78-1 BCA P 12915 (A.S.B.C.A.), ASBCA No. 20564, 1977 WL 2313
Appeal of Telline Radio, Inc.
Under Contract No. DAAD07–72–C–0317
November 18, 1977
APPEARANCES FOR THE APPELLANT:
Richard F. Smith, Esq.
Jack W. Fleming, Esq.
Lewis, Mitchell & Moore
APPEARANCES FOR THE GOVERNMENT:
Colonel Joseph A. Dudzik, Jr., JAGC
Chief Trial Attorney
Captain Michael E. Gillett, JAGC
OPINION BY ADMINISTRATIVE JUDGE BURNS
PURSUANT TO RULE 12
In this Rule 12 proceeding, appellant makes two claims under the Changes article of the captioned fixed price supply contract. The major claim alleges that a Government-specified part was defectively designed and could not perform the function contemplated in the machine the contract required appellant to deliver. Appellant’s second claim asserts that respondent’s insistence that each unit delivered be identified with a permanent serial number is beyond the contract requirements.
Respondent denies that the specified part was defective, and, with respect to the second claim, respondent claims the contract supports the demand for permanent identification serial numbers.
The Board need only determine if liability is established.
FINDINGS OF FACT
1. In the past ten years, White Sands Missile Range (WSMR) in testing various missiles has used a transponder as part of its safety program. A transponder is a radio device able to receive and send signals. Several contracts were awarded to satisfy WSMR’s transponder supply need. In stating its requirement, the Government specified a Winchester M4P connector with respect to the transponder and its battery. This particular connector has male and female components that, when mated, allow for the transmission of power. From experience gained from items furnished under two contracts, WSMR knew that, after repeated use, the female component had a tendency to lose its grip on the male component and thereby cause a power interruption (Tr. 3–168). To overcome this tendency, WSMR restored the required tension by crimping the female component (Tr. id.). Crimping was routinely done when preparing a transponder for use at the missile range.
2. a. In the spring of 1972, WSMR issued an invitation for bids (IFB), restricted to small business firms, calling for the delivery of 50 transponders, 50 batteries and 50 harness cables pursuant to the requirements set forth in a purchase description. Following WSMR’s past practice, the purchase description specified the Winchester connectors for each of the three items. However, bidders were not advised that the female component required crimping to assure troublefree performance.
b. The purchase description set out the following stringent environmental conditions:
‘d. Vibration: Sinusoidal vibration with frequencies of 20 Hz to 2000 Hz, logrithmically scanning the frequency over a four-minute period, on each of the mutually perpendicular axis as follows:
(1) 20 g’s from 20 Hz to 150 Hz
(2) 30 g’s from 150 Hz to 300 Hz
(3) 40 g’s from 300 Hz to 500 Hz
(4) 50 g’s from 500 Hz to 2000 Hz’
3. At the request of a private concern, the manufacturer of the specified connector conducted several tests in 1968 (Stipulation, Stopper testimony). The connector was tested to a maximum level of 10 g’s and from 10 Hertz up to 500 Hertz (Tr. 2–119). For policy reasons, Winchester only guarantees the unit to the tested limits. The Winchester connector is not a qualified military connector and is not on the Qualified Products List.
4. Prior to specifying the Winchester connector, the Government never performed any qualification tests on this device (Tr. 1–56). Moreover, respondent never reviewed any test reports of the manufacturer (id.).
5. The Winchester connector cost $1.50 per unit (Tr. 4–114).
6. In June 1972, Telline Radio, Inc. (TRI) was awarded the captioned fixed price supply contract for $44,380 (R4, Tab 4). As of the time of award, appellant employed three or four people and three corporate officers (Tr. 1–87; 2–10).
7. The contract item was a very sophisticated state-of-the-art machine requiring the maximum performance by each of the parts of the unit (Tr. 1–92; 2–17). The transponder has over 100 parts and between 1,000 and 1,500 solder joints (Tr. 1–98; 3–25).
