February 7, 1973 tive of the frequency of repairs.47 Our view is strengthened by the fact that the Manual lists nine types of defects which can normally be repaired (only four which normally cannot be repaired) and by the next sentence which does constitute a restriction on the frequency of repairs: But repairs should not be permitted when the imperfections or damage are the result of continuing failure to take known corrective action to eliminate the cause of the imperfections or damage. We must determine whether the May 13 letter or Bureau practice 48 differed from the Concrete Manual as to the extent of permissable repairs and if so, whether the imperfections were the result of Cen-ViRo's continuing failure to take known corrective action. The contrasting views of the parties on the first of these questions are illustrated by the Comparison of Pipe Acceptance Guidelines (Exh. 116) 47 If it was intended otherwise the sentence could easily have been modified to make the intention clear, e.g., "Inadvertent or occasional imperfections or damage that occur during normal operations can be repaired and the pipe made acceptable." Cf. The language concerning repairs in ASTM Standard Specifications for Concrete Sewer, Storm Drain, and Culvert Pipe (C14) and ASTM Tentative Specifications for Reinforced Concrete Culvert, Storm Drain, and Sewer Pipe (C76), contained in Appendix of Concrete Pipe Handbook (Exh. 102), which clearly contemplate repairs made necessary by occasional imperfections in manufacture or accidental injury in handling. See also the language in the Bureau's Standard Specifications for RCP Pipe, dated February 1, 1969 (App's Exh. Q), which leaves no doubt repairs are limited to occasional imperfections or accidental damage. 48 See Inspectors Daily Report, dated April 30, 1965 (note 26, supra), and Tentative Instructions to Concrete Pipe Inspectors dated May 7, 1965, furnished in response to the Board's call of August 18, 1971. 497-456-73-2 prepared by the Government and the Table of Comparison Between Bureau's Letter of May 13, 1965, and the Concrete Manual (Exh. 6 of Notice of Appeal), prepared by Cen-Vi-Ro. However, it should be emphasized that Mr. Rippon testified that the Bureau's decision to limit repairs to the pipe was embodied in the May 13 letter (Tr. 1752). It would seem anomalous indeed that the Bureau considered it necessary to instruct its representatives in the field to limit repairs not authorized by the contract. The task of comparing the provisions of the Concrete Manual and the May 13 letter is complicated by the fact that the terminology used differs. Nevertheless, we proceed with our comparison: large May 13 letter: Concrete Manual Allows Repair of: (1) Rock pockets and (2) exposed steel on the outside of any size pipe and on the inside of pipe 36 inches or larger in diameter.49 Not covered. 50 49 The Government asserts that the Concrete Manual is permissive as to what may be repaired and if no size limitations are specified the contracting officer is free to impose such limitations (Brief, p. 111). CenVi-Ro argues that where limitations on the sizes of repairable defects were intended, the Manual supplies them and that if none are specified for a particular defect no size limitations were intended (Appendix I to Claims on DC-6000, Exh. 5N, pp. 2 & 3; Notice of Appeal, p. 22). We think Cen-Vi-Ro has the better of this argument. 50 Cen-Vi-Ro points to the provision in the Manual under Section 137 (c), Preparation of Imperfections for Repair, calling for the removal of all visibly unsound or imperfect concrete. However, we cannot equate this with an express provision for the repair of pipes with scaling or loose and weak interior 6. Pipe cracked longi- (6) Fractures or tudinally for substan- cracks passing tially the full length through the shell. will be rejected. All pipe containing shorter longitudinal cracks must be hydrostatically tested. From the above it is apparent that the limitation on the repair of surfaces and consider this a procedure for the repair of pipes otherwise repairable, that is, pipes with the listed imperfections. 51 With respect to tests on repaired pipe, Cen-Vi-Ro points to paragraph (h) of Section 137 of the Concrete Manual which provides that each pipe on which major repairs have been effected be tested at the service head and for tests on occasional pipe having lesser repairs capable of affecting performance of the pipe to assure the security of such repairs. This paragraph also provides for tests on representative units of cracked but unshattered pipe and states that if there is no leakage, other than sweating at 50-foot head, the pipe may be accepted for heads of less than 50 foot. fallouts to those of one square foot or less was a restriction on repairs expressly permitted by the Concrete Manual as to pipes 36 inches or larger in diameter, that limitation of repairs to six inches in gasket area of bell was also such a restriction (only in case of impact damage to pipes below 18 inches in diameter-45° on an 18-inch diameter pipe would be approximately seven inches would it not be restrictive of repairs permitted by the Manual), that the refusal to permit extensive repairs to rock pockets in bell areas may have been such a restriction and that the refusal to permit repair of at least some circumferential cracks 52 and of some longitudinal cracks were restrictions on repairs permitted by the Concrete Manual. Notwithstanding the above findings we conclude that the language of the Concrete Manual cannot be interpreted as a mandatory requirement that the Government must allow repair of any and all of the listed defects without regard to magnitude and extent and that some room for the application of judgment as to whether particular defects may be repaired must be allowed.53 52 The Tentative Instructions to Concrete Pipe Inspectors provided that pipes having circumferential cracks in the spigot of 12 inches or more would be rejected. 