582 F.2d 561 | Ct. Cl. | 1978
Lead Opinion
delivered the opinion of the court:
The Renegotiation Board determined that plaintiff Manufacturers Service Co., Inc. (MSC) realized excessive profits of $110,699 during its 1967 fiscal year (Jan. 1, 1967-Nov. 11, 1967), excessive profits of $145,862 during FY 1968 (Nov. 12, 1967-May 31, 1968), and excessive profits of $161,718 during FY 1969 (June 1, 1968-May 31, 1969). Before Senior Trial Judge White, plaintiff contended that it
I
Manufacturers Service Co. was established in 1956 by Foster Irish as a sole proprietorship. Prior to that time, Mr. Irish was employed as a comptroller at Plymouth Industrial Products (PIP) which primarily manufactured plastics and specialized in the production of supports used in the packing of artillery ammunition for the Government. Foster Irish joined PIP in 1954 at the urging of a former acquaintance, Aldred Simmons, PIP’s founder and president, at a time when PIP was in extremely poor financial condition. For the initial three or four months of employment, Mr. Irish worked without pay and even loaned PIP about $10,000 to assist it in meeting its payrolls and other expenses. When Mr. Irish left PIP in 1956 to form MSC, it was at the urging of Mr. Simmons. At that time, PIP lacked both the technical and financial ability to set up and operate its own metal shop, and no other local metal stamping concern would sell PIP any stampings due to its precarious financial situation. Mr. Irish formed MSC specifically to supply PIP with the stamped metal inserts needed for the production of various packing supports, even though he had no prior experience in the metal stamping field. MSC commenced operations in a room rented from PIP and purchased start-up equipment, molding and dies from that company as well. Throughout its active existence, MSC produced only these formed metal inserts and then only in response to formal firm, fixed-price purchase orders from PIP. Indeed, during the review years at least, MSC never attempted to find additional customers and in fact functioned as a near sole source metal insert supplier
In June 1966, prior to its incorporation, MSC moved to expanded facilities in anticipation of large increases in its business resulting from the development of a different type of packing support for artillery ammunition known as the "combination ring.” The concept of the combination ring originated solely from Mr. Simmons who, through his experience and contacts developed as an Army officer during World War II, knew of the Government’s dissatisfaction with existing types of ammunition packing supports. His idea of a combination ring consisted of an 18-gauge curled and plated ring (the material of this ring being curled back on itself within the inside diameter) joined by means of a crimping operation to a 14-gauge flat ring of larger diameter, and with the assembled unit then being encapsulated in an asphalt-asbestos compound. Although conceived prior to I960,
In 1960, at the request of Mr. Simmons and in the joint belief that there would be a future need for quantity orders of the combination ring, MSC began its attempt to develop tooling capable of mass producing the 18-gauge ring. In 1961, MSC retained the services of a local machine shop to
Shortly thereafter, in late 1966, PIP received its first large order for the encapsulated combination ring, and shortly MSC accepted its first comparable order for combination rings. Except for the plating of the 18-gauge curled ring, MSC began filling this order by itself producing the entire combination rings. MSC soon realized that its recently expanded facilities were inadequate to meet the expected future demand for combination rings, and in the latter part of 1966, elected to utilize subcontractors in lieu of further enlarging its own facilities to meet the expected demand. The decision to subcontract was influenced both by the desire to avoid the financial risk of such expansion
As a result of its decision to subcontract, MSC produced combination rings by assembling and crimping together 18-gauge curled rings and 14-gauge flat rings that had been manufactured and plated (in the case of the 18-gauge curled rings) by subcontractors. Only local firms were approached by MSC for subcontracting and apparently MSC utilized every stamping and plating firm available in its locale. One such subcontractor manufactured both 18-gauge curled rings and 14-gauge flat rings; a second manufactured only 14-gauge flat rings, while a third made only 18-gauge curled rings; a fourth plated all the 18-gauge curled rings fabricated by the other subcontractors. After such manufacture of the 14-gauge and 18-gauge rings, and after the latter were plated, MSC performed the crimping
MSC’s decision to subcontract locally did not, however, relieve it of all responsibilities. MSC still had the overall obligation of making sure that the raw material needed by its subcontractors was ordered, and that the subassemblies were scheduled, completed and delivered to it in time to permit it to assemble and deliver the combination rings to PIP on time. MSC thus saw to it that the manufacturing subcontractors had enough steel on hand to make the rings, that their production was continuing, and that deliveries would be on time; it also checked with the plating subcontractor to make sure that the plating operation was proceeding on schedule and that this subcontractor would have an adequate inventory of 18-gauge curled rings for MSC’s use. Indeed, this demand for coordination required Donald Irish, one of the two executives of MSC, to visit regularly each of the four subcontractors, on an every-day or every-other-day basis.
