Composite Laminates, Inc. v. United States

38 Cont. Cas. Fed. 76,453, 27 Fed. Cl. 310, 1992 U.S. Claims LEXIS 175, 1992 WL 379533
CourtUnited States Court of Federal Claims
DecidedDecember 15, 1992
DocketNo. 91-879C
StatusPublished
Cited by8 cases

This text of 38 Cont. Cas. Fed. 76,453 (Composite Laminates, Inc. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Composite Laminates, Inc. v. United States, 38 Cont. Cas. Fed. 76,453, 27 Fed. Cl. 310, 1992 U.S. Claims LEXIS 175, 1992 WL 379533 (uscfc 1992).

Opinion

OPINION

HORN, Judge.

BACKGROUND

This case comes before the court on the plaintiff’s motion for partial summary judgment, which defendant opposes.1 The plaintiff requests the court to convert the Navy’s termination for default issued in this case by the contracting officer into one for convenience, and to award appropriate damages, plus interest, fees and costs. The plaintiff, Composite Laminates, Inc. (Composite) has been a commercial and government contractor since 1983, with its principle place of business in Long Beach, California.

FACTS

For the purposes of this decision on plaintiff’s motion for partial summary judgment, the facts appear to be as follows. On June 20, 1990, the Naval Supply Center in Charleston, South Carolina (Navy) awarded a $951,215.00, fixed price contract to Composite Laminates, Inc. to provide, among other things, a set of fiberglass fairing covers and a molded urethane boot for the USS NARWHAL. To manufacture some of the plastic portion of the tooling and laminates under the contract, Composite proposed to utilize, as a subcontractor, Owen Enterprises, Inc. (Owen) of Wilmington, California, and the Navy accepted Owen as the subcontractor. Owen was a known government contractor in the reinforced plastics industry, and was approved by the Navy as generally meeting the rigid quality control/inspection requirements of Military Specification MIL-I-45208A (MIL-I-45108A).2 The first deliv[313]*313erables were due October 1, 1990, with the remainder of the contract to be completed by November 15, 1990. Based on laboratory tests completed on July 27, 1990, however, Composite concluded that Owen’s production methods were unable to produce laminates with a void content under 3%, a critical contract requirement. After subsequent tests suggested that another, more expensive, production method (the autoclave procedure) would produce almost void-free laminates, Composite began to look for a new subcontractor.

On August 1, 1990, Composite advised the Navy that it had entered into an agreement with Pacifica Aerospace Corporation (Pacifica) to replace Owen. However, a week later, a Navy survey team concluded that Pacifica, because of its lack of tooling experience, might be unable to complete the contract before December 31, 1990, thereby missing the final contract due date by a month-and-a-half. As a result, Composite continued its search for an acceptable subcontractor. On August 10, 1990, plaintiff selected Advanced Tooling, Inc. (Advanced), which promised to produce the tooling on time, by working an around-the-clock schedule.

Apparently not yet satisfied, however, that Advanced was an acceptable subcontractor, on August 14,1990, a Navy survey team conducted a capability survey of Advanced’s facilities. After the survey, but before the cure notice was issued on the next day, Luke Corzine, the president of Composite, and a Navy representative discussed termination of the contract over the phone. The next day, on August 15, 1990, the Navy’s contracting officer issued a cure letter stating that Composite has “failed to make sufficient progress in the tooling phase which is hampering the progression for completing the fairing covers within the required delivery schedule.” The letter also stated that the government might terminate the contract for default unless “the condition was cured within ten days.” Finally, the letter asked for a milestone plan of action to ensure that delivery dates set forth in the contract would be met, as well as confirmation that an agreement existed between Composite and its subcontractor. In fact, Composite was given twelve days to respond to the contracting officer. The August 15, 1990 cure notice, however, did not specifically mention the quality control/inspection requirements of MIL-I-45208A.

Composite then sought additional information about the cure notice from Joan Music, the Navy’s contract administrator. However, the number and substance of the phone calls are in dispute. It is clear, however, that on August 21, 1990, Composite sent a letter by telecopier to Ms. Music outlining accomplishments under the contract, and promising to submit a production schedule by August 24, 1990. The next day, August 22, 1990, the Navy drafted a letter, which was received by plaintiff on August 23, 1990, detailing the deficiencies found at Advanced Tooling, and concluding that Advanced was not qualified to produce the material required under the contract because its inspection system was inadequate and not acceptable to the government.3

On August 23, 1990, Composite responded to the Navy requesting some technical information, a number of changes to the contract (including a relaxation in thickness tolerance), and permission to substitute Advanced Tooling for Owen.4 The plaintiff indicated that it was proceeding to make [314]*314corrections to all the deficiencies identified by the government in defendant’s August 22, 1990 letter. Also, as an attachment to the plaintiff’s August 23, 1990 letter to the Navy, Composite submitted a production schedule showing that all materials would be produced by November 3, 1990, (with testing and packaging to add .another week). All representations, however, were predicated upon a quick approval of Composite’s production procedure.

On August 29, 1990, the Navy survey team returned to Advanced. Composite asserts that by this time tooling was 80% to 85% complete. Although the parties appear to disagree as to the percentage completed as of August 29, 1990, they agree, however, that none of the tooling was produced in accordance with MIL-I-45208A. Composite also maintains that while the second survey team was at their facility, the Navy gave plaintiff a hand-written response to the deficiencies in the August 22, 1990 letter, and according to the plaintiff a typed version of the response was telecopied to the defendant on August 30, 1990. Three hours after the survey team departed, on August 29, 1990, the Navy terminated the contract for default, citing Composite’s failure “to cure the conditions as required in cure notice 4300.203.A4 of 15 August 1990, having failed to comply with the required inspection system (MIL-I-45208A).” The termination also noted that plaintiff had “failed to make progress so as to endanger performance of this contract.”

The propriety of the termination of plaintiff’s contract, and the circumstances surrounding it are the subject of this litigation. At issue is plaintiff’s contention that the Navy wrongfully terminated the contract with plaintiff by: (1) failing to inform Composite of alleged deficiencies in sufficient detail so that the defects could be remedied during the cure period; (2) failing to recognize Composite’s rights' pursuant to the August 22, 1990 letter, which plaintiff alleges operated as a second cure notice; (3) failing to grant Composite the required ten day cure period; and (4) ignoring Composite’s adequate assurances that it could perform the contract on schedule.

After careful consideration of the briefs filed by the parties, the oral argument held on the motion for partial summary judgment, consideration of the numerous materials filed by the parties, and for the reasons discussed below, the court, hereby DENIES the plaintiff’s motion for summary judgment.

DISCUSSION

SUMMARY JUDGMENT

Summary judgment in this court is properly granted only when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law.

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Cite This Page — Counsel Stack

Bluebook (online)
38 Cont. Cas. Fed. 76,453, 27 Fed. Cl. 310, 1992 U.S. Claims LEXIS 175, 1992 WL 379533, Counsel Stack Legal Research, https://law.counselstack.com/opinion/composite-laminates-inc-v-united-states-uscfc-1992.