Dynalectron Corp. v. United States

518 F.2d 594, 21 Cont. Cas. Fed. 84,115, 207 Ct. Cl. 349, 1975 U.S. Ct. Cl. LEXIS 266
CourtUnited States Court of Claims
DecidedJuly 11, 1975
DocketNo. 414-69
StatusPublished
Cited by23 cases

This text of 518 F.2d 594 (Dynalectron Corp. 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
Dynalectron Corp. v. United States, 518 F.2d 594, 21 Cont. Cas. Fed. 84,115, 207 Ct. Cl. 349, 1975 U.S. Ct. Cl. LEXIS 266 (cc 1975).

Opinion

Nichols, Judge,

delivered the opinion of the court:

Dynalectron Corporation (Pacific Division) seeks review of the decision of the Armed Services Board of Contract Appeals (ASBCA), -69 — 1BCA ¶ 7595, affirming a default termination. This court earlier by order, 199 Ct. Cl. 996 (1972), refused to review the Board denial of excess reprocurement costs to the Government. We cited S & E Contractors, Inc. v. United States, 406 U.S. 1 (1972). As frequently happens in this type of case, a recommended decision of Trial Judge Harkins has become the focal point of the parties’ adverse attention. However, under the law it is the Board decision we are reviewing. Trial Judge Harkins has aided us greatly by his able analysis but we reject 'his affirmance of the Board, [353]*353which we find incompatible with his criticisms of the Board’s conclusions and a misconstruction of the contract.

The subject matter of this case is a fixed price, supply contract for 258 Very High Frequency (YHF) jamming antennas for use on B-52 Air Force bombers as part of the AN/ALA-15 Electronic Countermeasures (ECM) system. Plaintiff’s contract was awarded December 31, 1964, pursuant to a bid submitted on December 1, 1964, in response to an Invitation for Bids (IFB) issued on November 13, 1964. Plaintiff was the sole bidder from the 58 firms solicited. The contract called for “First Article” tests and test reports as well as an initial increment of 258 antennas (with options for an additional 449), each approximately $368.80 (minor variations in this price were negotiated during the life of the contract). The original contract involved $107,284.63, and each of the two supplemental orders added another $99,107.40, to the overall value of the procurement. The contract was terminated for default on June 16, 1966. Plaintiff had delivered only the 25 antennas whose delivery was allowed prior to completion of the First Article test program.

The original contract was twice formally amended: once on February 11, 1965, and a second time on December 20, 1965. It was the failure to have successful test data completed and available for Government review on January 3, 1966, as required by the December 20 agreement, that was the assigned cause for the default termination. The January 3 test data showed that plaintiff had not solved several critical engineering design problems, whose impossibility forms the basis for this appeal.

The standard for review is that of the Wunderlich Act, 68 Stat. 81,41 U.S.C. §§ 321-22 (1970). Upon careful review of the Board’s and trial judge’s decisions and of the entire record, we agree with the trial judge that the Board’s key factual finding of a waiver by contractor of all claims of contract impossibility is not supported by substantial evidence. Waiver requires knowledge, and the record is unconflicting that plaintiff (and defendant for that matter) did not realize the full impossibility of the defective specifications until May 1966, or about 18 months after the Board held plaintiff had full knowledge. We further observe the various defects in [354]*354the specifications to be independent causes of impossibility with, tiie result that knowledge of some defects is not knowledge of all.

Therefore since we agree with the trial judge that at least one cause of impossibility was not known or realized until May 1966, and that it was then promptly communicated to the Air Force, said impossibility was not waived and serves as an absolute bar to a def ault termination. On the other hand, plaintiff did waive, by not communicating, some of the other defects in the specifications, which defendant might, if notified, have corrected to its own as well as plaintiff’s advantage.

By waiver in this case we mean that plaintiff, discovering some defects in the specifications, instead of refusing further effort at performance, as was its right (as even the Board admits), elected to treat what had been intended as a fixed-price production contract as if it were a ^Research and Development (It & D) project, experimenting with new techniques at its own sole expense, unless it were to succeed. If this had occurred as to all the defective specifications, plaintiff could not recover. But it did not.

I

A chronology of this case follows:

1960-1964: Tamar Electronics, Inc., developed the original “Tamar Antenna” to meet the pure performance specifications of Exhibit WCLG-3B (an Air Force document prepared by a Wright-Patterson AFB engineer to govern all AN/ALA-15 system component procurement contracts, including the two types of antennas required on the ALA-15 system.) Tamar Electronics subsequently turned over its “Tamar Antenna” to its wholly owned subsidiary, Stoddart Aircraft Radio Company, Inc. And in 1964 Stoddart sold its rights in the “Tamar Antenna” to Dynalectron. During the lifetime of the three procurements from Tamar/Stoddart, the Air Force attached the Tamar/Stoddart antenna drawings to Exhibit WCLG-3B as design specifications (whereas previously WCLG-3B had only limited antenna size, weight, and shape to “good engineering practices.”) The Air Force failed to keep the drawings attached to the exhibit current with the latest production model of the antenna so that by 1964 the drawings, e.g., showed a “no-eyelet” anten[355]*355na while an “eyelet” antenna was being produced and delivered.
Summer 1964: Stoddart Aircraft Eadio Co. and the Air Force became embroiled in a default termination dispute because the Tamar antenna would not meet all of the WCLG-3B specifications; the Air Force backed down on the dispute and production of the Tamar antenna with eyelets continued.
August 1964: Dynalectron and Stoddart completed negotiations for sale of Tamar antenna line to Dynalectron.
November 1964: After the Air Force-Stoddart-Dyna-lectron negotiations to license further Tamar antenna procurement from Stoddart fell through, the Air Force issued its IFB. The IFB contained the defective specifications.
December 1, 1964: Dynalectron submitted only bid received by the Air Force. Bid letter noted intention to supply Tamar antenna with eyelets and to submit copies of prior test procedures for use with new contract. Bid letter also questioned what Air Force meant by “qualification tests” in IFB.
December 10, 1964: Dynalectron TWX accepted Air Force definition of “qualification tests” as synonymous with “engineering acceptance tests” and “pre-production teste.”
December 21, 1964: Dynalectron received classified test data on Tamar antennas from Stoddart Aircraft Eadio Co.
December 31, 1964: Dynalectron contract with Air Force was legally effective on this date.
Mid-January, 1965: Dynalectron completed review of classified test data received in December and became aware of some defects in the specifications.
February 11, 1965: First formal amendment to contract signed. Dynalectron agreed to non-eyelet antenna (new production process and design) and to new test procedures.

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518 F.2d 594, 21 Cont. Cas. Fed. 84,115, 207 Ct. Cl. 349, 1975 U.S. Ct. Cl. LEXIS 266, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dynalectron-corp-v-united-states-cc-1975.