B-119159, JUN. 20, 1960

B-119159, JUN. 20, 1960

TO THE SECRETARY OF THE INTERIOR:

REFERENCE IS MADE TO A LETTER DATED MARCH 18, 1960, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY OF THE INTERIOR, RELATING TO THE CLAIM OF FOSTER WHEELER CORPORATION FOR $101,318.72, ALLEGED TO BE DUE AS A RESULT OF THE TERMINATION OF CONTRACT NO. IM-6678, DATED JUNE 13, 1951, WITH THE BUREAU OF MINES.

THE FACTS RELATING TO THE CLAIM--- WHICH WAS FORWARDED HERE FOR DIRECT SETTLEMENT BY THE ASSISTANT SECRETARY OF THE INTERIOR WITH HIS LETTER OF NOVEMBER 13, 1953--- ARE SET FORTH IN OUR LETTER B-119159, DATED APRIL 19, 1954, WHEREBY THE MATTER WAS RETURNED TO YOUR PREDECESSOR IN OFFICE IN ORDER THAT A FINDING OF FACT MIGHT BE MADE BY THE CONTRACTING OFFICER UNDER THE DISPUTES CLAUSE OF THE CONTRACT IN THE FRAMEWORK OF THE LAW APPLICABLE TO CERTAIN ASPECTS OF THE CASE, WITH RESPECT TO WHICH THE SECRETARY OF THE INTERIOR WAS ADVISED IN THE LETTER. IN CLAIMING THE AMOUNT REFERRED TO, WHICH IS STATED TO REPRESENT THE COSTS WHICH THE CONTRACTOR INCURRED IN PERFORMING THE CONTRACT UP TO THE DATE WHEN IT WAS TERMINATED BY THE GOVERNMENT AS FOR DEFAULT, PLUS 12 PERCENT THEREON AS PROFIT, THE CONTRACTOR CONTENDS (1) THAT DELIVER WAS NOT DUE UNDER THE CONTRACT ON JULY 9, 1963, THE DATE WHEN IT WAS TERMINATED AS FOR THE CONTRACTOR'S FAILURE TO DELIVER THE HEAT EXCHANGERS REQUIRED TO BE FURNISHED THEREUNDER AS STIPULATED, AND (2) THAT EVEN IF THE DELIVERY TERMS OF THE CONTRACT ARE CONSTRUED AS PROVIDING FOR DELIVERY ON APRIL 11, 1953, THE CONTRACTOR WAS ENTITLED TO BE EXCUSED FOR THE DELAY INVOLVED BECAUSE OF THE GOVERNMENT'S DELAY IN SUPPLYING THE CONTRACTOR WITH A PERFORMANCE RATING AND THE FACT THAT THE PREFERENCE RATING EVENTUALLY FURNISHED WAS NOT OF A HIGH ENOUGH LEVEL TO ENABLE IT TO OBTAIN TIMELY DELIVERIES ON THE CRITICAL MATERIALS NEEDED FOR THE MANUFACTURE OF THE HEAT EXCHANGERS, A SITUATION WHICH, TOGETHER WITH THE STEEL STRIKE IN PROGRESS DURING THE PERIOD APRIL TO AUGUST 1952, THE CONTRACTOR CONTENDS DELAYED THE WORK FOR A NUMBER OF MONTHS AND MADE IT IMPOSSIBLE FOR IT TO DELIVER THE EQUIPMENT BY APRIL 11, 1953.

RELATIVE TO THE CONTRACTOR'S FIRST CONTENTION, THE SPECIFICATIONS FOR THE HEAT EXCHANGERS, AS SET FORTH IN THE INVITATION AND SUBSEQUENT CONTRACT, PROVIDED THAT THEY WERE TO BE IN ACCORDANCE WITH BUREAU OF MINES SPECIFICATION ED-S-25, DATED FEBRUARY 23, 1951, AND BUREAU OF MINES DRAWING RC-270,"PRODUCT-FEED EXCHANGER COAL-HYDRO, ITEM -E503.' PARAGRAPH 3.0 OF THE SPECIFICATIONS, FABRICATION DETAILS, STATED:

"THE ARRANGEMENT, MATERIALS, AND DIMENSIONS OF ELEMENTS OF THE UNIT ARE SHOWN ON DRAWING RC-270 WHICH IS A PART OF THIS SPECIFICATION.'

