Highway Products, Inc. v. United States

• Decision Date: 28 January 1976
• Docket Number: No. 48-73.,48-73.
• Citation: 530 F.2d 911
• Parties: HIGHWAY PRODUCTS, INC. v. The UNITED STATES.
• Court: U.S. Claims Court

530 F.2d 911

HIGHWAY PRODUCTS, INC. v. The UNITED STATES.

No. 48-73.

United States Court of Claims.

January 28, 1976.

COPYRIGHT MATERIAL OMITTED

Timothy V. Dix, Akron, Ohio, for plaintiff. Richard E. Guster, Akron, Ohio, atty. of record. Roetzel & Andress, Akron, Ohio, of counsel.

Russell W. Koskinen, Washington, D.C., with whom was Asst. Atty. Gen. Rex E. Lee, Washington, D.C., for defendant.

Before SKELTON, NICHOLS and KUNZIG, Judges.

ON PLAINTIFF'S MOTIONS FOR SUMMARY JUDGMENT AND TRIAL DE NOVO AND DEFENDANT'S CROSS-MOTION FOR SUMMARY JUDGMENT

PER CURIAM:

This case comes before the court on plaintiff's request, filed May 8, 1975, for review by the court of the recommended decision of Trial Judge Kenneth R. Harkins, filed April 7, 1975, pursuant to Rule 166(c) on plaintiff's motion and defendant's cross-motion for summary judgment, wherein such facts as are necessary to the decision are set forth. The case has been submitted to the court on the briefs and oral argument of counsel. Since the court agrees with the recommended decision of the trial judge, as hereinafter set forth, it hereby affirms and adopts the said decision as the basis for its judgment in this case. Therefore, plaintiff is not entitled to recover, its motions for summary judgment and trial de novo are denied, defendant's cross-motion for summary judgment is granted and plaintiff's petition is dismissed.

OPINION OF TRIAL JUDGE

HARKINS, Trial Judge:

This case stems from a competitively negotiated, firm, fixed-price supply contract with the Department of the Army for 30 Hawk missile launchers¹ and is before the court on cross-motions for summary judgment for review, pursuant to Wunderlich Act² standards, of nine claims denied by the Armed Services Board of Contract Appeals (ASBCA).³

Plaintiff seeks $123,026.10 for additional costs allegedly incurred because its low bid and the contract price resulted from a defective body of technical information that accompanied the request for proposals (RFP), which defects were not corrected by defendant until after plaintiff's bid was confirmed. Plaintiff asserts five alternative grounds for relief:

(1) Forty of the ASBCA's findings of fact are challenged as not supported by substantial evidence and seven of the ASBCA's conclusions as erroneous as a matter of law;

(2) The supply of source information previously omitted in the RFP technical package was a compensable change in the circumstances of this case;

(3) An express agreement entered concurrently with the execution of the contract would permit plaintiff to be compensated for performance requirements of which it was not aware when it submitted its bid;

(4) Defendant's representatives overreached plaintiff by accepting a contract that they knew was based on defective drawings and specifications as well as misinformation; and

(5) Mistake of material fact rendered the written terms of the contract different from the contract intended by the parties.

For the reasons set forth below, the findings of the ASBCA are supported by substantial evidence, its conclusions are legally correct, and plaintiff's claims for relief outside the contract are not supported by the record.

The Hawk missile system had been developed by the United States Army Missile Command at Redstone Arsenal (Redstone), Alabama. Raytheon had been the prime contractor and a Division of Northrop Corporation had been the sole source subcontractor for Hawk missile launchers. About 700-800 Hawk missile launchers had been manufactured prior to plaintiff's contract, which was the first breakout for competitive procurement of the launcher. Plaintiff's management was experienced in Government procurement and familiar with Government contract principles. Plaintiff's president and chief executive officer, over a 21-year period, had held engineering or management positions with firms that had Government contracts in excess of $300,000,000.

On January 26, 1962, the Ordnance District of Cleveland (Cleveland Ordnance) solicited proposals for the launchers from 10 potential manufacturers, including plaintiff, Highway Products, Inc. The RFP consisted of the standard transmittal letter, which stated in part "proposals should include a statement to the effect that you understand the requirements and can comply therewith," a schedule, a list of standard clauses, and an Exhibit A, which listed applicable drawings, applicable specifications, missile purchase descriptions (MPD's), and military and federal standards. The technical package called out in the RFP included approximately 2,400 drawings and totaled approximately 3,000 individual items.

