120 F. Supp. 912 | Ct. Cl. | 1954
delivered the opinion of the court:
Plaintiff sues for $126,187.96 which allegedly represents its cost in certain development work on the image orthicon pickup tube, a supersensitive electronic device designed for television cameras in connection with guided missile weapons. Recovery is said to be grounded on either an implied contract within our general jurisdiction
This litigation grew out of a contract between plaintiff and the Army’s Aircraft Radio Laboratory (hereinafter ARL) dated June 13, 1944, and executed July 11, 1944. Under this contract plaintiff agreed to furnish and deliver for a fixed fee, five television cameras (hereinafter “conversion units”) equipped with the image orthicon tube, plus five spare tubes. It is plaintiff’s position that while it contracted to furnish these image orthicon tubes for a fixed fee, the circumstances under which the contract was executed and performed renders the Government liable on an implied contract for certain costs incurred in their development and production. It is said that the contract presupposed certain technical assistance from the Radio Corporation of America which was not forthcoming. We summarize below such portions of our findings as are pertinent to this opinion.
The idea for the image orthicon tube was conceived by a scientist in the employ of the Radio Corporation of America
Prior to 1943, simpler tubes were also developed by RCA, the first being the plain (as opposed to the image) 2-inch orthicon tube, and the second an iconoscope. With the development of the iconoscope, RCA’s interest in the orthicon tube diminished and it abandoned orthicon development.
Plaintiff, through NDRC, requested technical assistance in the design, engineering, and processing of the 2-inch orthicon tube from RCA. Two of RCA’s engineers were sent to plaintiff’s plant to render such assistance, one in October 1942 and another in April 1943.
RCA’s development of the more sensitive image orthicon tube was sufficiently advanced at the end of 1943 to allow the execution of a production contract with the Navy, and the first tubes under the contract were delivered in January of 1944. However, many production and development problems had to be dealt with in the first few months and two out of every three tubes produced were defective. Production throughout 1944 was carried on in the RCA laboratories and averaged five to ten tubes per month.
During 1943 the Navy was also in contact with plaintiff in connection with an orthicon type television camera which plaintiff was interested in selling to the Navy. However, Navy officials stated that in view of information which they had received concerning a new version of image tube development they were not interested. In October 1943 plaintiff was engaged in the development of a “two-sided mosaic,” which is the main feature of the image tube that distinguishes it from other tubes referred to herein. The actual work on this two-sided mosaic, subsequently utilized in the image tube, had been in process for a considerable period of time before October 1943.
On January 26, 1944, plaintiff demonstrated a conversion unit constructed around a vericon tube (this being plaintiff’s name for the plain orthicon 212 tube) to certain representa
It appears that while plaintiff was very interested in a contract for the conversion units on some basis, it was reluctant to undertake the production of the image tube inasmuch as its development facilities were otherwise occupied. In the course of various discussions representatives of the Army stated their willingness to make an effort to obtain certain technical assistance for plaintiff from ECA.
It seems clear that during the earlier stages of the negotiations both parties thought that technical assistance from ECA would be forthcoming. This was true on March 9, 1944, when Mr. Harris of AEL visited plaintiff’s laboratory concerning Army procurement. A memorandum was made of this conference, item 2 of which covered “Proposed Development Contract for 5 Conversion Units Using Image Orthicon, and the production of Image Orthicon by Eem-ington Band.” This memorandum noted that there were to be five conversion units at $10,000 each and five spare image tubes at $1,000 each, a total of $55,000. This served as an informal estimate for the letter of intent which was subsequently issued on April 13,1944.
In the meantime, some difficulty was encountered in obtaining technical assistance and on April 13,1944, plaintiff’s chief engineer, Mr. Lamb, was informed by the Naval Inspector at the ECA laboratory that ECA would not furnish engineering data without a directive. This directive would presumably have had to issue from the General Staff.
Efforts to obtain the necessary information from ECA were first made by the Navy and later by NDBC. Neither was successful.
Subject: Image Orthicon Development.
* * * * *
We are very appreciative of your action in requesting assistance from NDBC in connection with the development contract between A. B. L. and ourselves for five Image Orthicon type conversion units.
We would like to make it clear that it is not in our program to copy slavishly the design of any existing tube of this type.
We already have made considerable progress on independent development of this generic type pickup tube, as representatives of A. B. L. know from visits to our laboratory and from reports we have made to them. This development has progressed, of course, from our experience over the past two years in developing and producing the Yericon 212, a two-inch pick-up tube of the orthicon type. Our Image Yericon development is. directly an extension on what we already have accomplished with the simpler Yericon and actually has been in progress for over a year as a project unsponsored by any government agency upto the time we Were awarded' the present contract by A. B. L.