ALSO, IT WAS SPECIFIED IN PARAGRAPH 3.5 THAT "THE TOLERANCES AS SHOWN ON DWG. RC-270 SHALL BE HELD. AND PARAGRAPH 6.0, SUBSTITUTIONS, PROVIDED:

"NO SUBSTITUTIONS OF MATERIALS NOR CHANGES IN PROCEDURES HEREIN SPECIFIED SHALL BE MADE WITHOUT PRIOR APPROVAL OF THE GOVERNMENT. RECOMMENDATIONS AS TO CHANGES IN DESIGN AND/OR PROCEDURES, HOWEVER, ARE INVITED.'

IN FOSTER WHEELER'S LETTER OF MARCH 29, 1951, ACCOMPANYING ITS BID UNDER THE INVITATION, THE CONTRACTOR, IN OFFERING TO FURNISH THE HEAT EXCHANGERS FOR THE TOTAL PRICE OF $109,380, STATED WITH REFERENCE TO WHEN IT WOULD BE ABLE TO EFFECT DELIVERY THEREOF:

"SHIPMENT CAN BE MADE 10 TO 12 MONTHS AFTER RECEIPT OF ORDER AND APPROVAL OF DRAWINGS PROVIDED PRIORITY RATING FOR CRITICAL MATERIALS IS AVAILABLE.'

ALSO, IN ITS BID, SUBMITTED ON STANDARD FORM 33, THE DELIVERY TIME WAS STATED AS FOLLOWS:

"SHIPMENT - 10-12 MONTHS AFTER RECEIPT OF ORDER AND APPROVAL OF DRAWINGS BASED ON RECEIPT OF PRIORITY RATING.'

THE RECORD SHOWS THAT FOSTER WHEELER'S BID IN THE AMOUNT OF $109,560 (AFTER CORRECTION OF AN ERROR IN EXTENSION) WAS ACCEPTED UNDER DATE OF JUNE 13, 1951, AND THAT ORDER NO. LA-51-2594, AUTHORIZING IT TO PROCEED WITH THE WORK, WAS ISSUED UNDER THAT DATE. CRUCIAL TO A DETERMINATION OF WHETHER DELIVERY OF THE HEAT EXCHANGERS WAS PAST DUE ON JULY 9, 1953, IS THE QUESTION WHETHER CHANGE ORDER NO. 1 TO THE CONTRACT PROPERLY MAY BE SAID TO HAVE FIXED APRIL 1953 AS THE TIME WHEN THE HEAT EXCHANGERS WERE REQUIRED TO BE DELIVERED, WITHOUT REGARD TO THE DATE OF APPROVAL OF THE CONTRACTOR'S DRAWING NO. H-33629-F. THE CONTRACTOR CONTENDS THAT THIS DRAWING, WHICH WAS APPROVED BY THE BUREAU OF MINES ON NOVEMBER 25, 1952, AUTOMATICALLY EXTENDED THE CONTRACT DELIVERY DATE TO NOVEMBER 25, 1953.

CHANGE ORDER NO. 1, THE ONLY CHANGE ORDER ISSUED UNDER THE CONTRACT, IS DATED NOVEMBER 12, 1952, AND IT WAS SIGNED BY L. L. HIRST, AS CONTRACTING OFFICER. THE CHANGE ORDER BEARS THE CONTRACTOR'S WRITTEN ACCEPTANCE AND SHOWS THAT IT WAS APPROVED BY THE DIRECTOR, BUREAU OF MINES, ON DECEMBER 9, 1952. AN APPROVED COPY THEREOF WAS TRANSMITTED TO THE CONTRACTOR BY THE BUREAU OF MINES BY LETTER OF DECEMBER 17, 1952.