53 Cen-Vi-Ro appears to agree, for in its letter of June 10, 1965 (Exh. 5G), in reply to the Bureau's May 13 letter, Cen-Vi-Ro stated that the specifications allow repair of circumferential cracks but agrees that extensive circumferential cracks should not be allowed and that each section should be judged on its own merits. The same comments are made with respect to longitudinal cracks. February 7, 1973 While the Manual does not expressly define major repair and varying definitions of the term were given at the hearing, it is clear that under the Manual only repairs such as extend through the shell thickness or large repairs to bell are major. Cen-Vi-Ro's expert witnesses, Mr. Howard F. Peckworth and Dr. Raymond E. Davis, although recognizing that it depended on the extent of the defect, characterized the list of nine normally repairable defects in the Manual as being generally or usually minor repair.55 The Government's expert witness, Mr. Walter R. McLean, testified that a major repair is any repair affecting structural integrity of the pipe.56 We accept this definition. 54 The Bureau's concept of major repair is that all repairs other than those normally accomplished on the rollaway are major (Tr. 1411, 1412). Mr. Herrera was of the opinion that a major repair was anything requiring replacement of concrete and cure to make it part of the original pipe (Tr. 791). 55 Tr. 104-108; Deposition of Dr. Davis, pp. 13-15. Mr. Peckworth, whose qualifications as an expert in concrete pipe are clearly supported by the record and were conceded by the Government (Tr. 132), described the late Dr. Raymond E. Davis as "probably the most famous man in the world on concrete" (Tr. 118). 56 Tr. 2256. Mr. Borden, Bureau engineer, testified that a patch of a chip or piece of concrete on the outside of a pipe which fell off and which had no bearing on quality would not be a cause for concern (Tr. 1688, 1689). Yet under the Government's definition, this could and probably would be a major repair. The resident engineer was of the opinion that a major repair was a repair to a large area of the bell, repair of an extended length of the spigot groove or a repair to a fallout of any consequence (Tr. 1925). We conclude that the Government's witnesses have repudiated the concept of major repair which is based on where the repairs were accomplished (note 54, supra). 57 A summary prepared by Mr. Kenneth Thomas, chief plant inspector, reflects that 25.6 percent of all pipe units less rejects manufactured under DC-6000 required major repairs (24.6 percent of pipes installed). The summary reflects that 14.3 percent of total pipes less rejects manufactured under DC6130 required major repair (14 percent of all pipes installed). These percentages are based in part on Mr. Thomas' estimate from his observations, admitted to be a guess, that 50 percent of pipes produced prior to May 15, 1965, required major repair.58 Percentages of pipes requiring major repair produced after May 15 are based on Bureau records. While we have no doubt of Mr. Thomas' sincerity, we cannot accept this analysis as accurate. First, as to pipes requiring major repairs which were produced prior to May 15, 1965, it is admitted to be a guess. It Analysis of the State of Production Just Prior to Bureau's May 15 Inventory (Exh. 133, pp. 5 and 7). It appears that the definition of major repair used in compiling this exhibit is all repairs other than those normally accomplished on the rollaway as part of regular production procedure (note 54, supra). 58 Tr. 1413, 1414, 1599. The record reflects that Mr. Thomas responded at one point with the 50 percent estimate to a question concerning pipe manufactured before May [15] which was repaired after May [15] and at another point with the 50 percent estimate to a question concerning pipe requiring repair which was in inventory or produced prior to May [15] (Tr. 1413, 1414). While we assume that the latter is intended, we note that Department counsel's supplemental brief of March 26, 1971, refers to the estimate as being "of pipes in inventory prior to May 15 requiring repair." The difference could be significant since it appears that R. H. Fulton laid in excess of 1,200 pipes prior to the suspension of laying operations in November of 1964 (par. 86, Findings of Fact). should be noted that the Government's own record indicates 251 pipes required major repair as of October 17, 1964 (tabulation enclosed with memorandum, dated October 22, 1964, Exh. 8). Second, it is based on a concept of major repair which is at variance with that we have adopted based on the Concrete Manual and testimony of the Government's own witnesses. Thirdly, the Cumulative Daily Pipe Record (DC-6000) as of May 7, 1965, indicates that 10,526 pipes had been manufactured of which 706 required major repair. Since there is no evi 50 Cumulative Daily Pipe Record for period May 7 to 14, 1965 (App's Exh. 0). The Government asserts (Supplemental Brief of March 26, 1971, note 58, supra) that this figure cannot be accepted because (i) it was copied from Cen-Vi-Ro's records [and presumably represents an incorrect definition of major repair]; (ii) there is no evidence whether it represents pipes marked for repair or actually repaired and (iii) it does not include thousands of faulty pipe in inventory which were not inspected by the Bureau or repaired by Cen-Vi-Ro prior to May 15, 1965. While there is no evidence of the definition of major repair utilized by Cen-Vi-Ro in keeping its records, we have rejected the concept of major repair utilized by the