While development of the Image Vericon would undoubtedly be expedited by full exchange of engineering information with BCA, only such data as may be necessary to insure mechanical and electrical interchangeability between our Image Vericon and the BCA Image Orthicon would be required at this time if it is desired by A. B. L. that the tubes should be interchangeable in the same equipment. These data would include physical dimensions, electrode connector and base-pin locations, and electrical operating requirements.
If A. B. L. desires such coordination in design, this information should be furnished to us as soon as practicable.
By mid-May of 1944, plaintiff was fully aware of BCA’s position, and expected only dimensional drawings (for interchangeability) and sample tubes, and this was all the assistance plaintiff ever received.
Plaintiff desired that ABL write a development contract with an escalator clause which would permit price revision
Direct engineering is included as direct labor since the whole job is essentially engineering and development, and indirect engineering is included m general expense. Any amortization would be reflected in reduced cost on subsequent contracts for the same material.
The proposal was accepted by the Government and the formal contract, dated June 13, 1944, was executed on July 20, 1944 (see finding 18). This contract contained the following article which was typed into this particular contract in addition to the standard form:
Article 30. Prior Agreements. — The letter order here-inbefore mentioned and all amendments thereto, if any, and all prior agreements relating to the subject matter hereof are merged into and superseded by this contract.
In view of the facts recited above we cannot say that plaintiff could have reasonably expected to fulfill the contract without at least some developmental expense on the image tube, nor can we say that such cost was outside this written contract. It is true, as plaintiff points out, that defendant’s officers never stated with absolute definiteness that RCA would not furnish the information. It is equally clear, however, that plaintiff was never definitely advised that it would. The tenor of all the discussions on this subject was that the Government would make an effort to get the data. A reasonable effort was made which was unsuccessful. Plaintiff entered the contract with knowledge of this lack of success and further agreed by a specially inserted provision that all- prior agreements were merged and superseded by the written instrument.
* * * The reason for this is that engineering and development expense for development of the Image Veri-con tube was not contemplated as a major 'part of the cost when the proposal for this contract was formulated or when the contract was executed. [Italics supplied.]
This request was denied by the contracting agency.
Plaintiff was never able to furnish the image tube as required by the specifications. The requirements of the specifications had to be reduced to enable the Government to accept the equipment. Due to its inferior performance, the equipment was never used.. The contract price, by agreement, was reduced by the sum of $18,216.17 and has been paid. .
We conclude that while plaintiff may have hoped that RCA assistance might eventually be made available, it entered the contract fully aware that it probably would not. It appears that plaintiff was prepared to absorb the development cost on this contract with the view toward recouping on later orders but the costs involved were underestimated. The development costs for which plaintiff now sues were covered in the written contract. Having entered into a formal express contract fully aware of the uncertainty of development cost, recovery cannot now be had on an implied contract theory covering the same subject matter. Klebe v. United States, 263 U. S. 188, affirming 57 C. Cls. 160; Hawkins v. United States, 96 U. S. 689; Johnson v. Igleheart Brothers Inc., 95 F. 2d 4, cert. den. 304 U. S. 585; The Lacchi Construction Co., Incorporated, v. United States, 102 C. Cls. 324. Similarly, section 17 (a) of the Contract Settlement Act is by its terms restricted to situations in which services or
We do not agree with plaintiff’s contention that section 17 (b) of the Contract Settlement Act, which provides for certain adjustments “whenever any formal or technical defect or omission in any prime contract * * * might invalidate the contract or commitment * * (italics supplied) can be the basis of any recovery here. Plaintiff argues that the “defect and omission was that the obligation of the prime contract, in respect to the development work on the image tube should have been more thoroughly reduced to writing.” Assuming, arguendo, that there was such an “obligation” outside the contract, its omission would surely be one of substance rather than “technical” or “formal,” as those terms are used in the statute. Samuel Saffer's Sons v. War Dept., supra.
We conclude that the obligations of the parties with respect to the cost of furnishing the image orthicon tubes were included in the terms of the formal written contract and plaintiff is not entitled to recover here. The petition is dismissed.
It is so ordered.
