
    JAMES A. BOYAJIAN, ASSIGNEE OF TRIUMPH MANUFACTURING COMPANY, BANKRUPT v. THE UNITED STATES
    [No. 261-60.
    Decided March 20, 1970]
    
      
      David V. Anthony, attorney of record, for plaintiff. Sellers, Oowner & Cu/neo, of counsel.
    
      Miehael J. Rubin, with, wliom was Assista/nt Attorney General William D. Ruchelshaus, for defendant.
    Before CoweN, Chief Judge, Laeamore, Dureee, Davis, ColliNS, SkeltoN and Nichols, Judges.
    
   PeR Curiam:

This case was referred to Trial Commissioner Saul Bichard Gamer with directions to make findings of fact and recommendation for conclusions of law under the order of reference and Rule 57(a) [since September 1, 1969, Rule 134(h)]. The commissioner has done so in an opinion and report filed on April 30, 1969. Exceptions to the commissioner’s opinion, findings and recommended conclusion of law were taken by plaintiff, defendant urged their adoption, and the case has been submitted to the court on oral argument of counsel and the briefs of the parties. The commissioner’s discussion of, and refusal to apply, the “total cost” theory of damages is wholly consistent with our recent decision in H. John Homan, Co., Inc. v. United States, 189 Ct. Cl. 500, 418 F. 2d 522 (1969). In Homan there were factors — pointed out in the opinion in that case—calling for use of that theory which are absent here. Since the court agrees with the opinion, findings and recommended conclusion of law of the trial commissioner, as hereinafter set forth, it hereby adopts the same as the basis for its judgment in this case. Therefore, plaintiff is not entitled to recover and the petition is dismissed.

OPINION OK COMMISSIONER

Gamer, 0ommissioner: The petition herein sets forth, in six causes of action, various claims arising out of production contracts which the Triumph Manufacturing Company, an Illinois corporation, entered into with the Air Force in 1955 and 1956. Triumph was adjudged a bankrupt in 1958, and in 1960, as authorized by an order of the bankruptcy court, all of its right, title, and interest in the claims herein were assigned to plaintiff, who was Triumph’s president and principal stockholder. For convenience, however, Triumph will sometimes be referred to as the plaintiff.

On defendant’s motion for summary judgment, the court, by order of October 30, 1964, dismissed the fifth cause of action. Thereafter, trial proceedings were conducted with respect to the remaining five causes.

The causes of action left for consideration are grounded upon contracts for the manufacture of “Modulators,” as well as a contract for the manufacture of “Interval and Dwell Testers.” There were three Modulator contracts dated October 24, 1955, May 2, 1956, and July 20, 1956, respectively, but they were generally administered as one. (Essentially, the second and third contracts constituted additions to the original quantity.) Accordingly, they will sometimes be referred to collectively as the Modulator contract. The Interval and Dwell Tester contract was dated February 10,1955.

THE modulator CONTRACT CLAIMS

First Cause of Action

The contract provided that preproduction models, referred to as “First Articles,” be submitted to defendant for testing and approval prior to the commencement of full-scale production. Plaintiff contends that it manufactured the three required models and, prior to their submission to defendant, it proceeded, as provided by the contract, to test them to make certain they were properly calibrated; that such tests were performed in accordance with a method authorized by the contract, i.e., the “interference pattern method”; that, in applying such test method, plaintiff complied in all respects with the specified procedures; that defendant, however, knew from past experience on previous contracts, but wrongfully failed to disclose to plaintiff, that such procedures were defective and that it would, therefore, be difficult to attain proper calibration with their use; that, upon plaintiff’s submission of the models in October 1956, defendant tested them by using a different method, i.e., by employing certain test equipment called a “Zifor”; that the Zifor was a relatively new item, manufactured by the Collins Radio Company, which quickly gave accurate calibration results; that defendant’s Zifor tests showed that the three submitted First Articles were not properly calibrated, resulting in their rejection; that defendant then wrongfully insisted that the First Articles, as well as all 529 Modulators to be produced, be thereafter tested and calibrated only in accordance with the Zifor; that, although defendant lent a Zifor to plaintiff for the limited purpose of properly calibrating the First Articles, which were thereafter accepted on January 31,1957, plaintiff was required to purchase a Zifor from the Collins Radio Company for use in its contract production operations and that plaintiff could not, therefore, commence such operations until it had obtained a Zifor; and that defendant’s insistence upon plaintiff’s use of a Zifor caused a six-month delay in the performance of the contract in that plaintiff was not able to obtain one until April 1957 and could, therefore, make no substantial or effective production progress until such time. Plaintiff says that the furnishing by defendant of inaccurate and defective interference pattern method calibration procedures, as well as its knowledge, but failure to make disclosure, of such defective procedures and the resultant difficulties of obtaining accurate results from the use thereof, constituted breaches of the contract. It argues that, had it known in October 1955, when the contract was awarded, that the interference pattern method would be useless, and that defendant would insist on the Zifor procedure instead, it could have then promptly ordered a Zifor and would have had ample time to obtain it prior to the submission of the First Articles a year later in October 1956, so that production could have then immediately commenced. Thus, says plaintiff, the six-month delay in production to April 1957, during which period plaintiff’s overhead and other expenses continued, would have been avoided. This cause of action is based upon such delay damages.

Second Cause of Action

Plaintiff contends that the aforesaid six-month delay in production to April 1957 depleted its capital to such an extent that it was unable to continue with performance; that, to enable plaintiff to continue, plaintiff and the Air Force, under date of April 10, 1957, entered into an “Advance Payment Pool Agreement” under which defendant agreed to advance to plaintiff amounts not to exceed $250,000; that defendant, on April 10, 1957, and July 18, 1957, advanced the sums of $160,000 and $20,000, respectively, but despite plaintiff’s need for the balance of $70,000 to obtain the smooth production flow incident to large-scale production, defendant arbitrarily and capriciously refused to advance any additional sums; and that defendant’s refusal was, under the circumstances, a breach of contract, resulting in inefficient, costly, and delayed contract performance.

Third Came of Action

This cause is grounded upon the same facts as the first cause of action. The difference between the two causes relates only to the damages. On the first cause, plaintiff claims only delay damages resulting from the alleged breaches of contract. On this third cause, damages are based on alleged “additional work, labor and services not contemplated by the contract.” Petition, ¶14.

Damages

Plaintiff combines all three causes together for damage purposes. Such damages are equated with the loss it incurred in completing the contract. Plaintiff takes its total claimed contract costs of $694,735, subtracts therefrom its total contract receipts of $486,210, and seeks to recover the difference of $208,525.

Defendant contests plaintiff’s right to recover on these causes both on the facts and the law. As to the first and third causes, it particularly relies on its defense of failure to exhaust administrative remedies under the contract Changes and Disputes clauses. Plaintiff did not submit any of its claims to the Armed Services Board of Contract Appeals. Defendant says that the causes of action grounded upon the required use of the Zifor are in effect based only on an alleged change in contract requirements susceptible to appropriate handling under such contract clauses. Defendant concedes, however, that the contract clauses do not provide any administrative remedy with respect to the second cause of action based upon an alleged breach of the Advance Payment Pool Agreement.

Defendant urges further that, in any event, and regardless of the merits of the three causes of action, plaintiff’s attempt to obtain recovery on the basis of its total expenditures less contract receipts is, under the facts and circumstances here involved, wholly inappropriate, and that, since the record contains no other proof indicating what, on a proper basis, plaintiff’s damages attributable to defendant’s alleged breaches were, the three causes of action should be dismissed for failure of damage proof.

Defendant’s defense based on plaintiff’s failure to prove damages is, on this record, required to be sustained. The so-called “total cost” method upon which plaintiff relies is here unacceptable. Accordingly, there is no need to make any determination on the merits of these three causes, for even assuming they are valid and that defendant’s conduct amounted to the claimed breaches, plaintiff’s failure to make any satisfactory showing of the amount of damages flowing from such breaches would require the dismissal of such causes anyway.

[Recovery of damages for a breach of contract is not allowed unless acceptable evidence demonstrates that the damages claimed resulted from and were caused by the breach. “The costs must be tied in to fault on defendant’s part.” River Construction Corp. v. United States, 159 Ct. Cl. 254, 270 (1962). As the court held in J. D. Hedin Construction Co. v. United States, 171 Ct. Cl. 70, 108, 347 F. 2d 235, 259 (1965):

As in all breach of contract cases, the proper measure of damages for defendant’s breaches is the amount of plaintiff’s extra costs directly attributable to said breaches. Saddler v. United States, supra. [152 Ct. Cl. 557, 287 F.2d 411 (1961) ] These take the form of delay damages compensated as increased overhead incurred as a result of the protracted performance. Moreover, the contractor is entitled to recover its additional expenditures directly attributable to the breach. In computing the additional overhead, we have held that a contractor is entitled to recover as damages the amount of overhead on a daily basis allocable to the period of overrun for which the government is responsible. McGraw & Company v. United States, 131 Ct. Cl. 501 (1955); Comb Co. v. United States, 103 Ct. Cl. 174 (1945).
Defendant properly contends that the excess costs claimed must be tied in to defendant’s breaches. * * *

However, contrary to these basic causal-connection damage principles, no attempt is here made to relate any specific amount of increased costs to any particular alleged breach. Nor is any satisfactory explanation given as to why such an attempt was not made or why it would not have produced reasonably accurate results. Instead, the damage proof consists only of an accountant’s schedule (and the accountant’s testimony in support thereof), setting forth computations, based on plaintiff’s books and records, of plaintiff’s total expenditures in performing the contract, and subtracting therefrom the total contract receipts, thus arriving at a total “loss” figure, for which plaintiff demands recoupment. The first cause of action is based solely on a defined, limited delay period resulting from the requirement that a Zifor be obtained. As was pointed out in J. D. Hedin Construction Co. v. United States, supra, the ascertainment of increased costs directly attributable to delay resulting from a breach of contract by defendant is normally measurable with a reasonable degree of accuracy. The records in a very large number of cases before this court, which have been deemed sufficient to support judgments for such delay damages (including alleged labor inefficiency and indirect overhead expenses, which plaintiff claims resulted from the alleged delays here involved) , attest to this fact. The second cause of action is similarly 'based on delays. And the third cause of action is grounded on the necessity “to perform additional work, labor and services,” again because of the need to obtain a Zifor. Surely, a reasonable attempt could have been made to show how much more work, labor and services had to be performed because of the necessity of obtaining a Zifor.

On this record, it is not possible to conclude that plaintiff’s total contract loss, i.e.} the difference between plaintiff’s contract expenditures and its contract receipts, is reasonably to be equated with the increased costs directly resulting from defendant’s alleged breaches.

The first of the three contracts herein was entered into on October 24, 1955. The First Articles were not submitted to defendant until October 15,1956, almost one year later. The rejection of the First Articles, which is the basis of the first breach claimed, thus did not take place until after their submission on October 15,1956. However, no Government-caused delay of any kind is alleged during this one-year period which might have in any way affected plaintiff’s costs. Although plaintiff shows no contract costs incurred in 1955, substantial expenditures were made in 1956, and, while such 1956 costs are not segregated on a pre-October or post-October basis, it is evident that significant costs were incurred up to October 15, 1956. This 1956 period, which involves most of the year, covers the time when the setup for the planned large-scale production was being established, when at least some materials were being purchased, and when the work on the First Articles was being accomplished. Yet, plaintiff seeks full reimbursement for all of its labor, material, and overhead costs for the entire year 1956, i.e., to the extent that they were not covered by contract receipts and contributed to its contract loss. Thus, defendant would be called upon to indemnify plaintiff against any price and cost increases which contributed to plaintiff’s loss, even though such increases occurred during nondelay periods and for which defendant could in no wise be held responsible. It is settled, however, that a contractor is not entitled to recover “expenses which would properly have been incurred regardless of the [breach].” Saddler v. United States, 152 Ct. Cl. 557, 564, 287 F. 2d 411, 415 (1961). And even accepting, under their broadest aspects, the contentions made by plaintiff as to the various alleged delay periods, it is plain that there were, in addition, other nondelay periods during the entire time of contract performance, which time extended into 195.8 (the last shipment having been made on April 17, 1958). The alleged six-month delay due to the necessity of obtaining a Zifor is conceded to have terminated in April 1957, when plaintiff was finally able to obtain one. At the same time, the Advance Payment Pool Agreement was executed and $160,000 advanced thereunder, giving plaintiff the funds without which it was unable to proceed with contract performance. This new financing, plus the acquisition of the Zifor, admittedly enabled plaintiff to proceed with its production activities. It was not until some three months later, i.e., sometime after July 18,1957, when defendant made its $20,000 advance under the Advance Payment Pool Agreement, that plaintiff began complaining that its production activities were being hampered because defendant would not advance any further part of the $70,000 still available under the agreement. Thus, even were plaintiff’s delay contentions accepted, there would be an additional nondelay period between April 17,1957, and the time later in the year when the alleged delays attributable to defendant’s refusal to make any further advances under the agreement occurred. Yet, by the “total cost” method here urged, plaintiff makes no distinction between the delay and nondelay periods. All contract expenditures throughout the entire contract period of performance are indiscriminately lumped, and insofar as contract receipts failed to cover them, reimbursement is asked in full. It is noted, however, that when, on March 12, 1958, plaintiff sought an equitable adjustment because it “was required to acquire Zifor test equipment and resubmit first articles and was subjected to a four months delay and additional engineering and labor costs on account of this change in specifications,” it evidently did arrive at what it felt was an approximate specific sum for this particular matter since it stated: “This change and resulting delays on these contracts involved additional costs to the contractor in the amount of $25,000.”