Bureau in compiling Exhibit 133. We see no reason for regarding the figure 706 as anything other than pipes marked for major repair anymore than there is for regarding the figure 668 (App's Exh. 0) as anything other than pipes marked for special hydro as of May 14, 1965 (Tr. 1607). We refuse to believe that the Bureau copied figures into its records which were completely devoid of meaning. Reason (iii) advanced by counsel will not withstand analysis. Page 1 of Exhibit 133 reflects that 10,641 pipes had been manufactured under DC-6000 through May 7, 1965 (Tr. 15821585), of which 612 had been rejected, 7,698 accepted, 664 marked for special hydro and 1,667 were unclassified (that is tests not complete or not submitted to Bureau, etc.). Mr. Lincoln admitted that at this time only approximately 700 pipes had not been inspected by the Bureau (Tr. 1930). Accordingly, it is apparent that there could not be thousands of pipes in inventory which had not been inspected by the Bureau. Cen-Vi-Ro contends that the Bureau incorrectly interpreted the contract as to internal pipe diameter tolerances thus contributing to the shutdown of laying operations and necessitating the payment of $100,000 to its subcontractor, R. H. Fulton, referred to previously (note 18, supra). Cen-Vi-Ro further alleges that the Bureau's enforcement of an incorrect pipe diameter interpretation resulted in machine operators underfilling the forms and caused flaking interiors, a matter which will be discussed in subsequent paragraphs of this opinion. Appellant has stipulated that small diameter pipes (as interpre 60 It is of interest that in the meeting of July 24, 1965, Mr. Rippon is quoted as saying that it was not the intent of the specifications to permit repair of 400 to 500 sections of pipe with these types of defects (p. 6, Notes on Meeting, note 46, supra). February 7, 1973 ted by the Bureau) were manufactured in July, August and September 1964.61 However, because CenVi-Ro at this time did not normally measure the internal diameter of the pipe prior to presenting it to the Bureau 62 and because pipes were not always presented for inspection as manufactured, the full extent of small diameter pipes did not come to light until October 1964.63 By letter, dated October 16, 1964 (Exh. 5B), the project engineer approved the substitution of 9,280 lineal feet of undersized 54-inch pipes for full size pipes provided larger size pipes were substituted to compensate for excess friction loss. In a letter, dated October 30, 1964 (Exh. 5C), appellant reported the existence of 1,054 pipes totaling 17.784 linear feet classified as small diameter and furnished a listing of proposed substitutions. The letter 64 1 Tr. 568. The record amply supports this stipulation. The first instance of pipe rejected for small diameter appears in an Inspectors Daily Report, dated July 29, 1964. A total of 34 66-inch pipes are reported as undersize as of August 29, 1964 (Inspectors Daily Report, dated August 31, 1964). Tr. 587, 1899; memorandum, dated September 20, 1966, Exh. 34. Mr. Franklin testified that this was because Cen-Vi-Ro had always met their design "Q", i.e., required flow in cubic feet per second (Tr. 354, 587). Tr. 352; memorandum, dated September 20, 1966, note 62, supra. However, an Inspectors Daily Report dated September 29, 1964, states that Cen-Vi-Ro was quite concerned about undersize pipes. A summary attached to a memorandum, dated October 22, 1964 (Exh. 8) indicates that 1,045 pipes were classified as small diameter as of October 17, 1964, of which 676 were 54-inch diameter. es When asked how many of the pipes would have been small diameter even under Cen-ViRo's interpretation, Mr. Franklin replied that "I would say it would be a number. I know, I feel reasonably sure that it would be equal to stated that corrective measures had been initiated which had substantially eliminated the problem of small diameters.65 Substitutions proposed by appellant (except for 40 units of 72-inch pipe for which appellant had not proposed to compensate for friction loss) were approved by the project engineer's letter of November 23, 1964 (Exh. 5D), upon the understanding that manufacturing procedures were being corrected to eliminate overfilling. However, the manufacture of some small diameter pipes continued 66 and by letter, dated January 21, 1965 (Exh. 14), the project engineer expressed his concern and suggested that appellant review its manufacturing procedures to assure that pipes were manufactured in accordance with the specifications. the amount requested in the substitution proposal because some of those were marginal and then we undoubtedly produced some pipe by the time that was requested; after the time that it was requested, it was excessive." (Tr. 589.) 65 The corrective measures included milling the forming rings at the ends of the pressure roller, building up the roller in the center and instructing machine operators not to overfill the forms (Tr. 355, 356, 360-362; Inspectors Daily Report, dated October 3, 1964). 60 Tr. 838, 839. It appears that during the five-month period November 1964 through March 1965, only 158 additional small diameter pipes were produced (memorandum, dated September 20, 1966, note 62, supra). However, an Inspectors Daily Report, dated March 27, 1965, reflects that eight small diameter pipes had been manufactured on the preceding day. It is interesting to note that memoranda written by Mr. Franklin to Raymond International, Inc., as late as May 1, 1965, reflect concern over the production of small diameter pipe and that during the meeting of July 24, 1965, Mr. Kiesel, Vice President of Raymond, indicated that small diameters were one of the major problems facing Cen-Vi-Ro (p. 7, Notes on Meeting, note 46, supra). |