Dana Corporation v. United States

• Decision Date: 12 December 1972
• Docket Number: No. 390-70.,390-70.
• Citation: 200 Ct. Cl. 200,470 F.2d 1032
• Parties: DANA CORPORATION v. The UNITED STATES.
• Court: U.S. Claims Court

200 Ct. Cl. 200, 470 F.2d 1032 (1972)

DANA CORPORATION v. The UNITED STATES.

No. 390-70.

United States Court of Claims.

December 12, 1972.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Maurice J. Gilchrist, Bronxville, New York, for plaintiff; Robert D. Witte, attorney of record. Witte & Witte, Bronxville, N. Y., of counsel.

Gerald L. Schrader, Washington, D. C., with whom was Asst. Atty. Gen. Harlington Wood, Jr., for defendant.

Before COWEN, Chief Judge, and DAVIS, SKELTON, NICHOLS, KASHIWA, KUNZIG and BENNETT, Judges.

ON PLAINTIFF'S MOTION AND DEFENDANT'S CROSS-MOTION FOR SUMMARY JUDGMENT

PER CURIAM:

This case was referred to Trial Commissioner Franklin M. Stone with directions to file his opinion on the issues of plaintiff's motion and defendant's cross-motion for summary judgment under the order of reference and Rule 166(c). The commissioner has done so in an opinion and report filed on April 21, 1972, in which such facts as are necessary to the opinion are set forth. Defendant has filed a request for review by the court of part of the commissioner's opinion and report, and plaintiff in effect filed a belated request for review of other parts of the opinion and report. The case has been submitted to the court on oral argument of counsel and the briefs of the parties. The court hereby adopts the trial commissioner's opinion with modifications — as hereinafter set forth — and modifies his conclusions, also as hereinafter set forth. The modified opinion and conclusions form the basis for the court's judgment in this case. Therefore, defendant's motion for summary judgment is granted and plaintiff's motion is denied with respect to the kits packaged prior to April 6, 1967; with respect to the kits packaged between April 6, 1967, and July 19, 1967, further proceedings in this court are suspended pursuant to Rule 167 for a period of six months to afford the parties an opportunity to obtain administrative resolution of the issues specified infra in the opinion.

Commissioner Stone's opinion, as modified by the court, is as follows:

This contract case is before the court on plaintiff's motion and defendant's cross-motion for summary judgment. The court is called upon to review, in accordance with the standards prescribed by the Wunderlich Act,¹ a decision rendered by the Post Office Department Board of Contract Appeals (POD BCA) on March 30, 1970,² denying plaintiff's claim for additional compensation in the amount of $55,193.25, for packaging charges on shipments of 10,513 rear axles sold and delivered to the Post Office Department ("POD" or "Department") by plaintiff.

Over the years between 1951 and 1966, the POD had procured about 20,000 mailster-type three-wheel vehicles. Plaintiff, a major manufacturer of axles, had previously furnished rear axles to several prime contractors for inclusion in these "mailsters" which they had sold to the POD. Problems of vehicle stability and safety were encountered and studies were initiated to correct same in which plaintiff participated. In June 1966, the POD decided to replace, as soon as possible, the rear axles of a substantial number of these mailsters with axles of larger dimension to provide greater vehicle stability.

On June 8, 1966, the Department issued a "Request for Quotation" (RFQ) for the replacement of rear axles, on a modified Standard Form 33.³ The items to be supplied were described in said request as follows:

AXLE MODIFICATION RETROFIT KITS, Part No. 25700-IX (6,413 Kits) and Part No. 25699-IX (2,600 Kits), manufactured by the Dana Corporation, Salisbury Division, 2601 Tyler Avenue, Fort Wayne, Indiana, including instructions for installation on the Westcoast and Universal Fiberglas 1/4-ton vehicles. The instruction sheets shall be of the exact types the contractor normally furnishes commercially for these type kits.

The request called for the offer "F.O. B. CARS OR WHARVES, POINT OF MANUFACTURE * * *," and in this connection further stated in pertinent part: "Prices are desired for complete delivery, F.O.B. * * * in * * * days from the date of award of contract."

The request also contained, inter alia, the following pertinent provisions:

Offeror is required to state approximate Gross Weight in pounds ____, Height ____, Width ____, Depth ____ in inches of cartoned kits. This will be used only for determining the means of making shipments and for the issuance of shipping instructions.

PACKAGING: Each axle modification retrofit kit is to be packaged separately in accordance with the best standard commercial practices for this type commodity.

