93 C. Cls. Reporter's Statement of the Case NATIONAL FORGE AND ORDNANCE COMPANY v. THE UNITED STATES [No. 44081. Decided March 3, 1941] On the Proofs Government contract; inspection of gun-tube forgings during manufacture. Where plaintiff under contract with the Government made and delivered to the Washington Navy Yard six gun-tube forgings which were rejected by the Government for defects discovered by the defendant at various stages of manufacture, it is held that under the provisions of the contract and in accordance with established practice at the time the contract was entered into there was no obligation on the part of the defendant to make final inspection of said gun-tube forgings at any particular stage of manufacture into completed articles and the plaintiff is not entitled to recover. The Reporter's statement of the case: Mr. Pickens Neagle for the plaintiff. Mr. Louis R. Mehlinger, with whom was Mr. Assistant Attorney General Francis M. Shea, for the defendant. This suit is for the recovery of $36,198.77, an amount charged against plaintiff by the defendant, representing the cost of work performed by the defendant in its Naval Gun Factory at the Navy Yard, Washington, D. C., on six 8" gun-tube forgings manufactured and furnished by plaintiff under a contract of March 11, 1933, with the Navy Department. The basis of the claimed right to recover this amount is that if the defendant had inspected the forgings immediately after the process of radial expansion (a part of the work which the contract contemplated would be performed by the defendant) the defects in the forgings would have been discovered, the forgings would then have been rejected, and the work subsequently performed thereon by the defendant would have been unnecessary, and, therefore, the cost to the defendant of the work performed on these forgings would not have been incurred and the amount mentioned would not have been a charge against plaintiff. 170 Reporter's Statement of the Case The defendant contends that all its acts and the procedure followed by it with reference to the six rejected gun forgings in question were authorized under, and were not in violation of, the provisions of the contract and specifications with plaintiff, and that plaintiff cannot recover the expense incurred by defendant representing the cost of work performed by defendant on the gun forgings prior to the time they were rejected for defects discovered. The court, having made the foregoing introductory statement, entered special findings of fact as follows: 1. April 6, 1937, the Comptroller General of the United States stated an account against the plaintiff which included the sum of $36,198.77, representing the cost to the defendant of processes of manufacture on six gun forgings after radial expansion furnished by the plaintiff under contract NOD-420 with the defendant, and withheld that sum from sums otherwise due the plaintiff on another contract. Contract NOd-420 was entered into March 11, 1933. The Secretary of the Navy was the contracting officer for the Government. The contract bound the plaintiff to furnish and deliver to the Navy Yard, Washington, D. C., 13 sets of 8"/55 gun forgings in accordance with designated specifications and drawings. Made a part of the contract were Ordnance Pamphlet No. 400 of May 1932 and Ordnance Pamphlet No. 9 as revised August 1918 and supplemented January 9, 1933. The contract and pamphlets are filed in evidence and made a part of these findings by reference. Articles 3, 4, and 28 of the specifications, contract, and Ordnance Pamphlet No. 400, respectively, provided as follows: 3. Should the language of any part of the specifications be ambiguous or doubtful, the Bureau of Ordnance shall decide as to the true intent and meaning thereof. 4. Inspection. (a) All material and workmanship shall be subject to inspection and test at all times and places and, when practicable, during manufacture. The Government shall have the right to reject articles which contain defective material or workmanship. Rejected articles shall be removed by and at the expense of the contractor promptly after notification of rejection. 323387-41-vol. 93-13 Reporter's Statement of the Case 93 C. Cls. (b) If inspection and test, whether preliminary or final, is made on the premises of the contractor or subcontractor, the contractor shall furnish, without additional charge, all reasonable facilities and assistance for the safe and convenient inspections and tests required by the inspectors in the performance of their duty. All inspections and tests by the Government shall be performed in such a manner as not to unduly delay the work. Special and performance tests shall be as described in the specifications. The Government reserves the right to charge to the contractor any additional cost of inspection and test when articles are not ready at the time inspection is requested by the contractor. (c) Final inspection and acceptance of materials and finished articles will be made after delivery, unless otherwise stated. If final inspection is made at a point other than the premises of the contractor or a subcontractor, it shall be at the expense of the Government except for the value of samples used in case of rejection. Final inspection shall be conclusive except as regards latent defects, fraud, or such gross mistakes as amount to fraud. Final inspection and acceptance or rejection of the materials or supplies shall be made as promptly as practicable, but failure to inspect and accept or reject materials or supplies shall not impose liability on the Government for such materials or supplies as are not in accordance with the specifications. In the event public necessity requires the use of materials or supplies not conforming to the specifications, payment therefor shall be made at a proper reduction in price. 