or less in area irrespective of the size of the pipe was a restriction on repairs normally permissible under the Manual. The Bureau by its action in increasing the permissible repairable area of fallouts to approximately two square feet has recognized that the one square foot limitation was too restrictive. We cannot say, however, that limiting the repairable area of fallouts on 54inch diameter pipes to an area of approximately two square feet was unreasonable. Fallouts are attributable to mix design and machine operators and Cen-Vi-Ro, as a reasonably skilled contractor, is chargeable with knowledge of the appropriate corrective action, namely having proper mix and skilled machine operators. There is an inverse relationship between fallouts and rocky bells and we hold that these defects were sufficiently numerous and continued for a sufficient period of time that Cen-Vi-Ro may properly be held to have continually failed to take known corrective action prior to May 15, 1965. It follows that restrictions on the repairable area of fallouts on pipes manufactured prior to May 15 was not improper. The record establishes that corrective action to reduce or eliminate though we have found that Cen-ViRo has established that the identified pipe was repairable in accordance with the Concrete Manual, this pipe was manufactured during a period in which Cen-Vi-Ro is chargeable with failure to take known corrective action. The 26 pipes rejected for fallouts after May 15, 1965, were all larger than 54 inches in diameter. We have found that the repairable area limitation of approximately two square feet for fallouts was improper as to pipes larger than 54 inches in diameter. The evidence indicates the area of the fallout on one 66-inch x 20-foot pipe manufactured after May 15, 1965, was 1.25 square feet. However, this pipe had two other fallouts including one in the spigot. The area of fallout on one 66-inch x 16-foot pipe manufactured after May 15 approached four square feet. A second 66-inch x 20-foot pipe manufactured after May 15, 1965, passed the hydrostatic test. The fallout on this pipe exceeded four square feet. We conclude these pipes were properly rejected. A 66-inch x 16-foot pipe manufactured after May 15, 1965, was simply rejected for a fallout in excess of one square foot. We conclude that this pipe was repairable. fallouts was taken after May 15, tained as to the one 66-inch x 16-foot The appeal as to fallouts is sus 1965. Dr. Davis considered that 15 of 21 pipes examined by him which were rejected for fallouts were acceptable with repairs. Only one of these pipes has been identified. Al pipe, which was improperly rejected and is otherwise denied. CenVi-Ro is entitled to an equitable adjustment for the cost of this pipe less the cost of repair. The equitable adjustment is determined infra. February 7, 1973 Interior Scaling or Flaking of As we have seen, the specifications (Subparagraph 67.j.(2)) provided in part: "Pipe shall have cylindrical interior surfaces and shall be free from fractures, excessive interior surface crazing, and roughness." (Italics supplied.) The cited subparagraph also provided in pertinent part: Pipe manufactured by a centrifugal spinning method shall be free from excessive brush marks, that indicate hard brushing of the interior surface for the removal of water and laitance, and which will markedly affect the water-carrying capacity of the finished pipeline. the Bureau in inspecting pipes did not always distinguish between the two conditions. While it appears that one or two pipes which had or developed scaling or flaking interiors as distinguished from bad interiors may have been manufactured as early as September of 1964 (Exh. 5Q; Exh. 152; Exh. 2 of Notice of Appeal, Exh. 6), we find that the great majority of pipes which had or developed these conditions were manufactured during the period late February through March of 1965 (Tr. 851, 1099, 1911, 1912, 1994, 2010; Exh. 5Q). Cracking, frequently, if not always, preceded the condition on some of the pipes was progressive (Tr. 731, 732, 769, 903, 1910, 1911; Inspectors Daily Report, dated May 26, 1965). Although scaling or flaking sometimes appeared in pipes on the rollaway, that is, immediately after removal from the steam curing tunnel (Tr. 1910; Inspectors Daily Reports, dated March 22 and 23, 1965), cracking most often developed into flaking on pipes in the storage yard. 143 The record reflects and we The terms "scaling and flaking" flaking and there is no doubt that were used to describe two distinct types of conditions on the interior surfaces of the pipes: cracking and actual flaking. The resident engineer described scaling or flaking interiors as ranging from surface cracking on the inside of the pipes to pipes in the storage yard in which a depth of up to 3/4 of an inch, would crack, curl and flake out of the pipes (Tr. 1909). Mr. Murray testified that pipes which the Bureau regarded as having unacceptable interiors fell into two categories: half-moon shrinkage cracks and actual flaking.142 As will appear hereinafter, 142 Tr. 851. An informative discussion of the two conditions of pipe interiors appears on page two of Mr. Hubbard's letter, dated August 9, 1965 (Cen-Vi-Ro Correspondence) wherein the interiors on a majority of the pipes rejected for scaling or flaking are described as "more like a shrinkage crazing." Mr. Franklin described bad interiors made on the 16-foot spinner as "crescent cracks" (Tr. 635). See also Kiesel letter of July 26, 1965 (Cen-Vi-Ro Correspondence). 