Furthermore, if plaintiff proceeded on the basis of definite delay periods, and increased costs directly attributable thereto, it would of necessity be obliged to take into account the fact that productive work was actually proceeding during such periods. The “delay” periods complained about were in no way marked by complete inactivity. By plaintiff’s own admission, its forces were performing at least some work on the making of subassemblies while awaiting the Zifor.

In this connection, it should be noted that, should complete reimbursement be made to plaintiff of all of its contract costs, such costs would include, presumably, all of the interest it paid on a V-loan which it had (granted on September 7, 1956, in the amount of $140,000, and increased to $190,000 on January 25, 1957), insofar as such loan proceeds were used in connection with the Modulator contracts (the loan could be used for any defense contract work plaintiff had), as well as the interest it paid on the $180,000 in advances it had received under the Advance Payment Pool Agreement. Thus, plaintiff, in connection with the performance of the contracts, would receive interest-free Government financing. Similarly, it would include reimbursement to plaintiff of an expenditure for one thousand handbooks, the justification for which plaintiff itself could not explain, since the contract requirement with respect thereto had been canceled.

Nor does plaintiff make any satisfactory showing that its losses were not at least in part attributable to an unduly low unit price. On the first contract, plaintiff originally bid $880 per unit, but, as a result of negotiation, lowered the unit price to $815. On the two subsequent awards, plaintiff maintained its $815 unit price, although no other bidder would come down to that level.

Finally, the record further shows production interruptions and delays caused by events in no way attributable to defendant but for which plaintiff makes no adjustments whatsoever. For instance, Eastern Air Devices, Inc., plaintiff’s important subcontractor for the necessary motors, required, because of its own production scheduling needs, substantial “lead time,” and this caused an initial delay of around three months in plaintiff’s production when plaintiff, after finally having obtained the Zifor and the necessary financing under the Advance Payment Pool Agreement, was prepared to embark on full-scale production. At the trial plaintiff conceded that defendant was not responsible for this particular delay caused by Eastern. The same delay would have occurred had the First Articles been approved in October 1956. Similarly, it was, as set forth in plaintiff’s own formal request, “delays in deliveries of packaging materials,” as well as “a machinery breakdown at the company manufacturing the aluminum extrusions for the transit cases,” which necessitated its second advance of $20,000 under the Advance Payment Pool Agreement. Also, although the First Articles were originally due to be submitted on June 9, 1956, they were, pursuant to extensions of time requested by plaintiff, not submitted until October 1956.

In situations similar to the instant one, the court has consistently rejected damage claims based on the theory that all unreimbursed contract expenditures of every nature made throughout the life of the contract should be reimbursed. Urban Plumbing & Heating Co. v. United States, 181 Ct. Cl. 15, 408 F. 2d 382 (1969), cert. denied, 389 U.S. 958 (1970); Phillips Construction Co. v. United States, 184 Ct. Cl. 249, 394 F. 2d 834 (1968); WRB Corp. v. United States, 183 Ct. Cl. 409 (1968); Turnbull, Inc. v. United States, 180 Ct. Cl. 1010, 389 F. 2d 1007 (1967); Roberts v. United States, 174 Ct. Cl. 940, 357 F. 2d 938 (1966); Wunderlich Contracting Co., et al. v. United States, 173 Ct. Cl. 180, 351 F. 2d 956 (1965); Laburnum Construction Corp. v. United States, 163 Ct. Cl. 339, 325 F. 2d 451 (1963); River Construction Corp. v. United States, supra; Snyder-Lynch Motors, Inc. v. United States, 154 Ct. Cl. 476, 480, 292 F. 2d 907, 910 (1961); Lilley-Ames Co., Inc. v. United States, 154 Ct. Cl. 544, 293 F. 2d 630 (1961); F. H. McGraw & Co. v. United States, 131 Ct. Cl. 501, 130 F. Supp. 394 (1955); Christensen Construction Co. v. United States, 72 Ct. Cl. 500, 514 (1931).

In Christensen Construction Co. v. United States, supra at 514, the court, noting that “the amount of [the claimed] recovery is based upon the alleged total expenditures of the entire work less the amount received from the Government,” held that “[t]his is not the proper basis for recovery. To include all costs to plaintiff on the project, proper and improper, would place upon the Government the necessity of reimbursing it for whatever losses it incurred, notwithstanding their nature.” In Laburnum Construction Corp. v. United States, supra. 163 Ct. Cl. at 351-52, 325 F. 2d at 458-59, the court, after rejecting a calculation of “plaintiff’s damages by deducting from its overall direct costs the contract price that had been paid for it,” held that “[t]he proper measure of damages in a case such as this [i.e., various alleged delays caused by the Government] is to permit the plaintiff to recover its costs during the periods of delay,” and that “ [t]he burden of allocating costs to the particular periods involved is upon the plaintiff.” In Lilley-Ames Co., Inc. v. United States, supra, 154 Ct. Cl. at 549, 293 F. 2d at 632, the court held that “[t]he plaintiff of course can recover only for those expenses occasioned from the [breach] by the defendant. The plaintiff may not include all costs arising from the performance of the contract as the basis for its recovery.” And in Turnbull, Inc., et al. v. United States, supra, 180 Ct. 01. at 1025, 389 F. 2d at 1015, the court, noting the contractor’s failure “to prove increased costs or damages relating to specific or separate items,” refused to measure the amount of an equitable adjustment based upon “the difference between its bid price and the actual cost of performing the entire contract.” It reiterated its past criticism of “this ‘total cost’ method of computing recovery” as being unsatisfactory.

In the instant case, the proof of “damages” in effect consisted only of a schedule, supported by an accountant’s testimony, indicating what plaintiff’s books and records showed were plaintiff’s total contract costs, the total contract receipts, and plaintiff’s total loss, being the difference between the costs and the receipts. That this is not in and of itself acceptable “proof,” was made plain in River Construction Corp. v. United States, supra, 159 Ct. Cl. at 270-71, where the court held: “Recoverable damages cannot be proved by a naked claim for a return of costs even where they are verified. The costs must be tied in to fault on defendant’s part. Plaintiff’s claim is something like an attempt to secure damages based on the difference between costs and the contract price or a bid price. Such a method was rejected by the court in F. H. McGraw & Co. v. United States, 131 Ct. Cl. 501, 511 * * *. A schedule of verified costs * * * is not proof of damages but only a starting point * * *. Such a schedule verified by defendant is not an admission of anything but the accuracy of the statement reflecting the contents of books and records examined and the allocations and computations based thereon. Plaintiff’s one witness who testified about costs only verified that they were incurred on the job * * *. That did not prove defendant’s responsibility for those costs nor their reasonableness.” And in Roberts v. United States, supra, 174 Ct. Cl. at 949, 357 F. 2d at 944-45, the court again noted “* * * their [plaintiff’s costs] appearance on plaintiff’s damage schedule does not by itself amount to probative evidence in the absence of anything else ****** [p]roof that the plaintiff’s costs * * * exceeded his payments under the contract would not in the usual case give rise to his right to recover the difference.”

It is true, as plaintiff points out, that a calculation of a contractor’s total expenditure in the performance of his contract has been used in a few cases as the basis for a determination of his damages or increased costs resulting from some act of the defendant. However, an examination of each such case in this court demonstrates that in none of them did the damage proof relied on consist, as it does here, only of a single subtraction of contract receipts from total expenditures. In all of them, the total cost computation was used as “only a starting point” (River Construction Corp. v. United States, supra, at 271), with such adjustments thereafter made in such computation as allowances for various factors as to convince the court that the ultimate, reduced, figure fairly represented the increased costs the contractor directly suffered from the particular action of defendant which was the subject of the complaint. Similarly, in none of them were separate alleged breaches of contract combined for damage purposes into one “total loss” figure, with no attempt made to segregate the increased costs flowing directly from each breach.

Great Lakes Dredge & Dock Co. v. United States, 119 Ct. Cl. 504, 96 F. Supp. 923 (1951), cert. denied, 342 U.S. 953 (1952), involved an equitable adjustment to which the court held the contractor to be entitled as a result of a changed condition. The contract provided, in accordance with the usual standard clause, that such an adjustment should be based upon an “increase or decrease of cost.” In such cases the starting point for the calculation of the amount of the equitable adjustment is invariably a computation of the contractor’s cost of performing the extra work ordered by a change order or resulting from a changed condition. See Bruce Construction Corp., et al. v. United States, 168 Ct. Cl. 97, 324 F. 2d 516 (1963). In Great Lakes Dredge, the court rejected the contracting officer’s equitable adjustment allowance which was based not on the contractor’s actual increased costs but on what the costs would have been had a different system of coping with the changed condition been used. Instead, the court based the equitable adjustment on the difference between the contractor’s actual and originally estimated costs after making, however, an adjustment for the contractor’s underestimated bid, as well as adjustments for other costs, as shown by the record, for which the contractor was responsible and which were not attributable to the changed condition. On the record, the court concluded that the resulting amount was “the fairest basis for determining plaintiff’s increased costs due to the encountering of this subterranean water * * *." 119 Ct. Cl. at 559, 96 F. Supp. at 926.

MacDougald Construction Co. v. United States, 122 Ct. Cl. 210 (1952), also involved an equitable adjustment type of reimbursement resulting from plans and specifications changes. Here too the court refused to equate the recovery with the contractor’s “total loss” or “total cost.” Instead, it again adjusted such “loss” and “cost” by making allowances, in amounts shown by the record, for the contractor’s underbid and for costs incurred due to reasons other than the Government’s action which led to the increased expenditures.

In F. H. McGraw & Co. v. United States, supra, decided shortly after Great Lakes Dredge and MacDougald Construction Co., the court, in rejecting the proffered “total cost” damage proof, pointed out that what was involved in Great Lakes Dredge was a contract clause providing that “if unforeseen conditions were encountered, ‘any increase or decrease in cost’ should be adjusted.” 131 Ct. Cl. at 511, 130 F. Supp. at 400. The court, after stating that “[t]his [total cost] method of proving damage is by no means satisfactory, because, among other things, it assumes plaintiff’s costs were reasonable and that plaintiff was not responsible for any increases in cost, and because it assumes plaintiff’s bid was accurately computed, which is not always the case, by any means” (id.), flatly stated that its opinion in Great Lakes Dredge “was not intended to give approval to this method of proving damage, except in an extreme case and under proper safeguards,” and that “[ajpproval was not given to proof of damages for breach of contract by showing the difference in plaintiff’s bid and his costs on the entire job.”

It is true we were forced in that case by the lack of other proof to compute the increased cost resulting from the unforeseen conditions encountered by taking plaintiff’s actual costs incurred on account thereof and deducting therefrom certain costs for which plaintiff was responsible and then deducting from the balance the average of all bids and the defendant’s estimate of the cost of the work, But by so doing we did not intend to give approval to proof of damages by showing difference of cost and bid on the entire job. [/<$.]