THE FIRST FOUR PARAGRAPHS OF THE CHANGE ORDER MODIFIED THE CONTRACT SPECIFICATIONS WITH RESPECT TO CERTAIN "CRITICAL DIMENSIONS SHOWN ON DRAWING H-33629E" TO PROVIDE FOR CLOSER TOLERANCES ON THE POSITION OF THE SHELL NOZZLES OF THE HEAT EXCHANGERS SO THAT THE EXCHANGERS MIGHT BE "CONNECTED IN SERIES; " THE FIFTH PARAGRAPH PROVIDED FOR AN INCREASE IN THE CONTRACT PRICE AMOUNTING TO $1,200 TO COMPENSATE THE CONTRACTOR FOR THE EXTRA WORK INVOLVED; AND THE SIXTH AND SEVENTH PARAGRAPHS THEREOF PROVIDED AS FOLLOWS:

"WHEREAS, THE FINAL APPROVED DRAWING WAS RELEASED ON APRIL 11, 1952, THE FINAL DELIVERY DATE UNDER THE CONTRACT HAS BEEN DETERMINED TO BE APRIL, 1953.

"ALL OTHER TERMS AND CONDITIONS OF THE CONTRACT SHALL REMAIN IN FULL FORCE AND EFFECT.'

THE RECORD SHOWS THAT THE DRAWING H-33629-E, MENTIONED IN THE CHANGE ORDER, IS THE DRAWING WHICH IS REFERRED TO THEREIN AS THE FINAL APPROVED DRAWING "RELEASED ON APRIL 11, 1952," AND THAT IT REPRESENTS THE FIFTH REVISION OF THE CONTRACTOR'S DRAWING H-33629,"OUTLINE OF DETAILS PRODUCT FEED EXCHANGER, ITEM NO. 503.' DRAWING H-33629 HAD BEEN TRANSMITTED TO THE BUREAU OF MINES FOR APPROVAL BY THE CONTRACTOR'S LETTER OF SEPTEMBER 14, 1951, WHICH, AMONG OTHER THINGS, DIRECTED ATTENTION TO THE FACT THAT THE "BAFFLE DETAIL" SHOWN ON THE BUREAU'S "ORIGINAL DRAWING," NAMELY DRAWING RC-270, HAD BEEN REVISED. DRAWING H-33629 WAS NOT APPROVED FOR THE REASONS INDICATED IN THE BUREAU'S LETTER OF SEPTEMBER 26, 1951. SUBSEQUENTLY, REVISIONS OF THIS DRAWING, DESIGNATED H-33629, WITH THE SUFFIXED LETTERS A, B, C, D, E AND F, WERE SUBMITTED TO THE BUREAU FOR APPROVAL AND WERE EITHER APPROVED OR DISAPPROVED, AS THE CASE MAY BE.

AS INDICATED IN THE FINDING OF FACT AND DECISION RENDERED UNDER DATE OF OCTOBER 4, 1955, BY EARLE P. SHOUB, CONTRACTING OFFICER (WHO HAD BEEN APPOINTED AS SUCH ON JULY 9, 1953, TO REPLACE L. L. HIRST), DRAWING H- 33629-F WAS PREPARED ON OCTOBER 13, 1952, OR A FEW DAYS AFTER G. D. GARDNER, OF THE BUREAU OF MINES, HAD VISITED THE CONTRACTOR'S PLANT (OCTOBER 7, 1952) AND ADVISED ITS CHIEF INSPECTOR, A. E. KEATING, OF THE NECESSITY FOR THE MODIFICATION OF THE SPECIFICATIONS WHICH WAS THE SUBJECT OF CHANGE ORDER NO. 1, AND IT WAS PREPARED SHORTLY BEFORE THE CONTRACTOR'S LETTER OF OCTOBER 23, 1952, REQUESTING THE ISSUANCE OF THE CHANGE ORDER "IN ORDER TO COVER OUR INCREASED COSTS.' DRAWING H-33629-F, WHICH WAS TRANSMITTED TO THE BUREAU OF MINES FOR APPROVAL BY THE CONTRACTOR'S LETTER OF NOVEMBER 14, 1952, CONSTITUTED A REVISION OF DRAWING H-33629-E IN THE FOLLOWING RESPECTS, AS FOUND BY THE CONTRACTING OFFICER:

1. THE SPECIFICATIONS ON THE DRAWING WERE MODIFIED TO INDICATE A HIGHER "STRESS RELIEVING TEMPERATURE" THAN THAT SHOWN IN PARAGRAPH 3.3 (D) OF THE CONTRACT SPECIFICATIONS;

2. THE DRAWING WAS MODIFIED TO INCLUDE THE CLOSER TOLERANCES ON THE POSITION OF THE SHELL NOZZLES OF THE HEAT EXCHANGES PROVIDED FOR IN CHANGE ORDER NO. 1; AND

3. THE DIMENSION FROM THE CENTER LINE OF THE HEAT EXCHANGER UNIT TO THE FACE OF THE SHELL NOZZLE WAS CHANGED FROM 17 1/2 INCHES (THE DIMENSION SHOWN ON DRAWING H-33629-E) TO 17 9/16 INCHES.

IN THE FINDING OF FACT AND DECISION, THE CONTRACTING OFFICER DRAWS ATTENTION TO THE FACT THAT APPROVAL TO RAISING THE STRESS-RELIEVING TEMPERATURE WAS GRANTED TO THE CONTRACTOR BY THE BUREAU'S TELEGRAM OF OCTOBER 8, 1952, AND TO THE FACT THAT THE CONTRACTOR HAD STATED IN ITS REFERRED-TO LETTER OF NOVEMBER 14, 1952, THAT THE CHANGE IN THE DIMENSION FROM THE CENTER LINE OF THE HEAT EXCHANGER UNIT TO THE FACE OF THE SHELL NOZZLE, REFERRED TO ABOVE, WAS NECESSARY IN ORDER THAT THE CONTRACTOR MIGHT USE THE MATERIAL WHICH IT ALREADY HAD AVAILABLE FOR FABRICATING THE HEAT EXCHANGERS AND STILL MAINTAIN THE CLOSER TOLERANCES ON THE POSITION OF THE SHELL NOZZLES PROVIDED FOR IN CHANGE ORDER NO. 1 AND SHOWN ON DRAWING H-33629-F. THE CONTRACTING OFFICER'S FINDINGS OF FACT AND CONCLUSIONS RELATIVE TO THE FIRST BASIS URGED BY THE CONTRACTOR IN SUPPORT OF THE ALLOWANCE OF ITS CLAIM ARE AS FOLLOWS:

"THE CONTRACTING OFFICER FINDS THAT CHANGE ORDER NO. 1 WAS INTENDED TO:

"/A) PROVIDE ADDITIONAL PAYMENT TO THE CONTRACTOR FOR CERTAIN MINOR CHANGES IN THE WORK REQUESTED BY THE GOVERNMENT, AND

"/B) PERMIT THE CONTRACTOR TO MAKE CERTAIN MINOR CHANGES IN THE WORK REQUESTED BY IT FOR ITS OWN CONVENIENCE AND TO AVOID DELAYS, AND

"/C) TO ESTABLISH A DELIVERY DATE FOR COMPLETION OF THE CONTRACT AS MODIFIED BY THE CHANGE ORDER, AND

"/D) THAT THE CHANGES CALLED FOR IN CHANGE ORDER NO. 1 WERE SUFFICIENTLY EXPLICIT AND CLEAR TO PERMIT FABRICATION OF THE MODIFIED EXCHANGERS EVEN IF REVISION F OF THE DRAWING HAD NOT BEEN PREPARED.

"THE CONTRACTING OFFICER FINDS THAT REVISION F OF THE DRAWING INCORPORATED INTO IT:

"/A) THE MODIFICATIONS IN THE WORK CALLED FOR IN CHANGE ORDER NO. 1, AND

"/B) A MODIFICATION OF A HEAT TREATING TEMPERATURE WHICH HAD PREVIOUSLY BEEN APPROVED IN WRITING.

