E. H. Sales, Inc. v. The United States

340 F.2d 358, 169 Ct. Cl. 269, 1965 U.S. Ct. Cl. LEXIS 52
CourtUnited States Court of Claims
DecidedJanuary 22, 1965
Docket75-61
StatusPublished
Cited by15 cases

This text of 340 F.2d 358 (E. H. Sales, Inc. v. The 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
E. H. Sales, Inc. v. The United States, 340 F.2d 358, 169 Ct. Cl. 269, 1965 U.S. Ct. Cl. LEXIS 52 (cc 1965).

Opinions

WHITAKER, Senior Judge.

This is a suit by plaintiff seeking an equitable adjustment under the “Changes” article of the contract. It is not a suit for breach of contract; it is a suit on the contract to recover an amount alleged to be due thereunder. In plaintiff’s motion for summary judgment, it says it “seeks an equitable adjustment in the per unit price of repair contract because of the Government’s failure to deliver approximately 79% of the material promised. Whereas the contract clearly stated that 183 business machines listed by purpose, size and manufacturer were ‘to be furnished’ only 38 machines were delivered. This failure to meet the Government-furnished property commitment drastically raised the Plaintiff’s per unit costs and necessitates the making of an ‘equitable adjustment’ under the terms of the ‘Changes’ clause.”

Defendant also makes a motion for summary judgment on the ground that this was an indefinite-quantities contract limiting the amount which the Government was required to spend on the rehabilitation of the machines to $100. We do not think the Government’s motion for summary judgment can be sustained.

The original contract was entered into on September 2, 1955, to run from that date through June 30, 1956. It called for the dismantling and either reassembling or repair of 183 pieces of machinery which were specifically described. It called for 153 presses, each of which was specifically identified as follows:

99 Multilith Machines 10" x 15"
3 Multilith Machines 14"x 20"
23 Webendorfers 17"x 22"
8 Harris 17"x 22"
3 Webendorfers 22" x 29"
4 Harris 22"x 34"

It also called for 30 folders, specifically identified as follows:

1 Multilith 12"x19"
1 Davidson-14"x 20"
1 Liberty 14"x 20"
4 Dexters 14"x 22"
6 Baum 17"x 22"
2 Baum 18" x 25"
2 Dexters 18"x 25"
13 Baum 22"x 28"

After the contractor had dismantled and inspected the machines turned over to it, it was to report to the contracting officer its estimate of the cost of repairing each of them, whereupon the contracting officer was required to issue a task order either calling for the repair of the article or for reassembling it.

Only a few machines were delivered to the contractor between the 2d of September, 1955, and January 16, 1956, possibly for the reason that the Government thought that there ought to be a limitation upon the amount that could be spent for labor in the dismantling and reassembling of the machines, and because it thought that the contract ought to be otherwise modified. It was modified on January 16, 1956. The revision eliminated the above-referred to provisions of the original contract, and there were substituted, among others, Sections A and B, the latter of which contained the clause upon which the Government relies, limiting its obligation to furnishing [360]*360materials amounting to not less than $100.

Section A of the revised contract sets out precisely the same items as were listed in the original contract. This section is headed “services and materials to be furnished.” Paragraph 1 thereof reads: “Services, facilities, material and parts necessary for the overhaul and repair of those of the equipments listed below designated by the Contracting Officer in a work order under this contract.” Then follow the same items listed in the original contract. Paragraph 2 of Section A reads: “Services, facilities, material and parts necessary for the dismantling and reassembling of those of the equipments listed above of which the cost of repair is deemed excessive.”

The substance of this section, therefore, is that the Government promises to furnish to the contractor the machines listed. The contractor on his part is to dismantle the machines and repair those which the contracting officer thinks it economical to repair and to reassemble the rest. This section is typewritten, as is also Section B, which contains the sentence upon which the Government relies. Section B reads:

“SECTION B. SCOPE, ESTIMATED COST AND TERM OF CONTRACT
“1. Scope. The equipments listed above are in need of repair and overhaul. The purpose of this contract is to ascertain which of the above equipments it is economically feasible to overhaul and to overhaul those machines.
“Total Estimated Cost and Estimated Fixed Fees .. $50,000.00 “The above amount is an estimate only. The amount of materials and services which the contractor may be required to furnish and the Government to accept hereunder shall be the amounts which shall be specified by work orders issued hereunder by the Government during the ordering period of the contract. In any event, however, the Government shall order materials and services amounting to not less than $100.00, and the Government shall be entitled to order and the contractor shall be required to furnish materials and services amounting to not more than the total of the estimated cost and the estimated fixed fees set forth above.”

The Government has paid plaintiff more than $100 for work done on machines furnished, which, the Government says, is the extent of its obligation. We are clearly of the opinion that this position is untenable. Whereas the Government, had only to deliver machines the repair of which would cost $100, the plaintiff was obliged to keep available facilities for the dismantling and reassembling and repairing of machines at a cost of $50,000, which later was increased to $125,000. As we said in Neil A. Goldwasser, d. b. a. Century Offset Company v. United States, Ct.Cl., 325 F.2d 722, decided December 13, 1963, this “would have been a one-sided bargain, bordering upon a lack of mutuality under the facts of this case. The contract should not be given this construction if it can be avoided.”

Moreover, the $100 limitation provision is in direct conflict with the provisions of Section A. The caption of Section A is “services and materials to be furnished.” Under this heading there are listed the machines the Government says it will furnish to the contractor, describing each particular machine in detail. Some of the machines to be furnished were to be overhauled and repaired, as provided for in Section A, paragraph 1. The others, the cost of the repair of which was deemed excessive, were to be merely dismantled and reassembled, but this section contains a definite representation that the Government will deliver, for one purpose or another, all of the machines listed.

The first paragraph of Section B is in harmony with Section A. It reads:

“1. Scope. The equipments listed above are in need of repair and over[361]*361haul. The purpose of this contract is to ascertain which of the above ecpiipments it is economically feasible to overhaul and to overhaul those machines.
“Total Estimated Cost and Estimated Fixed Fees. .$50,000.00”

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E. H. Sales, Inc. v. The United States
340 F.2d 358 (Court of Claims, 1965)

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Bluebook (online)
340 F.2d 358, 169 Ct. Cl. 269, 1965 U.S. Ct. Cl. LEXIS 52, Counsel Stack Legal Research, https://law.counselstack.com/opinion/e-h-sales-inc-v-the-united-states-cc-1965.