WPC Enterprises, Incorporated v. United States

• Decision Date: 24 January 1964
• Docket Number: No. 256-59.,256-59.
• Citation: 323 F.2d 874,163 Ct. Cl. 1
• Parties: WPC ENTERPRISES, INCORPORATED v. The UNITED STATES.
• Court: U.S. Claims Court

163 Ct. Cl. 1, 323 F.2d 874 (1963)

WPC ENTERPRISES, INCORPORATED v. The UNITED STATES.

No. 256-59.

United States Court of Claims.

October 11, 1963.

Rehearing Denied January 24, 1964.

Gilbert A. Cuneo, Washington, D. C., for plaintiff. Joseph Sachter, New York City, David N. Barus, Walter D. Matson and Cummings & Sellers, Washington, D. C., of counsel.

Edward L. Metzler, Washington, D. C., with whom was Asst. Atty. Gen., John W. Douglas, for defendant.

Before JONES, Chief Judge, and WHITAKER, LARAMORE, DURFEE and DAVIS, Judges.

DAVIS, Judge.

This is a study in the toils of ambiguity. The parties put their names to a contract which, on the point crucial to this lawsuit, could reasonably be read in two conflicting fashions. Each signatory seized in its own mind upon a different one of these contradictory versions. Compounding that confusion, they discussed the issue with each other in such a way that each thought, but this time without good reason, it had obtained the other's acquiescence in its chosen reading. The impasse became unmistakably plain when it was too late. Our task is to determine on whom should fall the risk of such mutually reinforced obscurity.

The Government set out to procure, through bids, a large number of complex generator sets — called the MD-3 set — used to calibrate the electronic systems of the B-47 and other aircraft and to start the engines when an electric starter is required. Beech Aircraft Corporation, which had previously made these elaborate devices for the Air Force on a negotiated basis, had prepared specifications and drawings of various of the component parts which the Government acquired and incorporated in the bid invitations. Plaintiff¹ was the low bidder, lower than Beech and another company which had also provided the sets under a negotiated contract. After a period of consideration and some discussion, the award was made to plaintiff and it performed the contract as required by the Government.

The only dispute now before us is whether five components of these generator sets had to be manufactured by (or with the authorization of) certain named companies, as the Government urges, or whether plaintiff was entitled under the contract to furnish identical components made by other firms (presumably at lower prices). After the award, defendant insisted that the products of the specified companies had to be furnished. Plaintiff complied but, claiming that this directive constituted a contractual change, sought review by the Board of Contract Appeals under the Changes and Disputes articles. The Board turned down the appeal on the ground that plaintiff had been told before the award of the defendant's position and had acquiesced.

For the five components now involved, the textual provisions of the specifications (borrowed from Beech) gave general descriptions, without naming any manufacturer; however, the drawings (also from Beech) listed the part numbers given to the item by a particular firm and declared that that manufacturer was the "approved source", or that the component "may be purchased" from that company, or indicated "make from" a part furnished by a particular company, or simply said that the component was a certain part number of a specific firm. There are also other, slighter, indications of contractual meaning on which the parties rely; the details are set forth in the findings.

Each side urges that its position is sustained by the invitation as a whole — without any need to go beyond the bounds of the contractual instruments. The defendant stresses the references to specific part numbers, designated by particular fabricators, as necessarily showing that only parts made under the aegis of that manufacturer would be acceptable; this use of exact part numbers is said to be equivalent to a mandatory direction to incorporate only those very items. Defendant also points out that: (i) the drawings and specifications for the five components were not adequate for a new manufacturer to make those articles in the relatively short time allotted for completion of the procurement; (ii) the defendant was satisfied with components made from parts supplied by the named manufacturers (because they had been fully tested in the past), but would be required before acceptance to test components made by others; and (iii) this burdensome and time-consuming testing would not be practicable within the scheduled period of delivery. It should have been clear, defendant concludes, that the contract called for items supplied by or through the specific companies named in the drawings. (Defendant's witnesses testified to this effect before the Board and at the trial in this court.)

