B-143250, AUG. 17, 1960

B-143250, AUG. 17, 1960

TO REAR ADMIRAL PAUL D. STROOP:

REFERENCE IS MADE TO A LETTER DATED APRIL 13, 1960 (L-121:SAS), FROM YOUR OFFICE, FURNISHING A REPORT ON A CLAIM OF THE WINDER AIRCRAFT CORPORATION OF FLORIDA, UNDER CONTRACT NORD-17005, ENTERED INTO ON MARCH 28, 1956, FOR THE PROCUREMENT OF MISSILE CRADLES AT PRICES AGGREGATING THE SUM OF $17,153.05.

IT WAS EXPLAINED THAT THE COMPANY'S CLAIM FOR PAYMENT OF THE ADDITIONAL SUM OF $50,531.53 UNDER THE CONTRACT WAS NOT CONSIDERED TO BE ELIGIBLE FOR ADJUSTMENT UNDER THE FIRST WAR POWERS ACT, 1941, AS AMENDED, OR UNDER THE SUCCESSOR LEGISLATION, PUBLIC LAW 85-804. ALSO, COMMENTS WERE FURNISHED WITH RESPECT TO THE THREE MAJOR FACTORS ON WHICH THE CLAIM IS BASED, WHICH RELATED TO (1) THE CONTRACTOR'S COMPLAINT THAT THE GOVERNMENT WAS RESPONSIBLE FOR FOUR WORK STOPPAGES; (2) THE CONTRACTOR'S COMPLAINT THAT MATERIAL COSTS HAD INCREASED DURING THE PERIOD OF CONTRACT PERFORMANCE; AND (3) THE CONTRACTOR'S COMPLAINT THAT INADEQUATE SPECIFICATIONS AND DRAWINGS CAUSED DELAYS IN PRODUCTION.

THIS CLAIM AND ANOTHER CLAIM OF THE SAME CONTRACTOR UNDER A CONTRACT WITH THE DEPARTMENT OF THE ARMY WERE THE SUBJECT OF A RECENT CONFERENCE HELD IN OUR OFFICE WITH REPRESENTATIVES OF THE WINDER AIRCRAFT CORPORATION AND ITS ASSIGNEE, THE SEMINOLE BANK OF TAMPA. THEY OFFERED TO SUBMIT ADDITIONAL INFORMATION IN SUPPORT OF EACH CLAIM.

BY LETTER DATED JULY 16, 1960, COPY ENCLOSED, THE CONTRACTOR'S ATTORNEYS SUBMITTED COPIES OF CORRESPONDENCE AND COMPANY MEMORANDA INCLUDING A COPY OF A MEMORANDUM DATED APRIL 3, 1957, SIGNED BY THREE OF THE CONTRACTOR'S EMPLOYEES. THE WRITER, MR. JOEL T. HENRY, REFERRED TO A TELEPHONE CALL ON APRIL 3, 1957, TO MR. WILLIAM H. SIMMET; STATED THAT WORK STOPPAGES WERE DISCUSSED IN THE TELEPHONE CONVERSATION; AND THAT REFERENCE WAS MADE TO A LETTER FROM MR. CHESTER L. DONNELLY--- SHOWN TO MR. SIMMET ON MARCH 26, 1957--- ADVISING THE CONTRACTOR THAT THE NAVY WAS NOT STOPPING PRODUCTION BUT JUST WAS NOT ACCEPTING ANY ADDITIONAL CRADLES. IN A NOTE AT THE BOTTOM OF THE MEMORANDUM, MARKED "F.S., " IT IS INDICATED THAT MR. JAMES L. GREEN, ONE OF THE SIGNERS OF THE MEMORANDUM, HAD STATED TO THE WRITER THAT ALL PRODUCTION FOR CONTRACT NORD-17005 WAS STOPPED AT APPROXIMATELY 10 A.M., E.S.T., ON AUGUST 15, 1956, BY MR. CHESTER L. DONNELLY, U.S. NAVAL INSPECTOR.

