mond International, Inc., dated October 2, 1970 (App's Exh. P), summarizes changes in the prime rate of interest from August 23, 1960, to September 22, 1970. Interest sought is based on rates in this letter. There is no evidence of any specific loan transactions or interest payment by Cen-Vi-Ro in the record. Interest has been allowed as part of an equitable adjustment when it has been shown to have been incurred specifically to fund a change.211 The evidence herein falls short of that minimal standard. The claim for interest is denied. DC-6130 We have previously alluded to Cen-Vi-Ro's difficulties in producing acceptable pipe for the prime contractor, R. H. Fulton, under this contract. As we have seen, 261,586 linear feet or approximately 38 percent of the 682,142 feet of pipe to be furnished under this contract was to be noncylinder prestress.212 Cen-Vi-Ro's Claims R. H. Fulton under date of July 15, 1966 (Exh. 81J), forwarded a 211 Baltimore Contractors, Inc., ASBCA No. 14819 (June 27, 1972), 72-2 BCA par. 9554; cf. Sun Electric Corporation, ASBCA No. 13031 (June 30, 1970), 70-2 BCA par. 8371. 212 Note 9, supra. Although the contract permitted 23,280 ft. of 42-inch diameter pipes to be RCP (Exh. 79), Cen-Vi-Ro proposed to furnish only 1,790 ft. of RCP pipe in 42-inch diameter (A75 and B75) and the balance of such pipe was to NCP (Exh. 81P). Cen-Vi-Ro appears to have subcontracted manufacture of all but 2,018.50 feet of 42-inch pipe to Gifford-Hill-American (Exh. 81K, p. F-9 & 11). Consequently, pipes referred to in this portion of the opinion are principally 18 through 27 inches in diameter. notice of claim, dated June 28, 1966, from Cen-Vi-Ro (Exh. 811). The notice stated four reasons for the claim which may be summarized as unwarranted special hydrotesting, rejection of serviceable pipe or pipes that could have been made so under the specifications, extraordinary repairs and superficial dressing up of pipes which were not required by the specifications, and arbitrary inspection, principally in the rejection and later acceptance of the same pipes. Cen-Vi-Ro's formal claim, dated November 7, 1966 (Exh. 81K), in the amount of $976,926 was forwarded to the Bureau by R. H. Fulton on December 2, 1966 (Exh. 81L). The contracting officer refused to consider the claim until R. H. Fulton filed legal authorization permitting Cen-Vi-Ro to pursue the claim. A power of attorney, dated November 24, 1967, permitting CenVi-Ro to pursue the claim in the name of R. H. Fulton was furnished by letter, dated April 26, 1968.213 The claims were denied in their entirety by the contracting officer (Findings of Fact and Decison, dated October 18, 1968, Exh. 81). The claims will be considered in the 213 Cen-Vi-Ro has asserted that the Bureau had an obligation to make a finding to R. H. Fulton on the claim and has disputed the necessity for the power of attorney (letter, dated May 20, 1968, Exh. 81([0]). Cen-Vi-Ro is correct in this assertion. See Owens-Corning Fiberglass Corp. v. United States, 190 Ct. Cl. 211 (1969) and cases cited. Cf. Holder Construction Company, GSBCA No. 1913 (June 10, 1968), 68-1 BCA par. 7072, on reconsideration (existence of dispute between Government and prime is a prerequisite to Board jurisdiction of claim on behalf of subcontractor). February 7, 1973 order in which they were determined by the contracting officer. Noncylinder Prestress Concrete Pipe Approximately 68 percent of Cen-Vi-Ro's claims under DC-6130, or $660,794.40, is asserted under this heading. The amount claimed includes loss on outside purchase of pipe above sales price to R. H. Fulton, lost profit on sales, loss on prestress set-up expense and prestress equipment and increased plant write-off occasioned by the lesser tonnage produced (Exh. 81K, p. F-1). Cen-Vi-Ro's difficulties in manufacturing NCP pipe are best related through the testimony of Mr. Murray, Cen-Vi-Ro's production manager from January 1 to July 10, 1965. He admitted that there were many hydrostatic test failures which contributed to irregular production and curtailed activity on the wire wrapping machine.214 He stated that the leaks occurred at the spigot end where there was a raised section to provide for one side of the spigot gasket groove (Tr. 928, 929; Dwg. No. 662-525-1990, Exh. 81U). Leakage also occurred at the anchor lug for the prestressed As we have found previously, wire.215 The pressure was reduced Cen-Vi-Ro manufactured the first NCP pipe core on April 2, 1965, and wrapping, testing and coating of the cores commenced on June 3, 1965. A brief description of the manufacturing process is as follows: longitudinal rods were installed in the form, the concrete core was spun, the core was steam cured, the form was stripped and in the process stress on the rods was transferred to the concrete, after further aging the core was wrapped with steel wire under high tension, the core was hydrostatically tested and if it passed the test, a cement paste was applied to the outside of the core, followed by a mortar encasement (Tr. 922, 923; Subparagraph 