International Gunnery Range Services, Inc. v. Widnall, 94-1444
| Decision Date | 24 August 1995 |
| Docket Number | No. 94-1444,94-1444 |
| Citation | 64 F.3d 678 |
| Parties | 40 Cont.Cas.Fed. (CCH) P 76,835 NOTICE: Federal Circuit Local Rule 47.6(b) states that opinions and orders which are designated as not citable as precedent shall not be employed or cited as precedent. This does not preclude assertion of issues of claim preclusion, issue preclusion, judicial estoppel, law of the case or the like based on a decision of the Court rendered in a nonprecedential opinion or order. INTERNATIONAL GUNNERY RANGE SERVICES, INC., Appellant, v. Sheila E. WIDNALL, Secretary of the Air Force, Appellee. |
| Court | U.S. Court of Appeals — Federal Circuit |
Before PLAGER, Circuit Judge, COWEN, Senior Circuit Judge, and LOURIE, Circuit Judge.
International Gunnery Range Services, Inc. (IGRS) appeals the decisions of the Armed Services Board of Contract Appeals (Board) in International Gunnery Range Serv., Inc. v. United States, 94-3 BCA (CCH) p 27,002 (June 23, 1994), and International Gunnery Range Serv., Inc. v. United States, 90-1 BCA (CCH) p 22,601 (Dec. 28, 1989). We vacate both Board decisions and remand the case to the Board for further proceedings in accordance with this decision.
On January 18, 1981 the United States, acting through the Department of the Air Force at the Luke Air Force Base, Arizona, awarded Arizona Excavating a contract in the total amount of $1,908,425.00. The contract was subsequently novated to IGRS, Arizona Excavator's successor-in-interest. The contract was for the maintenance of the Gila Bend Gunnery Range at the Luke Air Force Base. The parties agreed that the Government would furnish IGRS with trucks to be used as targets in Air Force bombing and strafing exercises. IGRS placed the vehicles on the target range and removed them after a stipulated period. After the vehicles were removed from the range, IGRS was permitted to sell them or otherwise salvage them.
During the performance of the work, the Air Force issued several orders and contract modifications, which resulted in IGRS's assertion of nine separate claims for upward adjustment of the contract price in the total sum of $857,364.17.
Following completion of the contract performance on December 31, 1982, Dennis Marketic, President of IGRS met with the contracting officer, Msgt. Robert Thompson, and negotiated an agreement to settle all of IGRS's claims in exchange for 245 government trucks. The contracting officer determined that he did not have the authority to transfer government owned-property. Therefore, he submitted the proposed settlement to the Air Force Contract Adjustment Board (AFCAB) for approval under public law 85-804, 50 U.S.C. Secs. 1431-1435 (1976).
On April 2, 1985, the AFCAB approved the proposed settlement and directed the parties to enter into a contract modification containing the terms of the settlement as set forth in the order of the AFCAB.
On May 12, 1985, the parties formally executed Modification P00031, (hereinafter modification), incorporating the agreement as directed by the ASCAB. The modification provided in pertinent part as follows:
1. The parties agree that in full settlement of all claims the government will:
a. Transfer title to IGRS to 245 salvage trucks obtained through DPDO [the Defense Property Disposal Office]. These trucks will be selected by agreement of the contracting officer and IGRS and they will be in a similar condition to those trucks that would have been generated under the contract. These trucks will be an approximate mixture of 75% five ton trucks and 25% 2 1/2 ton trucks. The Government will, within 20 days of the execution of this agreement, submit requisitions for these trucks through appropriate channels. These trucks will be made available to IGRS at either Luke AFB or DPDO at Tucson, AZ. The contracting officer will furnish evidence of the transfer of title sufficient to IGRS to register the vehicles. These trucks will be made available within a [sic] 180 days of this agreement.
b. Return title to IGRS to all salvage presently in place at IGRS's facility at Gila Bend, AZ.
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2. This contract modification constitutes a full discharge, accord and satisfaction, and release of any and all claims, demands, or causes of action, actual or constructive, legal, equitable, contractual or administrative, known or unknown, which IGRS and the Government have against the other, arising out of contract F02604-81-D0007, including, but not limited to, all claims relating to salvage described in this agreement, the absence of salvage, or the storage of salvage.
