For the reasons stated, Harbor's motion for judgment on the pleadings is granted and defendant's contingent counterclaim against Harbor is hereby dismissed.

This is a timely appeal from a decision of the contracting officer that steam cleaners accepted by the Government were later found to contain latent defects and that as a result appellant is liable to the Government in the amount of $29,060.

All 456 cleaners were to be contractor-designed to meet the requirements of Specifications MIL-C-4035D. Both contracts contained the standard Inspection article on Standard Form 32, which provides in part that "Except as otherwise provided in this contract, acceptance shall be conclusive except as regards latent defects, fraud, or such gross mistakes as amount to fraud."

The principal problem presented is as to whether the defects were latent.

After filing its appeal, appellant in effect "stood mute." It has filed no complaint, offered no evidence, submitted on the record, and filed no brief.

The contracting officer's findings with respect to the defects were as follows:

"*** it is the determination of the Contracting
Officer that the Steam Cleaners supplied by you to the
Government contained latent defects which under normal
inspection, to be performed by the Government under
the terms of the contracts, would not be disclosed.
These latent defects consisted of:

a. The end item being a Steam Cleaner, it was
known to you that water and hot steam would be run
through it. You selected a pump for the Steam Cleaners
suitable for pumping oil or gasoline, but not water,
because its parts were not made of corrosion resistant
materials. These pumps, as a result of being the wrong
type of pump, in a very short time corroded and seized,
rendering them completely useless. Normal inspection
required by the terms of the contracts did not require
the dismantling of the Steam Cleaner and a teardown of
the pump to determine the material content of its parts.
The use of a pump suitable for pumping oil or gasoline
instead of using a corrosion resistant pump, (for example,
one of brass construction in the areas where corrosion
would result from pumping water) constitutes a latent
defect within the terms of the contracts.

b. The firepot insulation cracked, flaked and
deteriorized after a very short period of use. This was
due apparently to improper material being used in its
construction required by the contracts, did not require
the teardown of the Steam Cleaner and a physical analysis
of the insulation material. This defect therefore con-
stitutes a latent defect within the terms of the contracts.
tracts.

C. The heating coil support failed because of im-
proper design and location within the combustion chamber
of the Steam Cleaner. This defect also constitutes a
latent defect within the terms of the contract because
normal inspection did not require a teardown of the Steam
Cleaner to examine the support that failed. ***"'

In support of the above findings the Government has presented affidavits by the Government engineers.

While the record does show that the defects were not discovered by the Government prior to acceptance, it does not show how the Government inspected the cleaners and it does not show how inspection of such cleaners would normally be conducted. Nor does it show why a reasonable

inspection would not disclose the defects.

The contracting officer states that normal inspection does not require the dismantling or teardown of the cleaner and an analysis of the materials used. This would seem to be true if one were buying one, or a small quantity of, "off the shelf" cleaners. But we are here

concerned with contracts for 456 cleaners, at a total price of $347,268.89, to be designed and produced to conform to Government specifications. The specifications contain requirements to be met by materials and components. When the Government specifies that materials and components are to have certain properties and meet certain requirements it presumably has some way of inspecting or testing to see if the specifications are met.

Moreover, under the contracts the Government expressly had the right to inspect at all times and places, including inspections during manufacture, and including inspections of components before they were installed. Thus, there was no need to wait until the cleaners were completed before inspecting the components.

DECISION

This is an affirmative claim by the Government against appellant. In such cases the Government has the burden of proof, The Heil Co., ASBCA No. 10047, June 22, 1965, 65-2 BCA, par. 4924, and this is true where, after acceptance, the Government alleges that accepted items contained a latent defect. Polan Industries, Inc., ASBCA Nos. 3996, et. al., October 28, 1958, 58-2 BCA, par. 1982, on page 8175.

At common law, under the Uniform Sales Act, and under the Uniform Commercial Code, inspection and acceptance of supplies is not conclusive and does not bar the buyer from making a subsequent claim for defects if he acts promptly, but the buyer under such circumstances has a heavy burden of proof. Resolute Paper Products Corp., ASBCA Nos. 3961 and 4053, March 27, 1958, 58-1 BCA, par. 1679.

Under the Inspection article in the contract it is provided that "acceptance shall be conclusive except as regards latent defects, fraud, or such gross mistakes as amount to fraud." Therefore, the Government has a heavy burden of proof in this case.

A latent defect is usually defined as one that is hidden from the knowledge as well as from the sight and which could not be discovered by ordinary and reasonable care or by a reasonable inspection. Polan Industries, Inc., supra, page 8172; Cottman Mechanical Contractors, Inc., ASBCA No. 11387, September 11, 1967, 67-2 BCA, par. 6566.

It is well established that a defect which can be readily discovered by an ordinary examination or test is not latent and a failure to make the examination or test does not make it so. The finality of acceptance under the cited contract provision is not diminished by such failure. Polan Industries, Inc., supra, page 8172.

