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THE SUBJECT CONTRACT WAS AWARDED TO YOUR CLIENT ON MAY 24. YOUR CLIENT'S SAMPLE DOSIMETERS WERE TESTED IN ACCORDANCE WITH CONTRACT TERMS ON SIX DIFFERENT OCCASIONS. IT HAS BEEN CONCLUDED BY BOTH PARTIES THAT THE DECEMBER 1956 SPECIFICATIONS CITED ABOVE ARE NOT SUSCEPTIBLE OF PERFORMANCE AND THAT INSTRUMENTS HAVE NOT BEEN PREVIOUSLY PRODUCED AND SUPPLIED TO THE GOVERNMENT BY ANY OTHER FIRM UNDER THESE SPECIFICATIONS. THE CONTRACT WAS FULLY AND SATISFACTORILY PERFORMED. YOU CONTENDED IN YOUR SUBMISSION TO OUR CLAIMS DIVISION THAT UNIVERSAL'S INABILITY TO PRODUCE ACCEPTABLE DOSIMETERS WAS CAUSED BY DEFECTIVE SPECIFICATIONS. WHICH HAD REPORTED THAT THE INTENDED MEANING OF THE CONTRACT AMENDMENT WAS THAT THE 1956 SPECIFICATION WAS NOT SUSCEPTIBLE OF PERFORMANCE BY UNIVERSAL.

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B-134339, OCT. 8, 1964

TO SELLERS, CONNER AND CUNEO:

IN YOUR LETTERS DATED MARCH 30 AND JULY 10, 1964, YOU REQUEST RECONSIDERATION OF OUR CLAIMS DIVISION SETTLEMENT DATED DECEMBER 16, 1963, WHICH DENIED A CLAIM BY UNIVERSAL TRANSISTOR PRODUCTS CORPORATION FOR COSTS ALLEGEDLY INCURRED IN ITS UNSUCCESSFUL EFFORT TO PERFORM CONTRACT NO. GS-OOS-14657 WITH THE GENERAL SERVICES ADMINISTRATION (GSA), FOR SUPPLYING 57,500 RADIOLOGICAL DOSIMETERS.

THE SUBJECT CONTRACT WAS AWARDED TO YOUR CLIENT ON MAY 24, 1957. REQUIRED THE SUBMISSION OF PREPRODUCTION SAMPLES IN ORDER TO TEST FOR COMPLIANCE WITH SPECIFICATION CD V-138 AS REVISED DECEMBER 31, 1956. YOUR CLIENT'S SAMPLE DOSIMETERS WERE TESTED IN ACCORDANCE WITH CONTRACT TERMS ON SIX DIFFERENT OCCASIONS, AND EACH TIME FAILED TO PASS SPECIFICATION REQUIREMENTS. UPON THREAT OF CONTRACT TERMINATION, UNIVERSAL REQUESTED PERMISSION TO SUBCONTRACT THE PRODUCTION TO A QUALIFIED SUPPLIER. AFTER DISCUSSIONS, GSA ACCEPTED UNIVERSAL'S OFFER AND ENTERED INTO A CONTRACT AMENDMENT DATED NOVEMBER 17, 1960, WHICH PROVIDED IN RELEVANT PART:

"WHEREAS, VARIOUS SUCCESSIVE SAMPLE SUBMITTED FOR TESTS BY THE CONTRACTOR FAILED TO COMPLY WITH CONTRACT SPECIFICATIONS AND THE CONTRACTOR TO DATE, HAS EXPENDED IN EXCESS OF $150,000 IN AN EFFORT TO PRODUCE AN ACCEPTABLE SAMPLE, AND;

"WHEREAS, IT HAS BEEN CONCLUDED BY BOTH PARTIES THAT THE DECEMBER 1956 SPECIFICATIONS CITED ABOVE ARE NOT SUSCEPTIBLE OF PERFORMANCE AND THAT INSTRUMENTS HAVE NOT BEEN PREVIOUSLY PRODUCED AND SUPPLIED TO THE GOVERNMENT BY ANY OTHER FIRM UNDER THESE SPECIFICATIONS, AND;