8. In November 1972, Telline commenced first article testing on two units. To perform vibration testing, TRI retained the services of General Testing Laboratory (GTL) (Tr. 1–101, 111). The record establishes that the vibration test specified in the contract was a severe test (Tr. 1–90). A strip recorder was utilized to monitor the testing (Tr. 1–107). This instrument is attached to the vibrating equipment so as permanently to record the conduct of the test unit while it is undergoing vibration.
9. On 27 November 1972, two units were being subjected to the vibration test (App. Exh. 13). The strip recording of that day reflected several intermittents or transients. An intermittent or transient is a sudden fluctuation in the output of the unit being monitored; it is an abrupt change in the output (Tr. 1–112; 3–54). In the testing of the units, intermittents were noticed in the performance of the transponder. This failure was noticed at the upper level of the vibration test (Tr. 4–67). After each testing, TRI’s project engineer investigated the connectors to assure himself that the connectors were firmly in place and mated (Tr. 3–54).
10. On 28 and 29 November, additional vibration testing was done and intermittents again were noticed in the performance of the two units (R4, Tab 72A). In its report of these tests, appellant attributed the source of the intermittents to the sequencing operation of the high powered equipment used in vibration testing.
11. In an attempt to isolate the cause of the equipment failures from the testing equipment, appellant, on 5 December 1972, performed an acceleration test at the Naval Ordnance Laboratory (Tr. 1–128). TRI had already run an acceleration test at the General Testing Laboratory on 7 November 1972 (App. Exh. 13). The acceleration testing at the Naval Laboratory produced transients of a different character from those of the transients displayed on the strip recorder at General Testing (Tr. 1–129; R4, Tab 19).
12. In November 1972, the president of TRI sensed that there were voltage fluctuations at the plant of General Testing (Tr. 2–28). GTL’s vibration equipment was very large and generated considerable power transience (Tr. id.). The transponder in the November vibration testing was not operating on battery power (Tr. 2–37). The president conceded that the fluctuation in the testing could have been caused by the fluctuations in the power with the General Testing plant (Tr. 2–36). When the vibration equipment is at 500 cycles, the machine is operating under a heavy load condition (Tr. 2–35).
13. Following submission of its first article testing report, respondent rejected the first article. Faced with such a rejection, Telline held off any production of the units (Tr. 1–132).
14. In late January 1973, representatives of WSMR visited TRI’s plant to discuss the problems facing the appellant. The author of the purchase description toured the plant, examined the strip recording charts and discussed the intermittents (Tr. 3–144). He was pleased with appellant’s workmanship (Tr. 3–145). Mechanically and electrically appellant’s transponder was considered to be excellent and the soldering to be of the highest quality (Tr. 1–57, 58). Nevertheless, Telline in January 1973 was not told of the failures of the Winchester connector experienced by the Government (Tr. 4–56).
15. In May 1973, TRI started to test two first article units. Rather than retest the November units again, two new units were built (Tr. 1–142). Also in May, TRI tested at Fairchild Industries (Tr. 1–145). Again the units failed the vibration tests. In the May testing, an intermittent occurred at the very outset, and this time the battery malfunctioned rather than the transponder (Tr. 2–85). The failure was at the 10 g level (Tr. 4–70). Appellant’s president was able to duplicate the transient by wiggling the Winchester connector (Tr. 3–58). The May units had new connectors (Tr. 2–59). An inspection disclosed that the female connector had spread apart (Tr. 3–11). To overcome this defect, the part was crimped (Tr. id.). Crimping takes a minute of effort (Tr. 2–102). The May units were then retested and passed the vibration tests. Thereafter, the crimping of the female component became a standard operating procedure. No one disputes that the failure of the May units was due to a defective famale component in the Winchester connector. We so find.