In this case the evidence presented is not sufficient to prove the correctness of the Government's allegation that the defects were latent as it does not show what a normal or reasonable inspection is on the items concerned and why it would not have disclosed the defects.

The appeal is sustained.

Section 4. Impossibility

A. Literal Impossibility

HOL-GAR MANUFACTURING CORPORATION v. THE UNITED STATES

360 F. 2d 634 (1966)

ON DEFENDANT'S MOTION FOR PARTIAL SUMMARY JUDGMENT AND PLAINTIFF'S CROSSMOTTION FOR SUMMARY JUDGMENT

WHITAKER, Senior Judge, delivered the opinion of the court:

This case is before the court on defendant's motion and plaintiff's cross-motion for summary judgment. Plaintiff seeks reimbursement for additional costs incurred in trying to perform its contract with defendant under specifications which, prior to amendment, it contends were defective, in that the desired performance could not be attained by following them. After the Contracting Officer had denied its claim, plaintiff took an appeal to the head of the Department, as required by the "Disputes" clause of the contract. The Armed Services Board of Contract Appeals, acting for the head of the Department, also denied plaintiff's claim. For reasons hereinafter set out, we hold that the Board was in error and that the plaintiff is entitled to recover for costs which it incurred in trying to perform under defective specifications.

On December 13, 1956, the Air Materiel Command of the Department of the Air Force issued a Request for Proposals for the manufacture and delivery of 107 electric generator sets, in accordance with Exhibit RADC-2491, which was an elaborate set of specifications drafted by the Air Force Air Research and Development Command. The specifications provided specific size and weight limitations for the generator unit and set out various environmental conditions under which the unit was to be operable. provided that the unit be capable of operating 23 hours a day for six months (4,000 hours), with only normal maintenance.

It also

With regard to the diesel engine, which is of particular concern in this case, RADC-2491 called for an air-cooled, multi-cylinder, full stroke type which "shall have demonstrated, through prior test by independent or government laboratory, sufficient durability of the basic engine to meet the requirements of this specification." It then went on to provide for the amount of cubic inch displacement; the direction of rotation and operating speed of the engine; the type of fuel to be used; the components of the fuel system, including the type of fuel tank, fuel transfer pump, fuel replenishment system and fuel piping; the type of air induction, exhaust and cooling systems; the type of lubrication system, including the kind of oil filters and lubricating oils to be used; the type of pistons, valves, crankshaft, main bearings, camshaft, flywheel, cylinder block, cylinder head, crankcase and connecting rods; the components of the starting system, including the type of cranking motor, battery charging system and storage battery assembly; and the type of engine speed governing system.

The Technical Proposal, among other things, was to give detailed analysis of the proposed method or methods of compliance with each portion of the governing specifications; to outline basic difficulties or problems, if any, in meeting the specifications; and to provide a complete and detailed statement clearly defining the bidder's recommended solution of any problems outlined.

On January 31, 1957, after a bidders' conference at which contractual details were discussed and technical details of the specifications were reviewed, plaintiff submitted its Technical Proposal. In accordance with the Request for Proposals, this Technical Proposal set forth the components and materials which plaintiff proposed to use and the methods it proposed to employ in complying with the specifications. With regard to the diesel engine, plaintiff submitted that the general requirements of the specifications limited consideration to three models of engines--the American MARC Hallet AC2, the Onan DPR, and the International Fermont FA98. It then explained why it thought the latter two models would not meet, in several important details, the more specific requirements of the specifications.1 It then outlined the American MARC Hallet AC2 engine (hereinafter MARC) which, with only slight modification, it thought would meet the design requirements and would probably also meet the performance requirements of the specifications, since it had successfully passed tests by the Marine Corps. Plaintiff accordingly proposed the use of a slightly modified MARC engine, as one of the components of the generator set.

On the basis of this Technical Proposal, plaintiff and defendant on March 25, 1957, entered into a negotiated fixed-price supply type contract for the manufacture and delivery of the 107 generator sets for a total contract price of $467,717.60.

The first item in the contract schedule called for the delivery of design data within 70 days after receipt of the contract, showing specifically and in detail how plaintiff meant to comply with the specifications, Exhibit RADC-2491, supra. The second item in the schedule called for the manufacture of three preproduction samples, designated in the contract as First Articles. One of these was to be delivered within 50 days after approval of the design data, for testing and approval by defendant. The other two were to be subjected to tests by plaintiff to determine whether they complied with the specifications. The results of these latter tests were to be submitted to the defendant within 170 days after approval of the design data. The remainder of the generator sets were to be manufactured and delivered at monthly intervals after approval of the test results.

1The Onan engine was found to be unsuitable primarily on the ground that use of it would require exceeding the weight and size limitations for the generator sets.