"WHEREAS, THE GOVERNMENT STILL DESIRE DELIVERY OF THE ABOVE QUANTITY OF RADIOLOGICAL DOSIMETERS, THE CONTRACTOR IN LIEU THEREOF, HAS OFFERED TO SUPPLY TO THE GOVERNMENT, 57,500 CD-V-138 RADIOLOGICAL DOSIMETERS TO BE MANUFACTURED BY BENDIX CORPORATION, CINCINNATI, OHIO, IN ACCORDANCE WITH A MORE STRINGENT AND IMPROVED SPECIFICATION,OCDM ITEM SPECIFICATION CD-V-138 (REVISED NOV. 1, 1959), AT A REVISED CONTRACT PRICE OF $4.78 PER INSTRUMENT, FOB CINCINNATI, OHIO, FOR DELIVERY WITHIN 220 DAYS OR SOONER AFTER EXECUTION OF THIS AMENDMENT; 8000 EACH TO BE DELIVERED WITHIN 90 DAYS, BALANCE AT THE RATE OF 8000 UNITS OR MORE PER MONTH, AND; "

PURSUANT TO THE ABOVE AMENDMENT, THE CONTRACT WAS FULLY AND SATISFACTORILY PERFORMED.

YOU CONTENDED IN YOUR SUBMISSION TO OUR CLAIMS DIVISION THAT UNIVERSAL'S INABILITY TO PRODUCE ACCEPTABLE DOSIMETERS WAS CAUSED BY DEFECTIVE SPECIFICATIONS, AND ATTEMPTED TO OVERCOME THE ADMINISTRATIVE AGENCY'S ASSERTION TO THE CONTRARY BY DETAILING YOUR CLIENT'S AND ALLEGEDLY ANOTHER FIRM'S UNSUCCESSFUL ATTEMPTS TO MAKE A CONFORMING DOSIMETER, AND BY INTERPRETING THE ABOVE-QUOTED LANGUAGE OF THE CONTRACT AMENDMENT AS AN ADMISSION BY THE GOVERNMENT AS TO THE CORRECTNESS OF YOUR POSITION. OUR CLAIMS DIVISION SETTLEMENT CONCURRED WITH THE VIEW OF THE ADMINISTRATIVE AGENCY, WHICH HAD REPORTED THAT THE INTENDED MEANING OF THE CONTRACT AMENDMENT WAS THAT THE 1956 SPECIFICATION WAS NOT SUSCEPTIBLE OF PERFORMANCE BY UNIVERSAL, BUT COULD BE PERFORMED BY A FIRM MORE SKILLED IN THIS FIELD. THE CLAIMS DIVISION BELIEVED THAT ANY IMPLICATION IN THE LANGUAGE OF THE CONTRACT AMENDMENT ADVERSE TO THIS VIEW WAS REFUTED BY THE FACT THAT THE AMENDMENT ITSELF PERMITTED THE CONTRACTOR, IN EXCHANGE FOR AN INCREASE IN PRICE, TO SUBCONTRACT THE MANUFACTURE OF DOSIMETERS TO BENDIX CORPORATION "IN ACCORDANCE WITH A MORE STRINGENT AND IMPROVED ECIFICATION.'

