Varo, Inc. v. United States

548 F.2d 953, 23 Cont. Cas. Fed. 80,975, 212 Ct. Cl. 432, 1977 U.S. Ct. Cl. LEXIS 46
CourtUnited States Court of Claims
DecidedJanuary 26, 1977
DocketNo. 369-74
StatusPublished
Cited by1 cases

This text of 548 F.2d 953 (Varo, Inc. 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
Varo, Inc. v. United States, 548 F.2d 953, 23 Cont. Cas. Fed. 80,975, 212 Ct. Cl. 432, 1977 U.S. Ct. Cl. LEXIS 46 (cc 1977).

Opinion

Per Curiam :

This case comes before the court on defendant’s request, filed May 21, 1976, for review of the recommended decision of Senior Trial Judge Mastin G. White, filed on April 15, 1976, pursuant to Rule 166 (c), wherein he recommended judgment for the plaintiff on both claims. The plaintiff petitioned for review under the standards of the Wunderlich Act, 41 U.S.C. §§ 321, 322, of two decisions of the Armed Services Board of Contract Appeals (ASBCA), Nos. 16087 and 16146, 73-2 BCA ¶10,206, on motion for reconsideration, 74-1 BCA ¶10,458, construing and applying a contract, No. DAAA BO 7-68-C-0291, for fabrication and supply of 135 searchlights, and a larger number of xenon lamps, some to be incorporated in the searchlights, some to be furnished as spares.

Upon consideration of the recommended decision, together with the defendant’s objections thereto and the briefs and oral arguments of counsel, the court agrees with the said decision and adopts and affirms the same as the basis for its judgment in this case. We find no comment by us necessary for addition to the trial judge’s observations on ASBCA No. 16087. With respect to No. 16146, the parties invited our closest attention to whether the trial judge misconstrued the contract, and we deem it will be helpful to add a few words to his on that subject, although we fully agree with him.

The procurement being novel, the plaintiff was originally required to furnish the usual “first articles” for testing, samples both of the searchlights and of the lamps, as they were to be, before starting production. As to the lamps, it was also required to furnish, for the same purpose, two out of the first ten of the regular production run, to be selected at random. It procured all its lamps by subcontract from Hanovia, Inc. Hanovia also had a prime contract by which [435]*435it furnished 200 of the same type of xenon, lamps direct to the Army. It planned to and did produce all the lamps, under both the prime contract and the subcontract, in a single unbroken production run, scheduling the prime contract lamps first. By reason of contract engagements between the Army and Hanovia, with which Varo 'had nothing to do, the Army agreed to accept three out of the first ten lamps in the regular production run, as and for both the “first articles” and the initial production samples. The Army sent them to General Testing Laboratories, which performed the required tests at a cost to the Government of approximately $6,000 per lamp. There was no effort to pass this cost through to Hanovia.

Varo then suggested, and the Government agreed, that the testing of lamps under its prime contract had become a useless expense. It was eliminated and the lamps were accepted on the basis of the tests above mentioned. There was at the time no caveat that a price reduction would be demanded. However, at a. later date defendant asserted that Varo had been let out of performing five tests, three “first article” lamps and two initial production run lamps, and the defendant was therefore entitled to a price reduction under the Changes Article. The Board agreed, measuring the amount of the reduction by the cost of performing five sets of tests at General Testing Laboratories, $30,000 in all. It appears that Varo, if required to perform any of the five, would or might have 'had to pay General Testing Laboratories itself, unless it could have passed the obligation on to Hanovia pursuant to the latter’s subcontract commitment to furnish “qualified” lamps at a final price. More certain grounds of decision appear available.

With regard to the two initial production lamps, the trial judge concludes, and we agree, that the tests were actually performed, since the first ten of the entire production run, not of the portion scheduled for Varo, were the only ten from which the samples could have been selected. That Varo benefited from having tests of these run without cost to it is not due to a change order, but to a fortuitous circumstance, of which it is entitled to garner the benefit. This is true even though, as the trial judge recognizes, the original contract [436]*436was clear that Varo would bear the expense of testing the initial production lamps.

As to the three “first article” lamps the issue is much closer, and able counsel on both sides found material in the original contract, going for them. Plaintiff argued that by that contract, it was not obliged to test the “first article” lamps, but only to deliver them for Government testing, so that before any change order the General Testing Laboratories bill would still have been rendered to the Government. Therefore, it was not let out of anything. Defendant would have us find it perfectly clear that the original contract required plaintiff to pay for “first article” testing of the involved lamps.

Defendant finds a linchpin for its argument in Par. 4.1 of the Military Specification, which it says the trial judge “inexplicably failed even to mention.” It reads as follows:

4.1 Responsibility for inspection. — Unless otherwise specified in the contract or purchase order, the supplier is responsible for the performance of all inspection requirements as specified herein. Except as otherwise specified, the supplier may utilize his own facilities or any commercial laboratory acceptable to the Government. The Government reserves the right to perform any of the inspections set forth in the specification when such inspections are deemed necessary to assure [that?] supplies and services conform to prescribed requirements.

Defendant deduces from this that the contractor must “inspect” which includes testing, at his expense, 'Unless some clear and specific provision assumes this obligation for the Government. It fails to find 'any such provision in the contract documents. It says the trial judge mistakenly applied provisions written, not for the lamps, but for the searchlights. It is clear the Government originally intended to test the searchlights itself.

Par. 4.3 tells what tests are required under the “inspection” rubric, for the lamps, but fails to say who is to do it. Par. 3.2.1 is quoted by the trial judge. Under the heading: First Article Model, the supplier is to “furnish” three lamps “to prove, prior to starting production, that his production methods * * *3; wpi d0. the job. Defendant says “furnish” means “produce or make available,” and the provision sought only to prescribe the number of lamps to be manufactured for [437]*437testing. “Furnish” is a protean word. We note, however, the first definition of “furnish” in Webster’s Unabridged:

la. To provide or supply with what is needed.

The word thus seems to denote a recipient, having a need. As a verb, it has an object, which may be the thing furnished, or the needy recipient. Whichever it is, the other comes into the sentence by way of a preposition. You “furnish the hungry with food,” or you “furnish food to the hungry.” The right question therefore is, what recipient is implied here? It seems to be the Government, for how else would the mere furnishing prove anything ? The language bears the weight the trial judge places on it; at its best for defendant it is ambiguous.

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35 Cont. Cas. Fed. 75,698 (Court of Claims, 1989)

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Bluebook (online)
548 F.2d 953, 23 Cont. Cas. Fed. 80,975, 212 Ct. Cl. 432, 1977 U.S. Ct. Cl. LEXIS 46, Counsel Stack Legal Research, https://law.counselstack.com/opinion/varo-inc-v-united-states-cc-1977.