16. At the time of the May testing and discovery, Telline still had the two units which failed the November 1972 vibration tests (Tr. 3–123; 4–72). In late May 1973, appellant decided to charge the failure of the November 1972 vibration tests to a faulty Winchester connector (Tr. 3–123). Despite this decision, Telline did not then investigate the November units (Tr. 3–124). Appellant’s president testified that he could think of no reason for trouble shooting the November units when Telline was anxious to get ahead with production (Tr. 4–72).
17. The May failure was a gross one while the November failure (intermittent) required considerable force and only rarely occurred (Tr. 4–70, 71). The May failure did not resemble the November failure (Tr. 3–119).
18. In both the November 1972 testing and the May 1973 testing appellant used the same harness (Tr. 3–89, 90, 110). Nothing was done to the connectors on this harness in the period of November through May, and no other vibration tests were performed in the interim (Tr. 3–117). The wiring harness contains male and female connectors (R4, Tab 4). On the transponder, a male connector projects from the wall of the unit; while on the battery unit, the female connector is implanted in the wall of the unit (App. Exhs. 3, 4). Consequently, the female connector on the harness mates with the male connector on the transponder while the male connector on the harness mates with the female connector on the battery. Therefore, in the May testing the female connector on the harness performed without failure. But the May testing was not done at the g rate of the November testing.
19. At is established in the record, and we find, that from the reading of a strip chart recording one is unable to assign the cause of an intermittent; all that one is able to conclude is that there was a failure in the unit for a very short period of time (Tr. 2–158; 4–117).
20. It is established in the record, and we find, that the Winchester connector becomes defective with continued use because the female component yields with use (Tr. 2–86, 87). In November 1972, the connectors were plugged and unplugged at least twice a day (Tr. 2–87). In November 1972, TRI tested on eight days (R4, Tab 72).
21. Appellant called a highly qualified expert in vibration analysis to support appellant’s position that the Winchester connector is defectively designed. This witness’s specialty is vibration testing and analysis (Tr. 2–110). In his opinion, the Winchester connector is an inherently loose connector (Tr. 2–121). Repeated matings and demating loosen up this type of connector and, if the looseness of the connector becomes extreme, the electrical contact and the circuit continuity of the signal can be affected (Tr. 2–123, 124). In this expert’s opinion, the Winchester connector was not adequate to withstand the vibration tests (Tr. 2–127). In the expert’s view, the test data of November 1972 was consistent with a loose connector (Tr. 2–128). However, the witness declined to state that the connector was the probable cause of the November failure; he refused so to state because his field does not cover the functioning of transponders (Tr. 2–129). Therefore, the witness only would consider the failure to be the possible fault of the connector (Tr. 2–129). However, in his view, this type connector is degenerative either because of the repeated matings or because of the loading condition, such as vibration (Tr. 2–138). Moreover, this type of connector is apt to fail at a high a level since the loading level will create a loose connector (Tr. 2–145). In his view, the testing begun in November was of sufficient duration to permit a conclusion that the connector failed (Tr. 2–156). For the most part, the opinions of this witness are not challenged by any other witness similarly qualified to speak. Moreover, the respondent’s engineer who reviewed appellant’s claim found it meritorious (Tr. 4–36, 37). As of the hearing, respondent’s engineer had not revised his opinion (Tr. 4–43).
22. In testing any unit for acceptance, the Government would not tamper with the connectors on the battery or transponder (Tr. 4–9).
23. Respondent rejected one unit and returned it to the appellant. On this occasion, appellant again tested for vibration and returned the unit without any adjustment (Tr. 3–76, 77). The unit was accepted.
24. On five occasions, units were returned for failing the vibration test (Tr. 4–21). When the units were returned, they would be again tested at Fairchild and returned to WSMR with possibly the crimping of the female component being done (Tr. 4–75). These units were then accepted.
25. As for appellant’s second claim, the contract reads as follows:
‘3. All units, including any optional quantity ordered, shall be serially numbered consecutively, beginning with the number 1. The first 10 units delivered, serial numbers 1 thru 10, and every tenth unit thereafter, shall be tested as specified in paragraphs 4.1.a thru 4.1.c(2) of PD 1051–72–A, ‘Production Units.’ In the event the first two units delivered, serial numbers 1 and 2, are the approved first article; production testing is not required on these two units. In the event the Government orders the optional quantity, units numbered 60, 70 and 75 shall be tested as set forth above.’
