A sample from the water and soap drums showed an admixture of methylethyl-ketone (MEK), a highly flammable cleaning fluid, in the soap and water solution. How MEK got into the solution is not clear, but the laboratory reports of Government and private laboratories established its presence the rein to the AIB's satisfaction and testimony received by it shows that MEK was available and used in the cleaning process, though it was not used in stripping the aircraft (id., pp. 253,254, 260-261, 306). Perhaps the drums used had once contained MEK and the MEK detected in the laboratory tests was a remnant of prior use (id., p. 12). Another sample of liquid found in the nacelle of the No. 2 engine also indicated the presence of MEK (id., pp. 14-15; see Coll. Bd. Rept. Ex. 29). The testimony received by us reinforces the AIB conclusions (Tr. 88, 108; as to the possibility that the drums once contained MEK, cf. Tr. 98). The immediate cause of the fire was a short circuit in the widelite lamp, as the AIB found (AIB Rept., p. 13). It considered that the lens of the lamp became overheated, that the wheel well contained volatile vapors from MEK or P-D-680 and that in this situation the arc of the spark which had ignited in the lamp cord caused a short circuit (id., p. 14). The testimony of the AIB's technical adviser, an accident prevention engineer in the AF Deputy Inspector General's office (Tr. 32-33), before this Board tends to confirm these AIB conclusions (Tr. 55-66, 85-86). The AIB, in order to formulate recommendations, also considered the safety practices prevailing at the wash rack. It sharply criticised the claimed ignorance of the night manager regarding the use of solvents which the AIB considered established by the evidence summarized above (AIB Rept., p. 18; for the night manager's statement to the AID, id., 450 et seq); considered that there was lack of real control over the use of solvents at the wash rack (see AIB Rept., p. 19; see Wash Rack Foreman's Stat., dtd 13 March 1969, id. p. 38); and found that the use of MEK and excessive use of P-D-680 as well as spray application thereof violated T. 0. 1-1-1, the specification governing aircraft cleaning under the contract (id., p. 20). The Board recommended (id., pp. 23-24) closer controls over the storage and issuance of flammables; a continuing training program to assure that personnel working with flammable solvents understands the dangers of handling such solvents and the proper handling procedures; controls over the use of portable lights in areas where flammable vapors were present; and revision and clarification of T.0. 1-1-1. In conclusion, it recommended termination of appellant's contract if violations of its safety provisions continued (id., p. 24) but it did not recommend that the Government exercise its right under paragraph (c) of the Ground and Flight Risk Clause to terminate the Government's assumption of risk on the ground that aircraft was kept in the open "under unreasonable conditions" (ASPR 10-404(a). Cl. par. (c)(1)). b. The CB Report On evidence similar to, if not always actually the same as, that considered by the AIB, the CB also found that the use of an unauthorized type of light which was neither explosion nor vapor proof (i.e., the wide lite referred to in the AIB report, supra) in the hazardous environment created by the improper use of P-D-680 or MEK or both were the immediate and direct causes of the fire (CB Rept, p. 5). In arriving In arriving at this conclusion the CB also received and relied on the testimony of appellant's employee who was washing the left wheel well at the time of the fire (CB Rept, Ex. I). In regard to appellant's liability under the Ground and Flight Risk Clause the Board heard the testimony of the Air Force safety monitor (CB Rept., Ex F). The safety monitor testified that the use of lights which were not explosion proof and the improper use of flammable solvent containers were recurrent problems and that appellant lacked care in controlling the use of these dangerous items (Ex. F, p. 4). He added that after the incident new controls had been introduced but that previous there to controls over the use of P-D-680 and MEK had been inadequate (Ex. F, p. 8; Ex. 20 (QADR No. 215-173, dtd 6 Jan 69)). He attributed the lack of control, notwithstanding action at the top, to the insufficiencies of first line supervision (Tr. 11). Though appellant in his view never gave enough emphasis to aircraft protection and safety (Tr. 15), he was unwilling to consider appellant's safety efforts a failure, although appellant had not gone as far as it should have, and saw no basis for charging appellant with lack of good faith (Ex. F, p. 15). While appellant had mostly taken the easy route of "palliatives" by taking corrective action in response to specific complaint, it had not failed to keep its promises (Ex. F, pp. 15-16) and its managerial personnel had been generally, though not always, responsive to safety demands (id., p. 18). The ACO who also testified before the CB (Ex. H) concurred in the view that appellant willingly made corrections but found the flaw in its conduct in its failure to follow either its own or contractually-imposed safety procedures before any untoward incident or violation had occurred (id., p. 6). He adverted to a February 1968 incident in which a fuel tank booster pump had exploded due to ignition of fuel vapors in the tank. His letter of 5 December 1968 to appellant had found appellant's conduct negligent but not willful within the meaning of paragraph (d)(i) of the Ground and Flight Risk Clause and did not hold appellant liable for the damage (CB. Rept., Ex. 30; same: R4 doc. Att 2). After making specific suggestions for improvement he had advised appellant in this letter (id., par. 5) that any future accident, resulting in aircraft damage deemed avoidable by full compliance with and application of all directions contained in contract documents, would be considered evidence of willful misconduct and lack of good faith on the part of appellant's managerial personnel and lead to non-assumption of risk by the Government. On the basis of his past position the ACO testified before the CB that in his view appellant had not maintained a proper safety program and that he would view further avoidable accidents as evidencing appellant's lack of good faith in safety matters (CB Rept., Ex. H, P. 