The Beryllium Corporation v. The United States

449 F.2d 362, 196 Ct. Cl. 12, 1971 U.S. Ct. Cl. LEXIS 2
CourtUnited States Court of Claims
DecidedOctober 15, 1971
Docket9-68
StatusPublished
Cited by12 cases

This text of 449 F.2d 362 (The Beryllium Corporation 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
The Beryllium Corporation v. The United States, 449 F.2d 362, 196 Ct. Cl. 12, 1971 U.S. Ct. Cl. LEXIS 2 (cc 1971).

Opinions

SKELTON, Judge:

This case involves a dispute between the Beryllium Corporation, plaintiff, and the United States, arising out of a contract for the production and sale of beryllium billets and end-products by the plaintiff to the Atomic Energy Commission (AEC) for its own use, as well as that of the Department of Defense (DOD) and other governmental agencies.

Beryllium is a light, hard metal made from beryl ore and is in relatively scarce supply. Prior to September 1, 1956, the AEC supplied its own needs and those of other governmental agencies from the operation of government plants by Brush Beryllium Company (Brush). The government, after making a survey of its needs, decided to transfer the production of this metal to private industry, and to that end solicited bids from thirty different companies to furnish 1,000,000 pounds per year. Contract 465 was awarded to plaintiff. A similar contract was awarded to Brush.

[364]*364The contract with plaintiff was effective September 1, 1956, and was to run to August 31, 1962. It called for the delivery of 500,000 pounds of beryllium in billets at $46.02 per pound. Deliveries were to commence not later than eleven months after September 6, 1956, and were to continue at a rate of approximately 100,000 pounds per year. Amortization of the plant, not to exceed $1,-680,000 was included in the contract price. Plaintiff was also to be paid $177,000 as start up costs upon delivery of the first 100,000 pounds-of beryllium. The contract specified that plaintiff would not lose its investment in the plant in the event the contract was terminated for the convenience of the government. The AEC had the right to divert to other purchasers such quantities of the metal as might be determined by the contracting officer only for government use or fabrication of or incorporation in items to be supplied to the government. Such sales to other purchasers were to have the same effect as if the beryllium had been delivered to the AEC.

The plaintiff built its plant but was unable to deliver the billets within the eleven-month period specified in the contract. It delivered its first acceptable billet about nine months late. The government considered terminating the contract for default, but after a conference with plaintiff, it decided to reduce the quantities of beryllium to be received from both plaintiff and Brush because of a lessening demand of the government for the metal. The AEC sent plaintiff a notice of partial termination on June 27, 1958, effective June 30, 1958. The contract was then amended by the parties by Modification No. 1 (not material here) and by Modifications Nos. 2 and 3.

By the terms of Modification 2, effective June 30, 1958, the quantity of beryllium to be delivered by plaintiff was reduced from 500,000 to 187,500 pounds. The delivery schedule was changed to “approximately 37,500 pounds per year,” with deliveries after September 1958, to be made “substantially at the contract rate.” The deliveries were to be made “each calendar quarter in quantities of not less than 7,000 pounds nor more than 15.000 pounds of beryllium metal.” The contract period was extended to June 1, 1963, and the price was increased to $64 per pound.

Because of the partial termination of the contract for the convenience of the government, the plaintiff was paid $1,-880.000 as a settlement for the reduced quantity of beryllium to the extent of 312,500 pounds. This payment included $1,747,000 for the cost of plaintiff’s plant, plus $133,000 other costs.

By Modification 3, it was provided that sales of beryllium in any form (billets, fabricated parts, scrap, etc.) to the government or its contractors would count as deliveries under the contract. (The original contract provided for billets only).

The plaintiff entered into a contract in January 1962, with Continental Ore Corporation (Continental) to sell 150,000 pounds of beryllium to Continental which in turn was to deliver the billets to Commodity Credit Corporation (CCC) in exchange for surplus agricultural products under a barter arrangement. The CCC proposed to stockpile the billets under a law enacted by Congress authorizing it to do so after plaintiff and the AEC had executed their original contract. In 1956 the CCC was not authorized to stockpile beryllium. The plaintiff delivered 32,620 pounds of beryllium to Continental during the first six months of 1962 and 75,901 pounds between July 1, 1962, and May 31, 1963. Plaintiff did not report these sales to the AEC because it contended, and still contends, that the sales to Continental do not count as deliveries under its contract with the AEC. The AEC contends otherwise. This is one of the points in controversy in this case, as will be discussed more fully below.

[365]*365In the meantime, the plaintiff had been delivering beryllium under its contract with the AEC. The following table shows all deliveries under both the AEC and Continental contracts:

Billet

"Tendered"

Beryllium Billet to AEC In Scrap

Dates products to CCC dispute purchased

7-1-58 to 6-30-69 _____ 7-1-59 to 6-30-60 _______ 7-1-60 to 6-30-61 _____ 7-1-61 to 6-30-62 ..._____ Pounds 33,402.09 ._ 37,331.79 75,668.56 25,752.52 Pounds 32,622 Pounds 15,980.8 Pounds 1,171.77 5,781.67 17,773.11 15,291.71 Total (6-20-62)______ 7-1-62 to 6-1-63 ______ 172,154.96 . 21,537.94 75,901 . 25,257.71 Total __ _ _______ _ -193,692.93 _. 65,275.97

* 226,314.93 lbs. with the 32,622 lbs. of billet delivered to Continental prior to July 1, 1962 and 302,215.93 lbs. with total deliveries to Continental through May 31, 1963.

On June 20, 1962, plaintiff tendered 15,980.80 pounds of beryllium to the AEC under its contract. The AEC refused to accept it on the ground that on that date it had already purchased 172,-154.96 pounds from plaintiff during the four years the contract had been in force, whereas, according to the contract it was only required to purchase 150,000 pounds during such four-year period (37,500 pounds per year). The plaintiff stored the 15,980.80 pounds and later used the beryllium in manufacturing parts which it sold. The plaintiff made a formal claim to the AEC for payment for the tendered metal. The problem was submitted to the contracting officer, who denied plaintiff’s claim. The plaintiff then appealed to the AEC, which referred it to a hearing examiner, pursuant to AEC regulations.1 The examiner conducted hearings and on May 1, 1964, rendered a decision in favor of the plaintiff on all the issues. In substance, he held that plaintiff’s deliveries in excess of 37,500 pounds in a year were not to count as deliveries under the contract; that the sales to Continental were not to be credited as deliveries under the AEC contract; and that by refusing to accept the 15,980.80 pounds on June 20, 1962, from the plaintiff, the AEC had terminated the contract for the convenience of the government. The examiner remanded the ease to the contracting officer for settlement negotiations on this basis.

Both parties appealed to the AEC for review of the examiner’s decision. The appeal by plaintiff is not material to this decision, as it involved complaints on matters not now before us, such as objecting to the ruling that the contract was terminated for the convenience of the government as to undelivered beryllium ; that deficiencies in 1959 and 1960 deliveries could not be made up as a part of the tender of June 20, 1962; and that the deliveries in 1963 were beyond the scope of the proceeding.

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The Beryllium Corporation v. The United States
449 F.2d 362 (Court of Claims, 1971)

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Bluebook (online)
449 F.2d 362, 196 Ct. Cl. 12, 1971 U.S. Ct. Cl. LEXIS 2, Counsel Stack Legal Research, https://law.counselstack.com/opinion/the-beryllium-corporation-v-the-united-states-cc-1971.