115 F. Supp. 903 | Ct. Cl. | 1953
ON DEPENDANT’S MOTION POR SUMMARY JUDGMENT
delivered the opinion of the court:
Plaintiff sues under the War Contract Hardship Claims Act,
Defendant has filed a motion for summary judgment directed only to those portions of the petition praying for relief under the Lucas Act, on the ground that there is no genuine issue as to a necessary jurisdictional fact in that plaintiff did not file prior to August 14, 1945, with a department or agency of defendant, a sufficient written request for the type of relief contemplated by the Lucas Act.
Plaintiff has incorporated in its petition a list of those contracts on which it allegedly incurred losses and concerning which losses plaintiff alleges it had on file with the department or agency concerned requests for relief within the meaning of the Lucas Act. Paragraph 8 of its petition alleges that:
* * * the losses sustained on said contracts and subcontracts by this corporation were caused by the large amount of research, experimental and preliminary work required to develop the products required by the departments and agencies of the Government under the said contracts, the numerous changes requested by the departments and agencies, and the improvement and perfection of the products to meet changed conditions and requirements, all' of which were at the instance and request of the contracting departments and agencies of the Government, * * *
Plaintiff also alleged (paragraph 6 of petition) that copies of each written request for relief on which plaintiff now relies are contained in its Lucas Act claim filed on Febru
It is defendant’s position that the requests for relief relied on by plaintiff and contained in its claim to the Navy Department (defendant’s Exhibits 1 and 2), were claims for contractual relief understood and treated as such by both parties, and were in no sense sufficient to put the contracting agencies on notice that they were being requested to grant plaintiff extra-legal relief such as was possible only under the First War Powers Act. Fogarty v. United States, 340 U. S. 8.
Plaintiff’s own characterization of its losses as set forth in paragraph 8 of its petition, quoted above, indicates that the claims based on them were contractual in nature rather than extra-legal. Am examination of the requests themselves bears out this impression.
The contracts listed on plaintiff’s Exhibit A to its petition and included in Group I, were three experimental contracts calling for the manufacture and delivery of a number of 5-cylinder auxiliary power plants between 1941 and 1944. Plaintiff was paid the total price stipulated in the contracts ($101,700), but the actual costs of performing the contracts exceeded such price by $267,666.02. Included in Group II (Exhibit A) were three subcontracts awarded to plaintiff by Electric Boat Company and covering the procurement of a number of 2-cylinder auxiliary power plants and spare parts for installation in Navy PT boats for the United States Navy. Plaintiff’s costs in excess of the contract prices paid plaintiff are alleged to have amounted to $68,933.53 plus certain inventory costs of $46,436.35.
In connection with plaintiff’s fixed-price production contracts, plaintiff filed “claims” with defendant which, in effect, amounted to attempts to secure defendant’s approval of plaintiff’s plan to liquidate portions of its previous development costs by adding to the fixed price a sum representing the amortization of the previous development costs of the product covered by the contracts. With respect to the cost-plus production contracts, plaintiff asked the contracting agencies to treat such development costs as reimbursable items of cost under the terms of the contracts and of T. D. 5000, incorporated therein by reference.
Plaintiff relies particularly upon its letter of April 9,1943 to Captain William H. Gardner, the contracting officer on contract No. W535-ac-27329, a cost-plus contract for the production of the experimental engines. The following ex-, cerpts from this letter are significant:
This letter is submitted in connection with Contractor’s claim for reimbursement on that portion of his capitalized Auxiliary Power Plant Development, charged to Contract No. W535-ac-27329, in accordance with Appendix “A” attached.
v ‡
In this letter, the Contractor will brief his method of setting up and amortizing his Auxiliary Power Plant Development expense, with specific reference to certain points, which have been raised by the Army Air Force Audit.
On the basis of production contracts, booked and anticipated, Lawrance Engineering and Besearch Corporation determined during April 1941 that March 1, 1941,*718 represented tbe date when its basic experimental and development program was completed, and that in the future, it would be considered as a production operation.
Included in this decision were the following:
1. That the expenditures on Auxiliary Power Plant ex-perimentations to February 28, 1941, should be deferred, and these deferred expenditures should be amortized over the production of Auxiliary Power Plants on the basis of contracts then on hand or to be received.
2. That with minor exceptions, no further expenditures on Auxiliary Power Plants should be deferred, as such expenditures would be applicable to specific models, and would be properly the cost under production contracts.
3. That such future experimental, engineering, and test work on Auxiliary Power Plants, as would not be applicable to production contracts, would be expensed currently, except where such work was in the nature of developing specific new products.
It is pertinent to note that these decisions were made and put into effect at least eight months prior to any contemplation of CPFF contracts.
It is also pertinent that in the subsequent negotiations of CPFF contracts, and in answer to direct questions, we were led to believe that our Auxiliary Power Plant development, as set up, would represent an allowable cost under Section 26.9, Paragraph (d), of T. D. 5000, reading in part as follows:
“(d) Other manufacturing cost.” [Here follows most of Paragraph (d).]
The balance of this letter was devoted to arguments contending that the contractor’s expenditures on the Auxiliary Power Plants during the experimental period were properly a cost of performing the later CPFF production contracts, that such costs were properly deferred and amortized in accordance with a reasonably consistent plan and that under the provisions of the contract and T. D. 5000 such expenditures should be allowed as a reimbursable item of cost of performing the CPFF production contract.
Nothing in the above-described letter suggests to us that plaintiff was seeking more than it believed itself to be entitled
Contractor contends that the basis for amortization, as established in Appendix “A,” is equitable.