PACKING: Each packaged kit is to be prepared for shipment in a manner to insure carrier acceptance and safe delivery to destination at the lowest applicable rate. Containers shall conform to the Consolidated Freight Classification Rules or other carrier regulations applicable to the mode of transportation.

Plaintiff completed, signed, and returned the modified Form 33, together with a letter dated June 21, 1966. The form contained a quotation of $84.67 per kit for the 6,413 kits (Part No. 25700-IX), for a total of $542,988.71, and an identical quotation per kit for the 2,600 kits (Part No. 25699-IX), for a total of $220,142. Beside this quote was a notation of "See letter." In addition, it indicated that a Federal Excise Tax of $6.77 per unit should be added unless proof of exemption certificate was provided for both items.

The aforementioned letter provided in part as follows:

The price of $84.67 per retrofit kit is based on standard commercial pack of five axles per pallet, and loose parts in a bag attached to the axle.

For kits packed individually, add $4.50 each to the quoted price. For kits packed individually, six per expendable pallet, add $5.25 each to the quoted price.

The letter contained no other mention of packing or packaging.

The evidence in the record is undisputed that plaintiff had not completed the kit design nor the disassembly and installation procedures at the time of the submittal of its proposal, and that certain members of the POD (particularly in the Research and Engineering Division) were aware of this fact.

For clarification at this point, it should be noted that defendant contends that plaintiff's June 21, 1966 letter gave the POD a choice between three alternative methods of packaging, with the price for each method listed. Plaintiff, on the other hand, contends that the letter offered defendant no choice but set out three alternatives, with the one to be utilized governed by the design and configuration of the kit and its disassembly and installation procedures when that work was completed.

In a letter dated June 30, 1966, Edwin R. Itnyre, the Contracting Officer, advised plaintiff that its proposal in the total amount of $824,148.72 had been accepted and authorized plaintiff to proceed immediately. He also stated therein that a copy of the definitive contract, dated June 30, 1966, would be forwarded to plaintiff at an early date. The $824,148.72 represented 9,013 kits (total number required by contract) at $91.44 per kit, which was the unit price of $84.67, plus the Federal Excise Tax of $6.77. However, only the total amount was stated in the letter.

By July 14, 1966, the definitive contract, which consisted essentially of the modified Standard Form 33 (see n. 3, supra), as completed and signed by plaintiff on June 21, 1966, was delivered to plaintiff. The form was signed by Mr. Itnyre, as Contracting Officer, and showed the date of award to be June 30, 1966, and the amount of the contract as $824,148.72. In addition, it contained a new sheet, numbered 2C, entitled "IMPORTANT NOTICE TO SUCCESSFUL CONTRACTOR." This notice advised that the bid accepted included any acceptable modifications and clarifications to the bid prior to the date of award, and specifically listed, among others, plaintiff's letter of June 21, 1966. The insert also included the following provision: "Accepting standard commercial pack of 5 axles per pallet, and loose parts in a bag attached to the axle." It further noted that the award amount included an 8 percent Federal Excise Tax and that in the event the tax was not applicable, the contract would be reduced accordingly. On September 10, 1966, the POD issued Amendment No. 1 to the contract adding 1,500 kits to be furnished by plaintiff at $91.44 for an increase of $137,160, resulting in a new total contract price of $961,308.72 for 10,513 kits. The kits were added in accordance with a contract provision which allowed the Government to increase the quantity up to 25 percent at the contract unit price within 90 days after award of the contract.

Motivated by the fact that the mailster vehicles at many destinations were idled for lack of suitable rear axle equipment, Julius E. Hall, Contract Administrator for the POD, proceeded to gather necessary information for issuing complete shipping instructions with a suitable priority list based on relative urgency of need for the kits. Mr. Hall obtained shipping lists prepared by the Vehicles Branch, Maintenance Division, POD, which he routed to William Roe, the POD's traffic man, for proper routing instructions and specification of carriers.

In August or September 1966, Henry Workman, plaintiff's Material Handling and Packaging Engineer, devised a system of individual packaging, 15 to a pallet, on the assumption that the large components would not be attached to the axle. However, the final decision on the design and configuration had not been made. Mr. Workman testified that if it had been determined to attach the large items to the axle, he would not have proposed individual packaging. Mr. Workman was not involved in the contract area and did not know of the packaging provisions of this contract. On or about October 14, 1966, Mr. Workman talked with Mr. Roe on the telephone. Messrs. Workman and Roe gave conflicting accounts of the discussion that took place during this telephone conversation...