LW Foster Sportswear Co. v. United States

• Citation: 405 F.2d 1285
• Decision Date: 24 January 1969
• Docket Number: No. 77-65.,77-65.
• Parties: L. W. FOSTER SPORTSWEAR CO., Inc. v. The UNITED STATES.
• Court: Court of Federal Claims

405 F.2d 1285 (1969)

L. W. FOSTER SPORTSWEAR CO., Inc. v. The UNITED STATES.

No. 77-65.

United States Court of Claims.

January 24, 1969.

Erwin Lodge, Philadelphia, Pa., attorney of record, for plaintiff.

Lawrence S. Smith, Washington, D. C., with whom was Asst. Atty. Gen., Edwin L. Weisl, Jr., for defendant.

Before COWEN, Chief Judge, and DURFEE, DAVIS, COLLINS, SKELTON and NICHOLS, Judges.

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

DAVIS, Judge.

This case, which is before the court on cross-motions for summary judgment, was referred to Commissioner Richard Arens, to whom we are greatly indebted. We adopt much of the statement of facts directly from his report to the court and come to the same conclusion.

This controversy arises out of two contracts entered into in 1958, under which plaintiff agreed to manufacture and deliver approximately 54,000 goatskin flying jackets for use of the Department of the Navy. Plaintiff requested the contracting officer to make an equitable adjustment in contract price under the Changes article to reimburse it for additional costs allegedly resulting from defective specifications and improper inspections. From a denial by the contracting officer of an equitable adjustment under the contracts, plaintiff appealed to the Armed Services Board of Contract Appeals which denied the appeal.¹ In this court, plaintiff challenges the ASBCA decision as being arbitrary and capricious, not supported by substantial evidence, and as being erroneous as a matter of law in designated particulars. Plaintiff also asserts alternately that it is entitled to recover on the same facts on a theory of breach of contract. Since its claims were entirely redressable under the contract, however, plaintiff is limited to that relief. It cannot maintain a separate breach of contract action which seeks no further or different relief. Fort Sill Associates v. United States, 355 F.2d 636, 183 Ct.Cl. 301, 304 (1968); Morrison-Knudsen Co., Inc. v. United States, 345 F.2d 833, 170 Ct.Cl. 757 (1965).

From 1949 to 1956, plaintiff successfully manufactured approximately 200,000 flying jackets for the Bureau of Aeronautics of the Department of the Navy under a series of contracts which contained specifications the same as or very similar to² those in the contracts in suit. In the performance of these prior contracts, plaintiff was permitted by the Navy to make certain deviations from the specifications, and plaintiff was thoroughly familiar with the practices and procedures used by Navy inspectors in inspecting the jackets. In 1956 the Military Clothing and Textile Supply Agency (MCTSA), an agency created under the Department of the Army, assumed responsibility for procurement of flying jackets of this type, but until entering into the instant contracts the MCTSA had never contracted for any such flying jackets. Prior to letting the instant bids, the MCTSA prepared Interim Quality Assurance Provisions (IQAP) relating to inspections of the flying jackets. These were then approved by the Navy and incorporated in the contracts. The provisions of the IQAP were substantially the same as those which governed the inspections under the prior contracts.

At the time it entered into these contracts, plaintiff did not discuss with MCTSA the problems which it encountered under the prior contracts, but "took it for granted" that any such problems would be resolved in the same manner in its performance under the new contracts, and that it would be permitted to make deviations from the specifications in order to produce an acceptable garment. Plaintiff's agent testified before the ASBCA that plaintiff "envisioned no difference" as to what would constitute an acceptable garment under the present contracts, because, although the procurement agency was different, plaintiff was contracting to make the same jackets which it had previously made for the Navy.³

On April 29, 1958, plaintiff was awarded the first of these contracts for 37,712 flying jackets to be delivered in designated quantities by August 27, 1958, September 26, 1958, and October 27, 1958, respectively. On May 21, 1958, plaintiff was awarded the second of the contracts for an additional 16,328 flying jackets, approximately one-third of which were to be delivered by July 21, 1958, another one-third by August 20, 1958, and the final one-third by September 19, 1958.