FINDINGS OF FACT
The court, having considered the evidence, the report of Commissioner Paul H. McMurray, and the briefs and argument of counsel, makes findings of fact as follows:
1. The plaintiff is a corporation, organized and operating under the laws of the State of Delaware.
2. The plaintiff, a war contractor, brings this action to recover, under an implied contract, the amount of $126,187.96, which it claims was spent in defendant’s behalf in an effort to learn, almost from scratch, the “know-how” of manufacturing a certain complicated, supersensitive television transmit
3. The image orthicon tube, involved herein, was conceived by Dr. Albert Rose, a scientist with the Radio Corporation of America (RCA), about 1939 or 1940. The image tube increases the sensitivity of the camera so that scenes can be picked up at a lower illumination, and its identifying structure is the two-sided mosaic. RCA did development work and created original models about 1939 or 1941. Then the National Defense Research Council (NDRC), realizing the merit of the tube, entered into a contract with RCA whereby NDRC bore the expense of further development.
Prior to 1943, simpler tubes had been developed by RCA, the first being a plain orthicon tube, and the second an icono-scope. With the development of the iconoscope, RCA’s interest in the orthicon tube diminished and it abandoned orthicon development.
Plaintiff, through NDRC, requested technical assistance in the design, engineering, processing, fabrication of the parts, and so forth, of the 2-inch orthicon pickup tube from RCA. Two engineers were sent by RCA to plaintiff’s plant to render technical assistance in the manufacture of the 2-inch, or No. 212, tube. Henry B. Devore visited plaintiff’s plant for this purpose in October 1942. Philip Richards did likewise in April 1943.
The fact that the Radio Corporation of America had a printed form of agreement for furnishing manufacturing assistance to other companies makes it appear that such procedure was not novel under its United States Government contracts. This particular Agreement of Clearance was made in respect to orthicon tubes which RCA was manufacturing for the United States Government and was executed pursuant to a letter dated March 19, 1943, which RCA had received from NDRC “authorizing it to furnish to your company design and manufacturing information relating to such apparatus.” The agreement further stated that such information would be furnished by RCA at its offices or factories located at Camden and Harrison, New Jersey, and suggested that Remington Rand should designate not more than three representatives to obtain such information. It also referred
In the period from April 14,1944, to March 28,1946, RCA protected its inventor’s rights by appropriate applications for patents.
4. RCA’s development of the more sensitive image orthicon tube was sufficiently advanced at the end of 1943 to allow the execution of a production contract with the Navy, and the first tubes under the contract were delivered in J anuary 1944. During the first months RCA had many production and development problems, and about two out of every three tubes were rejects. Even at best, rejects averaged 50 percent of the total production. RCA produced an average of five to ten tubes per month, the maximum production achieved being 25 per month. Production throughout 1944 was in the RCA laboratory. The RCA manufacturing division sent an observer to the laboratory for six months to study the process, but it was not until 1945 that development was sufficiently advanced, and the process sufficiently mastered by the manufacturing division, to permit production in said division.
5. Both the Army and the Navy wanted the plaintiff to make this supersensitive television tube but the negotiations for its manufacture by Remington Rand were handled primarily by the Army. A direct source of supply was already available to the Navy through its supplier, the Radio Corporation of America. Both branches of the armed services recognized and declared their need for an additional source of supply for these supersensitive tubes (a) because of a shortage, since RCA was unable to produce enough of these
6. The supersensitive pickup or transmitting television tube here involved is commonly spoken of as the “Image Tube” or the “Image Orthicon Tube,” the word “Image” being the distinctive term which always applies to the super-sensitive or larger tube, which is the only tube primarily involved in the implied contract on which the suit is brought. Sometimes this tube is referred to as the “Image Orthicon Type,” or by Remington Rand’s name for its product as the “Image Vericon Tube.” The word “Vericon” is a term used by Remington Rand to distinguish, as their own make, a tube of the “Orthicon Type.” This tube occasionally is called the “Image Orthicon Tube No. 317,” the number meaning that the tube was three (3) inches in diameter and seventeen (17) inches long.
7. Another, smaller and earlier-constructed, tube often referred to is the “Vericon 212.” This was the 2-inch tube, the number 212 meaning that the tube was 2 inches in diameter and 12 inches long. The term “Vericon,” meaning the “Vericon 212,” sometimes is used to distinguish the smaller tube from the “Image Orthicon.” The smaller tube, the vericon 212, amounts to one section of the 3-section larger, or image, tube. Both tubes generically are “Qrthicons,” the generic type being the “Orthicon” and the “Image Orthicon” a type which adds sensitivity. The “Image Tube,” that is, the supersensitive tube, is the one on which this suit is based. The smaller tube, the “Vericon 212,” comes into the case only incidentally.