79.e.3., Specifications DC-6130). Each core was required to withstand a hydrostatic test of 125 percent of design head for four minutes without cracking or leakage appearing on the surface (Subparagraph 79.i.). and the pipes were accepted at a lower head where no leakage occurred (Tr. 930). This testimony was confirmed by Mr. M. R. Powell, one of the Bureau's chief shift inspectors at Cen-Vi-Ro's plant after May 27, 1965 (Tr. 1264, 1265). This practice was referred to as downgrading. Subparagraph 79.g. (2) of the specification provides in part: * * * * * Where embedded pretensioned reinforcement is used, the pretension stress shall be maintained, by suitable supports, during the placing and curing of the pipe 214 Tr. 925, 926. An Inspectors Daily Report, dated June 25, 1965 (Exh. 100) quotes Mr. Hubbard as saying that his people have no complaints concerning testing prestress pipe, but the pipes just are not what they are supposed to be. 215 On page 2 of his memorandum of July 8, 1965, Mr. Murray described the areas of leakage as follows: "2. The hydro leaks show up at the seam, around the anchor lug, at the secondary flange and porosity in the barrel, particularly where the slope ring reduces the wall thickness." core until the concrete in the core has attained a strength equal to 1.8 times the longitudinal induced compression in the concrete. Suitable end anchorage devices shall be provided at each end of the longitudinal reinforcement capable of developing the full strength of the reinforcement. Mr. Murray testified that CenVi-Ro had a problem in losing the "upset button" on the end of the prestress rod during prestressing operations (Tr. 926, 927). He stated that the problem of longitudinal rod failure was not entirely solved before he left the job. In his memorandum of July 8, 1965, Mr. Murray described the problems involved in the manufacture of pipe in terms of penalties. He divided them into the following categories: 1. Inconsistent materials. 2. Erratic and untrained labor. 3. Form and equipment maintenance. 4. Long period storage. 5. Strict inspection resulting in costly special efforts, excessive special hydrostatic testing, and rejected pipe." 216 Two additional major categories ("penalties") applicable to DC6130 production were listed as: 1. Congestion in the spinning area. 2. Congestion and poor handling facilities in the stripping area. *** The congestion in both areas is built in and would be prohibitive to change. The memorandum stated that all of the foregoing problems were applicable to NCP production as well as others known and unknown: *** Something causes separation or slump between the fresh concrete and the 216 These problems were also stated to be present in the production of RCP pipes. form on cores with prestress longitudinals. We don't know whether we crack all of the secondary flanges during stripping operations or if we crack part of them when we release stress on tennons (sic) one at a time. * 5. We know the longitudinals have defective upset button and washer fabrication requiring makeshift measures at the stripping area. 6. The stripping reassembly and longitudinal prestress process requires excessive manhours of hard work. 7. With the aggregate, when we mix dry enough to stop slump we have rocky bells. When we mix wet enough for good bells, we have slump in the barrel. 8. On 95% of the cores, repair work is required on either the secondary flange, or the seam, prior to prestressing or testing. 9. The on and off handling at the coating machine is time consuming. 10. The maintenance on belts, couplings, and the slurry spray is already costly. 11. The rebound yield of 40% to 50% will result in high cement cost for coating throughout production. February 7, 1973 duce the required pipe, he didn't think they could do it economically (Tr. 932). In a letter, dated July 19, 1965, forwarded to the Bureau by R. H. Fulton (Exh. 84), Cen-Vi-Ro stated that the failure of the rod upset holding the anchor washer occurred after the core was cured and stripped. Cen-Vi-Ro requested permission to waive the end anchor requirement as to pipes where only beam action was a prime design factor. In a letter, dated July 22, 1965, forwarded to the Bureau by R. H. Fulton (Exh. 86(1)), Cen-Vi-Ro requested use of bond strength as suitable end anchorage between the pipe core and longitudinal rods and listed the classes of pipes where CenVi-Ro considered such strength would be satisfactory. By letter dated August 11, 1965 (Exh. 87), the chief engineer stated that end anchorage was not absolutely necessary in all pipe classifi-cations provided the prestressing rods were not broken other than at the retaining washer and the concrete in the core had attained 4,500 p.s.i. before prestressing forces applied to the end rings had been released to the concrete. The letter furnished a revised list of pipe classes which could be accepted at the discretion of the inspector where the above criteria were met. Forty-five pipes with broken pretension rods or end anchorage failures were downgraded and accepted