Milmark Services, Inc. v. U.S., 83-1259

• Decision Date: 05 April 1984
• Docket Number: No. 83-1259,83-1259
• Citation: 731 F.2d 855
• Parties: 32 Cont.Cas.Fed. (CCH) 72,350 MILMARK SERVICES, INC., Appellant, v. The UNITED STATES, Appellee. Appeal
• Court: U.S. Court of Appeals — Federal Circuit

Page 855

731 F.2d 855

32 Cont.Cas.Fed. (CCH) 72,350

MILMARK SERVICES, INC., Appellant, v. The UNITED STATES, Appellee.

Appeal No. 83-1259.

United States Court of Appeals, Federal Circuit.

April 5, 1984.

George W. Liebmann, Baltimore, Md., argued for appellant. With him on brief were Stephen L. Snyder and Howard A. Janet, Pikesville, Md.

Helene M. Goldberg, Washington, D.C., argued for appellee. With her on brief were J. Paul McGrath, Asst. Atty. Gen., David M. Cohen, Director and Stephen G. Anderson, Washington, D.C.

Before RICH, and NIES, Circuit Judges, and FORD, Judge. ^*

NIES, Circuit Judge.

This case is an appeal from the judgment of the United States Claims Court (White, Senior Judge) ¹ holding that the Immigration and Naturalization Service (INS) is not liable for termination of a contract with Milmark Services, Inc., following Milmark's non-performance.

The suit was brought directly to the United States Court of Claims from the contracting officer's decision in accordance with 41 U.S.C. Sec. 609(a)(1) (Supp. II 1978). Under Sec. 403(d) of the Federal Courts Improvement Act of 1982, Pub.L. No. 97-164, 96 Stat. 25, 58 (1982), the case was subsequently transferred from the U.S. Court of Claims Trial Division to the U.S. Claims Court. Pursuant to Claims Court Rule 54(b), the Claims Court, having rendered a decision that Milmark was not entitled to recover and having determined that there was no just reason for delay in the entry of judgment on Milmark's claims, entered judgment for the Government. Since a final judgment has been entered on Milmark's claims, we have jurisdiction over this appeal under 28 U.S.C. Sec. 1295(a)(3).

Milmark's position is that its default under the contract was caused by factors beyond its control and without its fault or negligence. The Claims Court held that Milmark's failure to perform according to the terms of the contract was not excusable. Milmark challenges certain findings of fact made by the trial court, the absence of findings allegedly necessary to the decision, the exclusion of proffered testimony, and the asserted failure by the court to recognize the Government's duty of cooperation.

Having considered Milmark's arguments, the record, and the decision of the Claims Court, we affirm.

The Standard of Review

The standard of review by this court of factual determinations by the U.S. Claims Court is not specifically delineated by statute. No decision of this court has directly addressed this issue. However, in CACI, Inc.-Federal v. United States, 719 F.2d 1567, 1582 (Fed.Cir.1983), the court concluded with the statement, "the kind of inquiry and analysis the Claims Court made in this case ... was clearly erroneous ...." (Emphasis added.)

The Government in its brief makes no argument directed to this issue but assumes by repeated references to findings being supported by "substantial evidence" that the more stringent "substantial evidence" standard rather than the "clearly erroneous" standard applies. See SSIH Equipment, S.A. v. USITC, 718 F.2d 365, 379, 218 USPQ 678, 690 (Fed.Cir.1983). Milmark merely asserts that certain findings are clearly erroneous, being contrary to the weight of the evidence.

While this court has not adopted the rule of some circuits that a party must specifically set out the applicable standard of review as an initial paragraph in its brief, an appellate court must always consider its standard of review and it is helpful to the court for the matter to be set out specifically in the briefs so that it can be determined whether the parties are or are not in agreement on the function of this court.

With respect to findings of fact by the U.S. Claims Court in a de novo proceeding on a contract claim, we believe that the appropriate standard of review is "clearly erroneous" as in appeals from trials in district courts. Heisig v. United States, 719 F.2d 1153, 1157-58 (Fed.Cir.1983). As defined by the Supreme Court in United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 542, 92 L.Ed. 746 (1948):

A finding is "clearly erroneous" when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.

