Teledyne Lewisburg v. U.S.

• Citation: 699 F.2d 1336
• Decision Date: 14 February 1983
• Docket Number: No. 254-80,254-80
• Parties: 30 Cont.Cas.Fed. (CCH) 70,826 TELEDYNE LEWISBURG, Appellee, v. The UNITED STATES, Appellant. Appeal
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

Page 1336

699 F.2d 1336

30 Cont.Cas.Fed. (CCH) 70,826

TELEDYNE LEWISBURG, Appellee, v. The UNITED STATES, Appellant.

Appeal No. 254-80.

United States Court of Appeals Federal Circuit.

Feb. 14, 1983.

Harvey G. Sherzer, Washington, D.C., argued for appellee. With him on the brief were Pettit & Martin, E. Sanderson Hoe, Frederic M. Levy, McKenna, Conner & Cuneo, Washington, D.C., and Lewis Kent, Northridge, Cal.

Eileen P. Fennessy, Washington, D.C., argued for appellant. With her on the brief were Asst. Atty. Gen. J. Paul McGrath, Frances L. Nunn, and Stephen R. O'Neil, Washington, D.C.

Before NICHOLS, KASHIWA, and NIES, Circuit Judges.

PER CURIAM.

This government contract case comes before us on appeal from the United States Claims Court. ^* It arises in the context of a Wunderlich review of a decision of the Armed Services Board of Contract Appeals. 41 U.S.C. Secs. 321, 322 (1976). On appeal by the Government two major issues are posed:

(1) whether the trial judge improperly made de novo fact findings; and

(2) whether the Government was liable due to warranties made in the contract for delivery of an outdated drawing set to the contractor or whether the contract's disclaimer relieved the Government of any liability.

Judge Spector held that the contract's disclaimer did not relieve the Government from liability when it delivered a drawing set that was outdated in that it was not the most recent set in its possession nor was it a drawing set that conformed to the model furnished by the Government. He found that the drawing set delivered had not met the warranties made in the contract. He further held that the Government's waiver of certain EMI (electromagnetic interference) specifications under the contract was not an accord and satisfaction of the contractor's EMI claims. Thus Judge Spector held that the contractor was entitled to recover the costs, including delay costs, of the review it undertook when it discovered it had an outdated drawing set, and the costs it incurred in trying unsuccessfully to eliminate the EMI difficulties which persisted despite conformance to the control plan approved by the Government. We agree.

We have made a careful and full review of the voluminous record in this case, consisting of 364 pre-hearing exhibits plus additional exhibits offered at the hearing and 2,636 pages of transcript. We find that the trial judge did not improperly make de novo fact findings. The trial judge primarily adopted the fact findings of the Armed Services Board of Contract Appeals. In only a few instances did he actually reject the board's findings. In those instances we hold that those facts found by the board were not supported by substantial evidence. We further hold that Judge Spector was correct in his legal analysis. The analysis and legal conclusions drawn by the board are not entitled to any finality. 41 U.S.C. Secs. 321, 322. Its decision was based upon one interpretation of the contract provisions by which neither Judge Spector nor we are bound. We fully agree with Judge Spector's opinion, which is appended hereto, and therefore affirm on the basis of that opinion. We wish, however, to add a few comments in response to the Government's appeal.

The appellant argues the trial judge improperly found there was no evidence to support the board's finding that appellee knew the prior contractor received waivers. The portions of the transcript cited by the board to support that finding do not, however, even concern that question. Appellant, now, first points to one individual's brief statement, not cited by the board, to support its argument. Although the testimony cited does mention waivers, it does not mention what the waivers were. The only relevant waivers in this decision are those waivers given the prior contractor for the EMI specifications. The testimony appellant points to makes no mention of these particular waivers. Indeed, it is entirely unclear what the brief mention in the record refers to. There is no other mention in the record that appellee knew about the waivers. The Claims Court therefore properly found that the board's finding in this regard was not supported by substantial evidence.

Appellant contends the trial judge found facts contrary to those of the board with respect to the pre-proposal conference. The trial judge, however, simply observed in footnotes that appellee's testimony was contrary to the board's finding. He, nonetheless, adopted the board's finding.

