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Dewey Electronics Corp. v. United States

October 1, 1986


Appealed from Armed Services Board of Contract Appeals.

Markey, Chief Judge, Friedman and Archer, Circuit Judges.


ARCHER, Circuit Judge.


Dewey Electronics Corporation (Dewey) appeals from that portion of the decision, dated June 28, 1985, of the Armed Services Board of Contract Appeals (Board), ASBCA Docket No. 27073, finding the government not liable on four claims for equitable adjustment, pricing of certain items and interest. We affirm.


On May 20, 1977, Dewey was awarded a contract with the government to manufacture automatic weather systems (AWS) for the Navy at a firm fixed price. The AWS consisted of two major components: (1) a remote sensor group which included meteorological sensors and data transmission electronics, and (2) a display group which included data reception electronics, digital displays and an analog chart recorder. Peripheral hardware associated with the AWS included a data distribution computer (DDC), an analog computer and a remote display unit. System parts were to be manufactured using government furnished equipment (GFE) in accordance with the specification requirements provided by the government. In attempting to perform the contract, Dewey encountered what it considered to be defects in the contract specification and the GFE which allegedly delayed its performance under the contract and increased its costs.

While not admitting that the GFE or contract specification were defective, the government nonetheless partially terminated the contract for convenience on April 14, 1978, deleting production of certain items in the weather system which required Dewey to copy allegedly defective portions of the GFE. Dewey was advised of this partial termination by telegram and further advised of those items which were not to be terminated under the contract. The telegram was confirmed on April 20, 1978 by a unilateral contract modification containing an incorrect contract number and discrepancies with the earlier telegram as to those items to be terminated. The government corrected the errors on June 2, 1978 by issuing a corrected unilateral contract modification.

Dewey encountered further difficulties in producing the remaining contract items in the AWS, including mechanical problems associated with the dimensions of certain components of other GFE, operational problems in an analog chart recorder obtained from a manufacturing source that the government had allegedly indicated to be reliable, and failure of certain electronic features which were produced in conformance with other GFE that the government had provided.

On February 1, 1979, Dewey submitted a series of claims, which it called a "consolidated claim," to the contracting officer. They consisted of: $149,950.04 for "settlement of the partial termination" effected on April 14, 1978; $389,863.00 as an equitable adjustment for repricing of "unterminated and reordered units"; and $37,421.78 for unabsorbed burden. Included in the consolidated claim was a claim for delay Dewey had suffered due to alleged defects in the GFE model, the costs of which were not segregated and which were stated to be included within both the termination claim and the equitable adjustment claim.*fn1 By letter dated March 6, 1979, Dewey elected to proceed with its claim under the Contract Disputes Act of 1978 (CDA), Pub. L. No. 95-563, 92 Stat. 2383 (1978) (codified at 41 U.S.C. §§ 601-613 (1982)).

Dewey was requested by the contracting officer on April 6, 1979 to separate its consolidated claim into each applicable category, i.e., termination claim, delay claim or equitable adjustment claim, but Dewey failed to fully comply with this request. A settlement proposal was submitted by Dewey on October 17, 1979 to the contracting officer covering only the termination claim.

The parties settled the termination claim in January, 1981. The settlement agreement contained the following language to preserve Dewey's right to resubmit the equitable adjustment portion of its 1979 consolidated claim, which Dewey had not submitted separately as it had been instructed to do.

Article 8. Except for the terminated portion of the contract, this agreement does not preclude the contractor from submitting claims, if any, on other matters relating to the contract, including but not limited to claims for contract price increases with respect to the nonterminated units which increases result from the termination and those for equitable adjustment to the contract price under the Changes Clause which result from the following alleged causes:

(a) defective Government furnished property.

(b) changes made by the Contracting Officer.

(c) Government caused delays.

On March 2, 1982, Dewey submitted a certified equitable adjustment claim to the contracting officer seeking an increase in the contract price. It also requested interest, pursuant to 41 U.S.C. § 611, on the equitable adjustment claim which Dewey considered as outstanding since February 2, 1979, when it first submitted its consolidated claim to the contracting officer. This certified filing restated Dewey's February 2, 1979 claims, other than the settled termination claim, and added more claims which were based on facts occurring after February 2, 1979. In all, Dewey's March 2, 1982 submission contained nine separate "claims."*fn2 The contracting officer did not respond to these certified claims within the time required by 41 U.S.C. § 605(c)(2) (1982), and Dewey therefore filed its appeal with the Armed Services Board of Contract Appeals pursuant to 41 U.S.C. § 605(c)(5) (1982).

On June 28, 1985, the Board issued a decision, limited to consideration of the entitlement issue. It found for Dewey on five claims and remanded them to the contracting officer for "negotiation of the equitable adjustment due appellant." The Board determined that Dewey was not entitled to recover on the four other claims and Dewey now appeals each of these adverse determinations.*fn3


The government has raised, as a jurisdictional matter,*fn4 the question of whether the decision of the Board constitutes a final decision within the meaning of 28 U.S.C. § 1295(a)(10) (1982). In doing so, it contends that the Board did not fully decide the case before it because five claims were remanded to the contracting officer to determine the amount that should be paid to Dewey on these claims as an equitable adjustment to the contract. The government refers to long-standing concepts of finality, requiring decision on both liability and damages, under 28 U.S.C. § 1291 (1982) relating to appeals from district courts. Reliance is also placed on decisions of our predecessor court involving the effective date of the Contract Disputes Act of 1978. We do not find these to be persuasive ...

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