"THE CONTRACTING OFFICER FINDS THAT REVISION F OF THE DRAWING WAS PREPARED SHORTLY AFTER THE CHANGES WERE DISCUSSED AND BEFORE CHANGE ORDER NO. 1 WAS SUBMITTED BY THE CONTRACTING OFFICER TO THE CONTRACTOR BUT THAT THE REVISED DRAWING WAS NOT SENT THE GOVERNMENT UNTIL AFTER THE CONTRACTOR RECEIVED THE CHANGE ORDER FOR SIGNATURE.

"THE CONTRACTING OFFICER FINDS THAT THE MODIFICATIONS OF THE WORK CALLED FOR BY CHANGE ORDER NO. 1 AMOUNTED TO ONLY $200 PER UNIT, REQUIRED NO ADDITIONAL MATERIAL AND REPRESENTED ADDITIONAL WORKING TIME OF A FEW DAYS PER UNIT.

"THE CONTRACTING OFFICER DECIDES THAT CHANGE ORDER NO. 1 REQUIRES THAT DELIVERY BE MADE ON OR BEFORE APRIL 30, 1953, AND THAT APPROVAL BY THE GOVERNMENT OF REVISION F OF THE DRAWING DID NOT EXTEND THE DELIVERY PERIOD TO ONE YEAR FROM DATE OF APPROVAL.'

THE CONTRACTING OFFICER ALSO HELD THAT THE FACTS DID NOT SUPPORT THE CONTRACTOR'S CLAIM THAT ANY DELAY IN THE PERFORMANCE OF THE CONTRACT WAS ATTRIBUTABLE TO PREFERENCE RATING OR PRIORITY DIFFICULTIES OF ANY KIND, OR TO THE STEEL STRIKE, AND THAT IT COULD NOT, THEREFORE, BE CONSIDERED EXCUSABLE.

THE RECORD SHOWS THAT THE ABOVE DECISION WAS RECEIVED BY THE CONTRACTOR ON NOVEMBER 7, 1955, AND THAT THE CONTRACTOR APPEALED THEREFROM WITHIN 30 DAYS TO THE SECRETARY OF THE INTERIOR, AS PROVIDED FOR IN THE DISPUTES CLAUSE OF THE CONTRACT.

IN AN OPINION RENDERED UNDER DATE OF JANUARY 26, 1960 (IBGA-61), PAUL H. GANTT, ACTING CHAIRMAN OF THE INTERIOR BOARD OF CONTRACT APPEALS--- WHOM THE PARTIES HAD AGREED UPON BY WRITTEN STIPULATION AS THE OFFICIAL AUTHORIZED TO HEAR, CONSIDER AND DETERMINE THE MERITS OF THE CONTRACTOR'S APPEAL AS YOUR AUTHORIZED REPRESENTATIVE--- HELD IN SUBSTANCE, THAT DRAWING H-33629-F WAS THE LAST OF THE DRAWINGS REQUIRED TO BE SUBMITTED FOR APPROVAL UNDER THE CONTRACT, AND THAT SINCE THIS DRAWING HAD BEEN APPROVED BY THE BUREAU OF MINES ON NOVEMBER 25, 1952, THE DELIVERY DATE OF THE CONTRACT WAS AUTOMATICALLY EXTENDED TO NOVEMBER 25, 1953, AND THE CONTRACTOR WAS NOT, THEREFORE, IN DEFAULT AT THE TIME THE CONTRACT WAS TERMINATED. IN VIEW OF HIS DISPOSITION OF THIS ISSUE, MR. GANTT DID NOT GO INTO THE OTHER ISSUES RAISED BY THE CONTRACTOR'S APPEAL.