8. This action is predicated on the theory that the defendant is obligated to pay Remington Rand for engineering research work done and materials furnished therefor which the defendant encouraged plaintiff to undertake, when it became evident that Remington Rand would not be furnished through RCA with the scientific and mechanical “know-how” — i. e., the technical knowledge, engineering assistance, and instructions — to enable the plaintiff to manufacture the 10 supersensitive image orthicon type television transmission tubes which the plaintiff agreed by written con
9. In 1943 the Navy was also in contact with plaintiff. Plaintiff was interested in selling an orthicon type camera to the Navy, but Navy officials stated that in view of information which they had received about that time concerning a new version of image tube development they were not interested. In October 1943 development by the plaintiff of the image orthicon tube was described by Work Order 3013 in plaintiff’s books as “Development of two-sided mosaic” and by Work Order 3014, initiated January 20, 1944, described in plaintiff’s books as “Development of image amplifier vericon * * * and electron multiplier.” There were records kept for the purpose of reflecting expenditures made in connection with the type or nature of work indicated. The actual work on a two-sided mosaic, subsequently utilized in connection with the image tube, had been in process for a considerable period of time before October 1943.
In January 1944 plaintiff expressed the opinion to a representative of the Navy that it could produce the image type tube and was willing to do so, if given a contract. Plaintiff made no specific request that the Navy secure RCA assistance. The matter of obtaining needed technical assistance from RCA was handled by the Navy. Mr. Lamb (representing plaintiff) also told the Army that Remington Rand understood the principles of this type of tube but pointed out that they desired engineering data and assistance from RCA in producing them. Subsequently, on May 26, 1944, plaintiff executed a development contract with the Navy for the manufacture of three cameras equipped with the image orthicon tube.
10. In the early stages of the negotiations between plaintiff and the Army both parties contemplated that Remington Rand’s furnishing of the image orthicon tubes would entail, primarily, “construction” or “production” work. In a memorandum, dated March 9, 1944, prepared following a conference held that day at Remington Rand’s Middletown,
11. There are two basically different kinds of “development” referred to in this case: (1) “Original development,” the equivalent of invention, or at least reinvention of what someone else has already done, but which is unknown to the second “inventor.” This type is represented, plaintiff insists, by an implied contract on which this suit is based and by Contract OEM sr-187. A contract of this type was described by Dr. Albert Rose, a scientist and member of the technical staff of RCA, as a contract for study and development, and (2) “Adaptation or unoriginal development,” in the nature of rearrangements and layout work, the redesigning of known elements and structures, or the adapting of another’s procedures to your personnel or organization and training your people to do it. This latter type of development is the sort primarily contemplated by the written contract for the 5 television cameras (“conversion units” being the security term used), the development and construction of which was the principal purpose of contract sc-164.
12. On January 26,1944, plaintiff demonstrated a conversion unit, constructed around the vericon 212 tube, to representatives of the Army and Navy. Plaintiff advised the Army Signal Corps, on January 31, 1944, that its facilities were available for manufacture of television equipment.
Eemington Eand and the defendant each understood that the contractor (Eemington Eand) did not then know how to manufacture the supersensitive tube without receiving engineering- data and manufacturing information from EGA; and it was pointed out to Mr. Samuel J. Harris, of Wright Field, a representative of the defendant, at a conference held March 8 or 9, 1944, at Eemington Eand’s Middle-town, Connecticut, laboratory, that Eemington Band would need engineering assistance for the immediate manufacture of this tube.
It was agreed that plaintiff’s development work would be expedited if BCA would furnish the technical “know-how.” The Signal Corps promised that it would “try” to induce EGA to furnish such help. Both plaintiff and defendant knew that the only source of such “know-how” was EGA and efforts were made by representatives of the defendant to get the desired assistance from ECA.
13. On March 8, 1944, plaintiff proposed a development contract, and on March 9 submitted an estimate of costs for a “Proposed Development Contract for 5 Conversion Units,. Using Image Orthicon, and the production of Image Orthi-con by Eemington Eand.” It was noted in this memorandum that there were to be five conversion units at $10,000 each and five spare tubes at $1,000 each, a total of $55,000. On March 31 the Signal Corps Award Board officially met and authorized the execution of a contract with plaintiff for development of the image tube, and on April 13 plaintiff
In the meanwhile Army officials had undertaken to secure •technical help for plaintiff from RCA. Inasmuch as RCA was under Navy contract, it was decided to have the Navy attempt to secure the needed technical assistance and cooperation from RCA. RCA was approached but was unwilling to assist plaintiff unless directly ordered to do so by defendant. Plaintiff was so notified about April 13,1944, and was-' told that a directive would be difficult to obtain. The Navy ■officer assigned to Remington Rand Navy Contract Operations prepared a directive for signature by the authorized Navy Command, but upon advice of Navy legal counsel the directive was not issued, due to the fact that RCA had, in part, developed the tube with its own resources, and because the processes were not protected by patent. A further conference was called with RCA, but with no better results, and by the end of April 1944 plaintiff was told that the Navy was unable to secure RCA help, and that any further efforts would have to be through the National Defense Research •Council (NDRC), the agency which had advanced funds to RCA for final development of the tube.