143 Tr. 731, 732, 769, 903, 1910 and 1911. Cen-Vi-Ro asserts that a certain amount of surface crazing is normal in all concrete pipes left exposed to the weather (letter of June 10, 1965, Exh. 5N, p. 15). However, we note the provisions of Subparagraph 67.0. of the specifications which provides in part: "Hauling and handling-Pipe shall not be stored in the manufacturer's yard or at the jobsite for an extended period of time under conditions which would cause injurious drying out of the concrete. Whenever necessary, in order to prevent cracking of the concrete or other objectionable effect of drying, stored pipe shall be adequately protected by means of shelter and application of water. * * find that flaking or scaling interiors were the Bureau's principal cause for concern over the quality of the pipe beginning in early March of 1965 (Tr. 1747, 1994, 1995), and was the defect which led ultimately to the issuance of the May 13 letter. However, there is evidence, which we accept as correct, that prior to March of 1965 the Bureau did not regard minor interior surface cracking, and even some flaking as a cause for rejection.144 Cen-Vi-Ro asserts that the flaking interiors were caused by changes in manufacturing methods made necessary by the Bureau's enforcement of an erroneous interpretation of the contract with respect to internal pipe diameters (Claim of October 13, 1966, Exh. 5M, p. A3; Notice of Appeal, p. 23). While we have ruled that the Bureau did not misinterpret the contract as alleged by Cen-Vi-Ro, we find that efforts to reduce or eliminate production of small diameter pipes as interpreted 144 The resident engineer testified that cracks first observed were not considered serious and that pipes with minor surface cracking would not be a cause for concern (Tr. 1910, 1911). Mr. Herrera asserted that pipes with minor flaking or scaling were acceptable at one time (Tr. 732). An Inspectors Daily Report, dated January 12, 1965, signed by the chief plant inspector, questions whether he should "AOK" pipes with several shrinkage cracks, but expresses doubt that he could make a rejection stand. An Inspectors Daily Report, dated March 23, 1965, states that pipes coming out of the steam tunnel have excessive laitance which flakes to a depth of 4 to 1 inch but that the area is not great enough to reject. A memorandum from the assistant project engineer, dated February 18, 1965 (note 45, supra) states that there are two types of interior surface crazing neither of which appear severely detrimental to the pipes and which would be a cause for rejection only in case of a failure to take "known corrective action." by the Bureau were the primary cause of flaking or scaling interiors. We have previously referred to Mr. Murray's testimony that the principal problem at the time of his arrival on the job in January 1965 was considered to be the production of small diameter pipe. An Inspectors Daily Report, dated January 5, 1965, reflects that 1,014 small diameter pipes had been approved for use while 1,129 had been manufactured. The report states that CenVi-Ro was advised that it was doubtful that anymore small diameter pipes would be approved. The project engineer's letter of January 21, 1965 (Exh. 14), expressing concern that small diameter pipe continued to be produced, heightened Cen-Vi-Ro's concern that it would not be allowed to use such pipe (Tr. 887). Mr. Murray asserted that in an effort to avoid small diameter pipes, the operators had been instructed not to overfill the forms with the consequence that the bores of the pipes were contoured too straight, and water and laitance 145 which surfaced during spinning operations could not be discharged (Tr. 841, 842). He conceded, however, that it was possible to make and that Cen-Vi-Ro had in fact made pipes that neither flaked nor were small diameter as interpreted by the Bureau (Tr. 891, 892). Mr. Herrera explained that in the Cen-Vi-Ro process it was normal to overfill the 145 Laitance is a scum composed of the finest particles of cement, mostly calicum carbonate, which when dry constitutes a chalky material having little strength (Tr. 178). February 7, 1973 form in the center and to rely on the spiral effect of the roller to distribute the concrete and remove excess material (Tr. 812; accord, Tr. 177 (Peckworth) and Tr. 362 (Franklin)). Mr. Herrera stated that the reason for the flaking was that the inside pipe wall was completed by material that should have been wasted (Tr. 813). He attributed this in principal part to underfilling the forms (Tr. 763). Mr. Hubbard testified that the resident engineer and the chief plant inspector suggested that Cen-Vi-Ro underfill or pour less concrete in the forms (Tr. 1097, 1115, 1117). This testimony was not denied. Mr. R. C. Borden, Bureau liaison engineer, who visited Cen-Vi-Ro's plant during the period April 20 to 23, 1965, was of the opinion that scaling of interior pipe surfaces was caused by underfilling of the forms permitting entrapment of water and cement between the end rings during spinning and a deficiency in the sand mix (Tr. 1690; Travel Report, dated May 18, 1965, Ex h. 20). An Inspectors Daily Report, dated April 14, 1965, states the belief that the tendency to underfill pipes was a primary cause of mushy pipe interiors. The Government's expert witness testified that underfilling the pipe in order to avoid small diameters would likely result in an excess of slurry on the inside of the pipe (Tr. 2295). In this connection