With respect to its major claim, appellant asserts entitlement to an adjustment under the Changes article on two grounds. First, the failure of the Government to disclose the known propensity of the Winchester connector to lose effectiveness after use and to require crimping to restore the connector’s functioning entitles appellant to the adjustment sought here. Alternatively, appellant argues that the Winchester connector, as designed, was incapable of performing the function contemplated for it by the Government and therefore the warranty that this device would function was breached.
Under the teaching of Helene Curtis, Inc. v. United States, 160 Ct. Cl. 437, 312 F.2d 774 (1963), the Government, in advertising for bids for a particular product, is obliged to disclose to prospective bidders whatever vital knowledge the Government posses of problems likely to be encountered in the performance of the contract and the solutions thereto; the knowledge of which the prospective bidder required but could not reasonably be expected to possess or acquire. Our findings establish that the Government, as of the time of the issuance of the IFB, knew of the problem with the Winchester connector and knew the female component had to be crimped to ensure performance. For reasons best known to itself, the Government did not disclose these facts to the prospective bidders. There is no evidence in the record to allow a finding that a prospective contractor, prior to bidding, should have known about or could have acquired the knowledge about the Winchester’s tendency to fail to function properly. On an item that costs $1.50, we would be amazed that any bidder, absent actual experience1 with this particular connector, would suspect this device. Consequently, respondent because of its neglect to disclose the vagaries of the Winchester connector must compensate appellant for the costs incurred because of nondisclosure.
We have found for the appellant on its first ground because we have certain problems with the second ground offered. We have no doubt that the Winchester connector is unable to perform to the requirements of the specification on various occasions. But we also are convinced that this connector is not habitually unable to perform its function. Therein lies the problem with the testing done in November 1972. The evidence points to two possible reasons for the failure on the vibration test. Either the connector or the power supply at General Testing Laboratory could have been the source of the intermittent. Further, appellant had enough reservations about the facilities at General Testing that these facilities were never again used. Tied into our reservations is the neglect of the appellant to test the November units when appellant discovered the connector to be defective.
However, by failing to inform appellant about the problems of the connector, respondent deprived appellant of the opportunity to check the connector if in fact it was malfunctioning in the November 1972 testing. Therefore the Government should underwrite the expense of such testing.
Respondent also should pay the cost of the retesting of units rejected and returned to appellant. We are not satisfied that these units were defective when delivered. The evidence shows at most that crimping was necessary to restore the unit to the acceptance level. The Government knew crimping to be the remedy and declined to perform it. We hold that rejections were unjustified when the respondent declined to make the trivial adjustment, a one minute process, it knew might be the cause of the rejection.
As for appellant’s second claim, there is no dispute that respondent required appellant to place non-removable numbers on the units. Respondent argues a reasonable interpretation dictates that the serial numbers should not be removable otherwise the serial number has no value to the Government.
The contract provision does not expressly require permanent serial numbers. If the respondent required a permanent serial number, the contract should have so stated. Appellant is entitled to the cost of complying with respondent’s demand.
This appeal is sustained.
THOMAS E. BURNS
Member of the Armed Services
Board of Contract Appeals
HARRIS J. ANDREWS, JR.
Vice Chairman, Armed Services
Board of Contract Appeals
I certify that the foregoing is a true copy of the decision and opinion of the Armed Services Board of Contract Appeals in ASBCA No. 20564, Appeal of Telline Radio, Inc., rendered in conformance with the Board’s Charter.
GEORGE L. HAWKES, Recorder
Armed Services Board of Contract
Telline had not worked with the Winchester connector (Tr. 2–102).
78-1 BCA P 12915 (A.S.B.C.A.), ASBCA No. 20564, 1977 WL 2313