Because of the failure of goatskin suppliers to make delivery as agreed, plaintiff's actual production did not begin until August 1958. As a result of this delay, the parties agreed to an extension of the delivery schedule but with a reduction in contract price. Thereafter, plaintiff made deliveries over a period from January to June 1959 of the prescribed quantity of jackets under the first contract, and made deliveries from October 1, 1958 to April 23, 1959, of 11,159 of the 16,328 jackets called for under the second contract. Because the deliveries under both contracts were later than the delivery schedule as extended, the contracting officer terminated both contracts, with the result that certain questions, not here at issue, were presented to and decided by the ASBCA.⁴

From the commencement of its production, plaintiff complained to defendant regarding the specifications, the IQ AP and the inspections, which plaintiff felt were too stringent and based in part upon a misinterpretation of the specifications and the IQAP.

Plaintiff felt that the specification requirements for the type of seams for the joining of the knit to the leather and the rayon lining underneath were not in accordance with the best considered practices of the trade, were virtually impossible to perform without causing abrasions and cut leather which would be scored as defects, and that the operation should be performed by another method. Another problem developed with regard to the method of sewing the pocket flap to the face of the jacket. Plaintiff contended that the method prescribed by the specifications was inconsistent with the contract diagram, was "practically impossible" to accomplish and could cause damage to the jacket. After lengthy discussions with resident government inspectors, plaintiff thought that an agreement had been reached for it to perform the operation in accordance with the method it had suggested, but thereafter the government inspectors instructed plaintiff's operators to revert to the method prescribed by the specifications. In the latter part of August 1958, plaintiff complained to the contracting officer about both problems. About a month later the contracting officer authorized plaintiff to perform both operations in accordance with the methods which plaintiff had suggested.

The evidence disclosed that a government inspector, who had never before inspected goatskin or leather products and who had not previously known what a "briar scratch" and a "healed scar" were on animal hide, was scoring as major defects healed scars and healed briar scratches. He was also scoring as defects mended knits which did not affect appearance or serviceability. By letter of October 31, 1958, plaintiff took up both matters with the contracting officer who, by letter of November 21, 1958, agreed that certain healed scars and healed briar scratches should not be scored as defects and that certain others should be scored as only minor defects; and that mended knits, which did not affect appearance or serviceability, should not be scored as defects.

On November 26, 1958, when the contracting officer was visiting plaintiff's plant, plaintiff complained that the specification requirements for 10 to 12 stitches per inch resulted in needle chews and excessive holes in the jackets, and that the requirement for a certain size margin and for cutting a loop after back-stitching resulted in breakage of the knit and other defects. The contracting officer agreed with plaintiff and orally authorized it to use fewer stitches per inch, to change the size of the margin, and to leave the loop in place uncut. This authorization was confirmed by the contracting officer by letter dated December 2, 1958.

Plaintiff's agent testified before the ASBCA in effect that although the foregoing problems resulted in rejections which in turn caused "tightened inspection" of the jackets, defendant did not resume "normal" inspections until January 16, 1959, some several weeks after the problems had been resolved; but that after the changing of the specifications and establishment of proper inspections, plaintiff was able to create and maintain an even flow of work, with a peak of nearly 3,000 units per week.

The record reveals that in the process of resolving some of the foregoing problems, plaintiff contacted personnel of the Bureau of Aeronautics of the Navy who expressed views to the MCTSA.

In denying plaintiff's appeal, the ASB CA stated that plaintiff was "aware that it could not or did not intend to manufacture in strict compliance with the specifications"; that the evidence failed to establish that the difficulties encountered because of the specification requirements "were not the normal, minor, and relatively insignificant specification requirements which often necessitate slight adjustment in mass production and for which additional compensation is neither sought nor expected"; that the "delay, if any, in reaching satisfactory solutions * * * must be charged to plaintiff because of its failure to timely alert the contracting officer of the problems known to it before the contract award"; and that while "some evidence indicates error in certain matters on the part of an inspector", "the record will not support a finding that the defects scored in the inspections were not in fact defects as defined by the specifications nor that lot rejections were not made as dictated by the contract provisions."

We hold that the ASBCA's characterization of the specification defects as minor is not supported by substantial...