IN REQUESTING RECONSIDERATION OF THE SETTLEMENT, YOU ARGUE THAT THE DESIGN FEATURES OF THE ALLEGEDLY DEFECTIVE 1956 SPECIFICATION COULD HAVE BEEN MODIFIED AND IMPROVED IN SUCH A MANNER AS TO RENDER IT SUSCEPTIBLE OF PERFORMANCE NOTWITHSTANDING THE INTRODUCTION INTO THE 1959 SPECIFICATION OF "MORE STRINGENT" REQUIREMENTS. THIS ARGUMENT IS CONSONANT WITH, AND INDEED DEPENDS UPON, YOUR CONTENTION THAT THE 1956 SPECIFICATIONS "WERE OF A DESIGN TYPE DETAILING PERFORMANCE WITH EXACTITUDE AND WERE NOT PERFORMANCE SPECIFICATIONS WHEREIN THE RESPONSIBILITY FOR IMPOSSIBILITY COULD CONCEIVABLY BE CHARGED TO THE CONTRACTOR.' YOU CONTEND THAT THE "DESIGN" TESTS SET FORTH IN ATTACHMENT A TO THE 1956 SPECIFICATION WERE INCLUDED TO ASCERTAIN IF THE ITEM WAS PRODUCED IN COMPLIANCE WITH THE DESIGN CHARACTERISTICS OF SUCH SPECIFICATION, AND YOU CITE CASES WHICH ALLOWED RECOVERY WHERE THE SPECIFICATIONS WERE DEFECTIVE IN THAT THEY CALLED FOR PRODUCTION BY SPECIFIED DESIGN OR MATERIALS THAT DID NOT GIVE THE DESIRED RESULTS. YOU ALSO AGAIN ASSERT THAT PERFORMANCE UNDER THE 1956 SPECIFICATION HAD BEEN ATTEMPTED WITHOUT SUCCESS BY LANDSVERK ELECTROMETER COMPANY PRIOR TO UNIVERSAL'S CONTRACT, THAT THIS FACT WAS NOT DISCLOSED TO UNIVERSAL AT THE PREBID CONFERENCE, AND THAT YOUR CLIENT DID NOT AND COULD NOT ANTICIPATE THE RESEARCH AND DEVELOPMENT EFFORT IT WAS REQUIRED TO EXPEND.

THE CONTRACTING AGENCY STATES UNEQUIVOCABLY THAT THE 1956 SPECIFICATION IS A PERFORMANCE, AND NOT AN ENGINEERING OR DESIGN, SPECIFICATION. REPORTS THAT NO HARD AND FAST MATERIAL, PROCESS, OR DIMENSIONAL REQUIREMENTS WERE IMPOSED UPON THE CONTRACTOR BY THESE SPECIFICATIONS, WHICH WERE ESSENTIALLY AN OUTLINE OF PERFORMANCE REQUIREMENTS. FURTHERMORE, THE REVISIONS MADE IN THE 1959 SPECIFICATION, UNDER WHICH SPECIFICATION BENDIX ACHIEVED APPROVAL OF INITIAL PRODUCTION TEST RESULTS IN THREE MONTHS AFTER THE CONTRACT AMENDMENT, DID NOT INCORPORATE IMPROVED ENGINEERING DESIGNS, BUT DID INTRODUCE MORE STRINGENT PHYSICAL RESTRICTIONS AND PERFORMANCE REQUIREMENTS. SOME OF THESE MORE STRINGENT REQUIREMENTS COVERED CERTAIN ASPECTS OF PERFORMANCE WHICH YOUR CLIENT HAD FAILED TO MEET UNDER THE MORE LENIENT 1956 SPECIFICATION. IN ADDITION, IT IS REPORTED THAT THE 1959 ACCEPTANCE TEST SPECIFICATIONS WERE MUCH MORE STRINGENT THAT THOSE OF 1956, AS WERE THE INSPECTION PROCEDURES, WHICH REQUIRED INSPECTION OF 25 INSTEAD OF 6 ITEMS.

OUR REVIEW OF THE 1956 SPECIFICATION INDICATES THAT, EXCEPT FOR CERTAIN MINOR DESIGN RESTRICTIONS ON THE PHYSICAL CHARACTERISTICS, SUCH AS SIZE, WEIGHT, COLOR AND MARKING, NO INSTRUCTIONS OR DIRECTIONS AS TO HOW STATED OPERATIONAL REQUIREMENTS SHOULD BE MET ARE INCLUDED THEREIN. ALSO, WE CANNOT AGREE THAT ATTACHMENT A TO THE SPECIFICATION, WHICH CALLED FOR "DESIGN TESTS" AND "SPECIAL DESIGN TESTS," PLACES THE DESIGN RESPONSIBILITY ON THE GOVERNMENT. THESE TESTS WERE INTENDED TO DETERMINE CONFORMANCE OF THE CONTRACTOR'S DOSIMETER WITH 18 SPECIFIC PARAGRAPHS OF THE 1956 SPECIFICATION, 17 OF WHICH APPEAR TO SET FORTH PERFORMANCE CHARACTERISTICS. CLEARLY, THE PURPOSE OF THE "DESIGN" TESTS WAS TO DETERMINE IF A DOSIMETER OF THE CONTRACTOR'S DESIGN WOULD MEET THE PERFORMANCE-TYPE SPECIFICATIONS.