14. On April 13,1944, Army Research Laboratory (ARL) wrote NDRC in part as follows:
This Laboratory is initiating a development contract with the Electronics Division of Remington-Rand, Inc., Middletown, Conn., for five (5) Image Orthicon Conversion Units. These units will be built in two sections, using standard size tubes. Remington-Rand is to construct the image orthicon tubes for these units.. The file number is 3337-ARL-44.
In order to expedite this work it is requested that:
(1) NDRC arrange for permission for Mr. Marshall P. Wilder of Remington-Rand to obtain first-hand information about the design and construction of image orthi-con tubes from RCA. It is understood that Remington-Rand is licensed by RCA to manufacture transmitting tubes.
(2) NDRC arrange to have two good image orthicon tubes furnished to Remington-Rand, on loan, for use as models and to start circuit development. Dr. V. Zworykin of RCA informs us that RCA has an appreciable stock of these tubes.
Referring to your letter of April 13th requesting assistance of NDRC in connection with development contract of Aircraft Radio Laboratory with the Electronics Division of Remington Rand, Inc., Middletown, Conn., for five Image Orthicon Conversion Units,—
(1) This section is pleased to release RCA to discuss with representatives of Remington Rand matters of design and construction of image orthicon tubes in so far as this can be done without interference with the program of work which RCA has under way for NDRC in this connection. This should not be construed as a request on the part of NDRC for RCA to assist Remington Rand in the design and construction of image orthi-con tubes, since such a request would involve commercial relationsMps between those companies with which NDRC has no concern. NDRC has no special interest in the development of the image orthicon tube at this time by Remington Rand, since no information has come, to NDRC of any contributions which Remington Rand is prepared to make beyond those to be expected from other sources.
On the same day NDRC wrote RCA as follows:
* * * The RCA is hereby authorized:
1. To discuss the design and construction of image orthicon tubes with Mr. M. P. Wilder or other representatives of Remington Rand, and
2. To furnish the Remington Rand on loan two good image orthicon tubes from the models which have been manufactured on NDRC contract, or if this stock does not permit such a loan, to request permission from the Navy for the release of two of their tubes.
RCA did not elect to help plaintiff, and on May 15, 1944, plaintiff knew that it would either have to abandon tube development, or proceed independently. On that date plaintiff was informed as follows:
It is desirable that the image vericon tube under development on Order No. 3337-ARL-44 be electrically and mechanically interchangeable with the shoulder contact type tube manufactured by RCA. However, if a waiver on these requirements will result in a decrease in size or an appreciable improvement in performance, a request for waiver of interchangeability together with*739 evidence of the advantages to be gained by said waiver should be submitted to this Laboratory for approval.
It is the understanding of this Laboratory that the Navy Department is furnishing you with one complete image orthicon equipment, Type CRY 59AAG. In addition, RCA, at the request of Dr. Buckley, of NDRC, is furnishing you with two of the latest type tubes. This Laboratory has requested that RCA, supply outline dimensional drawings of the tube with the connection labeled and the nominal operating voltages indicated. Delivery of these various items is anticipated within the next three weeks. It is believed that this material will be sufficient to permit you to proceed at a reasonable rate.
A preliminary investigation of the factors involved in obtaining direct assistance from RCA, together with a conference with representatives of the Navy Department, makes it appear inadvisable to request direct assistance from RCA at this time.
Plaintiff interpreted the letter to mean that RCA help would not be requested or given.
15. The defendant made a reasonable effort to induce RCA to give plaintiff technical assistance and when RCA help was refused, requested plaintiff to state whether or not it was prepared to proceed without such assistance. Plaintiff by letter of May 4,1944, stated:
Subject: Image Orthicon Development.
* $ * H* * ífc H*
We are very appreciative of your action in requesting assistance from NDRC in connection with the development contract between ARL and ourselves for five Image Orthicon type conversion units.
We would like to make it clear that it is not in our program to copy slavishly the design of any existing tube of this type.