Appellant also argues there is no evidence the drawing set given appellee was outdated in relation to a later drawing set. The board, however, found the appellee did not receive the most recent drawing set in the possession of the Government. Board decision at 16. Appellant contends that even if there were two sets of drawings, the record is devoid of evidence that there were any differences between the two sets. Our review of the record shows that there were revision level changes made from the date of the first drawing set to the date of the second drawing set. More importantly, this is not critical to the decision of the Claims Court. What is important is that the appellee's actions were reasonable in light of the fact it discovered it had an outdated drawing set. The record contains detailed evidence demonstrating that appellee's drawing set did not conform to the model supplied by the Government and that others had informed appellee it had an outdated drawing set. Prior to award of the contract appellee was allowed under the bidding procedures to look at the model but not to take it apart. Thus there was no way for the appellee to know that the drawings did not conform to the model. Further, appellant's assertion that the issue of outdated drawings was not raised before the board is erroneous since the board made findings about this. Board decision at 16.

In addition, appellant argues that the decision of the Claims Court is incorrect since the board found appellee failed in its burden to show the drawings were inadequate. It is true the board made this finding; this finding, however, is irrelevant to the legal reasoning of the Claims Court. The decision of the Claims Court rests upon the conclusions that appellee's detailed analysis of the drawings and the resultant delay were reasonable in light of the contract and the fact that appellee had an outdated drawing set.

Lastly, we wish to emphasize that we find this case similar to Thompson Ramo Wooldridge, Inc. v. United States, 361 F.2d 222 (Ct.Cl.1966) and distinguishable from Rixon Electronics, Inc. v. United States, 536 F.2d 1345 (Ct.Cl.1976), upon which the board relied. In Thompson, the Government was held liable for delivery to the contractor of unusable microfilm despite disclaimer language that seemed to negate the representations made in the contract concerning that government furnished property. In both Thompson and this case, the government furnished property was expressly stated to be of assistance in meeting the interchangeability requirement. The court in Thompson, in construing the same disclaimer language as in the instant case, held that the disclaimer did not nullify the representation made regarding the purpose for which the government furnished property was supplied. Although the contract in Thompson expressly provided for an equitable adjustment if the government furnished property was inadequate, a provision not in the contract at issue now, we find that difference to be inconsequential. The warranties made by the Government in the instant contract cannot simply be ignored because there was no equitable adjustment clause.

The present case clearly differs from Rixon since that decision rested upon a release of the contractor's claims that the contractor failed to prove was due to duress. Further the court in Rixon distinguished its case from Thompson by stating that there was "no statement * * * in the contract that the microfilm [was] usable for interchangeability." 536 F.2d at 1350. For that same reason Rixon is also distinguishable from the present case.

We have considered all the other contentions of the appellant and find them to be meritless. The decision of the Claims Court is affirmed.

AFFIRMED.

APPENDIX

The opinion of Judge Spector of the Claims Court follows:

This case involves review of a decision of the Armed Services Board of Contract Appeals ("ASBCA" or "Board") under the Wunderlich Act. ¹ Presented are two related claims alleging constructive changes in the contract by reason of the furnishing by the Government to the plaintiff of outdated manufacturing drawings, and of a model produced under a prior contract which did not meet the electromagnetic interference requirements of the specifications. The Government responds that it effectively disclaimed responsibility for the outdated drawings and for the noncompliant model which it had furnished.

STATEMENT OF FACTS ²

Introduction

We have here a case involving the design and manufacture of the AN/PRC-75 radio set, a portable, self-contained ultrahigh frequency (UHF) radio transceiver. The set is battery-powered, weighs approximately 10 1/2 pounds, and can be held and operated in one hand. It consists of six modules and 21 hybrid micro-circuits, totalling approximately 2,400 piece parts. Plaintiff is a well-known manufacturer of electronic equipment. The Government has in the past relied on it to produce a variety of sophisticated items including space telemetry, ground checkout equipment for use in the space program, and UHF transceivers for shipboard communications. Acting through the Department of the Navy, Naval Electronic Systems Command (NAVELEX), the Government entered into Contract No. N00039-73-C-0417 with plaintiff on October 20, 1972. Plaintiff was required thereunder to manufacture and deliver a quantity of the AN/PRC-75 radio sets. The contract was the product of "two-step" formally advertised procurement. The first step solicited unpriced...