28. During the progress of the work all material shall be subject to inspection for defects of material or workmanship, and all finished articles shall be rigidly inspected for defects of any sort in material, workmanship, fit, or efficiency. * * In Navy Ordnance Pamphlet No. 9, Article 8 provided: Forgings shall be free from seams, cracks. flaws, and foreign substances, and their uniform soundness and freedom from slag, streaks, cavities, segregations, and blowholes shall be of such degree as to insure their value and suitability for the purpose intended. Article 20 thereof is as follows: Pieces that satisfactorily meet all the requirements of these specifications as to physical qualities and are satisfactory as to dimensions will be provisionally accepted 170 Reporter's Statement of the Case by the United States and be considered delivered, but will not be considered as finally accepted. The inspector should promptly notify the contractor of the existence of any defect which, in his opinion, will make final acceptance of a piece doubtful, and should immediately condemn any piece having defects which are of such gravity as to certainly prevent final acceptance; but the final acceptance of a piece cannot be claimed because of any failure to discover defects at a particular time. Pieces may be rejected at any period of machining or assembling for defects discovered or developed. All of the test bars taken from a forging, as prescribed in Tables I and II, should give the physical qualities prescribed in Table V. The obligation is on the contractor to put the forging in proper physical condition before presenting it for official test, and the authority contained in this paragraph will not be used to save him the trouble or expense of so doing. In the case of streaked forgings, that is, forgings showing striations of different colored metal, careful examination will be made to see if there is any lack of continuity of the metal along such streaks. Such lack of continuity determined by the breaking or parting of the chip in turning or in chiseling in the direction of the streak, or in any other manner, will cause the rejection of the forging. Slag pockets and sand splits or cavities containing particles of slag, sand, or other foreign material will be treated as local physical defects in the steel, the seriousness of which will depend upon their location in the forging, their number per unit area of surface, their size and form, etc. If isolated and small their presence in a forging otherwise sound and satisfactory will not be deemed important; if in clusters or extending over a considerable surface, indicating a porous condition of the metal, the forging will be rejected. The contractor shall replace without charge any piece which may be condemned at any time prior to or during proof firing of the gun. If defects are developed in any of the gun forgings constituting a gun of such a character as to cause its rejection the actual expense incurred by the department for work done upon the defective material, and upon any other material whose rejection is necessitated by being assembled with the defective material, shall be borne by the manufacturer of the defective material. Reporter's Statement of the Case 93 C. Cls. Specifications for radial expansion forgings, supplemental to Navy Ordnance Pamphlet No. 9, were issued January 9, 1933, as follows: In manufacturing guns by the radial expansion method the barrels or tube forgings will be subjected to internal hydraulic pressures which will stress the outer surface of the forging to the prescribed elastic limit. The maximum dilation of the bore will not exceed 4 percent. Any abnormal dilations of the forging developed by the radial expansion processes indicate deficient physical qualities and will be cause for rejection. The physical requirements of the gun forgings are given on the respective forging drawings. 2. Radial expansion referred to in the preceding finding was a process of expanding the tube forgings hydraulically, and was performed by the defendant in the Navy Yard at Washington as a step in their manufacture into guns. From the time the forging is received in the Naval Gun Factory at the Navy Yard it goes through some forty stages of machining and manufacture. By successive operations the forging of the size here involved is bored smooth to an inside diameter of 7.51 inches and precisely gauged. The forging is set up in the lathe and turned to required outside diameters for radial expansion. After these and other detailed operations not necessary to mention, the forging is ready for radial expansion. Radial expansion is a highly specialized process, hydraulic pressure being applied gradually and at successive intervals in and throughout the length of the bore. It has a "hooping" effect on the tube, putting the outer zones in tension that otherwise would be effected by winding wire or shrinking hoops around the tube. It conditions the metal by compression of inner layers and tension of outer layers. In this way the weight of the gun in proportion to its calibre may be materially reduced. 3. Prior to May 29, 1934, the rules, regulations, or specifications of the Navy Department did not call for or require inspection upon completion of radial expansion and it had not been the practice of Naval inspectors to examine the bore of the gun forging immediately after it had been expanded radially by hydraulic pressure for the purpose |