Beta Systems, Div. of Velcon Filters, Inc. v. United States

35 Cont. Cas. Fed. 75,613, 16 Cl. Ct. 219, 1989 U.S. Claims LEXIS 8, 1989 WL 3691
CourtUnited States Court of Claims
DecidedJanuary 19, 1989
DocketNos. 738-85C, 77-88C
StatusPublished
Cited by3 cases

This text of 35 Cont. Cas. Fed. 75,613 (Beta Systems, Div. of Velcon Filters, Inc. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Beta Systems, Div. of Velcon Filters, Inc. v. United States, 35 Cont. Cas. Fed. 75,613, 16 Cl. Ct. 219, 1989 U.S. Claims LEXIS 8, 1989 WL 3691 (cc 1989).

Opinion

MEMORANDUM OPINION

LYDON, Senior Judge:

Plaintiff, a government contractor, has moved for partial summary judgment on Count I of its complaint in docket No. 77-88C. Defendant opposes said motion and cross-moves for partial summary judgment.1 The question in this case is basically one of contract interpretation and construction. Lurking in the shadows, however, as a result of the Federal Circuit’s opinion, supra, is the matter of intent relative to the interpretation question. While the parties differ significantly on the intent question, as reflected by their conflicting affidavit and declaration, both seek summary judgment on the ground that there are no issues of material fact and each claims [221]*221entitlement to judgment as a matter of law. Generally, the interpretation of a contract provision presents a legal question for the court to decide. However, where the provision in question is uncertain or ambiguous and parole evidence is advanced as an aid in interpretation of said provision, then the matter, a question of interpretation and conduct, becomes a question of fact, not a question of law, and summary judgment may accordingly be inappropriate. See Beta Systems, Inc. v. United States, 838 F.2d 1179,1183 (Fed.Cir.1988). The parties seek to obviate the intent question in their briefs by approaching the interpretation question by recourse to the language of the contract itself. To the extent that the intent question surfaces, both parties rely on the affidavit or declaration they proffer in support of their respective motions. At oral argument both parties indicated that trial on the intent question, under the circumstances of this case, would not be productive principally because the intent each advocated was subjective intent.

Preliminary Statement

Count I in docket No. 77-88C contains claims involving the second and third year of a multi-year procurement. Count II in docket No. 738-85C is Count I in docket No. 77-88C. Count II in docket No. 738-85C was the subject of discussion in Beta Systems, Inc. v. United States, supra, 838 F.2d at 1183-84, and, albeit dictum since Count II was not on appeal to the Federal Circuit, casts a large shadow on consideration of Count I in docket No. 77-88C now before the court on summary judgment motions filed by the parties.

The contract in question contained an Economic Price Adjustment (EPA) provision (section H-8) whereby seventy-percent of the contract price was subject to adjustment, upward or downward, for unanticipated economic fluctuation. The remaining thirty-percent of the contract price was not subject to the EPA provision (section H-8(a)). However, section H-8(p) of the EPA provision exempted from adjustment that portion of the contract price attributed to labor effort or acquisition of specific materials or components authorized by the contracting officer prior to First Article Approval. First Article Approval was granted on September 7, 1983 (838 F.2d at 1183). Plaintiff contends that the approval it received from the contracting officer on November 26, 1982 and March 19, 1983, covered all materials and substantially all labor for all four program years and options. Defendant, on the other hand, argues that the November 26, 1982 and March 19, 1983 approvals only covered the First Program Year and Option. This is so, defendant continues, because no funds had been authorized for the Second, Third and Fourth Program Years and Options when the contracting officer wrote the November 26, 1982 letter and the March 19, 1983 telex. The dispute thus centers on the construction and interpretation of section H-8(p) of the EPA provision and what role, if any, the intent of the parties should play in construing and/or interpreting section H-8(p).