* $ $ $ *
Contractor contends that the work during the experimental period has resulted in his being able to produce for the United States Government and commercial users a product of definite value to the war effort; that the Contractor’s only means of recovery of the expenditures during this experimental period are by amortization against production contracts.
If, under any conceivable theory, the above statements could be considered extra-legal arguments, they at best are only equitable reasons presented by the contractor in an effort to secure favorable consideration on a legal and contractual claim. Taken as a whole, the letter clearly bases the claim on the contractor’s rights under its CPFF contract and T. D. 5000, and, we think, rightly so. As pointed out by defendant, the contracting agency apparently took this same view, because it later allowed a substantial portion of these development costs in accordance with plaintiff’s requests. Why all of the costs were not allowed does not appear, but that fact does not, we think, convert the balance of the claim into one for extra-legal relief.
Similar contentions with respect to development expenses were made to the Navy in connection with Contract No. NOa(s)-551 and a substantial portion of the costs claimed were allowed under that contract.
The other documents relied on by plaintiff as being proper requests for extra-legal relief in connection with these items, were (1) a copy of Recapitulation of Navy Claims; (2) the Final Settlement Proposal covering Partial Termination of Contract NOa(s)-551 requesting, among other things, par
All of the above documents are concerned with the contractor’s attempt to have its deferred development costs considered by the contracting agencies as properly reimbursable under the CPFF contracts and T. D. 5000 and are in no sense requests for extra-legal relief from losses.
The next contract on which plaintiff claims it suffered a loss concerning which it filed with the contracting agency a request for relief as a matter of grace, is Navy Contract NOa(s)-74702. Plaintiff alleges that pursuant to this contract it agreed to develop for the Navy a 9-cylinder engine according to Navy specifications for a fixed price of $40,000; that the actual cost to plaintiff of performing the contract totaled $46,988.90; that on November 2, 1945, defendant terminated the contract for the convenience of the Government, paid plaintiff only $36,000, and “failed, neglected, and refused to pay the balance of $10,988.90”.
The next document relied on is a copy of a Settlement Agreement on Contract NOa(s)-74702, dated January 3, 1945, in connection with the termination of the contract. No request for relief of any kind is hinted at in this document.
The remaining document submitted is merely a letter dated January 23, 1947, from the Navy Department to plaintiff acknowledging the receipt of information on the change of plaintiff’s name from Lawrance Engineering & Besearch Corporation to Lawrance Aeronautical Corporation.
It does not appear that any request for relief within the meaning of the Lucas Act was filed with the Navy in connection with this contract. We note that this claim is also urged under the general jurisdiction of this court in paragraph 11 of the petition.
Plaintiff’s next Lucas Act claim is in connection with a contract with the Bureau of Supplies and Accounts (Navy) No. 83180 and supplements thereto. The total loss claimed is $86,596.57. The record contains no information concerning the nature of the contract and plaintiff does not indicate in its petition, brief, nor in its Lucas Act claim presented to the Navy, on what documents it relies as requests for relief. The contract is mentioned by number in two of the schedules included in plaintiff’s claim before the Navy under the Lucas Act (defendant’s Exhibit 1, pp. 59 and 101). Inasmuch as plaintiff alleges in its petition that all the requests for relief relied on are contained in its claim presented to the Navy in 1947 under the Lucas Act, and since no such requests relative to this contract appear in such claim, the losses, if any, incurred under this contract cannot be considered under the Act.
The last contract relied on is one with the War Production Board, No. 197, dated June 14, 1944. This was an experimental contract to be performed at an estimated cost of $14,875, to be completed on August 1, 1944. The contract provided that the work was not to extend beyond August 1, 1944, “except as otherwise authorized in writing by the Contracting Officer and agreed to by the Contractor.” The contract also provided that the contractor should not be required to incur costs in excess of the maximum amount stipulated in the contract unless the contracting officer first agreed in writing to reimburse the contractor therefor. Article 9 provided that, upon termination, the maximum amount payable might not exceed the maximum amount specified in the contract less any amounts already paid to the contractor.
The only account of record as to what transpired under this contract is contained in plaintiff’s Section 17 claim under the Contract Settlement Act of 1944 from which it appears
The above claim under the Contract Settlement Act and two invoices, one for expenses incurred during September 1944 ($12,737.01), and one for expenses incurred during August 1944 ($9,972.65), are relied on by plaintiff as constituting proper requests for extra-legal relief under the Lucas Act.
In our opinion, nothing in the claim or the invoices would serve to put the contracting agency on notice that it was being asked to do more than consider the claim within the framework of the Contract Settlement Act of 1944. A portion of the claim was allowed under the Act and the balance was the subject matter of an appeal to the Appeal Board at the time of the Lucas Act claim to the Navy Department. We do not think that the documents relied on by plaintiff in connection with this claim constitute proper requests for relief within the meaning of the Lucas Act.
In conclusion, we hold that plaintiff did not have on file with the departments or agencies concerned, any requests for
It is so ordered.
60 Stat. 902, as amended by 62 Stat. 869, 992, 41 U. S. C. (Supp. V App.), § 106 note.
55 Stat. 839, 50 U. S. C., 5 611.
Paragraphs 10,11, and 12. of plaintiff's petition.
This loss is also made the basis for a claim under the court’s general jurisdiction. See paragraph 12 of petition.
We note that the Appeal Board, Office of Contract Settlement has rendered decisions in two proceedings involving plaintiff corporation: Proceeding No. 1©8, Latwranoe Aeronautical Corporation v. Civilian Production Administration, decided February 13, 1947, Vol. 1, Decisions of the Appeal Board; Proceeding No. 159, Lmorance Aeronautical Corporation v. War Department, decided February 19, 1947, Vol. 1, Decisions of the Appeal Board.