Exhibit A to the RFP had been compiled at Redstone. Reproducible drawings, the MPD's, and design agency specifications were assembled at Redstone and furnished to the various procurement districts for reproduction. The various districts added the Army and Navy specifications (AN's), the joint Army and Navy specifications (JAN's), and other similar specifications, and put together the technical packages to accompany the RFP's. Since a specific purpose of the procurement breakout was to obtain additional supply sources for the launcher and its component parts, source information was deleted from the drawings in the RFP technical package.

Plaintiff's claims arise from deficiencies and discrepancies in the technical packages furnished by defendant from the documents that comprised the RFP and the executed contract. Exhibit A, in both the RFP documents and in the executed contract, was the same and referenced the same lists of drawings, specifications, MPD's and other standards. The technical package that was delivered with the RFP differed from the package that was delivered in association with the executed contract. The RFP package did not contain all of the drawings and specifications listed on Exhibit A, nor did it contain all referenced but unlisted drawings and specifications, and many of the drawings that were furnished were illegible. After plaintiff had submitted its bid and by the time the contract was executed, or shortly thereafter, however, plaintiff had been furnished a complete technical package.

The record is not clear, and, in the circumstances, the board could make no finding that would specify the items that plaintiff received in the RFP technical package. Testimony of plaintiff's witnesses and defendant's witnesses as to the completeness of the RFP technical package is in conflict. Further, plaintiff's assertions as to the completeness of the RFP technical package differed during the course of the bidding and negotiating process. In addition, the record is not clear whether the technical package that was delivered in connection with execution of the contract consisted of the complete package that originally was supposed to be with the RFP, or whether it contained drawings that showed the changes that had taken place since the technical package had been frozen for the procurement, and which were the basis for negotiation of changes that ultimately were incorporated in contract Modification Nos. 1 and 8.

Plaintiff received the RFP technical package in early February 1962. Although plaintiff's examinations showed the technical package to be deficient, the board found that plaintiff, before it submitted its bid, "never made or attempted a complete and exhaustive analysis and identification of all of the various drawings and specifications making up the RFP package."⁴ This finding is supported by substantial evidence.

On February 15, 1962, after preliminary telephone discussions with the contract administrator at Cleveland Ordnance about drawing problems, plaintiff submitted a list of 53 missing drawings, 18 unlisted but referenced drawings, and requested replacement of one illegible drawing. On February 20, 1962, during a visit to Redstone, plaintiff's contract administrator obtained all but nine of these 71 missing or unlisted drawings, and the nine remaining drawings were delivered subsequently by special delivery.

On February 22, 1962, plaintiff used the drawing problem as a basis for its request for a 2-week extension for submission of a proposal. Plaintiff's letter did not request other drawings and indicated that only a time extension was needed:

Some of these missing drawings turned out to be of such a nature that we could have scarcely submitted a reasonably accurate proposal without them, and most of the assembly drawings which were not included were the only means of determining quantities of components involved.

Inasmuch as we found it necessary to suspend some of our bidding analysis pending receipt of these missing drawings, and because of the complexity of determining component sources, we feel that an extension of the closing date is in order.

Plaintiff's request was granted. Plaintiff's proposal was submitted on March 20, 1962, without further mention of any drawing problem. Plaintiff's letter of transmittal recited "we wish to state that we understand the requirements of this proposal and are capable of complying therewith."

On April 2, 1962, plaintiff amended its proposal to correct an arithmetical error in the analysis of special tooling costs. Plaintiff's letter discussed the drawing problem and indicated it had been solved.⁵ As amended, plaintiff proposed a unit price of $28,647, with the total value of the contract at $863,910.

On April 9, 1962, during a preaward survey at plaintiff's plant, the Redstone representative warned plaintiff's administrator that two complex and difficult components of the launcher—the contact assembly and the axial piston pump—had not been properly priced and that the amounts plaintiff had allowed for procurement or manufacture were considerably less than the amounts required in previous procurements. Plaintiff's contract administrator was told the previous sources and the prices allowed for both the axial piston pump and the contact assembly. Notwithstanding this warning and...