B-172925, DEC 9, 1971

B-172925, DEC 9, 1971

CONTRACTS - IMPLIED - UNAUTHORIZED ACTS OF GOVERNMENT AGENTS DECISION DENYING CLAIM OF SEAHOL CONTRACTING COMPANY, CHARLESTON, S.C., FOR REPAIR OF A CRANKSHAFT USED IN THE ENGINE OF A NAVY MINESWEEP SHIP. IT IS CONTENDED, BASED ON WILLIAMS V UNITED STATES, 130 CT. CLS. 435, THAT THE GOVERNMENT IS OBLIGATED BY IMPLIED CONTRACT TO PAY THE REASONABLE COST OF THE REPAIRS. THE IMPLIED CONTRACT IS ALLEGED ON THE WORK OF CAPTAIN WAYNE L. ZIMMERMAN AND RATIFICATION BY THE NAVY WHEN IT ALLOWED THE WORK. CAPTAIN ZIMMERMAN, ON THE OTHER HAND, CONTENDS THAT HE WARNED SEAHOL THAT HE HAD NO CONTRACTING POWER AND THAT NO FUNDS WERE AVAILABLE FOR COMPENSATION. IN CORROBORATION, COMMANDER VENNING, FORCE COMMANDER, STATES THAT HE ALSO WARNED SEAHOL THAT NO FUNDS WERE AVAILABLE FOR COMPENSATION. FURTHER, COMMANDER VENNING STATES THAT HE INFORMED SEAHOL THAT THE ONLY OBLIGATION WHICH FORCE COMMAND COULD ACCEPT WOULD BE THE RISK OF OPERATING THE CRANKSHAFT IN THE SHIP'S ENGINE. AS A SUBSTANTIAL QUESTION OF FACT EXISTS AS TO WHETHER A "CONTRACT" CAME INTO BEING, THE CLAIM IS DENIED.

TO SELLERS, CONNER & CUNEO:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF MAY 6, 1971, WITH ENCLOSURES, PRESENTING A CLAIM IN THE AMOUNT OF $6,500, ON BEHALF OF THE SEAHOL CONTRACTING COMPANY, CHARLESTON, SOUTH CAROLINA, FOR REPAIR OF A CRANKSHAFT USED IN THE ENGINE OF A NAVY MINESWEEP SHIP.

IT IS CONTENDED THAT THE GOVERNMENT IS OBLIGATED ON THE BASIS OF AN IMPLIED CONTRACT TO PAY THE REASONABLE COST OF REPAIRING THE CRANKSHAFT. THAT CONTENTION IS BASED UPON THE RULING IN WILLIAMS V UNITED STATES, 130 CT. CL. 435, CERTIORARI DENIED, 349 U.S. 938 (1955), WHEREIN IT WAS DETERMINED THAT AN AGREEMENT BETWEEN THE PLAINTIFF AND AN AIR FORCE OFFICER, WHO WAS NOT AUTHORIZED TO BIND THE UNITED STATES IN THE FULLEST CONTRACTUAL SENSE, WAS RATIFIED THROUGH INACTION ON THE PART OF THE CONTRACTING OFFICER. THE COURT OF CLAIMS STATED, "IT SEEMS INCREDIBLE THAT (THE CONTRACTING OFFICER) DID NOT KNOW ALL ABOUT THE AGREEMENT AND BY HIS INACTION RATIFY IT."

IT IS STATED THAT IN NOVEMBER 1967, CAPTAIN WAYNE L. ZIMMERMAN, THEN COMMANDER OF THE MINESWEEP SUPPORT UNIT AT THE CHARLESTON NAVAL SHIPYARD, CONTACTED MR. LEWIS G. SEABROOK OF THE SEAHOL CONTRACTING COMPANY AND REQUESTED THAT SEAHOL ATTEMPT TO FIND A SATISFACTORY METHOD OF REMANUFACTURING AUSTENITIC STAINLESS STEEL NON-MAGNETIC CRANKSHAFTS OF PACKARD ENGINES INSTALLED IN A NUMBER OF MINESWEEP SHIPS. MR. SEABROOK PURPORTEDLY HAD A NUMBER OF CONVERSATIONS WITH CAPTAIN ZIMMERMAN WHICH CULMINATED IN AN ORAL AGREEMENT THAT SEAHOL WOULD ATTEMPT TO DEVELOP A PROCEDURE AND PERFORM WELD REPAIR ON A MINESWEEP ENGINE CRANKSHAFT. YOU INDICATE AN AGREEMENT WAS REACHED THAT A CRANKSHAFT WOULD BE SUPPLIED BY THE NAVY AND THE WORK WOULD BE ON A NO COST BASIS IF THE ATTEMPTED REPAIR WAS UNSUCCESSFUL. THE ORAL AGREEMENT IS ALSO REFERRED TO AS HAVING PROVIDED SPECIFICALLY THAT NO CHARGE WOULD BE MADE TO THE NAVY BY SEAHOL IF, AND ONLY IF, THE ATTEMPTED REPAIR WAS UNSUCCESSFUL.