In addition to these coordinating responsibilities, which are to varying degrees inherent in any subcontracting system, MSC also undertook the function of itself providing the subcontractors with some raw materials and necessary financing. During FY 68 and FY 69, MSC supplied one subcontractor with the steel it needed. The specification for the low carbon steel utilized for the ring production was a very common one, however, and MSC was able to place orders for the steel by merely referring to this specification. Neither MSC nor any of its subcontractors encountered any problems during the review years in obtaining this steel, and MSC was able to minimize the risk in prepurchasing by keeping the steel in its readily marketable coils until needed for a specific order. MSC also aided its metal plating subcontractor by advancing it $10,000 to finance the purchase of an automatic plating line necessary for meeting the increased Government demand.
In order to supply PIP with the completed rings, MSC itself performed the crimping operation necessary to form the combination ring from the parts provided by the subcontractors. MSC’s initial crimping operation required an employee to hand assemble an 18-gauge curled ring and a 14-gauge flat ring by placing the former within the upraised tabs of the latter, to insert the assembled combination ring into a press by using a pair of pliers, then to operate the press, and finally to remove the completed combination ring from the press and deposit it in a storage container. Utilizing this process, MSC was able to produce approximately 4,000 combination rings per press during each 8-hour shift. Subsequently, in order to speed up production, MSC began to use a slide technique in performing the crimping operation. Under this method, which was suggested by an employee of one of MSC’s subcontractors and was used for most of MSC’s production during the review periods, an employee assembled the 18-gauge curled ring and the 14-gauge flat ring, and placed them on a slide leading into a press. Once the assembled rings slid into the press, the employee operated the press, thereby crimping the rings together, and the press then automatically ejected the completed combination ring into a storage container. This technique expedited production and eliminated the prior requirement that hand-assembled rings be manually placed into the press with a pair of pliers for permanent assembly. Using the slide production method, MSC was able to increase its production to as many as 20,000 or 21,000 combination rings per press during each 8-hour shift.
When MSC finished its crimping operation, the combination rings were delivered to PIP which then covered them with an asphalt-asbestos compound. The completed product was ultimately used by the Government (or its agents) in packing 105mm howitzer ammunition, which was the main artillery weapon used by our forces in the Vietnam conflict. In 1970, an unanticipated change in the requirements of NATO ammunition standards made the encapsulated combination ring obsolete, and MSC chose to discontinue operations at that time.