11). to The Commander of Detachment 26, appearing as a witness before the CB, confirmed the picture developed by the preceding witness (CB Rept. Ex. L, pp. 3-4). He let himself be led, however, take the position that appellant's unwillingness to go to the root causes of its safety troubles, while leaving the policing for safety to the Air Force and merely correcting deficiencies of which it was advised, amounted to "bad faith" (id., p. 7). He added, however, that appellant's safety manager was very cooperative in ground safety matters, if the Air Force showed him how (id., p. 8), but again complained that this attitude put the burden on the Government (id., p. 9). He attributed this attitude to pressure on the General Manager to meet tight schedules which he did without due regard, in the witness' view, to safety (id., pp. 9-10). Based on this testimony and evidence as to a further accident on 15 January 1969 (CB Rept. Ex. 36) as well as QADR's (CB Rept., Ex. 14 through 18) reporting safety deficiencies, the CB found: "* * * clearly a pattern where in management adequately (CB Rept., The report did not, however make either a specific recommendation for action under paragraph (c) of the Ground and Flight Risk Clause or for contract termination for past or future safety violations nor did it recommend either for or against relieving appellant of liability for damage caused to aircraft No. 62-1831 by the 15 February 1969 fire. C. The ACO's Action under the Ground and Flight Risk Clause. Simultaneously with the issuance of the foregoing reports appellant requested to be relieved of liability for damage to aircraft No. 62-1831, as it had been relieved of liability for other accidents in the past. On 13 June 1969 the contracting officer of Detachment 26 rendered his final decision (R4 doc., Att. 1) denying the request. He found the rein that the accident occurred because of appellant's noncompliance with the contract terms relating to washing and cleaning of aircraft, as evidenced by the indiscriminate use of P-D-680, the use of a soap solution with an admixture of MEK, and the utilization of a portable light not authorized for use in an explosive and vapor-laden environment. He further found that appellant's managerial personnel had shown a lack of good faith and willful misconduct in regard to the maintenance and administration of a protection program for aircraft in the open and cited the following matters in support of his conclusion: a. b. C. d. The warning given by the cited 5 December 1968 Failure of appellant's managerial personnel to Failure of appellant's managerial personnel to A management pattern of answering safety defi- On the basis of these findings the contracting officer held appellant liable for material loss in respect of aircraft No. 62-1831 in the amount of $472,702.50 pursuant to paragraph (d) (i) of the Ground Risk and Flight Clause. 3. The Conduct of Appellant's Managerial Personnel in Respect In this appeal the record includes not only, of course the testimony and other data accumulated by the Air Force investigating boards but also a mass of other documents and the testimony of witnesses which the two Boards did not hear. On the whole we find no discrepancies between the facts developed by the Air Force Boards and the picture presented to us in testimony and documentary material. The documents and testimony before us of the Detachment 26 staff members establish clearly that appellant had a program adequate at least on paper (see e.g. R4 docs. 58, 59; Tr. 148) but that reliance on the Air Force and lack of aggressive supervision in regard to safety deprived appellant's safety program of much of its effectiveness (see R4 docs. 16, 50, 58; Tr. 336, 337). As a result there were numerous safety violations (Tr. 271, 272), often minor, as represented in the numerous QADR's before the Board (e.g. R4 docs. of tight delivery schedules with which appellant was willing to comply even at some cost to safety (Tr. 271), though the Air Force representatives on the spot did not consider the schedules so short as to prevent proper safety practice (Tr. 272). Partly the situation was due to human failings which prevented perfection in safety observance as appellant saw the situation (Tr. 329-331), and partly perhaps due to appellant's unwillingness to incur the cost of extensive classroom safety training which it deemed uneconomical and excessive (Tr. 149). There is little evidence in the record to tie appellant's managerial personnel (Within the meaning of paragraph (d) (i)) directly to safety violations (for the single example adduced, see Tr. 297-8, 299, 315) and there is some evidence that even the Air Force safety monitors were not always unmindful of the "practicalities" of the safety situation (Tr. 390-1, 397, 401-2; Appt. Ex. A-6). As to the specific area of appellant's facility here involved (the wash rack) there was little evidence of prior lack of safety in its operation. It had been greatly improved under the guidance of appellant's general manager (Tr. 321). Only one or two QADR's at most dealt with matters affecting the conduct of activities at the wash rack. Complaints resulting from appellant's own safety inspections were very minor, involving such things as a loose board (Tr. 389) and overall the safety program in the wash rack area functioned rather well (Tr. 388). To establish the conduct of appellant's managerial personnel, both parties called appellant's general manager at the time of the incident and for four years prior thereto (Tr. 200) as a witness. His testimony (Tr. 199 et seq., Tr. 317 et seq.) as well as that of appellant's safety manager (Tr. 339 et seq.) establish in great detail the facility's safety organization, operating through safety and safety policy committees which were staffed by seemingly competent personnel, including individuals drawn from the ranks of upper management. The committee members and appellant's St. Petersburg top management as well promulgated safety manuals, caused training session to be conducted by the Florida State Industrial Commission, conducted regular and frequent safety inspections received the deficiency reports of the Air force monitors, and acted to correct the deficiencies uncovered by the Air Force or appellant's own inspections. The large volume of memoranda and letters relating in particular to the QADR's (see Appt. Ex. A-7 |