FACTS

On September 29, 1982, the U.S. Army Troop Support and Aviation Material Readiness Command (AMRC) awarded Contract No. DAAJ09-82-D223 to Beta for supply of some 3544 liquid dispensing tank and pump units. Over the course of the contract some 4692 units were supplied. The contract was a 100% small business set-aside negotiated procurement. The contract was in the form of a multi-year procurement and required delivery over a period of in excess of four years. The multiyear procurement was broken down into “Program” years. The First Program Year (Fiscal Year 1982) was identified as “Contract Line Item Number (CLIN) 0001AA”, the First Program Year Option was identified as “CLIN 0003”; The Second Program Year (Fiscal Year 1983) was identified as “CLIN 0004AA”, the Second Program Year Option was identified as “CLIN 0005”; the Third Program Year (Fiscal Year 1984) was identified as “CLIN 0006AA”, the Third Program Year Option was identified as “0007”; the Fourth Program Year (Fiscal Year 1985) was identified as “CLIN 0008AA”, the Fourth Pro[222]*222gram Year Option was identified as “CLIN 0009”.

The First Program Year called for the purchase of 1000 tank and pump units, broken down by CLINs as follows: 998 units (CLIN No. 0001AA), one unit (CLIN No. 0001AB), and one unit (CLIN No. 0001AC); the Second Program Year called for 780 units; the Third Program Year called for 763 units; and the Fourth Program Year called for 1001 units; for a total multi-year procurement program of 3544 units. Under the September 29, 1982 contract, as awarded plaintiff, plaintiff was to supply 1000 units at a unit price of $6,497.00 for the First Program Year. The total First Year Program contract amount was $6,798,000.

In its bid submission, plaintiff proposed a unit price of $6,892.00 for 780 units for the Second Program Year resulting in a total contract price for the Second Program Year of $5,375,760, for the Third Program Year, plaintiffs bid price of $7,463.00 per unit produced a total contract price for that Program Year of $5,694,369 covering 763 units; and for the Fourth Program Year, plaintiffs bid price of $7,910.00 per unit produced a total contract price of 7,917,910 covering 1001 units. Bid prices were also submitted by plaintiff relative to the option quantities set forth in the contract documents for each of the Program Year Options. Plaintiffs bid prices per unit for the Program Year Options were $6,400.00 (First Program Year); $6,866.00 (Second Program Year); $7,400.00 (Third Program Year); and $7,898.00 (Fourth Program Year). Contract award was based on all the above unit bid prices. The above unit prices were subsequently changed by contract modifications which served to increase the total contract price for each Program Year. Funding was always certified as available before any modifications were issued relative to purchase of contract units for any Program Year or Program Year Option.

At the time the September 29, 1982 contract was awarded, funding was certified available to the Army for procurement under the First Program Year. Funding was certified available for the First Program Year Option at various times during the period November 19, 1982 — February 16, 1983 relative to the purchase of twenty-eight additional units under contract modification No. P 00002 dated May 11, 1983. Only five of these units were certified available (funded) for purchase prior to November 26, 1982. Those five units were funded on November 19, 1982. Funding was certified available for the First Program Year Option on May 18,1983, relative to the purchase of 220 additional units under contract modification No. P 00003 dated May 31, 1983.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Northrop Grumman Computing Systems, Inc. v. United States
93 Fed. Cl. 144 (Federal Claims, 2010)
General Dynamics Corp. v. Commissioner
1997 T.C. Memo. 420 (U.S. Tax Court, 1997)
Abruzzo v. United States
24 Cl. Ct. 668 (Court of Claims, 1991)

Cite This Page — Counsel Stack

Bluebook (online)
35 Cont. Cas. Fed. 75,613, 16 Cl. Ct. 219, 1989 U.S. Claims LEXIS 8, 1989 WL 3691, Counsel Stack Legal Research, https://law.counselstack.com/opinion/beta-systems-div-of-velcon-filters-inc-v-united-states-cc-1989.