Reporter's Statement of the Case

portion of unacceptable garments. Acceptable coats were delivered by plaintiff in quantities and on dates as follows:

Hol 1,930

2, 132

23V2, 179 1, 556

6. On October 14, 1935, the accumulated deliveries amounted to 80,937 coats, with 29,063 remaining undelivered under the contract. Thereafter the amount of material not made up into delivered garments, which plaintiff was entitled to have on hand under its bond, progressively decreased as acceptable garments were delivered from time to time.

7. The material in the construction of unacceptable garments, considered as part of the material for the 31,960 coats heretofore mentioned, reduced the material for coats not yet manufactured to which plaintiff would otherwise have been entitled. Taking the material in unacceptable gar

Reporter's Statement of the Case

ments as material furnished within the limit of plaintiff's bond, increasing plaintiff's stock by deliveries of unworked material from the Government, and decreasing it by deliveries of acceptable garments, the material at plaintiff's disposal at the close of the following days was approximately as follows:

8. The material at plaintiff's disposal set out in the foregoing table, finding 7, consisted of unworked material furnished by the Government, of material in process, and of material in unacceptable garments, either in plaintiff's hands or not yet returned thereto.

Reporter's Statement of the Case

There was a large percentage of unacceptable garments proffered for delivery, which, upon inspection at the quartermaster's depot, was returned to the plaintiff. This the defendant counted as material under the performance bond included in the material for 31,960 coats. The more unacceptable coats manufactured and not corrected the less unworked material was available to the contractor for making other coats.

9. The record is silent as to the number of coats in plaintiff's hands from day to day that had been rejected by the defendant. Most of them were repaired or busheled by the plaintiff and again proffered for delivery. Of the garments proffered for delivery, the percentages of unacceptable garments were as follows at the close of the delivery dates:

Reporter's Statement of the Case

10. Upon rejection of a coat by defendant's inspectors it was released to the plaintiff and, by the plaintiff, in most cases, altered or busheled in order to conform it to the defendant's requirements. It was then again proffered for delivery under the contract.

The high percentage of unacceptable coats made by the plaintiff so retarded plaintiff's operations as to put it substantially behind the agreed schedule of deliveries of the finished product to the defendant.

The coats were not immediately inspected for acceptance or rejection upon their receipt at the quartermaster's depot. The number of acceptable garments was unknown at such time and in order to determine the amount of unworked material due the contractor under its performance bond to replace immediately the material made up in the acceptable coats, the defendant, in the latter part of August, made an estimate of the number of acceptable coats then and there delivered, in lieu of immediate inspection, and issued new material accordingly. Theretofore issue of new material had awaited preliminary or final inspection, involving a wait of not exceeding 20 days.

Some shortage in delivery of material to plaintiff began about the middle of August 1935 prior to which time the minimum percentage of rejections at any one time had been 34.7% and the maximum 63.7%. The defendant's estimate of the unworked material due plaintiff was based on past performance. Beginning the fore part of September 1935 there was a decided improvement in the quality of plaintiff's proffered deliveries.

The record does not show the ratio between material in rejected garments returned from the quartermaster and material in plaintiff's plant in stock or in process.

There is no proof that the deficiency under material for 31,960 coats, beginning August 16, 1935, and ending October 9, 1935, as shown in finding 7, caused appreciable delay in performance, or that but for such lack the contractor would have finished on contract time. The plaintiff would have received more unworked material had it not had so many rejected garments on hand.

Reporter's Statement of the Case

11. In payment for its services there was withheld from plaintiff by the defendant from time to time, as liquidated damages for delay in delivery, $6,223.32, and in addition $59.32 was collected from the plaintiff as such damages, totalling $6,282.64. These damages were calculated on the basis of credit for delivery for all acceptable garments as of the date of receipt thereof at the quartermaster's depot. 12. The plaintiff submitted a claim for refundment of liquidated damages, and on this claim the contracting officer made findings of fact June 3, 1936, wherein he determined that the contractor and not the Government was responsible for the delay for which liquidated damages had been assessed and concluded:

That delays in production which resulted from contractor's inability to obtain material sufficient for peak production could only be attributed to the fact that the amount of bond the contractor elected to furnish did not cover the value of the materials necessary for such production, and therefore, such delays could not be construed as delays caused by an Act of the Government as contemplated by Article 15 of the contract. The liquidated damages so withheld or collected have not been paid or refunded to the plaintiff.

13. The action taken by the contracting officer in the course of the contract work and at its conclusion, heretofore described, was not arbitrary, unreasonable, or grossly

erroneous.

14. During the course of the contract work the plaintiff saved material that had been allowed it for manufacture, and at the conclusion returned this saved material to the defendant.

Certain other material furnished by the defendant was used by the plaintiff in excess of the agreed allowance, the cost whereof amounted to $518.25, after deducting another item not here involved. Demand on the plaintiff for the charge of $518.25 was made by the defendant on or about October 9, 1937, and it has not been satisfied.

The savings effected by the plaintiff exceeded in value the charge of $518.25.