We already have made considerable progress on independent development of this generic type pick-up tube, as representatives of ARL know from visits to our laboratory and from reports we have made to them. This development has progressed, of course, from our experience over the past two years in developing and producing the Yericon 212, a two-inch pick-up tube of the orthicon type. _Our Image Vericon development is directly an extension on what we already have accomplished with the simpler Yericon and actually has been in progress for over a year as a project unsponsored by any govern*740 ment agency up to tbe time we were awarded the present contract by ARL.
While development of the Image Yericon would undoubtedly be expedited by full exchange of engineering information with RCA, only such data as may be necessary to insure mechanical and electrical interchangeability between our Image Vericon and the RCA Image Orthicon would be required at this time if it is desired by ARL that the tubes should be interchangeable in the same equipment. These data would include physical dimensions, electrode connector and base-pin locations, and electrical operating requirements.
If ARL desires such coordination in design, this information should be furnished to us as soon as practicable.
Plaintiff advised defendant’s official verbally that it would go ahead with development, with or without RCA help. This determination appears to have been based in part, at least, on plaintiff’s confidence in an electronics engineer secured from RCA, who subsequently conceded his over-optimism as to what would be required to make the tubes if “he had been in possession of the knowledge”.
By mid-May of 1944, plaintiff was fully aware of RCA’s position, and expected only dimensional drawings (for interchangeability of RCA’s and plaintiff’s tubes) and sample tubes, and this was all the assistance plaintiff ever received.
16. RCA had previously sent two technicians to plaintiff’s plant to assist plaintiff in producing the orthicon tube. With respect to proposed production of the image tube, plaintiff expected to be given technical assistance, scientific data, and access to the RCA laboratory for at least one visit. It was against RCA policy to allow competitors or licensees access to its laboratory.
In order to have enabled plaintiff to produce the image tube, without extensive research and development, it would have been necessary for RCA to station technicians at plaintiff’s plant for an extended period or allow plaintiff’s personnel to work in the RCA laboratory for such a period. RCA was not willing to subject itself to the risk or the burden of such procedure. The time required to train plaintiff’s workers would no doubt have interfered, to some extent, with the RCA production schedule.
Plaintiff desired that ARL write a development contract with an escalator price clause which would permit price revision in the event anticipated costs were exceeded. Plaintiff was informed that ARL was limited to the execution of fixed-price development contracts and elected to proceed on a fixed-price basis, expecting to overcome any initial losses by subsequent orders.
18. Once plaintiff had agreed to a fixed-price contract, defendant on May 9,1944, requested plaintiff to submit a formal offer. Pending the execution of the formal contract, defendant on May 15, 1944,- issued a letter order dated April 13, 1944. On May 24,1944, plaintiff submitted its offer in which it proposed to furnish, for a stipulated price of $72,864.68,. five conversion units complete with tubes utilizing an image orthicon type of pickup tube. In its breakdown of anticipated costs plaintiff left the column designated for engineering and developing expenses blank, and explained this as follows :
Direct engineering is included as direct labor since the whole job is essentially engineering and development, and indirect engineering is included in general expense. Any amortization would be reflected in reduced costs on subsequent contracts for the same material.
On June 13,1944, plaintiff was notified of the award of the contract. On July 11,1944, a contract (dated June 13,1944) was forwarded to plaintiff and it was executed on July 20,, 1944. The contract provided in part as follows:
Akticle 1. Scope of This Contract. — The Contractor shall furnish and deliver to the Government, in accordance with the Contractor’s bid dated 24 May 1944 the following items:
. Item 1. 5 ea. Conversion Unit consisting of Conversion Unit * * *. Said Unit * * * to contain: * * *
:je * ❖ Hí
Image Orthicon Pickup Tube * * * (A detailed specification will be prepared by Aircraft Radio Laboratory*742 when technical limitations of the pick-up tube have been determined.)
* $ Sfc * *
ARticle SO. Prior Agreements. — The letter order hereinbefore mentioned and all amendments thereto, if any, and all other prior agreements relating to the subject matter hereof are merged into and superseded by this contract.
Article 30 was not part of the standard form but was typed into this particular contract.
19. The contract between plaintiff and ARL was regarded by both parties as entailing tube development. ARL only writes development contracts, not having procurement functions.
In March 1944 plaintiff’s laboratory was being set up for a development project or major proportions.