During its peak production in the review years, MSC managed to produce more than 43 million combination rings for PIP and was never delinquent in making a scheduled delivery. Only a negligible number of its rings were rejected for failure to meet Government requirements. And as the volume of production greatly increased during this period, the cost of production fell. In FY 1967, the cost of producing the ring averaged 11.7 cents per ring, with an average administrative cost of .6 cents per ring, making a total average cost of 12.3 cents. In FY 1968, the cost of production fell to 10.2 cents, while the administrative cost also fell to .4 cents, for a total average cost of 10.6 cents. By FY 1969, the production costs fell even further to 9.2 cents, while the administrative costs remained the same, for a total average cost of 9.6 cents. These reductions in cost were gradually reflected in the prices MSC charged PIP. The average price charged by MSC was 15.3 cents per ring during FY 67, 13.3 cents during FY 68, and 11.5 cents during FY 69. Stated in terms of actual review year performance, MSC produced 11,759,196 rings in FY 67, and earned a profit of $303,624, or 2.58 cents per ring; on a volume of 10,486,400 rings supplied to PIP in FY 68, MSC’s
In setting the prices leading to this level of profitability, MSC’s procedure was to estimate the per unit cost and then add what Foster Irish considered to be a "reasonable amount” to cover general and administrative expenses and provide a profit. MSC always accepted the initial per-unit price proposed by one of its subcontractors in its purchase orders from that subcontractor. Whenever MSC proposed a per-unit price to PIP for a quantity of rings in a particular purchase order, its initial price was also invariably accepted by PIP. PIP made three attempts to locate other sources for its combination rings, and even placed one order with an outside firm, but felt MSC’s performance was preferable to that obtainable from those companies.
II
It is necessary to consider first the Government’s contention that plaintiff has not made out its required prima facie case, for if this be true the failure would be conclusive against plaintiff and would result in at least an affirmance of the Board’s unilateral order.
has the initial burden of going forward with proof as to the statutory factors upon which it relies to the extent that the facts pertaining thereto are within its knowledge or possession, are accessible to the public generally in the form of published reports, or are actually made available to the contractor by the Government, voluntarily through a request made in pre-trial proceedings, by discovery under the rules of the court, or pursuant to the Freedom of Information Act .... Normally, when the contractor does this, it will have made a prima facie case, i.e., a showing which, unless rebutted, would justify a judgment in accord with the contractor’s contentions, (emphasis in original).
The contractor thus has something similar to a burden of production
These low-level requirements for the prima facie case do not mean that the contractor has little reason to present its most compelling evidence as part of that burden; such evidence will influence the outcome of the case by determining how easily the Government can meet its burden of persuasion. Aero Spacelines, Inc. v. United States, 208 Ct. Cl. 704, 716-17, 530 F.2d 324, 332-33 (1976); 9 J. Wigmore, Evidence, §§ 2485, 2487 (3d ed. 1940). When the contractor fails to include sufficient accessible evidence important to a statutory subfactor, the result can be that the court will not even consider that subfactor, Aero Spacelines, Inc. v. United States, 208 Ct. Cl. at 736, 530 F.2d at 344; on the other hand, failure of the Government to include certain evidence leaves the Government to meet its burden with other proof, Page-River-Curran v. United States, 216 Ct. Cl. 246, 277-78, 574 F. 2d 1063 (1978), and that burden can, of course, be more easily met when the plaintiffs proofs are inadequate.
Under these standards, there is sufficient evidence in this record for the court to conclude that the contractor has
Ill
Particularly troublesome in determining whether the defendant has carried its burden of persuasion is the failure of either party to present meaningful comparative data. As the following table shows, plaintiffs review years were quite unique when compared with its immediately preceding years.
Yet the parties have stipulated that comparisons with MSC’s pre-review years are not appropriate for purposes of determining if plaintiffs renegotiable profits were excessive.
