Opinion of the Court 125 C. Cls. atmospheric density. The correction of this difficulty was of importance to the Navy, especially during the war when a great deal of high-altitude flying was necessary. Relying upon the representations of plaintiff in which it proposed to manufacture an automatic mixture control device which incorporated certain features not then found in carburetors, and fuel injection controls, the defendant issued a letter of intent, dated January 13, 1943, on the basis of which it undertook to manufacture three fuel metering devices subject to rigorous performance specifications. The letter signified the intention of the Navy Department to enter into a formal contract for the manufacture of such devices. It was provided that the letter of intent should terminate if a formal contract was not executed by March 30, 1943, unless the time was extended. The letter fixed no price, but stipulated that plaintiff, at the earliest possible date, would submit a firm quotation supported by a cost breakdown. Due to extensions granted plaintiff, during which time it reported progress, the formal contract was not entered into until September 4, 1943. The pertinent details of the contract are set out in finding 3. The fixed price was $73,787.68, subject to upward or downward revision, pursuant to the terms of the contract. According to approved designs plaintiffs constructed initial models of the devices. Before the first device was submitted plaintiff wrote the Navy Department that it was running into unforeseen difficulties due to lack of finances, late deliveries by subcontractors and interferences, and asked for an increased price of $10,000 to "partially compensate * * * for our great increase in cost." The Bureau of Aeronautics, Navy Department, agreed to an amendment to the contract, making certain changes, but did not agree to increase the over-all price. This amendment was accepted by plaintiff on June 15, 1944. Plaintiff, on March 23, 1945, asked for an increase to $176,640.50, the asserted reasons being set out in finding 12. The Navy Department declined to agree to the increase in price. Between May 14, 1944, and January 10, 1946, when the contract was terminated for the convenience of the Govern 4 Opinion of the Court ment, the plaintiff submitted six successive models of the control unit and five of the fuel pump. The basic design and the shape of the models were not changed and the original castings were used throughout the contract period. None of the units and none of the pumps were satisfactory and none of them met the requirements of the specifications, although plaintiff worked for several months on one of the units completely redesigning it. Defendant did not order any of the changes nor any redesigning. Plaintiff neither asked for nor received permission from the defendant to make the changes. Pertinent parts of sections 8 and 4 of the contract are as follows: SECTION 8. Guarantees.-(a) The contractor guarantees that the articles provided under this contract will conform to the specifications herein, and will be free from any defects in material and workmanship. SECTION 4. Inspection.—(a) * * In case any articles fail to comply with the requirements of the Section hereof entitled "Guarantees," the Government shall have the right to reject such articles, or require their correction or replacement. * * Repeated reworking of models, defective materials, faulty manufacturing procedure and lack of finances contributed to plaintiff's costs. After the termination of the contract on January 10, 1946, plaintiff requested a retroactive price increase from $73,787.68 to $218,803.36 to cover excess costs over its estimates, and also submitted a termination settlement proposal in the sum of $194,207.47. The reasons for the adverse decisions on these applications are set out in findings 18 and 19. No appeal was taken from these decisions. Plaintiff was paid the original contract price of $73,787.68, plus settlement expenses and interest. Plaintiff incurred costs in excess of the contract revenue in the sum of $106,164.17, a large part of which was attributable to plaintiff's own mistakes, and no part of which was due to any act or fault of defendant in violation of any of the terms and conditions of the contract. Findings of Fact 125 C. Cls. Plaintiff initiated and voluntarily executed an experimental contract, and while it undoubtedly expended more than it had anticipated and a greater amount than it received, we think none of it is chargeable to the Government under the terms of the contract and specifications. Steel Products Co. v. United States, 78 C. Cls. 410; Hervey Veneer Co. v. United States, 110 C. Cls. 83. Plaintiff is not entitled to recover under the terms of the contract. Defendant has filed a counterclaim. No substantial evidence was offered in its support. It was probably offered as a precautionary step, a sort of safeguard in the event some wayfarer in rambling through the record—the plaintiff having submitted no brief-might find some basis for allowing plaintiff to recover, in which event the defendant would need protection