And the court considered MacDougald to be in the same category as Great Lakes Dredge, stating: “In the MacDougald case substantially the same thing was done [as in Great Lakes Dredge].” Id. In McGraw, the court, as to the equitable adjustment phase of the case, accepted the contracting officer’s finding of the amount of such adjustment (after pointing out that in Great Lakes Dredge the contracting officer had failed to make such a finding). And as to the damages for delay, the court, on the basis of “proof of these damages more reliable than the difference in plaintiff’s estimate and its actual costs” (131 Ct. Cl. at 512, 130 F. Supp. at 400), reimbursed plaintiff for its overhead allocable to the specific delay period involved (48 days), which the record satisfactorily showed.

Oliver-Finnie Co. v. United States, 150 Ct. Cl. 189, 279 F. 2d 498 (1960), is another case that has been cited as having permitted the use of the “total cost” method of computing damages. In that case one component of tbe breach of contract damages allowed as flowing from an unjustifiable stop-order was increased direct assembly-line labor costs. The proof satisfied the court that under the particular circumstances an accurate determination of such increased labor costs could not be made. It was determined, however, that a reasonably accurate method of measuring this one component of the damages was to calculate the excess of plaintiff’s actual direct assembly-line labor costs over its original estimate thereof (the record satisfying the court that plaintiff’s estimate on the item was not too low and that its costs with respect thereto were not unreasonable). Although the court, after eliminating one item of direct labor cost (premium pay for a certain class) which it concluded was not attributable to the breach, felt that in this instance the damage amount for the item in question was, as so computed, fair and reasonable, it nevertheless went on to say that “we view basing damages on the difference between bid estimate and actual costs with trepidation” (150 Ct. Cl. at 201, 279 F.2d at 506), and reiterated its F. H. McGraw & Co. conclusion that such “method of proving damages * * * is by no means satisfactory ** 150 Ct. Cl. at 200, 279 F.2d at 505-06. All other items of damage were, however, specifically calculated and definitely shown to be attributable to the breach, including delay damages related to a specific number of days. Plainly, the court’s action on the one direct labor item which was tied into the one stop-order breach involved in the case cannot be considered as authority for the propriety of combining, as plaintiff does here, alleged breaches and, without in any way attempting to relate any specific damage items to any particular breach, simply claiming the excess of the entire amount spent in performing the contract over the total contract amount received.

Finally, J. D. Hedin Construction Co. v. United States, supra, upon which plaintiff particularly relies, involved reimbursement for additional foundation work performed as a result of a change in specifications concerning -the piles to be used. Thus, the amount claimed for the particular work in controversy was, as the court recognized, “in the form of an equitable adjustment resulting from the change in specifications * * 171 Ct. Cl. at 86, 347 F. 2d at 246. For the delays involved, the contractor sought only its overhead, and for the increased foundation work costs resulting from the change in the piles specification, which was the work involved in the “total cost” method dispute, plaintiff sought reimbursement for such expenditures as re-excavation for sloughed-in footings, additional backfill, additional form work and grading, additional labor costs and water pumping. The amount allowed for the excess costs involved was specifically found to be “reasonable under the circumstances” {id), and the “total cost” method of determining them the “only possible method by which these damages can be computed * * *.” 171 Ct. Cl. at 87, 347 F. 2d at 247. On another item of claim, however (loss incurred by reason of having to take over a subcontract), where it was the Government which pressed for the adoption of the “total cost” method because the amount produced thereby happened in this instance to be to its advantage, the court refused to adopt the method “since the exact amount of excess costs which plaintiff incurred as a result of defendant’s breach can be precisely computed.” 171 Ct. Cl. at 105, 347 F. 2d at 257.

Analysis thus indicates that in each of the four above cases, the “total cost” computation was regarded as “only a starting point.” River Construction Corp. v. United States, supra, 159 Ct. Cl. at 271. In each, the recovery based on total cost was refined by appropriate adjustments. Thus the court used the “method under proper safeguards.” J. D. Hedin Construction Co. v. United States, supra, 171 Ct. Cl. at 86, 347 F. 2d at 247. Furthermore, the method was used only when the record showed “no other method was available” and “there is no other alternative.” Id. And, as shown, in three of the four cases (Great Lakes Dredge, MacDougald, and Hedin), the computation involved reimbursement in the nature of an equitable adjustment, with the fourth (Oliver-Finnic) involving only a labor computation which constituted but one component of the damages. It was not, in the usual “total cost” sense, based upon total contract expenditures.

None of sucli cases were comparable to the instant one, in which several breaches are alleged but consolidated for damage purposes into a claimed unadjusted “total cost” recovery. The above review indicates that the court has never allowed such a recovery in such a case. On the other hand, it has consistently insisted on a showing that “the excess costs claimed must be tied in to defendant’s breaches” (J. D. Hedin Construction Co., supra, 171 Ct. Cl. at 108, 341 F. 2d at 259), especially where, as here, there is an insufficient showing that such a direct damage calculation could not as a practical matter be made.

Nor does the mere fact that plaintiff’s books and records do not, in segregated form, show the amounts of the increased costs attributable to the breaches give it automatic license to use the “total cost” method. Contractors rarely keep their books in such fashion. Such failure, however, normally does not prevent the submission of reasonably satisfactory proof of increased costs incurred during certain contract periods or flowing from certain events based, for instance, on acceptable cost allocation principles or on expert testimony. See Turnbull, Inc., et al. v. United States, supra, 180 Ct. Cl. at 1024-25, 389 F. 2d at 1014-15.

Finally, plaintiff says that although in the past one of the principal grounds for criticizing the “total cost” method has been that, as stated in F. H. McGraw & Co. v. United States, supra, 131 Ct. Cl. at 511, 130 F. Supp. at 400, “it assumes plaintiff’s costs were reasonable * * * which is not always the case, by any means,” nevertheless this court, in Bruce Construction Corp. et al. v. United States, supra, recently adopted a different view, i.e., that a contractor’s expenditures made in the performance of the contract would be presumed to be reasonable. However, the issue in Bruce in no way involved the application of the “total cost” method of proving damages in a breach of contract case. Bruce involved the question of the appropriate amount of an equitable adjustment. There, the contractor was required to substitute a different building block for the block originally specified. Although the contractor actually paid the same price for the different block as it would have paid for the originally specified block, it nevertheless claimed the substituted block had a greater fair market value and that it was entitled to an equitable adjustment which reflected such value. The court rejected the contention, holding that the purpose of an equitable adjustment “is to safeguard the contractor against increased costs engendered by the modification” and that the amount thereof, therefore, “cannot be the value received by the Government * * *." Id., 163 Ct. Cl. at 100, 324 F. 2d at 518. It therefore held that the equitable adjustment should be “based on cost and not on fair market value” (id., 163 Ct. Cl. at 100-01, 324 F. 2d at 518), provided that such cost is reasonable. And in this connection, the court held that where the contractor itself, as in that case, was claiming that the price it had paid was not “reasonable,” in the sense that it was below fair market value, so that “there is an alleged disparity between ‘historical’ and ‘reasonable’ costs, the historical costs are presumed reasonable,” and “the burden would then be upon claimant to overcome the presumption of reasonableness.” Id., 163 Ct. Cl. at 101-02, 324 F. 2d at 519.

That the court does not construe such a “historical cost” presumption of reasonableness in an equitable adjustment situation, such as was involved in Bruce where the contractor was itself attempting to reject the reasonableness of its own costs, as carrying over in full force to a “total cost” damage contention is made evident by the cases of WRB Corp., et al. v. United States, supra; Turnbull, Inc., et al. v. United States, supra; Phillips Construction Co. v. United States, supra; Urban Plumbing & Heating Co. v. United States, supra; and Wunderlich Contracting Co., et al. v. United States, supra, all decided subsequent to Bruce, all rejecting the “total cost” method, and all reiterating or quoting with approval said oft-cited statement from F. H. McGraw & Co., supra, which plaintiff argues was superseded by Bruce. For instance, in WEB Corp., the court stated: “This theory has never been favored by the court and has been tolerated only when no other mode was available and when the reliability of the supporting evidence was fully substantiated. [Citations omitted.] The acceptability of the method hinges on proof that (1) the nature of the particular losses make it impossible or highly impracticable to determine them with a reasonable degree of accuracy; (2) the plaintiff’s bid or estimate was realistic; (3) its actual costs were reasonable; and (4) it was not responsible for the added expenses.” And the court went on to state that it was not satisfied “that plaintiff sufficiently proved the reasonableness of its estimates or its actual costs.” [Emphasis supplied.] 183 Ct. Cl. at 426. Thus, the court made clear that in such a case, the contractor’s obligation of carrying its burden of submitting satisfactory proof of damage also includes the burden of submitting “fully substantiated * * * supporting evidence” that “its actual costs were reasonable.” Id. Consequently, it is clear that a contractor does not meet such burden by simply proving what its total expenditures were, and then resting on a presumption of reasonableness as was applied by the court in the quite peculiar equitable adjustment circumstances involved in the Bruce Construction Corp. case.

In situations where the court has rejected the “total cost” method of proving damages, but where the record nevertheless contains reasonably satisfactory evidence of what the damages are, computed on an acceptable basis, the court has adopted such other evidence, Christensen Construction Co. v. United States, supra; Lilley-Ames Co., Inc. v. United States, supra; F. H. McGraw & Co. v. United States, supra; Turnbull, Inc., et al. v. United States, supra; or where such other evidence, although not satisfactory in and of itself upon which to base a judgment, has nevertheless been considered at least sufficient upon which to predicate a “jury verdict” award, it has rendered a judgment based on such a verdict. WRB Corp., et al. v. United States, supra, 183 Ct. Cl. at 425-26. Cf. Phillips Construction Co. v. United States, supra, 184 Ct. Cl. at 263, 394 F. 2d at 842. However, where the record is blank with respect to any such other alternative evidence, the court has been obliged to dismiss the claim for failure of damage proof, regardless of the merits. Roberts v. United States, supra, 174 Ct. Cl. at 946, 949, 357 F. 2d at 943-44; Snyder-Lynch Motors, Inc. v. United States, supra, 154 Ct. Cl. at 480, 292 F. 2d at 910; Wunderlich Contracting Co., et al. v. United States, supra, 173 Ct. Cl. at 192-93, 351 F. 2d at 964—65. Cf. River Construction Corp. v. United States, supra, 159 Ct. Cl. at 259. The instant case falls in the latter category. Accordingly, plaintiff’s three causes of action based upon the Modulator contract must be dismissed.

THE INTERVAL AND DWELL TESTER CONTRACT CLAIMS

Fourth Cause of Action

Paragraph, (a) of Part II of the contract Schedule, which part was headed “First Article Inspection,” required that, as a “First Article,” one tester “shall be tested to determine compliance with the applicable specifications”; that “[a] 11 testing of the First Article shall be performed at the Contractor’s or at a commercial testing laboratory”; that the “ ‘test set up’ to be used in First Article testing, including wiring diagram, shall be submitted to the Project Engineer before the First Article is tested”; that the tests be witnessed by an Air Force inspector; that the contractor should prepare the test results in report form and submit them to defendant “for evaluation and approval”; and that after satisfactory completion of the tests and the submission of the test data, “the said First Article shall then be forwarded” to defendant “for engineering evaluation and approval.”

Paragraphs (d) and (f) of such part further provided, respectively, that “[p] ending approval of the said First Article, the remaining articles of the said item shall not be fabricated, produced, or shipped,” and that “[a]t least fifteen (15) days prior to the start of testing of the First Article the Contractor shall send written notification thereof together with a test schedule” to defendant.

Furthermore, the contract specifications, denominated “Exhibit No. WCL-625,” contained a Section 4 which was headed “Sampling, Inspection, and Test Procedures,” and which classified the inspection and testing of the testers into “prepro-duction tests” and “inspection tests.” Paragraph 4.3 was addressed to the preproduction tests and Paragraph 4.4 to the inspection tests. Paragraph 4.4.3, headed “Contractor’s Responsibility,” although set forth under the section relating to the inspection tests, nevertheless contained the broad provision that “[c]ontractors not having laboratory testing facilities satisfactory to the Government shall engage the services of a commercial testing laboratory capable of conducting tests to determine compliance with all the requirements and tests in the exhibit, and acceptable to the Government.” [Emphasis supplied.]

Initially plaintiff disregarded all these provisions requiring it to make the preproduction test. It simply produced a tester and, in May 1955, submitted it to defendant without making such test. Its justification for so proceeding was that Paragraph 4.3.1 of the aforesaid specification section relating to the “preproduction test,” provided that: “One tester as specified in the contract will be tested for design approval at the Procuring Agency’s Laboratory by the agency.” Plaintiff interpreted this paragraph as providing that the preproduction test was to be performed by defendant.

