Specialty Assembling & Packing Co. v. United States

• Decision Date: 21 January 1966
• Docket Number: No. 204-57.,204-57.
• Citation: 174 Ct. Cl. 153,355 F.2d 554
• Parties: SPECIALTY ASSEMBLING & PACKING CO., Inc. v. The UNITED STATES.
• Court: U.S. Claims Court

174 Ct. Cl. 153, 355 F.2d 554 (1966)

SPECIALTY ASSEMBLING & PACKING CO., Inc. v. The UNITED STATES.

No. 204-57.

United States Court of Claims.

January 21, 1966.

COPYRIGHT MATERIAL OMITTED

Harold I. Cammer, New York City, attorney of record, for plaintiff.

John G. Roberts, Washington, D. C., with whom was Asst. Atty. Gen., John W. Douglas, for defendant. Edwin J. Reis, Washington, D. C., of counsel.

Before COWEN, Chief Judge, and LARAMORE, DURFEE, DAVIS and COLLINS, Judges.

PER CURIAM:^*

The amended and supplemental petition filed by the plaintiff on March 14, 1960, contained 18 separate counts and asserted claims under a number of contracts that were entered into between the plaintiff and the defendant (acting through the Signal Corps of the Army) during the period 1949-1950.

On February 7, 1962, the court partially allowed a motion for summary judgment filed by the defendant, and dismissed counts 2, 4, 6, 8, 10, 12, 14, 15, 16, 17, and 18 (298 F.2d 794, 156 Ct. Cl. 252).

Thereafter, during the pretrial proceedings, the plaintiff voluntarily withdrew subparagraphs (b) and (c) of paragraph 4 of count 1, subparagraph (c) of paragraph 11 of count 3, subparagraphs (e), (g), and (h) of paragraph 17 of count 5, and counts 9, 11, and 13. Thus, there remain for consideration and disposition counts 1 (as modified), 3 (as modified), 5 (as modified), and 7. These counts involve four different contracts.

FIRST COUNT

The first count of the amended and supplemental petition, as modified by the withdrawal of subparagraphs (b) and (c) of paragraph 4, relates to contract No. W-36-039-SC-46999 (which will usually be referred to hereafter in the commissioner's report as "contract 46999"). This contract was awarded to the plaintiff by the Signal Corps on May 25, 1949, and it originally called upon the plaintiff to produce 2,004 multimeters for an agreed price of $186,995. By a later amendment, the number of multimeters was increased to 2,520 and, with spare parts, the price was increased to $328,211.69. The contract scheduled the plaintiff's production deliveries to commence on November 30, 1949, and to end on February 23, 1950.

Contract 46999 provided that the multimeters were to be manufactured in accordance with U.S. Army Specification 71-3346. This was a performance-type specification that called for the production of an instrument which would meet specified performance standards in electrical measurement.

Paragraph 36 of contract 46999 required the plaintiff to submit five preproduction samples of the multimeter to the Signal Corps for approval within 120 days after the award, or by September 23, 1949. In this connection, subparagraph (c) of paragraph 36 provided that:

The Government will retain the samples for a period not exceeding 55 days. The contractor will not go into production * * * until written approval of the samples has been secured from the Contracting Officer.

A multimeter is an instrument that makes certain electrical measurements, particularly of voltages and resistances, essential for the testing and repair of electronic equipment. Contract 46999 called for the production of an instrument capable of measuring alternating current having a frequency range of up to 500 megacycles per second. No single instrument having such characteristics had previously been produced, and the plaintiff was not furnished any drawings or any model conforming to the specifications.

The heart of a multimeter is a radio frequency (RF) probe, the primary element of which is an electron tube known as a diode. No diode with the characteristics required by contract 46999 had been built prior to the letting of this contract, and considerable research and development work was required to produce an appropriate diode. While the probe was external to the rest of the instrument, being connected to it by a cable, the design of the entire instrument was dependent upon the design of the probe.

The plaintiff retained Kip Electronics, a manufacturer of electron tubes, and, with it, undertook to develop a diode that would meet the prescribed specifications. The resulting diode was incorporated into two engineering prototypes of the multimeter, which the plaintiff delivered to the Signal Corps Engineering Laboratories at Fort Monmouth, New Jersey, on October 28, 1949, for testing. These prototypes were not intended to be the preproduction samples called for by paragraph 36 of contract 46999.

