Findings of Fact 154 Ct. Cl. to be unserviceable. Condition 7 parts required reconditioning or cleaning in order to place them in condition 1 for use. The pricing of inventories of parts in excess of requirements was the same for condition 7 parts as for condition 1 parts, so that it is not possible to determine to what extent the inventory of parts represented the procurement of new parts for which reimbursements were made. All purchase orders for parts issued by the plaintiff were first approved by the contracting officer's representative. Early purchases were made on the basis of a table of mortality replacements experienced by Bowen and McLaughlin, in rebuilding 1280 engines up to September 30, 1951. 9. The bid proposal contained a provision for bidding on the "Estimated cost of additional facilities to be manufactured or acquired by contractor for account of Government or Government agency", for which plaintiff submitted a bid of $65,750. However, a separate contract was negotiated for additional facilities required for the performance of the engine rebuilding contract, designated as No. DA-04-495ORD-244, dated December 4, 1951, hereinafter referred to as Ord-244. The estimated cost of such facilities was $64,100, which was specifically set forth in a list of equipment and special tooling in Schedule "A", attached to this contract. Title I of contract Ord-244 provided for the acquisition of facilities and title II specified allowable costs and reimbursements to the contractor. Titile I provided in part: Article 1-A. Procurement of Facilities 2. The Contractor may, with the written approval of the Contracting Officer, substitute facilities similar to those in Schedule "A" or additional facilities thereto from time to time as required during the course of the work; in which event Schedule "A" will be modified accordingly. Copies of all approved revisions or changes of said Schedule "A" shall be furnished the Contracting Officer so that, at all times, his copy of Schedule "A" will be current and include all approved modifications. A final revised Schedule "A" containing all modifications will be prepared by the Contractor upon completion of the work under Title I and upon final approval by the Contracting Officer will be appended to each of the signed copies of this contract. The final re 476 Findings of Fact vised Schedule "A" shall be divided into "severable" and "non-severable" facilities. It is estimated that the total cost of the Contractor's performance under Title I of this contract will be approximately Sixty-four Thousand One Hundred and No/100ths dollars ($64,100.00) exclusive of the cost of any Government-furnished property. It is expressly understood, however, that neither the Government nor the Contractor guarantees the correctness of these estimates. The estimated costs set forth above are based upon an estimate approved and agreed to by the Government and the Contractor, a copy of which is on file in the office of the Contracting Officer. Title II provided for reimbursement to the contractor for its costs of facilities acquired, as approved or ratified by the contracting officer, in accordance with Part 2, Section XV of the Armed Services Procurement Regulations, as provided in title II of contract Ord-242 (finding 4). Contract Ord-244 provided for reimbursements "in accordance with said principles", as follows: (a) The net invoice price plus actual transportation cost of facilities procured from outside sources, (b) the net invoice price, cost of transportation, all direct labor and allocable overhead and general and administrative expenses for facilities manufactured, other than standard or commercial items, and (c) the lowest price currently charged for standard or commercial items manufactured; (d) costs for the installation of facilities in like manner as under (b) above, except (e) the net invoice price to the contractor when such installations were performed by an outside party under a subcontract; and (f) costs for necessary plant rearrangement, rehabilitation and incidental construction as under (b) above, when performed by the contractor with its own employees, or the net invoice price for such work, if performed by others. Article II-E, payments, provided in part: 2. Final Payment. Upon completion of the work pursuant to Title I and final acceptance thereof in writing by the Contracting Officer, the Government shall pay to the Contractor the unpaid balance of the cost of the work determined under Title II hereof, less any sum that may be necessary to settle any unsettled claims for Findings of Fact 154 Ct. Cl. labor or materials, or any claim in connection with this Contract which the Government may have against the Contractor. The Contracting Officer shall accept or