20. Plaintiff made no demands for compensation over and above the contract price until the spring of 1945. At that time plaintiff’s engineering department was informed by the accounting department that expenses were exceeding the total contract price. Plaintiff thereupon verbally requested an amendment to the contract which would increase plaintiff’s contract price. Plaintiff was advised to submit its request in writing. Plaintiff then wrote on May 21,1945, in part, as follows:
This is to advise that amendment of Contract No. W-33-106-sc-164 increasing the total amount by sixty thousand dollars ($60,000.00) will be required for completion of the contract. The reason for this is that engineering and development expense for development of the Image Yericon tube was not contemplated as a major part of the cost when the proposal for this contract was formulated or when the contract was executed. At that time it was understood that substantial engineering assistance would be given on the development of this tube, including detailed design and processing data, bj the manufacturers of the Image Orthicon and inability to obtain cooperation has necessitated considerably more fundamental research and development than otherwise would have been necessary.
Our actual cost for engineering and development of the Image tube to May 1,1945, is shown by the following breakdown:
*743 Direct Productive Labor-$21,341.24
Net Direct Material and Purchased Parts- 11,026.67
Indirect Factory Expense (Burden)- 31,132.33
Total_ 63,600.14
The total net cost on the contract at May 1, 1945, is $75,638.59. This is broken down as follows:
Direct Productive Labor-$25,335.21
Net Direct Material and Purchased Parts- 13, 505.39
Indirect Factory Expense (Burden)- 36,797.99
Total_ 75,638.59
Of this total amount at May 1st, the cost of experimental jigs and tools amounted to $5,100.00.
The estimated additional cost per unit for five units is analyzed as follows:
Net Direct Material and Purchased Parts_$2,000.00
Direct Labor (Engineering)_ 4,000.00
Indirect Factory Expense- 6, 000. 00
Total Cost per Unit_ 12,000. 00
Total Amount for Five Units_$60,000.00
Because of the additional time required to complete engineering development, we request that the delivery date be made December 1,1945.
It should be noted that in requesting this additional amount of money to complete this contract, we are not asking for any profit beyond the amount specified in the original proposal.
In accordance with wishes of technical personnel at ARL having cognizance of this contract, we are continuing the work without interruption and shall continue to do so in the expectation that early action on this request will be forthcoming.
Subsequently, at defendant’s request, plaintiff filed a detailed history of the transaction.
21. By letter of February 22, 1946, defendant advised plaintiff that it could not re-write the contract as suggested. Defendant stated:
1. Reference is made to your bid proposal for the subject contract set forth in a letter dated 21 May 1945, signed by Mr. James J. Lamb, Chief Engineer, requesting an increase of $60,000.00 in the contract price. That increase in price was for the development of an Image Vericon Tube.
*744 2. That request was apparently based on the fact that it was originally planned to furnish an RCA Tube on subject contract and that Tube was later found unsuited to the purpose.
3. Subject contract, as now written, requires the delivery of 10 each Image Vericon Tube, 5 each of which are to be installed one each in each of five each Conversion Unit MX-XA-35/AXT-2 (XA-3) which in turn is to-comply with certain specifications.
4. The addition of development charges, therefore, falls under Procurement Regulation 308B “Mistakes.”" Authority to process changes under that regulation has been withdrawn from this Headquarters.
_ 5. The change cannot be processed under the price revision article of subject contract as that article provides for downward revision only.
_ 6. This Headquarters is now considering the possibility of writing a new contract for the development of the tube. Your Company will be notified when a decision has been reached.
* * * * *
Thereupon plaintiff sent an engineer to Wright Field to' explore other possibilities for effecting recoupment. Plaintiff’s representative and an Army captain discussed the situation and plaintiff was advised that extra reimbursement would necessarily have to be predicated on a change order-providing for some improvement or change in the design. As a result of this conversation plaintiff wrote a letter dated March 12, 1946, outlining alleged development work to be-covered by an amendment to the contract. However,, on May 14, 1946, Air Materiel Command advised plaintiff that it could not grant relief for development costs.
22. On November 27, 1946, plaintiff filed a claim under section 17 of the Contract Settlement Act. The contracting-officer denied this claim on January 8,1948, stating:
*****
. 3. Upon analysis of all of the evidence available to-this Command, it was revealed that claimant had every reason to believe, prior to its bid for the formal contract,, that -it would be required to engineer and develop the image type tubes. * * * Claimant’s subsequent bid and1 acceptance of the formal contract calling for. such tubes without mention .of any Government-furnished assistance indicates that claimant either intended that its bid would!*745 cover the cost of that development or erroneously failed to provide for such costs. * * *
On June 15, 1948, plaintiff appealed from this decision to the Office of Contract Settlement, which, after taking plaintiff’s proof, denied plaintiff’s claim, stating in part:
Appellant contends that in the early period of the negotiations looking to the contract, it was assumed by both parties that engineering assistance from RCA would be forthcoming, and that such assumption carries through to the final signing of the contract. It is quite true that during February and March of 1944 the responsible officials of both parties thought that engineering assistance would be received. This belief, however, began to be dissipated in April when it was learned that the assistance would not be given without a directive, and sometime in May or June, well before appellant signed the contract on July 20, Colonel Norvell gave it as his opinion that the assistance would not be forthcoming. Although some of the people connected with the negotiations still had a hope that the assistance would be given, it must be conceded that by June 28,1944, when Colonel Norvell went overseas, it was known that the chances of obtaining such assistance were not very good. By the time it signed the contract appellant could not have reasonably believed that it would probably receive the engineering assistance it desired.