WE HAVE RECEIVED A REPORT FROM THE NAVAL SHIP SYSTEMS COMMAND, ENCLOSING A STATEMENT OF JULY 16, 1969, FROM CAPTAIN ZIMMERMAN, IN REGARD TO THE REPAIR OF THE CRANKSHAFT.

IT IS STATED BY CAPTAIN ZIMMERMAN THAT HE MET MR. WHITEMARSH B. SEABROOK OF THE MARINE CONTRACTING AND TOWING COMPANY, CHARLESTON, SOUTH CAROLINA, AT A RECEPTION ON NOVEMBER 15, 1967, FOLLOWING A CHANGE IN COMMAND OF A NAVY ACTIVITY. DURING A DISCUSSION OF DIESEL ENGINE REPAIR WORK, MR. SEABROOK WAS ADVISED THAT, TO THE BEST OF CAPTAIN ZIMMERMAN'S KNOWLEDGE, THE NAVY HAD NEVER APPROVED A METHOD OF RESTORING PACKARD ENGINE CRANKSHAFT JOURNALS BY MEANS OF WELDING AND GRINDING. MR. SEABROOK WAS INFORMED THAT THE CURRENT METHOD OF REPAIRING CRANKSHAFTS CALLED FOR GRINDING THE JOURNAL SURFACES TO A UNIFORM DIAMETER FOLLOWED BY ELECTROPLATING CHROMIUM METAL ON THE SURFACE TO RESTORE THE JOURNALS TO THEIR ORIGINAL DIAMETER. IT WAS INDICATED THAT GRINDING SCRATCHES BENEATH THE CHROMIUM, LOCATED IN THE JUNCTURE OF CRANKPIN JOURNAL AND WELD, APPARENTLY RESULT IN LINES OF STRESS CONCENTRATION AND ULTIMATELY LEAD TO CATASTROPHIC FAILURE OF THE CRANKSHAFT. MR. SEABROOK STATED THAT HIS COMPANY WAS AFFILIATED WITH A WELDING COMPANY AND THAT HE WOULD LIKE TO DISCUSS THE MATTER FURTHER.

DURING A SUBSEQUENT MEETING ATTENDED BY MR. WHITEMARSH B. SEABROOK, MR. LEWIS G. SEABROOK AND CAPTAIN ZIMMERMAN, IT WAS AGREED THAT MR. WHITEMARSH B. SEABROOK WOULD BE FURNISHED A SCRAP PIECE OF A BROKEN CRANKSHAFT TO DETERMINE IF IT WAS FEASIBLE TO WELD ON THE JOURNALS. HE REPORTED THAT EFFORTS TO IDENTIFY THE CRANKSHAFT METAL AND TO SELECT A SUITABLE WELDING WIRE FOR USE IN THE CONTINUOUS BEAD METHOD OF WELDING HAD BEEN SUCCESSFUL. HE INDICATED THAT HIS COMPANY'S INTEREST WAS IN SELLING WELDING WIRE BUT THAT IT COULD ASSIST IN THE SELECTION OF SUITABLE MACHINES FOR AUTOMATIC WELDING AND CRANKSHAFT GRINDING. FURTHER DISCUSSIONS CONCERNED THE MATTER OF REPAIRING A DAMAGED CRANKSHAFT IN THE INTEREST OF DEVELOPING THE CAPABILITY OF THE SEAHOL CONTRACTING COMPANY TO PROVIDE THIS SERVICE TO THE NAVY. A DAMAGED CRANKSHAFT, WITH ONE JOURNAL SCORED TO THE POINT THAT IT COULD NOT BE REPAIRED BY THE PLATING PROCESS, WAS MADE AVAILABLE TO MR. LEWIS G. SEABROOK TO DETERMINE IF THE WELDING PROCESS WOULD WARP THE SHAFT. CAPTAIN ZIMMERMAN STATED THAT IT WAS AT THIS TIME THAT MR. LEWIS G. SEABROOK OF THE SEAHOL CONTRACTING COMPANY WAS CAREFULLY AND COMPLETELY ADVISED THAT: (A) THE SQUADRON COMMANDER HAD NO AUTHORITY TO COMMIT FUNDS FOR THE RESEARCH AND DEVELOPMENT PROJECT; AND (B) THE SQUADRON COMMANDER HAD NO AUTHORITY TO APPROVE THE GRINDING/WELDING METHOD OF REPAIR OF THE CRANKSHAFT.