Defendant’s proofs did not totally avoid making comparisons, for it did attempt to compare MSC with its alleged industry. These comparisons were with the average profit levels of firms engaged in the metal stamping industry as published in the Internal Revenue Service’s Corporation Source Book of Statistics of Income. This data is classified by total assets, and defendant sought to compare MSC with the averages of firms with similar sales volumes, net worth and capital employed. Comparison of MSC’s profits with those of the metal stamping industry with respect to sales yielded these results:
MSC and Industry Profit/Sales Comparisons
However, discounting of the use of IRS composite averages in - renegotiation proceedings is now of long standing. Butkin Precision Mfg. Corp. v. United States, 211 Ct. Cl. at 118-19, 544 F.2d at 504; Gibraltar Mfg. Co. v. United States, 212 Ct. Cl. at 229, 546 F.2d at 388; Instrument Systems Corp. v. United States, 212 Ct. Cl. at 107, 546 F.2d at 361. Here, our disappointment in these figures is again well-founded for the firms within this SIC classification are only required to derive 51% of their business from metal stamping operations, and thus these industrial averages may in reality include companies that
IV
Defendant’s failure to provide us with meaningful comparative data is not fatal to its case, for it "simply leaves the Government to meet its burden, if it can, with other proof.” Page-River-Curran v. United States, supra, 216 Ct. Cl at 277-78. Defendant also benefits from our
The remaining evidence indicates that MSC’s vast production volume during the review years was directly related to the Government’s urgent need for artillery ammunition in support of our involvement in Vietnam. The very premise of statutory renegotiation is that "accurate pricing and the control of contractors’ profits cannot be achieved during a build-up of production for defense of war.” Mason & Hanger-Silas Mason Co. v. United States, 207 Ct. Cl. at 115, 518 F.2d at 1346-47. The predominant interest of procurement officials in volume of purchases, the requirement of unprecedented speed and the vastly increased demand create a situation where the opportunities for military suppliers to make exorbitant profits are greatly enhanced. Similarly, the knowledge that the peak wartime demand is of short duration itself operates to remove normal competitive restraints on profits. Major Coat Co. v. United States, 211 Ct. Cl. at 23, 543 F.2d at 110. Even when contractors reduce their prices to the Government, Congress still remained suspicious of wartime profit levels because "experience in several wars has shown the tendency for unit prices not to decline as fast as the volume increase would justify.” Butkin Precision Mfg. Corp. v. United States, 211 Ct. Cl. at 121, 544 F.2d at 505.
Viewed from this perspective, it is hard to say that MSC did not realize some excessive profits during the review years. Its profit-sales ratio for FY 1967 was 16.9%, 19.9% for FY 1968, and 16.2% for FY 1969. These are not skimpy
That increased wartime demand created a situation where MSC received some excessive profits is also supported by the manner in which MSC set its prices to PIP. Even though as much as 91% of MSC’s costs of goods sold was the result of the prices charged by its subcontractors, MSC never challenged the prices these subcontractors requested nor apparently did it shop for the least expensive subcontractor. The very speed demanded by the Government’s requirements, which precluded MSC from expanding its own physical facilities, may very well have required MSC to be less than "competitive” in seeking the lowest possible price for its inputs. These demands may also explain why these subcontracts were not awarded on the basis of competitive bids, and why only local (indeed, every local) stamping and plating firm was used. MSC’s acceptance of its subcontractor’s prices is more significant because its prices to PIP were also never questioned. Its sales to PIP were never the result of orders awarded on competitive bids, and its method of setting its prices was conducive to generous returns. Plaintiff set these unquestioned prices by adding to its estimated costs a figure considered reasonable to cover general and administrative expenses and to provide for profits. The actual pricing experience of MSC indicates how inaccurate this pricing
The record thus shows, in our view, that it is entirely proper to start in this case with the initial premise that wartime demands and the special circumstances of wartime procurement — all of which Congress had primarily in mind when it enacted the Renegotiation Act — probably formed the basis for the company’s rather high level of profits during the review years.
V
In spite of the inherent dangers in wartime procurement and in MSC’s pricing arrangements during that period, the plaintiff might deserve a clearance if its increases in net worth, total assets and profits were due to an increase in efficiency (or other factors negating the existence of war-inflated profits). The company claims responsibility for two
Nevertheless, MSC’s ability to increase its volume to over 43 million parts in 29 months while still maintaining high quality and timeliness in its deliveries is worthy of some favorable recognition under efficiency, at least in the absence of comparative information. See Major Coat Co. v. United States, 211 Ct. Cl. at 34-35, 543 F.2d at 116. Defendant has conceded that MSC merits some favorable consideration for its efficiency.