in the way of an offset. Otherwise, according to the statement of the Reconstruction Finance Corporation, out of whose transactions the counterclaim arose, a deficiency judgment would be useless. Perhaps this precaution on the part of defendant's counsel was wise since no mind can tell for certain what another mind may conclude. In the light of the entire record we think plaintiff has been treated fairly. The petition of the plaintiff and the counterclaim of the defendant are dismissed. It is so ordered. HOWELL, Judge; MADDEN, Judge; WHITAKER, Judge; and LITTLETON, Judge, concur. FINDINGS OF FACT The court makes findings of fact, based upon the evidence, the report of Commissioner Currell Vance, and the briefs and argument of counsel, as follows: 1. Bristol and Martin, Inc., is a corporation organized under the laws of New York, having its principal place of business at 466 Broome Street, New York 13, New York. 2. Mr. D. J. Deschamps, an employee of plaintiff in charge of its Fuel Injection Department, after having previously 4 Findings of Fact initiated discussions with the Department of the Navy, submitted on December 10, 1942 a "prospectus" to defendant, which stated in part: We have succeeded in incorporating the following features in our automatic mixture control, some of which are not yet found in present carburetors and fuel injection mixture controls. Then followed a list of ten technical features, which need not be set forth in detail. It is sufficient to say that the most important feature of the device was that it was based upon a certain principle known as the speed-density principle. There has always been some doubt as to the feasibility of speed-density carburetion, and plaintiff's proposed device was experimental. 3. Defendant, relying upon the representations made by plaintiff in its "prospectus", on January 13, 1943, sent a letter of intent to plaintiff whereby plaintiff undertook to perform certain work described therein as follows: Item 1 Design, develop and construct three (3) fuel metering (a) A throttle body with mixture control attached, 4. The purpose of this work was to effect revolutionary improvements in the carburetion of airplane engines at high altitudes by utilizing the principles of fuel injection. Due to conditions of atmospheric density at high altitudes, the performance of the type of carburetor then in use was unreliable or defective; so that the perfection of this new principle was of great importance in the prosecution of the war, and also from the Navy's long-range point of view of progress in high altitude flying. At the times mentioned in this petition, the experimental work undertaken by the plaintiff was entirely of a pioneer character, the plaintiff, at the initiation of the project, being the sole manufacturer engaged therein in this country. The performance specifications imposed by the contract were very rigorous. Findings of Fact 125 C. Cls. 5. The letter of intent signified the intention of the Navy Department to enter into a formal contract for the manufacture by plaintiff of the above devices. It provided that the letter of intent should terminate if the formal contract were not executed by the end of the second full calendar month after date (i. e., by March 30, 1943), unless the time were extended. The letter of intent fixed no price, but provided that plaintiff would submit at the earliest possible date a firm quotation supported by a cost breakdown. 6. On March 9, 1943, plaintiff wrote the Navy, Bureau of Aeronautics, asking for an extension of the time allowed for execution of the formal contract. Plaintiff stated that it was "making good progress with the project", but that it had not yet been able to obtain cost data of certain items and therefore asked the Navy to agree to extend the letter of intent for two months, within which plaintiff felt it could submit the definite cost figures upon which to base a formal contract. Because of extensions of time granted in response to this and subsequent requests by plaintiff, the formal contract was not entered into until September 4, 1943. The reason for the extension of time between the issuance of the letter of intent and the execution of the contract was to allow plaintiff time to make cost estimates so as to be able to submit a firm cost proposal for incorporation in the contract. 7. By formal contract No. NOa (s) 156, plaintiff undertook to perform the work described therein, for a fixed price of $73,787.68, which price, however, was subject to upward or downward revision in accordance with the terms of the contract. The fixed price, submitted by plaintiff, was based upon plaintiff's estimate of the cost of the design and shop work. Plaintiff believed that it could manufacture the devices called for in the contract in accordance with the very rigorous specifications. The pertinent provisions of the contract are: SECTION 4-INSPECTION In case any articles fail to comply with the requirements of the Section hereof entitled "Guarantees", the Government shall have the right to reject such articles, or require their correction or replacement. |