WE WERE REQUESTED TO CONTACT THE DEPARTMENT OF THE NAVY IN AN EFFORT TO LOCATE THE LETTER FROM MR. DONNELLY WHICH APPEARS TO HAVE BEEN TURNED OVER TO MR. SIMMET BUT NOT RETURNED. IN A LETTER DATED AUGUST 2, 1960, MR. GORDON E. MARKS, PRESIDENT OF THE SEMINOLE BANK OF TAMPA, STATES THAT HE REMEMBERS THIS LETTER FROM MR. DONNELLY AND IN IT MR. DONNELLY ADVISED THE CONTRACTOR THAT WORK HAD BEEN STOPPED ON THE GUIDED MISSILE CRADLE CONTRACT BECAUSE OF CERTAIN ENGINEERING DIFFICULTIES AND TECHNICALITIES.

WE HAVE RECEIVED A SECOND LETTER DATED JULY 28, 1960, FROM THE CONTRACTOR'S ATTORNEYS, A COPY OF WHICH IS ALSO ENCLOSED. IT WILL BE NOTED THAT THE LETTER CITES DECISIONS OF THE ARMED SERVICES BOARD OF CONTRACT APPEALS AS SUPPORTING THE CLAIM UNDER THE ARMY CONTRACT AND STATES THAT THE SAME DECISIONS ALSO HAVE A BEARING ON THE VALIDITY OF THE CLAIM UNDER NAVY CONTRACT NORD-17005.

IT IS ARGUED THAT THE DESIGN OF THE EQUIPMENT WAS NOT OF A QUALITY TO PRODUCE THE ITEM WITHOUT CAUSING THE CONTRACTOR EXCESSIVE COSTS; THAT THE CONTRACTOR WAS REQUIRED TO PERFORM CERTAIN TESTS WHICH WERE NOT ANTICIPATED; THAT SOME OF THE DISCREPANCIES IN THE PLANS WERE CORRECTED BY VERBAL AUTHORIZATION OF PERSONNEL IN THE OFFICE OF THE CONTRACTING OFFICER; AND THAT, IN MAKING THESE CHANGES, THE CONTRACTOR THEN RAN INTO DIFFICULTIES WITH THE NAVY INSPECTOR. IT IS ALLEGED THAT IN THE LAST CONFERENCE ON THE MATTER WITH NAVY OFFICIALS IT WAS INDICATED THAT NEW PLANS AND SPECIFICATIONS WERE USED FOR THE PRODUCTION OF ITEMS OF THE SAME TYPES UNDER A SUBSEQUENT CONTRACT WITH ANOTHER FIRM AT A SUBSTANTIAL INCREASE IN COST OVER THE PRICE PAYABLE UNDER CONTRACT NORD-17005.

WE WOULD APPRECIATE YOUR FURTHER COMMENTS ON THE CLAIM AND REQUEST THAT WE BE FURNISHED A COPY OF MR. DONNELLY'S LETTER, IF AVAILABLE, TOGETHER WITH A TRANSCRIPT OR THE ORIGINAL COMPLETE FILE OF THE NAVY CONCERNING THIS CLAIM, INCLUDING THE PERTINENT SPECIFICATIONS AND DRAWINGS. IT IS ALSO REQUESTED THAT WE BE FURNISHED A CITATION TO THE APPROPRIATION OR ACCOUNT CHARGEABLE IN THE EVENT OF AN ALLOWANCE OF ANY PORTION OF THE CLAIM, THE ORIGINALS OR APPROPRIATE COPIES OF THE SPECIFICATIONS, DRAWINGS, ETC., APPLICABLE TO THE SUBSEQUENT CONTRACT FOR THE SAME ITEMS, AND A REFERENCE TO THE CONTRACT INVOLVED, GIVING THE NUMBER AND DATE OF THE CONTRACT.