AMONG THE ENCLOSURES FORWARDED HERE WITH THE LETTER FROM THE ASSISTANT SECRETARY IS AN ,ADDITIONAL FINDING OF FACT AND DETERMINATION BY THE CONTRACTING OFFICER, CONTRACT IM-6678," DATED JANUARY 14, 1960, WHEREIN MR. SHOUB STATES THAT DURING THE PREHEARING CONFERENCE HELD IN CONNECTION WITH THE CONTRACTOR'S APPEAL, IT WAS AGREED BY THE PARTIES THAT IF THE BOARD OF CONTRACT APPEALS DECIDED IN FAVOR OF THE APPELLANT, ONLY DIRECT EXPENDITURES FOR LABOR, SUPPLIES AND EQUIPMENT REQUIRED FOR THE WORK WHICH HAD BEEN PERFORMED UNDER THE CONTRACT WOULD BE ALLOWED THE CONTRACTOR IN SETTLEMENT OF ITS CLAIM, AND THAT THE AMOUNT OF SUCH EXPENDITURES, AS DETERMINED BY THE CONTRACTING OFFICER, TOTAL $64,756.49. ALSO FORWARDED IS A RELEASE AGREEMENT EXECUTED BY THE FOSTER WHEELER CORPORATION UNDER DATE OF FEBRUARY 5, 1960, WHEREIN THE CONTRACTOR AGREED TO ACCEPT THE SUM OF $64,756.49 IN FULL SETTLEMENT OF ITS CLAIM, PROVIDED PAYMENT WERE MADE WITHIN 120 DAYS FROM DATE, OR BY JUNE 3, 1960. THE CONTRACTOR, THROUGH ITS VICE PRESIDENT, E. FRANCIS WENTWORTH, JR., ADVISED OUR DEPUTY GENERAL COUNSEL ON MAY 19, 1960, THAT THE DEADLINE FOR PAYMENT HAD BEEN WITHDRAWN, AND THAT PAYMENT OF THE AMOUNT WILL BE ACCEPTED IN FULL SETTLEMENT IF MADE WITHIN A REASONABLE LENGTH OF TIME. THE RECORD REVEALS THAT A "HEARING- CONFERENCE" WAS HELD IN PITTSBURGH, PENNSYLVANIA, ON DECEMBER 17, 1959, IN CONNECTION WITH THE CONTRACTOR'S APPEAL AND THAT EARLE P. SHOUB, WHO HAD RENDERED THE DECISION OF OCTOBER 4, 1955, AS CONTRACTING OFFICER, WAS PRESENT AND TESTIFIED. UPON BEING EXAMINED BY MR. GANTT ON THE ISSUES INVOLVED IN THE APPEAL, MR. SHOUB ACKNOWLEDGED THAT DRAWING H-33629-F HAD BEEN APPROVED ON NOVEMBER 25, 1952, BY THE MECHANICAL ENGINEER IN THE BUREAU OF MINES WHO WAS CHARGED WITH THE RESPONSIBILITY OF REVIEWING AND APPROVING DRAWINGS PROVIDED BY THE CONTRACTOR, AND THAT THE PURPOSE OF THE APPROVAL OF THE DRAWING "WAS TO MODIFY THE SPECIFICATIONS SO THAT THE GOVERNMENT WOULD BE ASSURED THAT WHEN THE HEAT EXCHANGERS WERE DELIVERED THEY COULD BE CONNECTED TOGETHER AND TO PREFABRICATED PIPING WITHOUT EITHER HAVING TO MODIFY THE HEAT EXCHANGERS OR PIPING OR PROVIDE ANY SPECIAL ADAPTERS.' ALSO, HE ADMITTED THAT THE $1200 AMOUNT BY WHICH THE CONTRACT PRICE WAS INCREASED TO COMPENSATE THE CONTRACTOR FOR THIS CHANGE DID NOT REFLECT THE IMPORTANCE THEREOF TO THE GOVERNMENT, AND THAT IT WOULD VERY PROBABLY HAVE COST THE GOVERNMENT SIGNIFICANTLY MORE IN THE FINAL INSTALLATION IF THE CHANGE HAD NOT BEEN MADE BEFORE FABRICATION.