Accordingly, the clearly erroneous standard will be applied with respect to review of factual disputes in this case.

Background

The INS maintains information on aliens entering and leaving the United States by requiring aliens to complete an I-94 form upon passage through immigration. After being completed, the form is sent to INS headquarters for processing. Information on the form is entered onto magnetic tape and fed into the INS data base.

In August of 1979, the INS solicited bids for the performance of data entry services in connection with the I-94 program. The solicitation indicated that the successful bidder would be required to enter 400,000 documents per week, that each batch of 400,000 processed documents would be due at the INS within two weeks after pick-up, that some documents would be "difficult to read," and that the error rate on every 100,000 documents could not exceed 2.5%. ² Milmark submitted the lowest bid and was awarded the contract. The bid solicitation was protested, delaying the contract award and upsetting Milmark's preparation. A protest submitted by the incumbent contractor raised the question of whether Milmark could perform within the error rate, given the poor quality of the I-94 forms. Milmark gave assurances during the protest that, as a subcontractor for the incumbent contractor, it was "fully aware of the perplexity and peculiarities, i.e., handwriting, language difficulties, etc." Milmark perceived no problem in performance and twice extended its bid. The contract was executed on April 22, 1980.

Milmark picked up the first batch of 400,000 documents on April 24, but failed to deliver the entered data by the May 9 due date. On May 30, Milmark delivered 200,000 of the processed documents, and on June 6, delivery was made of the remaining 200,000. The second batch of 400,000 documents was also delivered well after the due date specified in the contract. Milmark subsequently picked up 10 batches of 400,000 documents on schedule, but had succeeded in processing only 100,000 of these documents by July 18, 1980. During the period of April to July 1980, Milmark submitted only two of 12 progress reports required under the contract.

On May 27, 1980, the INS issued a show cause notice advising Milmark that a default termination of the contract was being considered. As a result of the subsequent delinquencies in Milmark's performance, the INS decided to terminate the contract on July 14. At Milmark's request, termination was postponed and Milmark was given a final opportunity to demonstrate its ability to handle the contract by delivering a full batch of 400,000 documents on Friday, July 18. Upon Milmark's failure to deliver any of the processed documents until Monday, July 21, the INS contracting officer terminated the contract by letter dated July 22, 1980. Milmark then filed suit against the Government for damages for breach of contract on July 24, 1981.

The Claims Court held that: (1) Milmark had not complied with the delivery schedule prescribed in the contract; (2) the INS was not required to give Milmark advance notice of, and an opportunity to cure, deficiencies in performance; (3) the INS had not breached the contract by rejecting all of Milmark's work because of excessive errors in the submitted tapes; and (4) Milmark's failure to deliver was not excusable on any ground asserted, i.e., delay in receiving the award of the contract; changes in the contract specifications by the INS; difficulty in interpreting the I-94 forms; refusal by the INS to furnish certain requested information; failure of the INS to provide personnel assistance at Milmark's plant; failure by the INS to evaluate and return a test tape submitted by Milmark; or the short length of the start-up time.

I

The section of Milmark's brief entitled "Statement of Facts" presents an indiscriminate intermingling of undisputed facts with extrapolations and conclusions of counsel and statements of witnesses which had been rejected by the trial judge as lacking in credibility. At the conclusion of this confusing introduction to the case, a single finding of the trial judge with respect to the number of documents delivered on July 21, 1980, is asserted to be clearly erroneous. Neither in the "Statement of Issues" nor in the "Argument" section are other findings of the trial judge specifically attacked. Only when one reaches appellant's "Conclusion" is it apparent that appellant's position would require reversal of a number of factual determinations, and that, indeed, appellant seeks to have this court reexamine the record in its entirety and reevaluate factually each of the excuses for its default, requesting here, in effect, a trial de novo on the record. This is not the role or function of an appellate court. We will, therefore, address only the specific findings of fact challenged by appellant and the legal arguments we are able to discern from its brief. ³

II

Milmark contends that the Claims Court erred in failing to recognize the INS's duty of cooperation. According to Milmark, the opinion of the Claims Court "proceeds as though there is no duty."

Milmark asserts that the specifications of the contract were misleading and created "a problem of practical production impossibility," that the contract provided an inadequate lead time, that the INS improperly refused to...