Precision Specialty Corp. v. United States

34 Cont. Cas. Fed. 75,493, 15 Cl. Ct. 1, 1988 U.S. Claims LEXIS 89, 1988 WL 50245
CourtUnited States Court of Claims
DecidedMay 20, 1988
DocketNo. 668-84C
StatusPublished
Cited by2 cases

This text of 34 Cont. Cas. Fed. 75,493 (Precision Specialty 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
Precision Specialty Corp. v. United States, 34 Cont. Cas. Fed. 75,493, 15 Cl. Ct. 1, 1988 U.S. Claims LEXIS 89, 1988 WL 50245 (cc 1988).

Opinion

OPINION

REGINALD W. GIBSON, Judge:

Introduction

Plaintiff, Precision Specialty Corporation (Precision), filed a complaint in this court on December 17, 1984, claiming an entitlement to reimbursement of $5,244 in termination costs and challenging the contracting officer’s (CO’s) final decision, regarding Precision’s termination claim, following the termination for convenience of contract-purchase order No. DLA 700-83M-3482. Precision entered into this contract for delivery of supplies with the Defense Construction Supply Center (DCSC or defendant) on October 20, 1982. Subsequent to filing said complaint, plaintiff filed a motion for partial summary judgment, limited to the issue of defendant’s liability, on September 24, 1985. Defendant, in turn, followed with a cross-motion for summary judgment on November 15, 1985.

Jurisdiction properly lies in this court under 28 U.S.C. § 1491 and 41 U.S.C. § 609(a)(1).1 For the reasons given below, [3]*3we grant plaintiff’s partial summary judgment motion and hold that the government is liable to plaintiff pursuant to its termination claim. We, concomitantly, deny defendant’s cross-motion.

Facts

The court finds the operative facts delineated hereinafter to be undisputed by the parties.

Precision entered into a fixed-price supply contract with defendant (No. DLA 700-83M-3482) on October 20, 1982. The contract called for plaintiff to deliver 18 gear-shaft spurs by March 19, 1983, for a total contract price of $22,500. In November of 1982 defendant notified plaintiff by a dated message to stop work on six of the contract units. Shortly thereafter, in December of 1982, a second message issued from defendant similarly instructing plaintiff to also stop work on an additional ten (10) contract units. Finally, on or about January 13, 1983 and January 24,1983, plaintiff received Modifications No. P0001 and No. P0002 which, respectively, terminated the first six (6) contract units and the subsequent ten (10) contract units. After these partial terminations for convenience, plaintiff was then contractually obligated only to deliver two (2) contract units. Both contract modifications, supra, included the following language:

The “Additional General Provisions” set forth as paragraphs 17 through 20 of DD Form 1155r are hereby incorporated into this order by reference and this order is hereby terminated for the convenience of the Government pursuant to paragraph [18] for the supplies identified in paragraph (c) below.

Paragraph 18 of the Additional General Provisions provides, in pertinent part, as follows:

The contracting officer, by written notice, may terminate this contract, in whole or in part, when it is in the best interest of the Government. If this contract is for supplies and is so terminated, the Contractor shall be compensated in accordance with Section VIII oí the Defense Acquisition Regulation [DAR] in effect on this contract’s date....

(emphasis added). On each modification, 1.e., No. P0001 and No. P0002, plaintiff signed same and indicated thereon that the “[contractor has incurred costs and will submit a termination claim.” (emphasis added). The modification forms instructed plaintiff to forward any claim resulting from the convenience termination in accordance with the directions issued by the terminating contracting officer. Thereafter, Precision did submit as required a termination settlement proposal on DD Form 831 (Settlement Proposal — Short Form) dated December 1, 1983. In its settlement proposal, plaintiff claimed $5,244 in termination costs as charges for increased production costs, manufacturing overhead, and legal and accounting fees that accrued in preparation of the settlement proposal. These charges, which plaintiff certified on DD Form 831, were only “allocable to the terminated portion of [the] contract.” However, in passing on the efficacy of said claim, the terminating contracting officer (TCO) made a unilateral final decision, dated April 5, 1984, in which he recharacter-ized the settlement proposal of plaintiff as an “equitable adjustment in price of the remaining units on the contract.” Thereafter, and premised solely on said recharac-terization, he found that no contract provision entitled plaintiff to such an equitable adjustment of the price for the remaining two (2) contract items under clause 18 of the “Additional General Provisions” as cited above, and, therefore, summarily denied plaintiff’s claim.2

Contentions of the Parties

A. Plaintiff

Against this background, under Section VIII of the DAR, plaintiff argues that it [4]*4submitted the required form (i.e., DD Form 831) and followed the correct procedures in a timely fashion in tendering its termination claim in the amount of $5,244. Moreover, according to plaintiff, defendant mischaracterized its submission (termination claim) as a claim for an equitable adjustment without a legal basis therefor, misread the contract clause covering such adjustments, and misapplied the regulations to deny plaintiff’s recovery of costs on the continued portion of the contract. Section VIII permitted plaintiff to submit a claim for compensation of costs associated with the continued performance of work under the contract, plaintiff contends. In this regard, plaintiff claims an entitlement —to a per unit production cost increase to cover the unabsorbed set-up and tooling costs of plaintiff’s supplier that arose due to the reduction in quantity (i.e., 16 units) ordered by defendant, to a reimbursement for appropriate overhead, and finally to a reimbursement for legal and accounting fees incurred as a result of preparing the settlement proposal. Therefore, Precision asserts that the court should grant its motion for summary judgment, as to defendant’s liability, since defendant is legally liable for all reasonable costs incurred by plaintiff in performing the continued por-, tion of the contract.

B. Defendant

Conversely, in its cross-motion, defendant maintains that plaintiff submitted a claim for an equitable adjustment in the price of the remaining units under the contract and that the contract clause governing convenience terminations does not specifically allow for the filing of an equitable adjustment claim. Further, if the contract clause did allow for the filing of such a claim, defendant argues that plaintiff’s claim was untimely submitted to the CO since it was not filed within the 90 days after the termination of the contract, as required by the regulations. Alternatively, defendant contends that even if plaintiff’s claim is construed to be a termination claim, and thus concluded to have been timely filed, plaintiff has failed to support its claim with the corroborative documentation required by the regulations. Thus, argues defendant, for such reason, plaintiff is not entitled to relief.3

Issues

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Related

Mulholland v. United States
16 Cl. Ct. 252 (Court of Claims, 1989)

Cite This Page — Counsel Stack

Bluebook (online)
34 Cont. Cas. Fed. 75,493, 15 Cl. Ct. 1, 1988 U.S. Claims LEXIS 89, 1988 WL 50245, Counsel Stack Legal Research, https://law.counselstack.com/opinion/precision-specialty-corp-v-united-states-cc-1988.