The Signal Corps Engineering Laboratories lacked the equipment required for the testing of the engineering prototypes submitted by the plaintiff, and sent them to the Bureau of Standards in Washington, D. C., for evaluation and testing, particularly with reference to the operation of the probe. Examination and testing by the Bureau of Standards and conferences among the engineers representing the Bureau of Standards, the Signal Corps, and the plaintiff resulted in minor changes in the design of the diode, and in the determination that aging of the diode was essential in order to correct it for air entrapped on the interior surface of the glass, which resulted in unstable performance. Thereafter, the plaintiff proceeded to prepare five preproduction samples of the multimeter, incorporating in them the changes mentioned in the preceding sentence.

Between February 15 and 20, 1950, the plaintiff delivered to the Signal Corps the five preproduction samples called for by paragraph 36 of contract 46999. This was 5 months later than paragraph 36 required, but the defendant at no time complained of this delay.

As previously indicated, subparagraph (c) of paragraph 36 of contract 46999 provided that the defendant would retain the preproduction samples "for a period not exceeding 55 days," and that the plaintiff would not begin production of the multimeters "until written approval of the samples has been secured from the Contracting Officer." This provision clearly required the defendant to approve or reject the preproduction samples within 55 days after their submission, or by April 16, 1950. On three occasions between February and April 1950, the plaintiff advised the contracting officer that it was prepared to start deliveries within 45 days after the receipt of the required written approval. The defendant never gave written approval of these samples.

As it had done with the engineering prototypes, the Signal Corps sent the preproduction samples to the Bureau of Standards for testing, and over a year's delay ensued. The delay was due to the fact that the Signal Corps Engineering Laboratories did not possess the required RF standards for the specified frequency and voltage ranges, and much time was lost in scheduling these tests to take place at the Bureau of Standards in Washington, D. C. Furthermore, the Bureau of Standards required a great deal of time for the preparations that were necessary in order to make these tests.

By October 1950, the Bureau of Standards had not yet completed its tests. The parties thereupon agreed to establish at the plaintiff's plant a pilot run under the supervision of a Signal Corps field engineer in an effort to develop pragmatic test procedures by means of which it could be determined whether the multimeters produced by the plaintiff performed in accordance with the specifications. A pilot run is an experimental method sometimes employed for initial, limited production of a new item on a tentative basis and under close engineering supervision.

In April 1951, as a result of the experience gained from the pilot run at the plaintiff's plant, test procedures were agreed upon by the Signal Corps field engineer, engineers of the Bureau of Standards, and representatives of the plaintiff.

In June 1951, the plaintiff received the return of one of its preproduction sample multimeters, which the Bureau of Standards had calibrated for use as a standard by which to test other instruments produced under contract 46999.

Prior to July 6, 1951, the defendant did not accept any of the multimeters produced during the pilot run, except for five units which the defendant took in February 1951 under a waiver by the contracting officer to meet an emergency requirement. Commencing July 6, 1951, the defendant began accepting deliveries under contract 46999; and by September 18, 1951, approximately 400 units had been delivered to the defendant. By a letter dated September 18, 1951, the defendant terminated the pilot run. Thereupon, the plaintiff commenced normal production of the multimeters. Deliveries under the contract were completed in May 1952.

The multimeters which the plaintiff eventually produced and which the defendant accepted under contract 46999 were identical with the preproduction samples which the plaintiff submitted in February 1950, except for some minor corrections requested by the defendant.

As a party to a contract, the Government has rights and obligations similar to those of a private person under similar circumstances. Perry v. United States, 294 U.S. 330, 352, 55 S. Ct. 432, 79 L.Ed. 912 (1935); Standard Rice Company, Inc. v. United States, 53 F.Supp. 717, 101 Ct.Cl. 85, 95 (1944), affirmed 323 U.S. 106, 65 S.Ct. 145, 89 L.Ed. 104. Therefore, when the Government promised in subparagraph (c) of paragraph 36 of contract 46999 to approve or reject the plaintiff's preproduction samples within 55 days after their submission, there was implicit in this promise an assurance to the plaintiff that the Government was able to, and would, discharge its obligation in this respect. Carnegie Steel Co. v. United States, 240 U.S. 156, 165-166, 36 S.Ct. 342, 60 L.Ed. 576 (1916). It is true that the Government encountered unforeseen difficulties in acting on the preproduction samples, due principally to the fact that the probe to be produced under the contract as an integral part of the multimeter was a new device and the Government could not be sure that the existing test procedures were fully capable of measuring the...