23. It is not established by the evidence that the decision of either the contracting officer or the Office of Contract ■Settlement was arbitrary, capricious or made in bad faith.
24. Plaintiff was never able to furnish the image tube, as required by the specifications. The requirements of both Army and Navy specifications had to be reduced, to enable the services to accept the equipment. Due to its inferior performance, the equipment furnished defendant under the ■contract in question was never used. The contract price, by agreement, was reduced by the sum of $18,216.17.
25. While Remington Rand was not eager to undertake the manufacture of the 10 image orthicon tubes, inasmuch as its facilities were occupied at the time, it was very anxious to get the contract on some basis. Although it was clear prior to plaintiff’s proposal and the execution of the contract that RCA assistance would not be forthcoming, plaintiff
There is evidence that a government representative commended plaintiff for its work in performing the contract but it does not appear that any representative of defendant either represented to plaintiff that it would furnish the information from RCA or requested any performance outside the written contract. The tenor of all discussions relative to RCA help was that an effort would be made to obtain it*
26. While some hope for engineering data may have been entertained, even after RCA’s refusal, plaintiff entered the contract to furnish the ten image orthicon tubes for a fixed fee with full knowledge that in all probability it would have to produce them without RCA assistance.
Defendant was very interested in the performance of this contract but it did not represent to plaintiff that there would be reimbursement for the cost of image tube development outside the terms of the written contract.
27. One of the reasons defendant wanted Remington Rand to do this work was the fact that they had investigated other possible sources of supply and had tried to get the work done in other places. The defendant was also convinced that Remington Rand would be a good facility for handling this project.
28. The first written request for additional compensation was made by the plaintiff in May 1945 when it was learned that costs exceeded total income, although there had been verbal discussions prior to that time between representatives of the plaintiff and the defendant, concerning the additional requirements which would be necessary if the plaintiff did the development work. Plaintiff did not ask for reimbursement of all development expense in its written request but proposed an amendment of the existing contract to provide for the estimated additional amount of $60,000.00.
29. The entire image tube development expense is reflected by Work Orders Nos. 3013, 3014. All such expenses were charged by plaintiff to the ARL contract herein involved, and none of the expense was charged to the Navy contract, although the development work was necessary for the performance of both contracts.
Work Order No. 3013_ $17,906.83
Work Order No. 3014_ 102,272. IS
Total- 120,179.01
General and administrative expense claimed (5% of $120,179. 01)_ 6,008.95
Total Amount of Claim_$126,187.96-
CONCLUSION 03? LAW
Upon the foregoing findings of fact, which are made a part of the judgment herein, the court concludes that as a matter of law the plaintiff is not entitled to recover and its petition is therefore dismissed.
28 U. S. C. § 1491 (1952 ed) provides in part:
“The Court of Claims shall have jurisdiction to render judgment upon any claim against the united States: * * » (4) Founded upon any * * * Implied contract with the United States.”
Section 17 of the Contract Settlement Act (58 Stat. 649, 665, 41 U. S. C. § 117 (1946 ed.) provides:
“(a) Where any person has arranged to. furnish or furnished to a contracting agency or to a war contractor any materials, services, or facilities related to the prosecution of the war, without a formal contract, relying in good faith upon the apparent authority of an officer or agent of a contracting agency, written or oral instructions, or any other request to proceed from a contracting agency, the contracting agency shall pay such person fair compensation therefor.
“(b), Whenever any formal or technical defect or omission in any prime contract, or in any grant of authority to an officer or agent of a contracting agency who ordered any materials, services, and facilities might invalidate the contract or commitment, the contracting agency (1) shall not take advantage of such defect or omission; (2) shall amend, confirm, or ratify such contract or commitment without consideration in order to cure such defect or omission ; and (3) shall make a fair settlement of any obligation .thereby created or incurred by such agency, whether expressed or implied, in fact or in law, or in the nature of an' implied or quasi contract.”
See note 2 supra.