCE MANUFACTURING COMPANY TO RANKIN MANUFACTURING COMPANY AT ITS OWN EXPENSE. THE F.O.B. DELIVERY POINT FOR THE SLIP COVERS WAS CHANGED TO RANKIN MANUFACTURING COMPANY, CEDAR FALLS, IOWA. THE CONTRACTOR SPECIFICALLY AGREED THAT IT WOULD BEAR ANY ADDITIONAL COSTS OCCASIONED BY THE CHANGE OF F.O.B. POINT AND THAT ANY SAVINGS WOULD ACCRUE TO THE GOVERNMENT. SINCE THE CONTRACTOR AGREED IN WRITING AT THE TIME OF THE TRANSFER OF GOVERNMENT -FURNISHED MATERIAL THAT IT WAS TO BE AT ITS OWN EXPENSE, THAT PORTION OF ITS CURRENT CLAIM TOTALING $5,178.37 MUST BE DENIED IN ITS ENTIRETY.

INITIAL DELIVERIES OF THE GOVERNMENT-FURNISHED MATERIALS WERE APPROXIMATELY SIX AND TEN WEEKS SUBSEQUENT TO THE DATES THAT THE RESPECTIVE CONTRACTS ENVISIONED DELIVERIES WOULD BEGIN. HOWEVER, SUBSTANTIAL DELIVERIES OF MATERIALS HAD BEEN MADE IN SEPTEMBER AND NOVEMBER 1955 AND THE SUBCONTRACTOR HAD NOT PRODUCED SLIP COVERS FROM THE MATERIAL BY JUNE 1956. IT IS APPARENT THAT THE CAUSE OF THE SUBCONTRACTOR'S DELAY IN PRODUCING THE COVERS WAS SOMETHING OTHER THAN THE GOVERNMENT'S INITIAL LATE DELIVERIES. THE CONTRACT DELIVERY SCHEDULES ORIGINALLY COVERED NO MORE THAN A PERIOD OF FOUR MONTHS. THE CONTRACTOR WAS FINALLY PERMITTED TO DELIVER THE SLIP COVERS FROM NOVEMBER 1956 TO MARCH 1957 OR MORE THAN ONE YEAR SUBSEQUENT TO THE INITIAL DELIVERY OF GOVERNMENT-FURNISHED PROPERTY. INSOFAR AS TIME FOR PERFORMANCE WAS CONCERNED, IT IS OBVIOUS THAT THE CONTRACTOR WAS ADEQUATELY COMPENSATED FOR ANY DELAY IT MAY HAVE SUFFERED THROUGH GOVERNMENT DELAY IN DELIVERING THE GOVERNMENT-FURNISHED PROPERTY.

ARTICLE 41 (A) OF THE GENERAL PROVISIONS OF THE CONTRACT PROVIDED AS FOLLOWS:

"41. GOVERNMENT-FURNISHED PROPERTY.--- (A) THE GOVERNMENT SHALL DELIVER TO THE CONTRACTOR, FOR USE IN CONNECTION WITH AND UNDER THE TERMS OF THIS CONTRACT, THE PROPERTY WHICH THE SCHEDULE OR THE SPECIFICATIONS STATE THE GOVERNMENT WILL FURNISH (HEREINAFTER REFERRED TO AS ,GOVERNMENT-FURNISHED PROPERTY).' THE DELIVERY OR PERFORMANCE DATES FOR THE SUPPLIES OR SERVICES TO BE FURNISHED BY THE CONTRACTOR UNDER THIS CONTRACT ARE BASED UPON THE EXPECTATION THAT GOVERNMENT FURNISHED PROPERTY OF A TYPE SUITABLE FOR USE WILL BE DELIVERED TO THE CONTRACTOR AT THE TIMES STATED IN THE SCHEDULE OR IF NOT SO STATED IN SUFFICIENT TIME TO ENABLE THE CONTRACTOR TO MEET SUCH DELIVERY OR PERFORMANCE DATES. IN THE EVENT THAT GOVERNMENT- FURNISHED PROPERTY IS NOT DELIVERED TO THE CONTRACTOR BY SUCH TIME OR TIMES, THE CONTRACTING OFFICER SHALL, IF REQUESTED BY THE CONTRACTOR, MAKE A DETERMINATION OF THE DELAY OCCASIONED THE CONTRACTOR THEREBY, AND SHALL GRANT TO THE CONTRACTOR A REASONABLE EXTENSION OF TIME IN RESPECT OF SUCH DELIVERY OR PERFORMANCE DATES. THE GOVERNMENT SHALL NOT BE LIABLE TO THE CONTRACTOR FOR DAMAGES OR LOSS OF PROFIT BY REASON OF ANY DELAY IN DELIVERY OF OR FAILURE TO DELIVERY ANY OR ALL OF THE GOVERNMENT FURNISHED PROPERTY, EXCEPT THAT IN CASE OF SUCH DELAY OR FAILURE, UPON WRITTEN REQUEST OF THE CONTRACTOR, AN EQUITABLE ADJUSTMENT SHALL BE MADE IN THE DELIVERY OR PERFORMANCE DATES, OR PRICE, OR BOTH, AND IN ANY OTHER CONTRACTUAL PROVISION AFFECTED THEREBY, IN ACCORDANCE WITH THE PROCEDURES PROVIDED FOR IN THE CLAUSE OF THIS CONTRACT ENTITLED "CHANGES.'"

IN THE LIGHT OF THESE PROVISIONS, AND THE TERMS OF THE MODIFICATIONS OF OCTOBER 1956, WHICH RESCINDED THE DEFAULT TERMINATIONS OF SEPTEMBER 1956, FIXED A NEW DELIVERY SCHEDULE, INCREASED THE CONTRACT PRICE TO COVER THE ADDITIONAL COST OF SEPARATE PACKING AND SHIPPING OF THE SLIP COVERS, AND RECITED THAT THE CONTRACTOR WAIVED ANY AND ALL CLAIMS AGAINST THE GOVERNMENT BASED ON THE DEFAULT TERMINATION NOTICE, WE FIND NO BASIS FOR ALLOWANCE OF ANY PART OF THE PRESENT CLAIMS. THE QUOTED PROVISIONS EXPRESSLY STATE THAT THE CONTRACTOR WILL NOT BE ENTITLED TO DAMAGES OR LOSS OF PROFIT FOR FAILURE BY THE GOVERNMENT TO FURNISH MATERIAL AS REQUIRED THEREBY. FURTHERMORE, IN CONNECTION WITH REINSTATEMENT OF THE SLIP COVER PORTION OF THE CONTRACTS THE CONTRACTOR DID NOT MAKE A TIMELY REQUEST FOR ADJUSTMENT OF ITS CONTRACT PRICE UNDER THE GOVERNMENT- FURNISHED PROPERTY CLAUSE, AND ANY CLAIM AT THE PRESENT TIME ON THAT BASIS MUST BE CONSIDERED UNTIMELY. P.L.S. COAT AND SUIT CORP. V. UNITED STATES, 180 F.SUPP. 400.

IN VIEW OF THE FOREGOING, WE FIND NO BASIS FOR THE ALLOWANCE OF ANY PART OF THE CLAIM.