However, defendant refused to accept the First Article without the conduct by plaintiff or a commercial testing laboratory engaged by plaintiff of the tests specified in the above-mentioned portions of the contract and specifications and without the prior submission by plaintiff of its proposed test procedure. Plaintiff’s reliance on Paragraph 4.3.1 of the specifications in support of its contention that it was the Government and not plaintiff which was required to perform the preproduction test was rejected. Accordingly, plaintiff submitted its proposed test procedure on June 6, 1955, which defendant approved on June 20,1955, and plaintiff then conducted the test in its own plant. On August 4, 1955, plaintiff again submitted the First Article to defendant, together with the test results. Plaintiff then proceeded to manufacture the 116 testers called for by the contract, holding them in its plant, however, until it received advice from defendant of acceptance of the First Article.

Defendant then submitted the Article to an independent commercial testing laboratory of its own choosing to ascertain whether it was in compliance with contract requirements, and for this purpose caused the laboratory to conduct the identical tests that plaintiff had already performed at its own plant. Plaintiff construes this action on defendant’s part to constitute a reversal of defendant’s original position that plaintiff, not defendant, was required to perform the test. It accordingly complains that it was required to perform extra work not called for by the contract. Defendant contends, however, that its action in submitting the Article to an independent laboratory for testing was consistent with the portion of Part II which provided that, after contractor testing, the Article was to be submitted to defendant for “engineering evaluation and approval,” as well as with Paragraph 4.3.1 of the specifications providing that the Article would be “tested for design approval” by defendant.

Plaintiff further complains that, as a result of defendant’s submission of the Article to its commercial testing laboratory, contract performance was delayed until approximately January 28, 1957, because it was not until then that the laboratory finally approved the Article. Plaintiff charges that this 18-month delay from August 4, 1955, the date it submitted the First Article to defendant, to January 28, 1957, the date the First Article was finally approved, constituted a breach of contract. Defendant denies this, justifying the delay on the grounds that there were repeated failures of the Article (the laboratory ultimately tested four testers before the Article was approved). Plaintiff counters that the failures were attributable only to the fact of unnecessary duplicate testing, resulting in unusual strains on the Article.

Plaintiff seeks recovery of $9,000 as the value of the tests it performed.

As stated, after its submission of the tested First Article on August 4, 1955, plaintiff completed production of the entire contract quantity (116) of the testers. However, since the Article was not approved until some 18 months later, plaintiff bad to store the 116 completed testers in its plant for such period of time. Plaintiff seeks recovery of $1,800 as damages to compensate it for such storage.

On August 16,1957, which was subsequent to the ultimate approval by defendant of the First Article and the delivery by plaintiff of all the testers, plaintiff submitted a claim to the contracting officer for an equitable adjustment based on the alleged unnecessary preproduction testing requirement imposed on it as well as the alleged unreasonable length of time defendant took to approve the First Article.

By decision of September 8, 1958, the contracting officer denied the claim. Since the alleged unnecessary testing was performed by plaintiff in the summer of 1955, but claim with respect thereto was not made until August 1957, the contracting officer held it to be untimely (Article 2 of the General Provisions of the contract required claims for equitable adjustments arising out of changes in the contract to be made “within 30 days from the date of receipt by the Contractor of the notification of change”). As to any increased costs resulting from the alleged unreasonable delay caused plaintiff in the performance of the contract, the contracting officer ruled that “ [r] egardless of the merits of your claim, there is no contractual provision under which the adjustment you request can be made.”

On October 2, 1958, plaintiff appealed the denial of its claim to the Armed Services Board of Contract Appeals. However, on June 29, 1960, plaintiff advised the Board that it “considered] the issue involved in the subject appeal to solely involve a question of law for which your Board would have no jurisdiction” and that “[u]nder the circumstances [plaintiff] desires to withdraw the subject appeal.” On July 6, 1960, the Board (by its “Becorder”) advised that, in accordance with plaintiff’s letter, its appeal had been withdrawn from the Board’s docket.

For the reasons following, these claims as above-described cannot be allowed.

The Test Costs Claim,

It is not understood bow the Paragraph 4.3.1 sentence of the specifications upon which plaintiff relies, which provides that the preproduction model “will be tested for design approval at the Procuring Agency’s Laboratory by the agency,” can reasonably be interpreted as relieving plaintiff of the requirement of making the preproduction test which, as shown, was specifically imposed upon plaintiff by the above-described detailed provisions of Part II of the contract Schedule, as well as by Paragraph 4.4.3 (“Contractor’s Responsibility”) of the specifications. The specification paragraph relied upon by plaintiff merely calls for defendant’s testing the model “for design approval” at defendant’s laboratory. Such “design approval” test is, however, wholly consistent with plaintiff’s making the preproduction test. Indeed, as indicated, Schedule Part II specifically provided that, upon completion by the contractor of the First Article tests and the submission by the contractor of the certified test data, the Article should then be forwarded to defendant “for engineering evaluation and approval.” Thus, the sentence upon which plaintiff’s case rests simply does not say, nor can it reasonably be interpreted as meaning, what plaintiff contends. Furthermore, the contrary meaning results in a harmonious interpretation of all parts of the contract and specifications. Under familiar principles, such an interpretation is preferred to one which would result in a conflict with other contract provisions, rendering them inoperative. Hol-Gar Manufacturing Corp. v. United States, 169 Ct. Cl. 384, 395-96, 351 F. 2d 972, 979 (1965).

Even assuming that, under some strained interpretation, specification Paragraph 4.3.1 could conceivably be construed as plaintiff urges, nevertheless plaintiff does not explain how all the other provisions of the contract and specifications specifically requiring it to make the preproduction test could justifiably be ignored. At the least there would be a plain inconsistency. And here the inconsistency would necessarily have to be resolved in favor of the Schedule Part II provisions requiring the contractor to make the test since the contract further explicitly provided that “to the extent of any inconsistency between the Schedule * * * and any specifications * * *, the Schedule * * * shall control.”

Finally, plaintiff’s testimony shows that at the time it submitted its bid it recognized the alleged conflict in the provisions. That plaintiff could not have regarded the preproduction test as an inconsequential contract item is demonstrated by the fact that, although, the entire contract amounted to approximately $17,500, plaintiff’s testing cost claim here asserted is in the amount of $9,000. Yet, inexplicably, it sought no clarification of what it considered to be a conflict, nor did it bring the alleged inconsistency to anyone’s attention. Cf. Gelco Builders & Burjay Construction Corp. v. United States, 177 Ct. Cl. 1025, 1031, 369 F. 2d 992, 997 (1966). However, in such a situation it is plain that plaintiff was not at liberty to rely on the one specification provision it interpreted as not requiring it to make the test, and simply to ignore all of the other Schedule and specification provisions requiring it to make the test. Where a conflict is obvious, and certainly where the contractor actually is cognizant of it, he must make appropriate inquiry. Jefferson Construction Co. v. United States, 176 Ct. Cl. 1363, 364 F. 2d 420 (1966), cert. denied, 386 U.S. 914 (1967); Jefferson Construction Co. v. United States, 151 Ct. Cl. 75 (1960).

The Storage Claim

As above pointed out, Paragraph (d) of Part II of the Schedule specifically provided that “[p] ending approval of the said First Article, the remaining articles of the said item shall not be fabricated, produced, or shipped.” This provision would he applicable without regard to whether plaintiff or defendant was to make the preproduction test. Even if plaintiff were to make it, and plaintiff were thus satisfied that the Article was in full compliance with all contract and specification provisions, Part 11(a) of the Schedule nevertheless required, as previously mentioned, that the Article was to be forwarded to defendant “for engineering evaluation and approval.” Plaintiff could not make the unilateral determination that the Article was satisfactory and then proceed to produce the full contract quantity; and this would be so whether or not it was proper for defendant, in making such engineering evaluation, to submit the Article to the same tests that plaintiff had already conducted.

Accordingly, plaintiff’s completion of the full number of testers called for by the contract prior to the approval of the First Article by defendant was in clear violation of the provisions of the Schedule and therefore at its own risk. Had the contract terms been observed and the testers not been produced until after the First Article was approved, there would have been no storage problem or claim with respect thereto.

CLAIM RE V-LOAN

Sixth Cause of Action

Pursuant to a V-loan agreement dated September 20,1956, $190,000 was advanced to plaintiff, upon which there is a balance due of $128,846.17, plus accrued interest, and which interest is still accruing.

Plaintiff’s claim with respect to this cause of action rests upon the first four causes of action. It says that defendant should not be entitled to charge plaintiff with interest on the loan following plaintiff’s alleged entitlement to be paid the moneys owed to plaintiff by defendant on said four causes. See Wire Corporation v. United States, 143 Ct. Cl. 688, 166 F. Supp. 744 (1958). To the extent that defendant is found herein to be indebted to plaintiff in an amount equal to or exceeding $128,846.17, plaintiff seeks the crediting of such amount against the V-loan mine pro time, thus stopping the running of interest after such credit dates on the amounts credited. Plaintiff further seeks recovery of any interest accrued and paid subsequent to October 1956, the date when the delay on the Modulator contracts is alleged to have commenced. To the extent a lesser sum is found to be due, plaintiff similarly seeks the crediting of such lesser sum nv/nc pro iunc with the same effect on plaintiff’s liability for interest with respect thereto.

There is no need to consider the validity of plaintiff’s theory. Even assuming its soundness, this cause of action must in any event be dismissed since, as above shown, plaintiff is not entitled to any recovery with respect to the first four causes of action.

FINDINGS ob Fact

1. Plaintiff is a resident of Golf, Illinois. Triumph Manufacturing Company (hereinafter referred to as Triumph) was an Illinois corporation with its principal place of business in Cicero, Illinois. Plaintiff purchased Triumph in 1951, at which time it was an established concern. Thereafter plaintiff was the president, the principal stockholder, and a substantial creditor of Triumph.

2. On or about July 31, 1958, Triumph was adjudged a bankrupt by the bankruptcy court of the United States District Court for the Northern District of Illinois, Eastern Division. By an order of the bankruptcy court dated March 16, 1960, the trustee in bankruptcy was directed to assign and transfer to plaintiff all Triumph’s right, title and interest to the claims involved herein. Plaintiff purchased all such right, title and interest, by sale and assignment, from the trustee in bankruptcy on July 7, 1960. “Plaintiff” and “Triumph” are hereafter used interchangeably.

THE MODULATOR CONTRACTS — CAUSES OE ACTION 1, 2, AND 3

3. (a) Pursuant to a Proposal Bequest issued by the Dayton Air Force Depot of the Department of the Air Force for the manufacture and supply of 168 units of an electromechanical device described as “Modulator MD-83/ARN,” together with maintenance spare parts, engineering data, and maintenance data (the bids to be opened on June 21, 1955), plaintiff, on June 20, 1955, submitted a bid in which it set forth the price of $880 per unit for the Modulator. The Modulator is an item of electronic test equipment used at maintenance depots to calibrate aircraft radio receiving equipment. It reproduces the signals which are generated by ground transmitters to aircraft in flight. Such signals are given to direct the course (the “beam”) upon which the aircraft is to fly-

(b) Thereafter, plaintiff and the Air Force representatives entered upon negotiations with respect to the unit price, and plaintiff was given an opportunity to review its proposal and to submit any revision it desired. Thereafter, on September

19, 1955, plaintiff submitted a revised quotation in which it lowered the unit price of the Modulator to $815 (as well as lowering the amounts for the maintenance spare parts and the engineering data).

4. (a) On October 24,1955, Triumph and the Dayton Air Force Depot of the Department of the Air Force executed Contract No. AF33 (604) 12150 for the manufacture and supply of 163 Modulators at a unit price of $815. In addition, there was a requirement for maintenance spare parts, engineering data, and maintenance data. The total price was $162,414. The unit was to conform to military specification MIL-M-82'TO (TTSAF) dated February 19, 1953.

(b) The contract included in its general provisions standard “Changes” and “Disputes” clauses.

(c) The contract contained a First Article inspection clause which required Triumph to submit three preproduction samples for test and approval before production of the required units.