IN HIS OPINION, MR. GANTT CONCLUDES THAT THE ABOVE TESTIMONY ESTABLISHES THAT THE NEED FOR DRAWING H-33629-F AND ITS APPROVAL ON NOVEMBER 25, 1952, WAS PROMPTED BY THE NEED OF THE GOVERNMENT TO FILL A VOID IN THE CONTRACT SPECIFICATIONS. HE DOES NOT COMMENT ON FINDING (D) OF THE CONTRACTING OFFICER'S DECISION OF OCTOBER 4, 1955, TO THE EFFECT THE CHANGES CALLED FOR IN CHANGE ORDER NO. 1 WERE SUFFICIENTLY EXPLICIT AND CLEAR TO PERMIT FABRICATION OF THE MODIFIED EXCHANGERS EVEN IF REVISION F OF THE CONTRACTOR'S DRAWING HAD NOT BEEN PREPARED. HOWEVER, HE CONCLUDES, IN EFFECT, THAT IT WAS THE INTENTION OF THE PARTIES TO LEAVE INTACT THE FORMULA PROVIDED IN THE ORIGINAL CONTRACT FOR DETERMINING THE DATE WHEN DELIVERY WAS REQUIRED TO BE COMPLETED AND THAT SINCE DRAWING H-33629-F WAS THE FINAL DRAWING REQUIRED TO BE APPROVED UNDER THE CONTRACT AND THE SAME WAS APPROVED ON NOVEMBER 25, 1952, THE DELIVERY DATE WAS AUTOMATICALLY EXTENDED TO NOVEMBER 25, 1953.

AS HEREINABOVE INDICATED, ONE OF THE REVISIONS IN THE SPECIFICATIONS DEPICTED ON DRAWING H-33629-F IS THE CHANGE IN DIMENSION FROM THE CENTER LINE OF THE HEAT EXCHANGER UNIT TO THE FACE OF THE SHELL NOZZLE FROM 17 1/2 INCHES TO 17 9/16 INCHES. THIS REPRESENTED A CHANGE IN A DIMENSION SHOWN ON DRAWING H-33629-E, AND THE CONTRACTOR HAD NOT BEEN GRANTED THE AUTHORITY FOR MAKING THIS REVISION IN CHANGE ORDER NO. 1. HENCE, WE FIND NO BASIS FOR DISAGREEMENT WITH THE APPEAL BOARD'S APPARENT REJECTION OF FINDING (D) OF THE CONTRACTING OFFICER'S FINDINGS OF FACT, OR WITH ITS CONCLUSION THAT THIS CHANGE WAS NECESSARY TO ENABLE THE CONTRACTOR TO USE THE MATERIAL WHICH IT HAD PROCURED FOR THE MANUFACTURE OF THE HEAT EXCHANGERS. APPROVAL FOR MAKING THE CHANGE HAD TO BE OBTAINED BY THE CONTRACTOR IN SOME MANNER, AND THE NORMAL PROCEDURE WAS TO DO SO BY WAY OF OBTAINING APPROVAL OF A REVISED DRAWING.

SINCE THE MODIFICATIONS TO THE SPECIFICATIONS DESCRIBED IN CHANGE ORDER NO. 1 WERE OF THE SAME GENERAL CHARACTER AS THOSE WHICH PREVIOUSLY HAD BEEN ACCOMPLISHED BY OBTAINING APPROVAL OF REVISIONS IN THE CONTRACTOR'S DRAWING, IT SEEMS FAIRLY OBVIOUS THAT THE MAIN, IF NOT THE ONLY, PURPOSE OF ISSUING THAT CHANGE ORDER WAS TO PROVIDE FOR AN INCREASE IN CONTRACT PRICE. NONE OF THE PREVIOUS MODIFICATIONS TO THE SPECIFICATIONS HAD ENTAILED AN ADJUSTMENT IN THE CONTRACT PRICE. THE VERY FACT THAT THE CHANGE ORDER SHOWS THAT THE DELIVERY DATE MENTIONED THEREIN WAS COMPUTED ON THE BASIS OF THE DATE OF APPROVAL OF THE CONTRACTOR'S REVISED DRAWING H -33629-E CONFIRMS THAT IT WAS THE INTENTION OF THE PARTIES, UP TO THAT TIME AT LEAST, THAT THE DATE OF APPROVAL OF THE LAST REVISED DRAWING TO BE SUBMITTED UNDER THE CONTRACT WAS TO DETERMINE THE DELIVERY DATE, AND THE LANGUAGE OF THE CHANGE ORDER IS NOT CLEAR IN INDICATING THAT THE PARTIES AT THAT TIME INTENDED TO CHANGE THE METHOD THERETOFORE IN USE FOR DETERMINING THE DATE WHEN DELIVERY WAS REQUIRED. THE RECORD CONTAINS NO CORRESPONDENCE OR STATEMENTS EMANATING FROM THE PARTIES DURING THE PERIOD WHEN THE CONTRACT WAS BEING PERFORMED WHICH ARE OF ANY MATERIAL VALUE IN SHOWING WHAT THE INTENTION OF THE PARTIES WAS IN THIS RESPECT. THE CHANGE ORDER WAS, OF COURSE, PREPARED BY THE GOVERNMENT AND THE ABOVE-QUOTED PROVISIONS THEREOF ARE REQUIRED TO BE INTERPRETED IN THE LIGHT OF THAT PRINCIPLE OF LAW STATED BY THE COURT OF CLAIMS IN PETER KIEWIT SONS' COMPANY V. UNITED STATES, 109 C.CLS. 390, 418, TO BE AS FOLLOWS:

"* * * WHERE ONE OF THE PARTIES TO A CONTRACT DRAWS THE DOCUMENT AND USES THEREIN LANGUAGE WHICH IS SUSCEPTIBLE OF MORE THAN ONE MEANING, AND THE INTENTION OF THE PARTIES DOES NOT OTHERWISE APPEAR, THAT MEANING WILL BE GIVEN THE DOCUMENT WHICH IS MORE FAVORABLE TO THE PARTY WHO DID NOT DRAW IT. * * *"

UNDER ALL OF THE CIRCUMSTANCES OF THE CASE, CONSIDERED IN THE LIGHT OF THE ABOVE PRINCIPLE OF LAW, THE CONSTRUCTION OF THE PERTINENT LANGUAGE OF THE CHANGE ORDER CONTENDED FOR BY THE CONTRACTOR AND ACCEPTED BY THE REPRESENTATIVE OF THE HEAD OF THE DEPARTMENT CONCERNED -- TO THE EFFECT THAT SUCH LANGUAGE REFLECTS AN INTENTION MERELY TO RESTATE A DATE ALREADY SET BY REVISION E AS THE FINAL DATE OF DELIVERY BASED ON THE THEN FINAL APPROVED DRAWING, RATHER THAN TO FIX APRIL 1953 AS A FIRM DELIVERY DATE WITHOUT REGARD TO THE DATE OF APPROVAL OF ANY DRAWINGS SUBSEQUENT TO DRAWING H-33629-E--- MAY BE ACCEPTED AS LEGALLY CORRECT. MOREOVER, SINCE DRAWING H-33629-F INCORPORATED A MODIFICATION OF THE SPECIFICATIONS NOT PROVIDED FOR IN CHANGE ORDER NO. 1, OR OTHERWISE AUTHORIZED, THE FINDING ON APPEAL THAT THIS DRAWING WAS THE FINAL DRAWING REQUIRED TO BE APPROVED UNDER THE CONTRACT MAY NOT BE SAID TO BE LACKING IN SUBSTANTIAL EVIDENCE TO SUPPORT IT. IT FOLLOWS THAT THE CONTRACTOR WAS NOT IN DEFAULT AT THE TIME THE CONTRACT WAS TERMINATED, AND THAT THE GOVERNMENT IS LIABLE TO THE CONTRACTOR FOR THE ACTION TAKEN.

ACCORDINGLY, INSTRUCTIONS HAVE TODAY BEEN ISSUED TO OUR CLAIMS DIVISION AUTHORIZING THE ALLOWANCE OF THE CLAIM IN THE AMOUNT OF $64,756.49 IN FULL SETTLEMENT. THE AMOUNT INVOLVED WILL BE CHARGED TO DEPARTMENT OF INTERIOR APPROPRIATION 14MC952, CONSERVATION AND DEVELOPMENT OF MINERAL RESOURCES, BUREAU OF MINES, PRIOR YEARS-PUBLIC LAW 798, APPROVED JULY 25, 1956, 70 STAT. 647, PURSUANT TO INSTRUCTIONS CONTAINED IN THE ASSISTANT SECRETARY'S LETTER.