Although MSC’s ability to produce this expanded volume of rings through utilization of its die was largely due to its decision to subcontract the necessary production of component parts, that decision also operated to reduce the risks MSC faced during this period by permitting it to avoid risking its own capital; as such, MSC cannot be allowed as
MSC likewise deserves some favorable recognition for its voluntary reduction of the prices it charged during the review years. 32 C.F.R. § 1460.12(b)(2) (1977). Of course, the
VI
Without meaningful comparative information,
Given the relatively minor favorable consideration to which plaintiff is entitled under the statutory factors (including efficiency, character of business, risks, and contribution to defense), and in the absence of any helpful comparative data, we conclude that the best profit-sales ratio to which this plaintiff could be entitled for the review years is 13% (making no distinction among the three years).
The findings of the trial judge, somewhat modified, are reflected in this opinion.
In that year, Mr. Simmons surrendered day-to-day control of PIP when the controlling interest was purchased by Ametek, Inc.
Simmons had previously succeeded in having the curled ring approved by Picatinny Arsenal in 1958 for use in packaging 90mm and 105mm ammunition. At that time however, there was no existing Government need for production quantities of the curled ring.
Aldred Simmons and certain PIP employees cooperated with MSC during this time by devoting some time, thought and physical effort to the project, but it does not appear such help was substantial.
As was true with MSC, Aldred Simmons had a role in forming Plymouth Die Mold, whose principal function throughout the 1960’s was to supply molds to PIP for use in the latter’s operations.
It would have cost MSC between $150,000 and $200,000 to tool up for in-house production of the combination rings.
In FY 67, 78% of MSC’s cost of sales was from the purchase of materials and work that had been subcontracted. In FY 68, this rose to 90% and reached 91% in FY 69.
Because each subcontractor maintained its own inspection department, MSC was able to inspect the rings produced by these subcontractors on a random basis.
Unlike its procedure for developing a suitable die and for selecting its subcontractors, MSC did not rely solely upon local sources to obtain the inclinable presses necessary for its slide production method, but instead purchased the necessary machines in Chicago.
Neither party questions the difference in profit per ring reflected in these two sets of numbers (i.e., the individual cost-price set as compared to the total profit-total sales set).
Because we find that plaintiff has met its prima facie burden, we need not now decide whether failure to establish a prima facie case would result in an adoption of the Renegotiation Board’s decision, as occurs when the contractor fails to prosecute a Board order, Harvard Industries, Inc. v. United States, Ct. Cl. No. 461-73, Order of May 1, 1975, or whether the failure could result in an award in an amount equal to the Government’s counterclaim (if that is sufficiently supported).
If, by referring to proof of profits earned, the Government is referring to the contractor’s burden of showing the accuracy of its accounting data, we have little trouble with the Government’s assertion that more should be required. Normally, accounting data accuracy is a separate part of the contractor’s opening case, and since it is not here in dispute, we need not consider it. See Lykes Bros. S.S. Co. v. United States, 198 Ct. Cl. 312, 326, 459 F.2d 1393, 1401 (1972); Camel Mfg. Co. v. United States, 215 Ct. Cl. 460, 572 F. 2d 280 (1978).
That is, the duty to produce evidence which would justify a reasonable jury in finding the existence or non-existence of the fact so that a judicial ruling for the other party may be avoided. McNaughton, Burden of Production of Evidence: A Function of a Burden of Persuasion, 68 Harv. L. Rev. 1382, 1383 (1955); see 9 J. Wigmore, Evidence § 2487 (3d ed. 1940).
We have so confined the contractor’s burden that we have even restricted contractors, in attempting to establish their prima facie case, from obtaining information which is not readily accessible. Instrument Systems Corp. v. United States, 212 Ct. Cl. 99, 108-09, 546 F.2d 357, 362 (1976).
We have also referred to the contractor’s burden in renegotiation as requiring merely "a modest showing of probable cause” as to the responsible invocation of the court’s processes. Instrument Systems Corp. v. United States, 212 Ct. Cl. at 108, 546 F.2d at 362.
We have even permitted the contractor to use evidence introduced by the defendant in the latter’s effort to meet its burden of persuasion as part of the contractor’s prima facie case if the defendant does not move to dismiss at the close of the contractor’s case. Dynasciences Corp. v. United States, 214 Ct. Cl. 643, 656-57 (1977).