5. (a) Under the respective dates of May 2,1956, and July 20, 1956, Contract Nos. AF33 (604) 13021 and AF33(604)-14201 requiring the manufacture and supply of 366 additional units were entered into by the same Air Force agency and Triumph, at the same unit price of $815 (135 units under the second contract and 231 under the third). The total number of units to be delivered under all three contracts was thus 529. The coordinated delivery schedule of the three contracts required delivery of fifty units per month, beginning 150 days after approval of the First Articles under the first contract. The two subsequent contracts for the identical item did not require First Article submissions. The total amount of the two additional contracts was $298,290.

(b) The two additional contracts were entered into after formal advertising. Plaintiff was the low bidder on each. On the second contract, the next two low bids were $850 and $853. On the third contract, the next two low bids were $835 and $840.

6. The first contract dated October 24, 1955, required delivery of the First Articles within 150 days after the date of receipt by the contractor of an executed copy of the contract. Under this provision, delivery of the three First Articles to defendant was due on or about June 8,1956 (since the signed copy of the contract was not mailed to plaintiff until January 5, 1956). In addition, Part 11(b) of the contract required submission of a proposed testing program at least 45 days prior to formal testing by the contractor. On June 6, 1956, defendant agreed to an extension of the delivery schedule for the FirstArticles until July 20,1956. Also by telegram dated June 20,1956, Triumph was authorized to delay the submission of its proposed test program until after submission of the First Articles.

7. On July 20,1956, Triumph had still not submitted the First Articles and defendant considered default termination. By letter dated August 6, 1956, defendant advised Triumph as follows:

This is to confirm conversation between you and Mr. Piekos of this office on 3 August 1956, wherein you stated the first article would be ready for submission in approximately one week. This item is urgently needed and the date of contract delivery is past. Accordingly, you are urged to expedite the submission of the first article, and in the event any delay of such submission would extend beyond 17 August 1956, the Government must consider the advisability of effecting a termination for default.

However, on August 22,1956, the parties entered into a supplemental agreement which, among other things, extended the delivery date of the First Articles and the test reports to September 15,1956.

8. Under the Modulator contracts, plaintiff was required to manufacture and calibrate instruments which would comply with the provisions of Paragraphs 3.4.1.1 and 3.4.1.2 of the applicable specification (MIL-M-8270, dated February 19,1953). These paragraphs provided as follows:

3.4.1.1. Variable Phase Signal. — The variable phase signal shall be a 30 cycle per second sine wave whose harmonic distortion shall not be more than 2 percent and whose frequency stability shall be directly proportional to the frequency stability of the power source. This signal shall be continuously variable in phase from 0 to 360 degrees with respect to the reference signal by a control on the front panel and shall be capable of being set to within plus or minus 0.1 degree.
3.4.1.2. Variable Phase Change. — The variable phase shall not vary more than plus or minus 0.2 degree of its preset reference phase under any combination of service conditions specified herein.

The specification did not require any particular method by which accurate calibration was to be achieved.

9. (a) The variable phase signal is expressed in degrees and represents the relationship between two electrical impulses. The Modulators were to be calibrated so that when the two impulses were in phase, or in coincidence with respect to time, the variable phase signal dial on the front of the Modulator read zero degrees. The phase angle calibration of the Modulator was, therefore, central to its purpose for if the calibration were in error by several degrees, the radios adjusted to the Modulator signal would receive incorrect course instructions, fly in improper air space, and cause a serious hazard to navigation.

(b) In order to prevent collision hazards, calibration standards for all aircraft — commercial as well as military— were set up and were at this time supervised by the Civil Aeronautics Authority, the forerunner of the Federal Aviation Agency.

10. (a) In 1956, when Triumph was fabricating its First Articles, at least two methods had been developed to achieve accurate phase angle calibration: the interference pattern, and the Zifor.

(b) The interference pattern was developed hi the early 1950’s and was the industry standard at the time that plaintiff was performing these contracts. The method required an extensive test setup involving a high quality oscilloscope and shielded filter. Before any actual calibration adjustment could be made, the interference pattern test setup had to be free from any distortion, phase shift, and pickup. The exact procedures to be followed in constructing the test setup were dependent upon the equipment being used, particularly the scope.

(c) Another procedure for phase angle calibration involved the use of a simple instrument called a “Zifor,” which was developed in 1954 by the Collins Radio Company in order to provide a fast, easy method of phase angle calibration in connection with its own Modulator production. Prior to the development of the Zifor, the interference pattern method was the only calibration method available. The Zifor, unlike the interference pattern method, required no adjustments or elaborate setup before use. Calibration using the Zifor required only connecting the Zifor to tire Modulator, taking simple readings, and adjusting the Modulator as necessary. The entire operation, including the Modulator adjustment, took only about 15 to 20 minutes.

11. When properly used, both the interference pattern method and the Zifor method yield the same result. Of the two methods, the Zifor is the simpler, the cheaper, and has less possibility of human error. Because both the interference pattern and the Zifor gave the same result when properly used, initially defendant did not care which method the contractor employed so long as its results were accurate.

12. In calibrating the First Articles, which it ultimately submitted to defendant in October 1956, plaintiff could have used any method to achieve the specification requirements. Plaintiff chose the industry standard interference pattern method. Plaintiff believed it had the proper equipment available for the use of such method.

13. (a) After the award of the contract, Triumph received a sample Modulator, built by National Electronics Laboratories. This sample was furnished in accordance with Part I(j) of the first contract (AF33(604) 12150) and Paragraph 6.2.2 of the specification.

(b) Part I(j) of the first contract provided as follows:

It is contemplated by the parties hereto that the Government will loan to the Contractor the item listed below for use hi connection with the performance of this contract, and that an appropriate written agreement of bailment will be entered into by and between the parties hereto for that purpose. In the event of failure or delay of the Government to loan such property, as aforesaid, the provisions of the clause of this contract entitled “Government-Fumished-Property” or “Government Property” relating to failure or delay in the furnishing of property, shall be applicable. It is further understood and agreed by the parties hereto that the property listed below is to be used as a guide only to assist the Contractor in the fabrication of the articles called for by this contract and that in the event any conflict arises between the property listed below and the specifications set forth by this contract, the specifications shall govern.
One (1) Modulator MD-83A/AKN

(c) Paragraph 6.2.2 of the applicable specification provided:

Sample Modulator. — A sample modulator will be furnished to the contractor, upon request. When a discrepancy exists between the specification and the sample modulator, the specification shall govern.

14. (a) Packed with the sample Modulator was a handbook, written by National Electronics Laboratories, entitled “Handbook, Operation and Service Instructions, Modulator MD-83A/ARN.” It was dated September 1, 1955, and was published under the authority of the Secretary of the Air Force and the Chief of the Bureau of Aeronautics as “Technical Order 33A1-8-36-31.”

(b) Item 4 of Part 1(a) of the contract Schedule called for Triumph to provide certain “Maintenance Data” for the Modulators in accordance with an exhibit attached to the contract, referred to as “MCMTT Exhibit No. 1-16,” entitled “Technical Publication Requirements for Test Equipment,” and for which the contract provided additional compensation ($2,000). Among the publications required by the exhibit was one with respect to “Operation and Service.”

(c) By Supplemental Agreement No. 1, dated August 22, 1956, the requirement for Maintenance Data, Item 4, was amended to require more publications and to increase the contract price for the item (to $4,000). The requirement for an “Operation and Service” publication was, however, deleted. By Supplemental Agreement No. 4, dated March 13, 1958, Item 4 was canceled in its entirety and the contract price accordingly decreased (by $4,000). Nevertheless, for unexplained reasons, plaintiff purchased one thousand hand-boots at a cost of $2,000 and packaged one each with every Modulator it shipped.

15. With respect to phase angle calibration, the handbook which Triumph received described both the interference pattern and the Zifor methods. The first method was the interference pattern method and was set forth in paragraphs 3-19 through 5-28. The handbook described, among other things, the “General Test Set-Up” required to use the interference pattern method, and listed several factors which would affect the accuracy of the method. Some of these factors involved the nature of the individual scope being used. Accordingly, the setup could be described only in general terms. A level of technical skill in addition to superior quality equipment was necessary to produce satisfactory results. Paragraph 5-28 of the handbook described a “Step by Step Calibration Procedure” for the interference pattern method, which set forth instructions for calibration once the proper setup was achieved. The second calibration method using a Zifor was set forth in paragraph 5-29, subparagraph (a) of which refers to the procedure as an “alternate calibration procedure.”

16. By September 1956, Triumph did not have sufficient capital to continue work on any of its Government contracts. Triumph entered into a V-loan agreement on September 12, 1956, with the First National Bank of Chicago, under which the Federal Keserve Bank of Chicago, as Fiscal Agent of the United States, guaranteed First National against any loss. Pursuant to said agreement, the sum of $190,000 was eventually advanced to Triumph. This sum was for application toward all of the Government contracts awarded Triumph. The agreement originally provided for a line of credit not to exceed $140,000. The loan bore interest at the rate of 5 percent per annum.

17. On or about October 15, 1956, approximately one month after the extended First Article delivery date, Triumph submitted three First Articles for approval. The Articles were hand-carried to defendant’s project engineer, Mr. Richard Goode, at Wright Patterson Air Force Base. In calibrating the First Articles by the interference pattern method, plaintiff attempted to follow the data set forth in the handbook which had been enclosed with the model furnished by defendant. Plaintiff’s chief engineer, who had no prior experience on the MD-83 Modulators, set up the test equipment and procedures.

18. During the period from the original date for the First Articles’ submission to their actual submission in October, defendant was concerned about Triumph’s delinquency, and made efforts to expedite the submission. Defendant did nothing which prevented the contractor from making an earlier submission. During this period plaintiff was incurring contract costs which are not alleged to be attributable to defendant and which were not anticipated in its bid.

19. The Government laboratory where plaintiff’s First Article submissions were checked included both an interference pattern setup and a Zifor. The interference pattern setup was checked for accuracy periodically against the Civil Aeronautics Authority standard and against other users. In addition, the Zifor and interference pattern setups were checked against each other periodically to assure that both were giving the same answer.

20. (a) In preliminary testing of the First Articles submitted by Triumph, Goode checked their phase angle calibration both by the interference pattern and Zifor methods. The result of both tests showed the First Articles to be out of calibration by about three degrees, while the specification required that the signal “shall be capable of being set to within plus or minus 0.1 degree.” The error was, in the estimation of the project engineer, a gross one, being thirty times greater than the tolerance allowed by the specification. Because the final Modulators to be produced would not pass through a Government laboratory, but would go directly into use at the maintenance depots, it was of the utmost importance that Triumph be able to make the calibration adjustment accurately in its plant.

(b) On or about October 23,1956, the First Articles were returned to plaintiff as unacceptable under the specification requirements.

21. Defendant’s engineer properly rejected plaintiff’s First Articles in October 1956 because such Articles did not meet the calibration accuracy requirements of the specification.

22. Following rejection of Triumph’s First Articles in October 1956 the project engineer, Mr. Richard Goode, on October 23, 1956, discussed the calibration problem with plaintiff’s engineer, Mr. Kenneth Tollstam. Goode ascertained that Triumph had used the interference pattern method to calibrate the Articles and concluded that the calibration inaccuracy was due to an error in the interference pattern setup which Triumph had used. Goode had acted as project engineer on at least four similar modulation contracts since 1950 on which all the contractors had used the interference pattern method, such method being the only one available during the early 1950’s. Every contractor had experienced trouble with the method, which was a difficult one to set up properly. Goode had worked with the engineers of such contractors in their plants and was familiar with the difficulties inherent in the method. Prior to the execution of plaintiff’s contracts here involved, Goode had conducted briefings, to which all prospective bidders had been invited, at which the calibration problem difficulties were discussed. However, no one from plaintiff’s organization had attended such briefings. Knowing of the many vagaries in getting the interference pattern method properly set up, concluding that ■there must be something radically wrong with plaintiff’s setup, and being familiar with the relatively new and simpler Zifor test method and the accurate results it could quickly achieve, Goode suggested that plaintiff obtain a Zifor. In so suggesting, Goode also considered the vital importance of the calibration problem and plaintiff’s apparent inability to solve it with the interference pattern method.