The contract also required IGRS to waive all of its claims for interest and attorney fees.
Following the execution of the modification, Msgt. Thompson and Mr. Marketic met in an attempt to agree upon the trucks that would be provided IGRS in accordance with the modification.
Mr. Marketic gave Msgt. Thompson a copy of the government manual containing condition codes that represented the classification of the condition of surplus vehicles by the Defense Reutilization and Marketing Service. After discussion, the parties agreed that trucks meeting the conditions described in the supply codes F and G, and disposal codes 4, 5, and 7 would be provided to IGRS. At that time, Msgt. Thompson was not very familiar with the condition codes and relied primarily on disposal codes 4, 5, and 7. Disposal code 4 is defined as "used property that would be usable without repairs." Disposal code 5 is defined as "property that would be usable without repairs, but is somewhat worn and deteriorated and may soon require repairs." Disposal code 7 is defined as "goods that require minor repairs not exceeding 15% of the original acquisition cost." He believed that the codes meant that the trucks would be in a repairable condition. He based that belief on his inspection of 16 or 18 trucks in the contractor's receiving yard.
Because of Msgt. Thompson's lack of familiarity with the codes, there was not a mutual understanding by the parties that the trucks to be provided IGRS in accordance with the modification would be in the condition described in supply codes F and G, and disposal codes 4, 5, and 7. However, both parties agreed that and understood that the trucks would be in the condition in which they were received at the base and before they were used for target practice. Mr. Marketic testified that if the Air Force had offered him trucks that had been used for target practice, he would have rejected them.
The contracting officer never anticipated that after the trucks were received at the base, they would be subjected to target practice and then transferred to IGRS. Instead, he anticipated that the 245 trucks to be provided by DPDO would be delivered to the contractor when received and if IGRS accepted them, that would complete the settlement between the parties.
On May 9, 1988, during his testimony at the first Board hearing, which was about three years after he and Mr. Marketic made the settlement agreement, Msgt. Thompson was asked to state his interpretation of the contract term: "trucks similar to those that would have been generated under the contract." He replied that his interpretation at the time of the hearing was that the contract term meant trucks that had been used for target practice. However, he stated that that was not his interpretation at the time of the settlement, when he understood and agreed that the trucks to be supplied from the Government would be delivered to IGRS before they were used for target practice.
The Board found that at the time Msgt. Thompson and Mr. Marketic entered into the settlement agreement in 1985, Msgt. Thompson believed that the modification language: "as would have been generated under the contract" referred to vehicles which had been used for target practice. That finding is contrary to the testimony of Marketic and Thompson and is not supported by substantial evidence.
On August 31, 1985, prior to the transfer of title to IGRS of the 245 trucks, Msgt. Thompson retired and was replaced by Captain Sharon Dunbar as contracting officer. She was informed by the Defense Reutilization and Marketing Service 2, from which the trucks were to be obtained, that the trucks were not available.
On May 21, 1986, three-and-a-half years after the contract work had been fully performed, Captain Dunbar issued a contract modification, terminating the contract for the convenience of the Government "due to the non-availability of the required 245 salvage trucks." IGRS then submitted a proposed termination settlement claim, seeking $8,589,028.00--over ten times the amount of IGRS original claim-for the value of the 245 trucks.
On September 3, 1986, the parties agreed to meet at Camp Pendleton and select trucks that would be similar to those that would "have been generated" under the contract. John Smith, an independent expert, was retained to evaluate the trucks. After his calculations were made to determine the value of the trucks, the Air Force was to pay IGRS the amount equal to the calculation. However, the parties were unable to agree on the specific trucks that would meet the requirements of their proposal for determining the value of the trucks. Consequently, they failed to reach a settlement on the basis of using Mr. Smith to value the trucks.
On December 19, 1986, Captain Dunbar issued a decision that $1,255,625.00 represented "the fair and reasonable compensation for the 245 salvage trucks provided for in the modification." IGRS was then paid the $1,255,625.00, and on January 8, 1987 filed an appeal.
While the case was pending before the ASBCA, the parties engaged in discovery and as a result of information thus obtained, Captain Dunbar determined that the value of the 245 trucks was $93,355.00. The determination was based on her conclusion that, under the terms of the contract, IGRS was entitled only to the value of the trucks after they had been used for target practice...
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