THE VIRTUAL ABSENCE OF DESIGN FEATURES IN THE SPECIFICATION MAY EXPLAIN THE BASIS OF STATEMENTS BY YOUR CLIENT IN A LETTER OF OCTOBER 22, 1959, THAT IT HAS "OVER-ESTIMATED ITS ABILITY IN THIS PARTICULAR ITEM WITHOUT GIVING FULL CONSIDERATION TO THE EXTENT OF RESEARCH AND DEVELOPMENT REQUIRED," AND IN A LETTER OF SEPTEMBER 28, 1960, THAT "IT IS BELIEVED THAT THE NEWNESS OF THIS PRODUCT SIMPLY MADE IT UNREALISTIC TO EXPECT PRODUCTION UNDER THE 1956 SPECIFICATIONS AT A COMPETITIVE PRICE.'

CONCERNING UNIVERSAL'S CONTENTION THAT THE CONTRACT DID NOT DISCLOSE THE ALLEGEDLY EXPERIMENTAL NATURE OF THE SPECIFICATION REFERENCED THEREIN, THE RELEVANCY OF SUCH CONTENTION MUST BE QUESTIONED, SINCE THE RECORD DOES NOT ESTABLISH THAT PERFORMANCE UNDER THE 1956 SPECIFICATION WAS IMPOSSIBLE, AND THE CONTRACTING AGENCY REPORTS THAT THE 1956 SPECIFICATION IS A RELAXED VERSION OF MILITARY SPECIFICATIONS WHICH HAD BEEN USED SINCE PRIOR TO 1950 FOR AFFECTING LARGE PROCUREMENTS OF DOSIMETERS. FURTHER, YOUR ASSERTION THAT LANDVERK ELECTROMETER COMPANY HAD BEEN UNABLE TO MEET THE 1956 SPECIFICATION FOR DOSIMETERS IS DENIED BY THE ADMINISTRATIVE AGENCY, WHICH REPORTS THAT LANDSVERK HAS NEVER BEEN AWARDED A CONTRACT UNDER THESE SPECIFICATIONS.

WITH RESPECT TO YOUR CONTENTION THAT YOUR CLIENT PRODUCED PREPRODUCTION SAMPLES OF EXPERIMENTAL DOSIMETERS IN ACCORDANCE WITH THE 1956 SPECIFICATION WHICH DID NOT ACHIEVE PERFORMANCE CHARACTERISTICS ACCEPTABLE TO THE GOVERNMENT, THE EVIDENCE OF RECORD WOULD APPEAR TO SUPPORT THE CONCLUSION THAT, WHILE YOUR CLIENT DID PRODUCE PREPRODUCTION SAMPLES UNDER THESE SPECIFICATIONS, SUCH SAMPLES WERE DESIGNED IN ACCORDANCE WITH ITS OWN ENGINEERING CONCEPTS AND DID NOT ACHIEVE THE PERFORMANCE CHARACTERISTICS REQUIRED BY SUCH SPECIFICATIONS. SINCE THE RECORD FURTHER INDICATES THAT ANOTHER COMPANY EXPERIENCED NO APPARENT DIFFICULTY IN PRODUCING A DOSIMETER WHICH MET MORE SEVERE PERFORMANCE DEMANDS, IT WOULD APPEAR TO FOLLOW THAT THE CONTRACT AMENDMENT CANNOT BE CONSTRUED AS AN ADMISSION BY THE GOVERNMENT THAT THE 1956 SPECIFICATION WAS NOT SUSCEPTIBLE OF PERFORMANCE BY ANYONE.

IN VIEW OF THE FOREGOING, OUR DISALLOWANCE OF UNIVERSAL'S CLAIM UNDER DATE OF DECEMBER 16, 1963, IS SUSTAINED.

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