seen in connection with the claim for scaling and flaking interiors, the contracting officer found that 620 54-inch pipe of the listed classes were accepted after the extent of scaling had been determined. The claim was computed on the basis that there were 270,561 pounds of steel in the surplus cages which had a completed value of $.15 per pound. Mr. Peterson, who was principally responsible for the computation of Cen-Vi-Ro's claims, testified that $.15 a pound represented the cost of the cages shown on Cen-Vi-Ro's books (Tr. 1007, 1078). After allowing a salvage credit of $.005 per pound, the direct loss was computed at $39,231.35. To this figure, Cen-Vi-Ro added a lump sum of $6,500 for disruption of production schedules, cage machine changeovers, rehandling of cages, steel, etc., and 15 percent for overhead and profit. The contracting officer emphasized the fact that Cen-Vi-Ro representatives were advised that the Bureau would review pipes rejected for scaling, found that Cen-Vi-Ro requested delay of this review pending demonstration of the Centriline Process and denied the claim for the reason that Cen-Vi-Ro's proceeding with cage manufacture under such circumstances was a voluntary and unnecessary act. Cen-Vi-Ro cites paragraphs (b) and (c) of Clause 10, Inspection and Acceptance, requiring it to promptly replace rejected material. or workmanship and alleges that it could not delay manufacture of re placement cages for an extended period of time on the assumption that a portion of the rejected pipe might eventually be accepted. It is true that Messrs. Murray and Herrera admitted that they considered a percentage (Mr. Herrera indicated that he thought up to 25 percent of the pipe rejected in the May 15 inventory would be reclaimed with minor repair) of the rejected pipe would ultimately be accepted (Tr. 735, 749, 780, 885). Examination of the contract (Exh. 1) indicates that in excess of 4,900 54-inch pipes of the listed classes were required for DC-6000. A tabulation attached to a memorandum from the resident engineer, dated March 8, 1965 (Exh. 16), reflects that 2,425 pipes (54A25, B25 and AB50) were required to meet pipe laying requirements through July 31, 1965. While the tabulation indicates that 550 pipes in excess of laying requirements through July (laying requirements for this size and classes of pipe beyond July are not stated) had been manufactured, 172 of these pipes had been rejected prior to May 15, 1965 (Exh. 59). As we have found, 879 additional pipes of this size in these classes were rejected Board finds that Cen-Vi-Ro's deciduring the May 15 inventory. The sion to resume manufacture of cages for these pipes was reasonable. Decision Since we have found that Cen-ViRo's decision to resume manufacture of 54AB50 cages was reasonable, the issue is whether at least 364 February 7, 1973 54-inch pipes (classes A25, B25, and AB50) rejected during the May 15 inventory complied with the specifications. In view of our finding that 1,013 pipes were wrongfully rejected during the May 15 inventory, we have no hesitation in answering this question in the affirmative. We accept Cen-Vi-Ro's direct cost figure for these cages less the $.005 per pound salvage credit. However, there is no evidence to support the lump sum of $6,500 claimed for disruption of production schedules, rehandling of cages, steel and etc. The appeal as to surplus cages is sustained in the amount of $39,231.35. The matter of overhead and profit is considered infra. Seams This aspect of the claim involves pipes with grout leakage at form seams. In addition to provisions of the specifications quoted previously providing for adequate repair of forms and for discarding defective forms (note 126, supra), Subparagraph 67.e.(2) of the specifications provided in pertinent part: All forms shall be sufficiently tight with suitable gaskets provided at all form joints and gates to prevent leakage of mortar. Paragraph 4 of the resident engineer's memorandum of May 24, 1965, provided: 4. Grout leakage at seams may be repaired before tests are made if cracks are not evident after all defective concrete is removed. The repaired pipe will be rejected if it fails to pass the required test. Among the defects normally repairable in accordance with the Concrete Manual is: "3. Roughness due to form-joint leakage." Paragraph (h) of Section 137 of the Concrete Manual provides in part: Occasional pipe having lesser repairs capable of affecting the performance of the pipe if the repairs are not sound shall be tested to assure the security of such typical lesser repairs. While it is possible that some final rejects for seam joint roughness are included in the 91 final rejects for miscellaneous reason (Cen-Vi-Ro's tabulation of 1,744 