CAPTAIN ZIMMERMAN ALSO REFERRED TO ACTIONS TAKEN BY THE NAVY IN CONNECTION WITH THE REPAIR OF THE CRANKSHAFT AND TO A MEETING WITH COMINERON 4, ATTENDED BY NAVY OFFICERS AND MR. LEWIS G. SEABROOK, WHEN CONSIDERATION WAS BEING GIVEN TO THE MATTER OF TESTING THE REPAIRED CRANKSHAFT. IT IS STATED THAT COMMANDER VENNING REITERATED AT THE MEETING THE FACT THAT THE FORCE COMMANDER WOULD NOT FUND THE PROJECT BUT WAS WILLING TO ACCEPT THE TECHNICAL RISKS INVOLVED IN OPERATING THE CRANKSHAFT IN A SHIP'S ENGINE.

IN ITS REPORT ON THE CLAIM OF THE SEAHOL CONTRACTING COMPANY, THE NAVAL SHIP SYSTEMS COMMAND NOTED CAPTAIN ZIMMERMAN'S STATEMENT THAT NO COMMITMENT WAS EVER MADE TO PAY FOR SUCH WORK WHETHER SUCCESSFUL OR NOT. IN OUR OPINION, IT IS QUESTIONABLE, IN VIEW OF THE STATEMENT OF CAPTAIN ZIMMERMAN, WHETHER THERE WAS ANY AGREEMENT TO PAY THE REASONABLE COST OF REPAIRING THE CRANKSHAFT IF THE SEAHOL CONTRACTING COMPANY WAS SUCCESSFUL IN REPAIRING THE CRANKSHAFT BY MEANS OF THE WELDING PROCESS. NAVY ACTIVITIES OTHER THAN COMINERON 4 MAY HAVE PARTICIPATED IN THE TOTAL REPAIR JOB BY RENDERING ASSISTANCE IN ONE FORM OR ANOTHER. HOWEVER, IT IS APPARENT THAT THE FACTS OF THE CASE CANNOT BE CONSIDERED COMPARABLE WITH THOSE OF WILLIAMS V UNITED STATES, SUPRA, IF, AS INDICATED BY CAPTAIN ZIMMERMAN, THE SEAHOL CONTRACTING COMPANY WAS SPECIFICALLY ADVISED THAT NO PAYMENT WOULD BE MADE FOR THE WORK UNDER ANY CIRCUMSTANCES.

IT HAS LONG BEEN THE ESTABLISHED RULE THAT THE GOVERNMENT ACCOUNTING AND ADMINISTRATIVE OFFICERS SHOULD REJECT ALL CLAIMS AS TO WHICH THEY BELIEVE THERE MAY BE SUBSTANTIAL DEFENSES OF LAW, OR AS TO THE VALIDITY OF WHICH THEY ARE IN DOUBT. SEE LONGWILL V UNITED STATES, 17 CT. CL. 288, 291 (1881); CHARLES V UNITED STATES, 19 CT. CL. 316, 319 (1884). WE BELIEVE THAT THIS RULE IS APPLICABLE TO THE FACTS AND CIRCUMSTANCES HERE INVOLVED SINCE IT HAS NOT BEEN ESTABLISHED THAT THE EXPERIMENTAL WORK OF ATTEMPTING TO REPAIR THE CRANKSHAFT OF A PACKARD ENGINE WAS PERFORMED ON THE BASIS OF AN AGREEMENT, EXPRESS OR IMPLIED, THAT THE GOVERNMENT WOULD PAY FOR SERVICES RENDERED IF THE ATTEMPT TO REPAIR THE CRANKSHAFT WAS SUCCESSFUL.

ACCORDINGLY, THE CLAIM IN THE AMOUNT OF $6,500 IS HEREBY DENIED IN ITS ENTIRETY.