Defendant has not identified any elements in the record which were not in the plaintiffs initial presentation (and which were therefore not introduced prior to the motion for dismissal), but rather were presented as evidence introduced by defendant to meet its burden of persuasion, see note 16, supra. We shall therefore assume that the facts favorable to MSC were part of plaintiffs prima facie case.
Defendant now seeks to be relieved of this stipulation, arguing that a party may be relieved of a stipulation if necessary to prevent injustice, and that this stipulation is without effect since it is beyond the power of the parties to stipulate. But defendant has not identified how it will suffer an injustice; to the extent it argues that our decisions prior to Major Coat failed to provide guidance sufficient for defendant to appreciate fairly the significance of its stipulation, we reject such a claim, for the central importance of some comparative data to renegotiation was recognized prior to the trial of this case. Mason & Hanger-Silas Mason Co. v. United States, 207 Ct. Cl. 106, 137-40, 518 F.2d 1341, 1359-61 (1975); Aero Spacelines, Inc. v. United States, 208 Ct. Cl. at 729, 530 F.2d at 340. The factual nature of this
Even were we to relieve defendant of this stipulation, however, it would not help defendant’s case greatly, for it asserts that only 1965 is a proper historical norm. MSC has been in existence since 1956, and we would require more evidence as to the appropriateness of any time period selected as a base period before giving it great weight, especially when one so short is advocated. See Mills Mfg. Corp. v. United States, 215 Ct. Cl. 536, 551-56, 570, 571 F.2d 1162, 1169-72, 1179(1978).
Defendant’s expert asserted that MSC’s profit-sales ratio was 19.7% in FY 67 and 44.0% in FY 68 instead of the 16.9% and 19.9% found respectively by the trial judge. No error in the trial judge’s calculations has been shown to us by defendant.
Our reluctance to use this data does not mean such data is never acceptable at
Although the sparseness of the comparative data makes it impossible to be mathematically precise, we note that the Government’s contention as to the amount of excessive profits earned would leave MSC with ratios far in excess of these industry averages, though the rationale for this result is not explained.
Mr. Irish testified that its prices, initally at least, were so set. (Record at 82)
Indeed the order of Sept. 9, 1968 decreased almost 16%, from its initial price of $.1225 per ring to $.1031, during performance.
In addition, it is possible that the unique interplay of personalities in the development of PIP and MSC may have provided some incentive for less than precise scrutiny of prices; at least in a wartime economy, this factor may have had greater play than would be true in a closely competitive market.
Plaintiffs claims as to the merits of its innovation are also blunted by the fact that other firms producing the metal combination ring did not appear to have any difficulty in mass producing the ring. Cf. Page-River-Curran v. United States, 216 Ct. Cl. at 265-66 (other contractors’ ability to furnish working communications system on time muted plaintiffs claims for technological breakthrough).
MSC asserts that little weight can be given to this expert’s efforts since they occurred almost two years after its "innovation.” Yet we do not believe development of this die was such a breakthrough that defendant’s efforts two years later necessarily built upon that invention, and plaintiff has failed to otherwise specify to our satisfaction why the expert’s efforts are not highly probative.
What we have said about both technological changes also refutes MSC’s claims for considerable favorable recognition for contribution to the defense effort. These changes were certainly not the product of so much inventive or risk-taking effort as to qualify plaintiff for a reward for exceptional performance, experimental work, or development of techniques of unusual merit. Major Coat Co. v. United States, 211 Ct. Cl. at 41, 543 F.2d at 120; 32 C.F.R. § 1460.13(b) (1977).
It is fair to say again that, on the whole, defendant escapes the harsh judgment of a clearance — because of failure to provide some sort of meaningful comparative data — because this case was tried prior to the more explicit decisions of this court explaining the need and calling for such comparative information.
The Board left MSC, in effect, with a profit-sales ratio of 11.4% (FY 67), 10.6% (FY 68) and 10.3% (FY 69). Defendant seeks even lower ratios for each year.