23. Tollstam reported to Triumph’s president, Mr. James Boyajian, Goode’s suggestion that plaintiff use the Zifor method. Plowever, upon inquiry, plaintiff found that it was unable to obtain a Zifor from the Collins Radio Company within the immediate future. Boyajian thereupon brought the matter to the attention of the contracting officer, Mr. Wayne Dixon, on November 1, 1956. At the meeting on that date Boyajian stated that, if the Government insisted upon use of a Zifor, it would be necessary for the Government to aid plaintiff in obtaining on© since plaintiff had been unsuccessful in procuring one directly from Collins. Not being an engineer, Dixon told Boyajian that, under the circumstances, he felt obliged to go along with the recommendation of his engineer (Goode) in such matters. Accordingly, plaintiff was required to use the Zifor method. Boyajian then stated that if plaintiff had from defendant something in writing stating that it was necessary for plaintiff to use a Collins Zifor on its contract, such writing could be presented to Collins in support of the Zifor order plaintiff would place with Collins. Accordingly, the contracting officer prepared the following letter, dated November 1, 1956, and delivered it by hand to Boyajian:

Your company can obtain a Zifor from the Collins Badio Company in Cedar Bapids, Iowa, for use in the calibration of Modulator MD-83, to be manufactured on subject contract. The Collins Badio model number is 478A-1. This Zifor is a necessity in the calibration of subject equipment and the Modulator MD-83 is very urgently required by the Air Force. Bequest your company contact the Collins Badio Company as soon as possible to obtain one of these units for calibration purposes.

24. The next day, November 2, 1956, plaintiff placed an order with the Collins Badio Company for a Zifor, and was advised'by Collins that delivery could not be made until the latter part of February 1957. Plaintiff informed Goode of this fact and requested that in the meantime the contractor be lent the Zifor which was at Wright Field. This Zifor was, however, only on loan from Collins to defendant. Accordingly, defendant felt it was not possible for it to lend this instrument to plaintiff. However, in early December 1956, defendant purchased this Zifor from Collins. Shortly thereafter defendant’s project engineer, Mr. Leon Yangun-ten (who had succeeded Goode the previous month), temporarily lent to Triumph the recently purchased Zifor in order to assist Triumph in calibrating its First Articles.

25. Plaintiff then used the borrowed Zifor to calibrate, and on December 12, 1956, again submitted First Articles for approval. The Zifor used to calibrate the Articles was then returned to defendant. This time the First Articles met the specification requirements with respect to phase angle calibration, and defendant completed full environmental testing, all of which, required about six weeks.

26. On January 28,1957, plaintiff’s V-loan agreement was amended so as to increase the limit to $190,000. The $140,000 previously advanced had been used in large part to finance other Government contracts which plaintiff had.

27. By letter dated January 31,1957, from the contracting officer, plaintiff was notified of First Article approval. The letter of approval stated as follows:

First Articles of Modulator MD-83A/ABN submitted by your company under subject contracts have been tested by the project engineer and are hereby approved for production provided Eastern Air Devices motors and alternators are used. The Eastern Air Devices Motoi’S and alternators are the only ones which have passed non-standard parts testing.
Your compaixy may submit other suppliers motors and alternators to the project engineer at W.A.D.C. for non-standard parts testing and approval if you so desire.

28. When Triumph submitted First Articles in October 1956, it had not yet ordered the important rotating components. It did not obtain defendant’s approval of the devices which could be used until January 31, 1957, such approval being contained, as hereinabove set forth, in the same letter which approved the First Articles. The supplier of these components, Eastern Air Devices, because of its own scheduling and production problems, required sixty to ninety days’ lead time after the order was placed. As hereinafter set forth, Triumph did not actually order these components until March 1957, and did not receive them until July 1957.

29. Shortly after approval of the First Articles, Boyajian asked the contracting officer for compensation for the Zifor change. The contracting officer stated that he had no authority to graxxt such relief and advised that relief might be available under Title II of the First War Powers Act. Accordingly, by letter of February 26,1957, plaintiff requested such relief. In this letter, plaintiff stated that it had used the calibration test method described in the handbook Technical Order whereas the Air Force had used the Zifor method, resulting in different readings; that the contracting officer’s letter of November 1, 1956, stated “that the Zifor is mandatory” and that plaintiff liad accordingly ordered one from Collins Radio Company tbe following day; that although plaintiff advised the Air Force “from time to time that delivery could not be made until the latter part of February, 1957,” plaintiff was at first refused the use of defendant’s Zifor for calibrating its First Articles, but on December 3, 1956, was lent defendant’s Zifor, which was used to calibrate the Articles; that on December 12, 1956, the Articles were again submitted and were approved on January 31, 1957; that defendant’s use of the Zifor to test the First Articles and insistence on plaintiff’s procuring one for production purposes had delayed plaintiff’s performance; that “because of the delays, our plant has been placed in a precarious financial position due to the large inventory on hand and the cost of maintaining our staff and facilities in readiness for production”; that plaintiff’s operation “is based on a break even point of $40,000.00 per month gross production sales,” and that “the four month delay due to the above described circumstances has caused a total monetary loss of $160,000.00 for which we are seeking reimbursement”; that thus far plaintiff had “accumulated an inventory consisting of tools, material, labor and overhead aggregating close to $200,000.-00”; and that but for “the four month delay in the first article approval,” plaintiff would have completed the contracts by December 31, 1956, or January 31, 1957, whereas now the delivery schedule would be extended to July or August 1957. Plaintiff requested that defendant “make available the funds necessary to enable us to proceed with this program.”

30. On March 1,1957, plaintiff ordered from Eastern Air Devices, Inc., the full quantity (529) of motors and alternators which it required for the Modulator contracts. The delivery schedule set forth in the order was in accordance with that fixed by Eastern in its letter of February 27, 1957, to plaintiff, i.e., 2 to 10' sets within 30 days, 100 sets in 90 days, and 100 sets thereafter per month.

31. The Zifor was scheduled for delivery around the middle of April 1957. However, by early April plaintiff was again financially unable to proceed with Modulator production, the additional V-loan funds received in January 1957 either having been consumed or the remaining amount being insufficient for the purpose. Consequently, plaintiff requested an advance payment on the Modulator contracts. Under date of April 10, 1957, Triumph and the Department of the Air Force entered into an “Advance Payment Pool Agreement,” under which the Government agreed to advance to Triumph an amount not to exceed $250,000 for the performance of the Modulator contracts. The purpose of the agreement was to enable Triumph to complete the contracts. Without the agreement and the funds made available thereunder Triumph would have ceased operations in April 1957. The agreement was authorized under Title II of the First War Powers Act, as amended.

32. The Advance Payment Pool Agreement operated in the following manner: advances under the agreement were deposited in a restricted bank account to be used only for expenses allocable to the Modulator contracts (such as overhead, materials, etc.). As the contractor made shipments under the Modulator contracts, payments were deposited in the same account, after deductions for interest. Checks drawn on the account were countersigned by an Air Force representative in Chicago, Illinois, and applied toward performance of the Modulator contracts. The advances were eventually paid back to the Government, in the form of a check to the Treasury, from the proceeds of the contracts in the restricted account.

33. The Advance Payment Pool Agreement required that requests for payments under the agreement be directed to the administering office in Dayton, Ohio, and that they be approved only upon a finding of necessity. Written requests for advances were required to be approved by the administering office in Dayton, Ohio.

34. The local Chicago Air Force representative in charge of administering the advance payment account was Mr. Adolph Piekos, who was assisted by Mr. Hugh T. Lavery. Their primary responsibilities were to facilitate performance of the contracts, to make certain that the funds advanced were applied toward the subject contracts, and to insure that the advances were recouped. Mr. Piekos had the title of Administrative Contracting Officer and was generally responsible for administering the Advance Payment Pool Agreement. Checks on the restricted account bad to be signed by plaintiff and Mr. Piekos. Mr. Piekos had never before handled an advance payment pool agreement. However, such agreements are rare, and this was the first one ever handled in the Chicago Air Procurement District.

35. (a) Plaintiff’s initial request for an advance payment was made on April 10, 1957, and requested $160,000 as “our estimated budget requirements for the period April 12 through June 28, 1957 * * The inquest detailed the use to which such sum would be put, which included $5,000 for payments to creditors who had already supplied materials; $48,000 for payrolls; $28,000 as an advance payment to Eastern Air Devices, which required such an advance; $26,000 to pay for c.o.d. shipments from Eastern; and $50,000 for other Modulator materials.

(b) Plaintiff’s request was granted and the advance was made,

36. At the time the Advance Payment Pool Agreement was entered into, defendant had studied cash flow sheets provided by Triumph, and had discussed the problem with plaintiff at a number of meetings. Both plaintiff ancb defendant believed that an advance of $160,000 would be sufficient to enable the contractor to complete the Modulator contracts. It was thought that such an advance would enable plaintiff to get into production, to commence shipping completed articles, and to begin receiving payment therefor. It was calculated that such receivables would be sufficient to finance the balance of the required production. Thus, plaintiff’s letter of June 7, 1957, to Piekos setting forth its estimated budget requirements for the three-month period June 1,1957, through August 31, 1957, showed its prospective expenses (labor, material, and overhead) as $148,500, and its estimated shipments (of 250 units) during such period as generating payments to it in the amount of $203,750. Plaintiff planned to ship 25 units in June, 100 in July, and 125 in August.

37. Plaintiff received the Zifor from the Collins Eadio Company on or about April 15, 1957. The record does not indicate the extent of the delay caused plaintiff in the completion of the contract by reason of its being required to obtain a Zifor, or the amount of increased costs, if any, attributable to such delay. In addition, the record does not show the increased amount, if any, of work, labor, or services caused plaintiff in the performance of the contract by reason of such requirement.

38. (a) By letter of April 22, 1957, to defendant written in support of its First War Powers Act relief application, plaintiff stated that the change in calibration and the necessity of purchasing a Zifor caused plaintiff “to hold back its scheduled production plans” since a Zifor could not be obtained until April 15,1957; that “[s]ince Triumph could not proceed under its original planning, certain work along the lines of sub-assemblies was placed into production, on a reduced basis”; and that “ [a] s a result of these changes, beyond the control of the contractor,” plaintiff “has suffered a financial loss, to date,” on the Modulator contracts “in the amount of $128,423.00.” No breakdown of this figure was set forth.

(b) No relief was granted to plaintiff under the First War Powers Act pursuant to the aforesaid application.

39. ^Regardless of its difficulties with calibration, Triumph was not able to go into production of Modulators in October 1956 because, as shown, it had not as yet ordered all of the necessary components. Had the First Articles been approved in October 1956, rather than rejected, and the rotating components then been ordered from Eastern Air Devices, the same two-to-three-month delay would have occurred because of the lead time Eastern required. Plaintiff did not have the required funds sufficiently in advance of October 1956 to have obtained the necessary components from Eastern in time to commence production with them in October. As stated, because of its financial plight, plaintiff was not, in September 1956, able to proceed on any of its Government contracts, which condition necessitated the $140,000 V-loan agreement entered into on September 12,1956.

40. (a) Phase angle calibration is the final stage of production, performed after the Modulator is completely fabricated. The lack of a Zifor, therefore, did not in itself prevent Triumph from proceeding with production.

(b) However, Triumph did not proceed, on a full-scale production basis, to fabricate items during the period between January 31, 1957, and April 1957. One reason for this was that the company had insufficient funds therefor. The funds which had been provided under the V-loan could be used to finance any Government contract work and plaintiff also used such funds on other Government contracts which it had. Consequently, plaintiff lacked necessary components, such as motors and alternators, which were to be supplied by Eastern Air Devices, Inc. However, during the period between January 31,1957, and April 1957, Triumph was able to proceed with some subassembly work on the Modulator contracts.

41. As part of their administration of the advance payment account, Piekos visited the Triumph plant about once a week, and Lavery was in the plant two or three times a week throughout the period the account was in existence. They were thus familiar with the contractor’s progress and the operation of Triumph’s plant.

42. During the administration of the Advance Payment Pool Agreement, all obligations of Triumph allocable to the Modulator contracts were paid as they came due. These obligations included, but were not limited to, payrolls, material invoices, and letters of credit required by the supplier of rotating components, Eastern Air Devices.