final rejects includes 63 for miscellaneous reasons, Exh. 5N, p. 10), there is no evidence that this is so. Our examination of the Final Inventory of Rejected Pipe (Exh. 152) reveals a total of eight pipes where bad seams or seam leaks were listed as among the reasons for rejection. None of the identified pipes examined by Dr. Davis (Exh. 154) list seam leaks or bad seams as a cause for rejection. Since Cen-Vi-Ro's claims under this heading appear to be limited to alleged excessive testing on pipes with repairs at seams, we will consider this aspect of the claim under the heading "Testing Criteria." Core Holes This claim involves pipes in which holes were drilled to obtain samples of concrete. It will be recalled that the chief plant inspector's memorandum of March 31, 1966 (note 29, supra), required the rejection of pipes with more than two repaired. core holes. Pipes with two repaired core holes were acceptable if the core holes were more than six feet apart and if the pipe passed the hydrostatic test. In its letter of protest, dated April 18, 1966 (note 111, supra), Cen-Vi-Ro conceded that the Concrete Manual did not provide for the repair of core holes but alleged that it had for many years made a practice of repairing such holes regardless of their position in the pipe. The project engineer's reply of May 9, 1966 (note 111, supra), stated flatly that pipes in which core holes had been drilled to obtain samples could not be accepted. In the Appendix to its claim (Exh. 5N, p. 9), Cen-Vi-Ro admits that neither the specifications nor the Concrete Manual provide for the repair of pipes with core holes. However, Cen-Vi-Ro asserts that it is industry practice to allow the repair of such pipe without testing. There is no evidence to support this assertion. The contracting officer found that no pipes were rejected in accordance with the criteria in the chief plant inspector's memorandum (par. 61, Findings of Fact). He determined that one pipe with two core holes was downgraded because of leaks at the repaired area on hydrotest and that only one pipe with six core holes was rejected for core holes. We find only three pipes in the Final Inventory of Rejected Pipe (Exh. 152) in which core holes are listed as among the reasons for rejection. One of these pipes is indi cated to have six core holes and a bad interior (66AB50 x 20, No. 13D, mfg. 3-3-65) and one is indicated to have five core holes and a flaky interior (66AB50 x 16, No. 9N, mfg. 6-8-65). The remaining pipe (54B75, No. 3N, mfg. 6-4-65) is indicated simply to have been cored and also to have a rocky bell. Decision Cen-Vi-Ro concedes there is no provision of the Concrete Manual or the specifications providing for the repair of core holes. However, CenVi-Ro asserts that it is industry practice to permit the repair of such holes without testing. While there is no doubt that industry practice may properly be applied to determine the meaning of contract language notwithstanding that the contract is unambiguous,161 we do not think that such trade practice even if it existed, would in the circumstances present here, justify a holding that all core holes were repairable. In any event, there is no evidence of such a practice. It follows that the claim with respect to core holes must be and hereby is denied. February 7, 1973 half percent, but not less than one joint, for each size and class of pipe. The length of the test period, for the purpose of selecting representative pipe units for tests, was set at the number of days the plant of the manufacturer was normally operated in a calendar week. The length of the test period could be reduced at the discretion of the contracting officer if there were a significant change in the materials used in the pipe, in the mix proportions, in production procedures or if there were numerous shutdowns of the pipe manufacturer's plant due to failures of the plant or equipment. The specifications (Subparagraph 67.i.(2)) required that the pipe be soaked at least three hours under ten p.s.i. prior to conducting the hydrostatic test. Pipes were to be tested at 120 percent of the specified internal pressure of the class for which the pipes were designed for 20 minutes and if the unit selected as representative of the lot failed the test (leaked or evidenced cracks extending under pressure), the contractor was entitled to have two other pipes selected by the contracting officer from the same lot tested. If these pipes passed the test, referred to as check tests, the lot was accepted. If either of these pipes failed, the lot would not be accepted until each pipe in the lot passed the test. It is, of course, more expensive to require testing of each piece of pipe (Tr. 1765–1767). The Government's expert