it should be noted that the practice. of placing less concrete in the forms, referred to as underfilling, did not mean insufficient concrete to meet specification requirements as to wall thickness (Tr. 825, 843, 844). Mr. Murray testified that any pipe you spin has some laitance in it (Tr. 892). While it is not clear whether this testimony applied solely to pipes during the spinning operation, its accuracy appears to be recognized by the specification provision concerning freedom from excessive brush marks for removal of water and laitance cited ante. Mr. Peckworth and Dr. Davis testified that the poorest concrete was always on the inside of spun pipe (Tr. 126; Deposition p. 75). While Messrs. Peckworth and McLean were asked and referred to other possible causes of scaling and flaking interiors such as storage under arid conditions,146 improper mix (too wet), dirty aggregates, improper curing, rapid temperature 147 146 Since we have found that cracking most often developed into flaking in the storage yard, it would seem that storage conditions were a prime cause of flaking (see the provisions of the specifications quoted in note 143, supra). However, the resident engineer testified as to Cen-Vi-Ro's efforts to prevent flaking (coating the interior surfaces of the pipes with a sealing compound and covering ends of some pipes and placing water inside to preserve moist conditions) which apparently had little or no effect on the flaking and indicated that belief the condition was attributable to drying had been abandoned (Tr. 1914, 1915). While Dr. Davis attributed crazing and flaking to a drying shrinkage associated with a wet mix, Mr. Peckworth indicated that it was unlikely drying would cause flaking (Tr. 180). 147 At the hearing and on Brief (pp. 66, 67), the Government emphasized Cen-Vi-Ro's alleged difficulties with aggregates and its change of aggregate suppliers. However, the record supports the conclusion that aggregates used by Cen-Vi-Ro were within tolerances allowed by the specifications (Pars. 94 and 95) for deleterious materials (Tr. 557, 915, 916). changes, and inexperienced machine operators (Tr. 176-180, 2287), we think it significant that 106 final rejects for scaling and bad interiors were manufactured in February, 131 in March, and only eight in April 1965 (Exh. 5Q). It thus appears that there is some merit to Cen-Vi-Ro's contention that the incidence of pipes with severe scaling or flaking interiors declined at or after the time the Bureau relaxed the criteria (April 12, 1965, note 72, supra) for determination of permissible internal pipe diameters and that scaling or flaking interiors were not a significant problem thereafter (Tr. 730, 841). We recognize that there is evidence that most pipe with flaking interiors were manufactured on the 20-foot spinner while most pipes with small diameters appear to have been manufactured on the 16-foot spinner (Tr. 632, 674, 675, 839; memorandum of October 27, 1964, Exh. 8; Exh. 5R). The Board finds that the practice of underfilling the forms in order to avoid manufacturing pipes with small diameters resulted in excessive laitance being retained in the pipe and was the principal cause of scaling or flaking interiors.148 The record reflects that 95 pipes were rejected for scaling prior to 148 The Government asserts that the alleged relationship between small diameters and flaking or scaling interiors was first raised by Cen-Vi-Ro representatives in a meeting on August 25, 1966, which was after the completion of pipe manufacture (memorandum, dated September 20, 1966, note 62, supra). While the record does not reflect that this relationship was raised with the Bureau prior to the August 25 meeting, memoranda written by Mr. Franklin to Raymond Inter the May 15 inventory (Exh. 59). It will be recalled that numbered paragraph 2 of the letter of May 13, 1965, required the rejection of all pipe with scaling or loose and weak interior surface material. As we have seen, 2,240 pipes were rejected for scaling (tabulation attached to memorandum of May 27, 1965, note 27, supra, reflects that 2,162 pipes were rejected for bad interiors) during the May 15 inventory of which approximately 1,579 had previously been accepted. An explanatory note (Special Report, dated May 21, 1965, note 24, supra) states that this scaling or flaking had developed since the pipes were accepted.149 At a meeting with Cen-Vi-Ro representatives on May 26, 1965, Cen-Vi-Ro was advised that a review would be made in the immediate future of all pipes rejected for scaling (Tr. 1686; memorandum, dated May 27, 1965, note 27, supra; Travel Report of R. C. Borden, dated June 9, 1965, Exh. 23). While it appears that Mr. Borden, at the time of his second visit to the CenVi-Ro plant (May 24 to 27, 1965), participated in a limited review of approximately 600 pipes rejected for scaling (resulting in a deter national, Inc., state that pipes with poor interior finish resulted from efforts to reduce the number of small diameters (memoranda of April 16 and May 1, 1965, Cen-Vi-Ro Correspondence). 149 Reflecting obvious concern over the effect of prior acceptance, the contracting officer determined that pipes with scaling or flaking interiors constituted latent defects inasmuch as the scaling frequently progressed and its ultimate extent could not be determined immediately after manufacture (Par. 51, "Findings of Fact"). Cen-Vi-Ro admits that some of the rejections for scaling or flaking interiors relate to latent defects (Exh. 5M, p. C5). |