43. (a) Plaintiff was not able to maintain the schedule set forth in its letter of June 7,1957, showing its budget requirements for the three-month period commencing June 1,1957. The shipment of 25 units scheduled for June was not made. Consequently, by July 1, 1957, no receivables had been generated and plaintiff was in need of further funds. By letter of July 3, 1957, plaintiff requested an additional advance of $20,000 under the Advance Payment Pool Agreement. Plaintiff stated that “[t]his additional request is necessary due to delays in deliveries of packaging materials and to a machinery breakdown at the company manufacturing the aluminum extrusions for the transit cases.” The letter set forth plaintiff’s budget requirements (for labor, materials, and overhead) for the period July 8, 1957, through July 26, 1957, as $20,000.

(b) Plaintiff’s request was granted and the advance made.

44. Triumph made its first shipment, consisting of 27 Modulators, on July 19, 1957, and shipments continued until the contract amount of 529 was completed by the last shipment made on April 17,1958.

45. Despite the second advance in July and the commencement of shipments that month, which resulted in contract funds being provided to plaintiff, in August plaintiff felt that it required further funds and on August 16, 1957, inquired of Piekos whether he would approve the making of further advances. Piekos stated that he would not so approve at that time. He was fearful that, considering plaintiff’s financial condition, it would not be capable of liquidating any larger loan than the $180,000 already advanced. He had been concerned about plaintiff’s inability to adhere to the schedule planned when the initial $160,000 advance was made. Under that schedule, the proposed June Modulator shipments would have provided funds to plaintiff which, he felt, would have made unnecessary the second $20,000 advance. He concluded that henceforth, plaintiff should adhere to the plan upon which the original $160,000 advance was based, when both plaintiff and defendant felt such an advance would be sufficient to carry plaintiff through to contract completion, with plaintiff generating the funds it required by making shipments. He therefore urged plaintiff to obtain the production funds it needed by adhering to the planned delivery schedule. He felt that if plaintiff so produced, it would be able to complete the contract without the need for further advances and defendant would be able to recoup the $180,000 already advanced.

46. Piekos did not have the final authority to deny or grant plaintiff’s requests for funds under the Advance Payment Pool Agreement. Only the administering office in Dayton had authority to approve or disapprove advances under the agreement. However, plaintiff concluded it would be futile to submit a formal request for an additional advance without Piekos’ approval. Accordingly after July 1957, when it received its second advance, Triumph did not submit any further requests to that office. Consequently, the total amount advanced to plaintiff was $180,000.

47. Since it did not have any substantial capital reserve upon which it could draw to finance its production, its only funds source being contract payments for shipments, whenever plaintiff required funds, such as to meet its weekly payrolls, it felt obliged to make a shipment of whatever number of Modulators was then completed. However, the inspection procedure under the Modulator contracts provided that five Modulator units be inspected from each lot of 65 units or of lots of lesser quantity. Thus, plaintiff was required to generate income through shipments of lots of less than 65 units and this required more frequent inspections by defendant. Plaintiff had only one inspection station which was at the end of its production line. Whenever defendant’s inspectors took over the station to inspect five Modulators from the proposed shipment, plaintiff’s production line operations were hampered since tests had to be made during the production assembly procedure, and these tests could not be made while defendant was manning the test station to make its tests. Defendant would consume approximately three days to complete its tests on the five Modulators. Thus the necessity to make frequent shipments to obtain funds hampered plaintiff’s production activities and delayed completion of the contract as compared to what the situation would have been had plaintiff had sufficient capital to finance production runs of 65 units at a time, with only one five-Modulator inspection of such a shipment. Plaintiff completed the contract by making 23 shipments. (As to 1957,1 in July; 4 in August; 3 in September; 3 in October; 3 in November; and 2 in December. As to 1958, 4 in January; 1 in February; and 1 in April.) Neither the number of days by which the completion of the contract was delayed, nor the amount of increased costs caused, by reason of this factor, is shown by the record.

48. Each time Triumph made a shipment, payment would be made promptly into the restricted account. The proceeds, after retention by defendant of amounts representing interest and principal payments with respect to the loan advances, were under plaintiff’s control. All bills were paid from the restricted account as quickly as they became due.

49. By letter of March 12,1958, to the contracting officer, plaintiff requested an equitable adjustment in the contract price of the Modulator contracts. It stated that it calibrated the First Articles in accordance with the handbook Technical Order supplied with the Modulator model furnished by defendant but that defendant, by its letter of November 1, 1956, directed plaintiff instead to calibrate witli the Zifor; that the “first articles were not accepted because the contractor used the preferred method of calibration as set out in the Handbook”; that plaintiff “was required to acquire Zifor test equipment and resubmit first articles and was subjected to a four months delay and additional engineering and labor costs on account of this change in specifications”; that plaintiff was “entitled to equitable adjustment because of the change in specifications directed by the contracting officer after award of the contract”; and that “[t]his change and resulting delays on these contracts involved additional costs to the contractor in the amount of $25,000.00.”

50. By letter of March 18,1958, to the contracting officer, plaintiff amended its previous application for relief pursuant to Title II of the First War Powers Act with respect to its performance of the Modulator contracts. Plaintiff stated that in the performance of the contracts it had suffered a loss of $223,000, which threatened to cause its bankruptcy. In addition to the Zifor matter, plaintiff stated, among other things, that in March 1957, plaintiff was ready to proceed with production since it then had a $190,000 V-loan, but that “[because of delays on these [Modulator] contracts and on another contract with the. Army Ordnance which involved in excess of $100,000.00 of the contractor’s working capital, it was necessary to ask for advance payments of these three contracts”; that on April 10, 1957, when the Advance Payment Pool Agreement was entered into, plaintiff “was in the position upon performance to receive a total of $434,115.00 out of invoicing on these contracts from which it would pay out $440,000.00 ($190,000.00 V-Loan plus $250,000.00 Advance Payments) to the Government”; that defendant advanced only $180,000, and not $250,000; that defendant’s failure to make “the further advance payments agreed upon, delayed production under the contracts some additional seven months and caused the contractor a tremendously increased production cost on these contracts”; that plaintiff had contemplated “production runs of 65 units,” the contract calling for inspection of five units per shipment; that, because of the need for funds, “the production runs were limited to 10 to 20 units with, inspection of five units out of each such production run”; that this “multiplied the production runs and setups and generated very substantial delays”; that plaintiff was placed on the “Controlled Bidder’s List” in April 1956, depriving plaintiff of other Government work; and that delays caused by defendant on the Modulator contract “absorbed so much of the contractor’s funds” that it had insufficient funds to pay the V-loan.

51. (a) By letter dated July 24,1958, defendant requested further information concerning plaintiff’s application for relief. In its response of August 27,1958, plaintiff elaborated on the impediment caused it by defendant’s failure to advance the full $250,000 under the Advance Payment Pool Agreement. It stated that most of the $180,000 advanced went to Eastern Air Devices for the motors and generators it was supplying and which were paid for under a letter of credit arrangement; that plaintiff was scheduled to purchase the motors and generators at the rate of 100 sets a month at $260 per set; that as of August 16,1957, plaintiff had received and paid for 255 sets of motors and generators but had shipped only 71 Modulators; that “[w]e were instructed by the Air Force that in order to comply with our agreement with Eastern Air Devices, we had to submit another Letter of Credit in the amount of $26,000.00 for 100 sets of motors and generators”; that the receivables generated up to that time and “the total advance made to us of $180,000.00 [were] insufficient to carry on the accelerated production program and meet the current expenditures”; that plaintiff therefore requested another $20,000 advance in August, which Piekos denied on August 22,1957, and instead “we were told to step up production to generate more receivables”; that to do so, plaintiff had to “break down our production line on several occasions to such low quantities as 9, 12, 13, etc., of which 5 units still had to go through the routine inspection procedure, which meant a three day let down on our production for each lot for shipment inspected”; that plaintiff’s “production required the use of the only test position that we had”; that “each unit had to be thoroughly checked and aligned by the only ziphor in our possession”; that plaintiff could not secure another Zifor “to set up a second test position to enable us to have the units inspected as well as carry out our production schedule, therefore, each inspection routine delayed our production by three days”; that the need “to meet our payroll and other contingent expenses as well as comply with our commitment of sending another Letter of Credit for 100 sets of motors and generators” to Eastern “forced” plaintiff “to submit small production lots of modulators for inspection”; that plaintiff made requests to Piekos “for financial relief two or three times a week from August 16,1957 to October 1, 1957” but that Piekos always insisted “that from hereon, we would have to generate funds for our production requirements from production and subsequent receivables generated”; that defendant’s failure to make further advances “delayed production under the contracts some additional seven months and caused the contractor a tremendously increased production cost on these contracts”; that but for “the method of handling the advance payments,” plaintiff “would have completed delivery early in November 1956”; and that defendant’s “failure to properly disburse funds for production” and the “delays encountered due to changes in test specifications outlined in our claims of March 18, 1958,” caused plaintiff “losses to the extent of $228,000.00,” for which plaintiff sought restitution.

(b) Plaintiff did not receive any part of the relief requested. One of the prerequisites to such relief was a determination that the contractor was essential to the national defense. It was determined, however, that plaintiff was not so essential.

52. (a) Based on its books and records (as supported by the testimony of an accountant), plaintiff’s total loss on the Modulator contracts was $170,283, computed as follows:

Direct Labor Costs
1956 _$ 12,928
1957 _ 70,283
1958 _ 16,145
Total-99,356
Engineering Labor Costs
1956 _ 12,390
1957 _ 15,360
1958 _ 9,737
Total 37,487
Mcmufacturinff Overhead Costs
1956 _ 25,463
1957 _ 75,203
1958 _ 30,998
Total _ 131,664
General & Administrative Expense
1956 _ 15,390
1957 _ 36,216
1958 _ 20,056
Total _ 71, 662
Material Costs
1956,1957,1958_ 316,324
Total Cost of Contract_ 656,493
Less:
Total Receipts_ 486,210
Net Loss_ 170,283

(b) It is not shown what, if any, part of said loss is attributable to any action on defendant’s part concerning which plaintiff complains herein.

THE INTERVAL AND DWELL TESTER CONTRACT — CAUSE OF ACTION 4

53. (a) On December 1,1954, Triumph bid on 116 Interval and Dwell Testers, Type MF-1, to be built “in accordance with Exhibit WCL-625.” This bid was in response to BFP-33-(604)-55-1963 of which Exhibit WCL-625 was made a part. Triumph was awarded Contract No. AF33 (604) 10483 under date of February 10, 1955. The contract price for the Dwell Testers was $142.70 per unit, making a total of $16,-553.20, plus $850 for maintenance and engineering data, for a total contract price of $17,403.20. The contract provided that “[t]he parties hereto agree that the Contractor shall furnish and deliver all the supplies and perform all the services set forth in the attached Schedule, for the consideration stated therein.” Exhibit WCL-625, which was in the nature of specifications, ivas incorporated in the Schedule by-reference.

(b) An Interval and Dwell Tester is an item of equipment used in the testing of aircraft bomb release interval controls, involving both the foot spacing (“Interval,” i.e., the distance measured along the flight path between points of impact of two successive bombs) and time duration (“Dwell,” i.e., the percentage of the time the bomb release is “on” to the total time between two successive bomb releases).

54. (a) Part II of the contract Schedule, which part is entitled “First Article Inspection,” provided as follows:

(a) One (1) each First Article of Item. 1, shall be tested to determine compliance with the applicable specifications. All testing of the First Article shall be performed at the Contractor’s or at a commercial testing laboratory. The “Test setup” to be used in First Article testing, including wiring diagram, shall be submitted to the Project Engineer before the First Article is tested. The performance of such tests shall be continuous until completed. Such First Article tests shall be witnessed by an Air Force Procurement Inspector assigned by the cognizant Air Procurement District and/or the assigned Air Force Project Engineer. The Contractor shall prepare three (3) copies of all test results in the form of a report, one (1) copy of which shall be reproducible. Such results shall be certified to by both the Contractor and the Air Force Procurement Inspector and shall be sent for evaluation and approval to:
Director of Procurement and Production
Dayton Air Force Depot Gentile Air Force Station
Dayton 10, Ohio
ATTN: MDPCB-47, Robert C. Moon, Buyer
After satisfactory completion of the above tests and the submission of the certified data, the said First Article shall then be forwarded to Service Area, 909 DSO, Fair-born, Ohio, Directorate of Dabs, ATTN: WCLGW-3, for engineering evaluation and approval.
(b) During the performance of any tests to be performed hereunder, the Government shall not be liable for any damage to or loss of the said First Article.
(c) If, as a result of the aforementioned tests, changes in specifications are required, the same will be processed in accordance with the General Provisions entitled “Changes.”
(d) Pending approval of tbe said First Article, the remaining articles of the said item shall not be fabricated, produced, or shipped.
(e) The Contractor will be notified in writing by the Contracting Officer upon approval of the First Article. After approval by the Government, said First Article shall be shipped back to the Contractor’s plant by an appropriate method of shipment, and at the Contractor’s expense, in its then condition and may be submitted by the Contractor as a contract item provided all worn, broken, or defective parts and finishes are replaced and/ or repaired by him.
(f) At least fifteen (15) days prior to the start of testing of the First Article the 'Contractor shall send written notification thereof together with a test schedule to the address listed under paragraph (a) above.