in accordance with this authorization at a lower head (Exh. 81V). An Inspectors Daily Report, dated September 1, 1965 (Exh. 100), states that all NCP cores would be reclaimed except those which indicated rods were broken prior to stripping. Cen-Vi-Ro produced a total of 865 NCP pipes of which 635 totaling 9,776 linear feet were accepted (Summary of Noncylinder Prestress Pipe Produced, Exh. 93). Of the accepted pipes 355, including the 45 with broken pretensions rods or end anchorage failures referred to above, were accepted at a lower head than for which the pipes were manufactured (Exh. 81W). Cen-Vi-Ro was apparently unable to overcome problems associated with the production of NCP pipe (Tr. 1267) and ceased production of NCP pipes by the end of August 1965 (Inspectors Daily Report, dated 8-31-65, Exh. 100). Manufacture of the balance of the NCP pipes totaling 251,810 linear feet and a substantial quantity of high head RCP pipes was subcontracted to Gifford-Hill-American, pretensioned concrete pipe being substituted for NCP.217 Cen-Vi-Ro alleges that abandonment of prestress production was due to overly critical and arbitrary inspection by the Bureau (Statement of Claim, Exh. 81K, p. A−1). 217 Pretensioned concrete pipe, an option permitted by the specifications, was reinforced with a sheet steel cylinder in addition to steel bars (Par. 78, Specifications DC-6130). It appears that manufacture of 89,086.54 linear feet of RCP pipe was also subcontracted to Gifford-Hill-American (Exh. 81K, pp. F-9 to F-13). This allegation is amplified on pages C-12 through C-14 of the claim: In the area of pre-stressed (sic) production surveillance inspection on production and finished product inspection was the single most cause (sic) of delays and unproductive activity. It is inconsistent in a manufacturing process to demand certain requirements in the process and not approve the finished product. * It became readily apparent that very little of the Non-Cylinder Pre-stress Pipe (sic) was ever going to be released. Not only could management foresee extremely high costs to produce and manufacture the pipe out (sic) through such superfluous activity delivery schedules would fall behind. This could only lead to delay claims by the pipe laying contractor and jeopardize the contract completion date. Therefore the most expeditious route was to use a product requiring little inspection to determine structural competence which would alleviate the burden of judgment by inexperienced field inspection personnel. The severe inspection and arbitrary techniques used by inspectors made it impossible for the contractor to get his plant operating efficiently. Although Mr. Hubbard indicated that problems in production under DC-6000 delayed production under DC-6130 (Tr. 1101, 1123), there is no persuasive evidence that Cen-ViRo's difficulties in producing NCP pipes and its decision to subcontract the manufacture of high head pipes were attributable to actions of the Bureau. Decision On brief, the Government asserts that this claim is for alleged arbitrary Bureau inspection and consequential damages and is thus beyond the jurisdiction of the Board (Appendix to Brief, pp. 27, 36 asserted 218 except for the claim for lost profits.219 On the merits the evidence simply does not support Cen-Vi-Ro's allegations of overly critical, arbitrary and severe Bureau inspection. The uncontradicted evidence supports the conclusion that Cen-Vi-Ro encountered unanticipated difficulties in manufacturing NCP pipes which would successfully pass hydrostatic tests and upon which required stresses on longitudinal reinforcing rods and end anchorage devices could be maintained. On the evidence presented these difficulties may not be attributed to acts of the Bureau. Appellant's production manager testified that while he thought at the time that Cen-Vi-Ro could produce the required pipe, he did not think they could do it eco 218 We consider that the claims are not readily distinguished from those based on the imposition of excessive standards of workmanship. See, e.g., Chris Berg, Inc. v. United States, Ct. Cl. No. 231-68 (February 18, 1972, Slip Opinion) (claim based on imposition of excessive standards of workmanship considered under Wunderlich Act standards). Cf. F. H. Antrim Construction Co., Inc., IBCA882-12-70 (July 28, 1971), 71-2 BCA par. 8983 (claim for alleged interference with the work by a project inspector who was not shown to have authority to bind the Government dismissed). 219 Appellant's claim under this heading includes $93,688 for loss of profit on sales of pipe purchased from Gifford-Hill-American (Exh. 81K, p. F-1). It is clear that an equitable adjustment excludes unearned or anticipated profits, General Builders Supply Co., Inc., et al. v. United States, 187 Ct. Cl. 477 (1969), and that this Board has no jurisdiction over such claims. American Cement Corporation, IBCA-496-5-65 and IBCA-578-766 (September 21, 1966), 73 I.D. 266, 66-2 BCA par. 5849, affirmed on reconsideration (January 10, 1967), 74 I.D. 15, 66-2 BCA par. 6065. |