The plaintiff, on the other hand, emphasizes the lack of express mandatory language in the references to particular manufacturers for the five disputed components — in contrast to certain other components which the specifications very plainly declared "shall be" or "shall consist of" an identified part made by a named manufacturer. A command to use only materials or elements made by a specific firm is not frequent in government procurement; it can be expected to be phrased explicitly and not left to inference. Moreover, the references to particular part numbers are not read as mandatory because of a specification provision (labeled "Identification of Parts") which stated:

"Beech and vendor part numbers will be shown on all items except those items supplied by other than Beech Aircraft Corporation or vendors to Beech. On items supplied by other than present sources Beech part numbers will be used with a suffix to indicate a different supplier."

To plaintiff, this clause implicitly authorized the use of identical components made by other companies than those named in the Beech drawings. It thought that it could obtain such qualified substitutes by combining the knowledge gained from three sources: the drawings and specifications (insufficient though they might be); a careful break-down of the sample models supplied plaintiff by the defendant; and general engineering competence. Plaintiff was satisfied that the proper components could be produced in this way within the time allowed. (The contractor's position was likewise supported by evidence before the Board of Contract Appeals.)

This summary of the opposing contentions is enough to show that no sure guide to the solution of the problem can be found within the four corners of the contractual documents. As with so many other agreements, there is something for each party and no ready answer can be drawn from the texts alone. Both plaintiff's and defendant's interpretations lie within the zone of reasonableness; neither appears to rest on an obvious error in drafting, a gross discrepancy, or an inadvertent but glaring gap; the arguments, rather, are quite closely in balance. It is precisely to this type of contract that this court has applied the rule that if some substantive provision of a government-drawn agreement is fairly susceptible of a certain construction and the contractor actually and reasonably so construes it, in the course of bidding or performance, that is the interpretation which will be adopted — unless the parties' intention is otherwise affirmatively revealed. Peter Kiewit Sons' Co. v. United States, 109 Ct.Cl. 390, 418 (1947); First-Citizens Bank & Trust Co. v. United States, 76 F.Supp. 250, 266, 110 Ct.Cl. 280, 310 (1948); Western Contracting Corp. v. United States 144 Ct.Cl. 318, 326 (1958); W. H. Edwards Eng'r. Corp. v. United States, Ct.Cl. No. 218-59, decided April 5, 1963, slip op. pp. 9-10; Freedman v. United States, Ct.Cl., 320 F.2d 359, 365. This rule is fair both to the drafters and to those who are required to accept or reject the contract as proffered, without haggling. Although the potential contractor may have some duty to inquire about a major patent discrepancy, or obvious omission, or a drastic conflict in provisions (see Consolidated Eng'r. Co. v. United States, 98 Ct.Cl. 256, 280 (1943); Ring Constr. Corp. v. United States, 162 F.Supp. 190, 192, 142 Ct.Cl. 731, 734 (1958); Jefferson Constr. Co. v. United States, 151 Ct.Cl. 75, 89-91 (1960)), he is not normally required (absent a clear warning in the contract) to seek clarification of any and all ambiguities, doubts, or possible differences in interpretation. The Government, as the author, has to shoulder the major task of seeing that within the zone of reasonableness the words of the agreement communicate the proper notions — as well as the main risk of a failure to carry that responsibility. If the defendant chafes under the continued application of this check, it can obtain a looser rein by a more meticulous writing of its contracts and especially of the specifications.² Or it can shift the burden of ambiguity (to some extent) by inserting provisions in the contract clearly calling upon possible contractors aware of a problem-in-interpretation to seek an explanation before bidding. See Beacon Constr. Co. of Mass. v. United States, Ct.Cl., 314 F.2d 501, 504; Guyler v. United States, Ct.Cl., 314 F.2d 506, 510-511 (concurring opinion).

If there were nothing more, the case would end here with a ruling for the plaintiff. But the defendant argues, and the Board of Contract Appeals found, that before the award was made or the contract signed the plaintiff learned the Government's view of the disputed point and accepted that position.³ The Board rested its decision on two meetings between the parties, after the bids but prior to the award. At the first (on December 19, 1956), the contractor's only representative was Cecil Sugarman, its sales manager who had had no part in the preparation of the bid and had no actual authority to commit the plaintiff; on the basis of the evidence of the Government representatives (Sugarman did not testify at that stage) the Board found it had been made clear to the contractor that only components (including the five in question) from the...