It may be that there were greater excessive profits in FY 68 and FY 69 when the production was greater (if the time-span is taken into account), but defendant has failed to demonstrate that that was so.
Concurrence Opinion
concurring in the result:
Here is another renegotiation case where the court has undertaken to make bricks without straw.
In floating, as we did, in Lykes Bros. Steamship Co. v. United States, 198 Ct. Cl. 312, 459 F.2d 1393 (1972), the idea that besides proving its financial data, the petitioner must make a prima facie case on factor analysis, we supposed, I believe, that the great prime defense contractors would be before us. Our new procedures were meant to make things easier for petitioners, but also had the unwanted effect of making the litigation slower and more costly. The idea that the majority of our litigants, allegedly swollen with excessive profits, would be little companies, as here, at the sub- or sub- sub-contract level, often impoverished to the degree of being unable to obtain a bond to stay collection of the refund ordered by the Board, was mercifully unknown to the court. As the cases revealed themselves, the defendant has repeatedly demanded dismissal for failure to make a prime facie case, and panels have as repeatedly declined to do it, as the court points out, with instances. Counsel have failed to make the investigations, and put on the stand the expert witnesses, that Lykes Bros, as construed by defendant, would demand. To me, at least, such a rigorous application of the Lykes Bros, standard would be to assess a penalty for being small and impecunious. The panel seems to me to intimate skepticism that any petitioner will ever fail the prima facie case test. Here, unlike most previous cases, defendant made a motion to dismiss at the close of plaintiffs case, which was the proper time to do so. Dynasciences Corp. v. United States, 214 Ct. Cl. 643 (1977). Probably its grounds for making such a motion were as strong as they will often be, that is, plaintiff offered practically nothing that, even if fully believed, established that the Board refund orders were excessive. Yet defendant somewhat lacks grace in moving to dismiss on such grounds, when its own case is going to suffer from the same defects. After denial of its motion, defendant went ahead, and its own case was just about
We are unaided here by the opinion or opinions of the Board, and therefore are unable to say whether they present even a superficial appearance of being reasonable. We do not know how the Board applied the factors. While such are not available to defendant to help in sustaining its burden of proof, they should be so available to some extent for petitioner. That is to say, it should be able to get the opinions into the record, however impecunious it might be. Once in the record, the opinions should help to make the petitioner’s prima facie case. In Instrument Systems Corp. v. United States, 212 Ct. Cl. 99, 109, 546 F.2d 357, 362 (1976), we said:
* * * Plaintiff may accept as correct part of the Board factor analysis, as to some factors, and show that the Board has done injustice with respect to others, thus stressing what the contractor best knows, its own business.
Thus, if the Board said petitioner’s business was free from risk, and petitioner in its prima facie case showed a substantial risk, petitioner might be held to have made a prima facie case by tentatively accepting and relying on the Board analysis as to all but one statutory factor, and refuting it as to that one. It is only required to show it has acted responsibly in invoking relief in this court, and a substantial misapprehension by the Board as to even one factor would do it. I deeply regret that so many cases have been allowed to be tried without the Board opinions, useful as they also are for so many other purposes, even though enjoying no presumption of correctness. There has been some sort of strange idea that they cannot even be spoken of without bringing on mistrials. The statute says a "statement” furnished by the Board shall not be used as proof of facts or conclusions stated therein. 50 U.S.C. app. § 1215(a). This does not preclude the party against whom the order is issued from accepting part of them arguendo.
CONCLUSION OF LAW
The court concludes as a matter of law that for the 1967, 1968 and 1969 fiscal years plaintiff realized excessive profits of $80,300, $111,104 and $90,876 respectively from contracts and subcontracts subject to renegotiation under the Renegotiation Act of 1951, as amended. Judgment is hereby rendered on defendant’s counterclaim in the sum of two-hundred eighty-two thousand, two-hundred and eighty dollars ($282,280), less appropriate state and federal tax credits, plus interest thereon as provided by law.