reject the completed work with reasonable promptness. Prior to final payment and as a condition thereto, the Contractor shall furnish the Government with a release of all claims against the Government arising under and by virtue of this Contract other than such claims, if any, as may be specifically excepted by the Contractor from the operation of the release in stated amount to be set forth therein. The contract provided that the Government would furnish equipment listed in Schedule "B" attached thereto, for which "none" was listed. It also reserved to the Government the right to furnish any additional equipment, or to provide any type of equipment listed in Schedule "A" that was in a satisfactory operating condition, in which event such equipment would be transferred from Schedule "A" to Schedule "B" of this contract. 10. Contract Ord-244 was revised by the following supplemental agreements: (a) By supplemental agreement No. 1, dated April 4, 1952, Schedule "A" of facilities and special tools was revised and increased by $30,703.75, and Schedule A-1 was substituted therefor in the estimated amount of $94,803.75. (b) On August 20, 1952, supplemental agreement No. 2 revised schedule A-1, and schedule A-2 was substituted therefor in the reduced amount of $94,461.75, and schedule B-1 listed some 23 items of equipment and 10 groups of special tools which were furnished by the Government, without cost to the contractor. (c) On December 8, 1952, supplemental agreement No. 3 revised schedule B-2, with four additional items of equipment furnished by the Government, and schedule A-3 revised, was substituted in lieu of schedule A-2, without any change in the estimated costs for reimbursements. (d) By supplemental agreement No. 4, dated January 27, 1953, the plaintiff undertook to dismantle, package and crate all equipment and tools acquired for the Government at its actual cost of materials, labor and 96.72 percent of direct labor as an allowance for overhead and general administrative expense, not to exceed an estimated $6,300. 476 Findings of Fact (e) On April 2, 1953, schedule A-4 was substituted for A-3 by supplemental agreement No. 5, increasing the estimated sum for reimbursement by $68,809.44, as follows: Actual cost of dismantling, crating and processing Total estimated costs___ 4,815. 68 169, 571. 19 (f) On February 21, 1955, contract Ord-244 was increased by the net sum of $10,751.03 under supplemental agreement No. 6, to the estimated sum of $180,322.22, by amendments to schedule A-4 as follows: Additional cost of special tools------ $4,960. 12 6, 916. 76 $11, 876. 88 Less a reduction of other facilities in schedule A-4__ -1, 125. 85 10, 751. 03 Net increase in estimated reimbursables‒‒‒‒‒ 11. The estimated costs for facilities under contract Ord244, as amended by supplemental agreements reported in the preceding finding were reimbursed and paid to the plaintiff in amounts set out in the following tabulation: 12. Prior to the award of contract Ord-242 to the plaintiff herein, the Los Angeles Ordnance District (sometimes referred to herein as LAOD) had contracted with only one firm for rebuilding the Ford tank engine, which was Bowen & McLaughlin of Phoenix, Arizona. On January 9, 1951, Bowen & McLaughlin was awarded a letter order for rebuilding 750 GAA Ford tank engines M4A3 without any specified price, but with the provision that a contract would be negotiated within 120 days. By supplemental agreement No. 1, dated May 9, 1951, the agreement was formalized as contract DA-04–495–ORD-36, increasing the quantity to 3,115 engines at a unit price of $727.48, and direct reimbursement for the cost of replacement parts estimated at $800 for each engine. The estimate for parts at $800 per engine was an indeterminate estimate since neither the LAOD nor Bowen & McLaughlin had any substantial information of what the replacement requirements would be. The Bowen & McLaughlin contract was similar to plaintiff's contract Ord-242, with the price redetermination clause and provisions for the reimbursement cost of parts, repair and replacements of shipping containers, but not for gasoline, oil and cleaning solvents. It was revised and increased from time to time by supplemental agreements as follows: Supplement No. 2 issued October 1, 1951, increased the quantity by 505 engines at $727.48, with the reimbursement for parts estimated at $800 each. Supplement No. 5 dated December 15, 1951, increased the quantity by 100 engines at a unit price of $699.22 with reimbursement for parts estimated at $800 each. Supplement No. 6, dated January 8, 1952, increased the quantity by 1047 engines at a unit price of $669.46, with reimbursement for parts, which was increased by $1,292,012, or an average of about $1,234 each. |