witness, Mr. McLean, testified that it was normal and custom ary to require a hydrotest on every section of concrete pressure pipe (Tr. 2324, 2325). It is therefore clear that by not requiring a hydrostatic test on each pipe, the Bureau obtained a more economical line and accepted the risk, subject to rights under the Inspection and Acceptance and Maintenance Warranty Clauses, that some flawed or defective pipes might not be detected. Cen-Vi-Ro contends that the Bureau consistently held the contractor to a standard of pipe quality different from that called for by the contract (Exh. 5L, p. 2; Exh. 5M, p. C2). Cen-Vi-Ro asserts that the Bureau refused to permit the repair of many pipes which were repairable in accordance with the Concrete Manual prior to hydrostatic testing and thus achieved additional depth in lot testing. We have found that this assertion is correct as to repairable rock pockets and longitudinal and circumferential cracks. Cen-Vi-Ro complains that Bureau representatives visually selected the most questionable pipes to be tested rather than using random sample. techniques. It is further alleged that units were rejected arbitrarily or were placed in limbo whereupon the contractor had the burden of proving the pipes were satisfactory which could only be done by a hydrostatic test (Notice of Appeal, pp. 29-3). Cen-Vi-Ro further asserts th Bureau inspectors were inexperienced in concrete pipe, that the project engineer and the chief plant inspector had previously been associated with a prior contract of the Canadian River Project (Specifications No. 5863) wherein each pipe was required to be tested and that it was difficult for them to adjust to a contract requiring only lot testing. It is further alleged that contrary to the contract, Bureau inspectors substituted hydrostatic testing for visual judgment and desired to have the maximum possible number of pipes hydrotested. According to Cen-Vi-Ro's figures, there were 1,680 special hydrostatic tests (Exh. 5N, p. 11). CenVi-Ro is apparently claiming the cost of conducting 1,483 of these tests. Government figures indicate that there were 764 lots, 767 lot tests of individual pipes of which 106 failed, 165 check tests representing lots of which 38 failed, 95 check tests of individual pipes of which 18 failed and 1,801 special hydrostatic tests of which 821, or 45.6 percent, resulted in failure.162 The total number of hydrotests (lot, check and special) was 3,171. As we have indicated ante, "special hydro" was the name given to hydrostatic tests other than lot tests which were not required by the contract. The contracting officer found that special hydro tests were permitted to be performed by the Government on 162 Hydrostatic Test Study, Exh. 64. We have some difficulty with the accuracy of this percentage since it is based on adding into the total of 1,589 special hydrostatic tests, the total (212) of a column entitled "Repair and Re-Hydro." Mr. Dale Powell, who prepared the Study, testified that the 212 represented tests in addition to the 1,589 (Tr. 1654); yet an explanatory note appended to the Study states that these were pipes which initially failed hydro and that retests, if made, are indicated in the failure column or in the "Downgraded and accepted" column. pipes with imperfections which could not be represented by lot or check tests (par. 65, Findings of Fact). The Government has stipulated that no provision of the contract authorized special hydrostatic tests (Tr. 343). This stipulation must, of course, be viewed in the light of the Government's position that the Concrete Manual is not a part of the contract. We note Mr. Herrera's testimony that tests on repaired pipes in accordance with the Concrete Manual were considered special hydro tests (Tr. 704, 705). Cen-Vi-Ro computed its bid on the basis that approximately three percent of 30,000 or 900 pipes would be tested under DC-6000 and that one test stand capable of testing two pipes at a time would be sufficient.163 In view of the fact that a plant for the manufacture of the pipe had to be constructed, that it is normal in the operation of a newly constructed plant to have a considerable period elapse before satisfactory pipes are produced (note 106, supra) and in view of the provisions of the contract requiring the testing of each pipe in the lot if either of the check tests resulted in failure, we think it clear that the assumptions on which the bid was based were too sanguine, to say the least. As we have seen, hydrostatic tests actually conducted were approximately 31⁄2 times the number contemplated at the time the bid was prepared. The original test equipment ca 163 Tr. 337, 338, 635, 636. Working papers upon which the bid was calculated are not. in the record. |