(b) The contract also included a division entitled “General Provisions.” These provisions included standard supply contract “Changes” and “Disputes” clauses as well as a standard “Inspection” clause which provided, among other things, that “[a] 11 supplies * * * shall be subject to inspection and test by the Government * * * prior to final acceptance.”

(c) Exhibit WCL-625 provided in part as follows:

4. SAMPLING, INSPECTION, AND TEST PROCEDURES
4.1 Glassification of Tests. — The inspection and testing of interval and dwell tester shall be classified as follows:
4.1.1 Preproduction Tests. — Preproduction tests are those tests accomplished on a sample representative of the production tester, to determine that the production equipment meets the requirements of this exhibit.
4.1.2 Inspection Tests. — Inspection tests are those tests accomplished on testers submitted for acceptance under contract to determine that they are equivalent in performance and construction to the approved prepro-duction sample. No equipments shall be accepted prior to the approval of the preproduction sample.
*****
4.3.1 Preproduction Test:
* * * * *
4.3.2 The preproduction test shall consist of the following tests and those specified under the inspection test methods.
4.3.2.1 Environmental tests shall include the following of Specification MIL-T-945:
fl) Humidity
(2) Temperature and Altitude _
_ 4.3.2.2 Life test shall cover a period of 200 operating hours without requiring servicing.
4.4 Inspection Test:
*****
4.4.3 Contractor’s Responsibility•. — Unless otherwise specified, contractor’s records of all inspection work and tests, giving the results of tests required to determine compliance with the requirements and tests specified herein, shall be kept complete and shall be available to the Government representative at all times. The tests shall be accomplished on articles to be supplied on the contract or order. The record or report of inspection and test shall be signed or approved by a responsible person specifically assigned by the contractor. Contractors not having laboratory testing facilities satisfactory to the Government shall engage the services of a commercial testing laboratory capable of conducting tests to determine compliance with all the requirements and tests in the exhibit, and acceptable to the Government.

55. Plaintiff, in the preparation of its bid, interpreted Paragraph 4.3.1 of Exhibit WCL-625 as meaning that the procuring agency laboratory would be responsible for the preproduction testing. Plaintiff detected what it construed as an inconsistency or conflict between such paragraph and Paragraph 4.4.3 of the Exhibit, as well as contract Schedule Part II. However, plaintiff concluded that Paragraph 4.3.1 controlled. Plaintiff did not make inquiry of any official or employee of the defendant with respect to such supposed conflict.

56. In early May 1955, Triumph’s First Article was hand-carried and submitted to Milton H. Gray, the project engineer, at Wright Air Development Center, Wright Patterson Air Force Base, Dayton, Ohio. Prior thereto plaintiff had not submitted the testing procedures referred to in Paragraph (f) of Part II of the Schedule, nor had it given the Article the preproduction test.

57. Mr. Gray refused to accept Triumph’s First Article. He took the position that the contract placed the responsibility of testing First Articles on the contractor. Mr. Gray also stated that First Article testing could be performed at the contractor’s plant or at a commercial testing laboratory, but that in either case it was to be the contractor’s responsibility. He requested that the testing procedure be submitted for approval prior to Triumph’s conducting the preproduction tests, as required by Part II of the contract Schedule.

58. Plaintiff submitted its proposed testing procedure on June 6, 1955, and the procedure was approved by defendant’s laboratory on June 20, 1955. Thereafter, testing of the First Articles was conducted in plaintiff’s plant and witnessed by Signal Corps resident inspectors from the Chicago Signal Corps. On August 4, 1955, Triumph submitted the First Article, together with certified test results, to defendant and then proceeded to produce the entire contract quantity of 116 testers. Plaintiff was not specifically advised by defendant that it had shipped the preproduction model to an independent laboratory until plaintiff had almost completed the production.

59. After receiving plaintiff’s First Article, defendant submitted it to an independent laboratory, the Bowser-Morner Testing Laboratory in Dayton, Ohio, for the performance by the laboratory of preproduction tests on the Article to determine whether it met the requirements of the contract and the specification, Exhibit WOL-625.

60. Testing at the Bowser-Momer Laboratory was conducted on Triumph’s First Article under the supervision of Mr. Earl G. Haber, Jr. Because of repeated failures of Triumph’s submissions the laboratory eventually tested a total of four Interval and Dwell Testers produced by Triumph under the contract.

61. The first Interval and Dwell Tester tested by Bowser-Momer was identified as Serial No. 87. Testing was completed on December 5, 1955. This Article failed during testing for the reason that the meter pointers stuck on the scale. Following this initial failure, Triumph and the project engineer, who was at this time Airman First Class Welch, decided to replace the meters with new ones. Bowser-Morner continued testing the new set of meters, but after a nominal 96 hours of humidity exposure, the new meters began to stick on the scale. The laboratory’s report to defendant with respect to this test was dated March 30, 1956.

62. In January 1956, Bowser-Morner tested a second Interval and Dwell Tester unit produced by Triumph under the contract. This unit was designated as Serial No. 75. The test was completed on January 11, 1956. During testing of this unit, the meters again stuck during the humidity exposure test. The laboratory’s report to defendant with respect to this test is dated April 2,1956.

63. Thereafter a third unit produced by Triumph was tested by Bowser-Morner, the test being completed on March 6,1956. The unit involved in these tests was designated as Serial No. 95. This unit failed the life test. The laboratory’s report to defendant with respect to this test is dated March 27, 1956.

64. By letters dated July 12, 1956, and July 18, 1956, defendant advised plaintiff that its First Articles had been rejected because of failure during testing. The reasons for the rejections were specified in the letters.

65. The fourth and final unit tested by Bowser-Morner was received by the laboratory on September 11, 1956. Ifc was designated as Serial No. 73. The testing of this unit was completed on November 9, 1956, and it passed all tests satisfactorily. The laboratory’s report to defendant with respect to this test is dated December 21,1956.

66. By letter dated January 28, 1957, defendant advised that the First Article had been approved.

67. Thereupon, plaintiff shipped to defendant all of the 116 testers called for by the contract. All of such testers were accepted by defendant.

68. Under date of August 16, 1957, after Triumph had completed deliveries of the testers, it made a claim to the Air Force for an equitable adjustment to cover the loss it sustained on the contract. It stated that when it bid, it had not made provision for the First Article preproduction test since it construed Paragraph 4.3.1 of Exhibit WCL-625 as placing responsibility for the test upon defendant; that upon defendant’s insistence, plaintiff made the test; that upon submission, defendant then caused the test to be made all over again by its laboratory, which was “a reversal from his [Mr. Gray’s] initial interpretation of Part II of the contract”; that, since the Article had been tested and approved at plaintiff’s plant, plaintiff had proceeded to procure the materials for, and to assemble, the 116 testers; that the Article was submitted to defendant on August 4,1955, but approval was not forthcoming until January 28,1957, “a very unreasonable length of time, over and above that normally allotted for pre-production approval”; that as a result of defendant’s actions, plaintiff “sustained a considerable monetary cost over and above that indicated in our bid”; and that plaintiff therefore requested “that the necessary financial adjustments be made to overcome the losses sustained, due to the acts of the Government.”

69. By further letter of September 24,1957, concerning its requested equitable adjustment, plaintiff gave a “breakdown of the monies expended in the execution of the contract.” Plaintiff’s breakdown showed its “Total Costs” to be $89,306.62. These costs included the figure of $9,000 for “Test Costs at Manufacturer’s Plant” and the figure of $1,800 as “Storage 100.00 per month for 18 mos.” From the “Total Costs,” it deducted the “Contract Price” of $17,903.20, making a “Total Loss” of $21,403.42, which amount plaintiff claimed.

70. The contracting officer denied Triumph’s claim for an equitable adjustment by letter dated September 8, 1958, which stated :

1. In accordance with the provisions of the above-numbered contract, the undersigned Contracting Officer has duly considered your request for alleged financial losses due to acts of the Government. The acts of the Government referred to include alleged unusual delay upon the part of the Government and the Government’s requirement that the contractor perform pre-production testing.
2. The undersigned Contracting Officer has decided that your request, as set forth above, is disallowed in whole for the following reasons:
a. You claim your testing of the first article was not called for by the contract but required by the Government and that you are entitled to an equitable adjustment to do this extra work. You had this testing performed in the Summer of 1955 and reported the result of the test to the Government on 29 July 1955. However, your letter dated 16 August 1957 is your first request for any adjustment for this work. Any claim for adjustment for an alleged extra must be asserted within 80 days of the purported change (General Provisions 2 and 3 of the contract). Begardless of the merits of your present claim, it is now untimely and the facts do not justify consideration of the claim, particularly in view of Mr. Gray’s death and the dispersal of Government witnesses.
b. You claim you were unreasonably delayed in your performance. Begardless of the merits of your claim, there is no contractual provision under which the adjustment you request can be made.
3. The “Disputes” clause of the contract provides that within 30 days from the date of receipt hereof the contractor may appeal from this decision by mailing or otherwise furnishing to the Contracting Officer a written appeal addressed to the Secretary of the Air Force. Two copies should accompany the original notice of appeal. The notice of appeal should identify the contract (by number), the decision from which the appeal is taken and be signed by appellant or an officer of appellant organization or by a duly authorized representative or attorney. Within thirty (30) days after receipt of notice of docketing of the appeal by the Board, the appellant shall file with the Board a complaint setting forth simple, concise and direct statement of each claim showing entitlement to relief.

71. On October 2, 1958, Triumph appealed to the Armed Services Board of Contract Appeals the decision of the contracting officer “erroneously denying the contractor’s request for equitable adjustment under paragraph 2 of the General Provisions for additional work done at the Government’s direction on account of conflicts and ambiguities in the contract provisions.” However, under date of June 29, 1960, plaintiff, by its counsel, advised the Becorder, Air Force Panel, Armed Services Board of Contract Appeals, that plaintiff “considers the issue involved in the subject appeal to solely involve a question of law for which your Board would have no jurisdiction,” and that “[ujnder the circumstances Mr. Boyajian desires to withdraw the subject appeal.” Under date of July 6,1960, the Recorder advised plaintiff’s attorney that, as requested in said letter of June 29, 1960, “You are hereby notified that the above-entitled appeal has been withdrawn from the docket of this Board.” There is no evidence that plaintiff made any subsequent efforts to pursue administrative remedies with respect to claims under the contract.

72. In this action plaintiff claims $9,000 for performing the environmental tests portion of the preproduction test, as set forth in Paragraph 4.3.2.1 of Exhibit WCL-625. The basis for this computation is a testing charge of $15 per hour for 200 hours of humidity testing, 200 hours for temperature testing, and 200 hours for altitude testing. The testing charge of $15 per hour is reasonable when compared with the hourly fee then being charged by commercial testing laboratories for such testing. The actual costs which plaintiff itself incurred in conducting the environmental tests in its own plant are not shown by the record.

73. Plaintiff claims $1,800 for storage of the 116 Interval and Dwell Testers which it produced for a period of 18 months awaiting First Article approval at the rate of $100 per month. The basis for this computation is not shown by the record. It is apparently not based upon what the charge of a commercial storage company would have been to store such number of testers for such a period of time. Instead, it appears to represent an estimate of the increased costs plaintiff incurred in its general production operations resulting from the interferences encountered by the presence in the plant of the 116 completed testers. The record does not show what was the amount, if any, of such costs which plaintiff actually incurred.

74. The unpaid balance on plaintiff’s V-loan is $128,846.17, plus interest.

CONCLUSION on Law

Upon the foregoing findings of fact and conclusions of law, which are adopted by the court and made a pai’t of the judgment herein, the court concludes as a matter of law that plaintiff is not entitled to recover and the petition is dismissed. 
      
       A Modulator Is an item of electronic test equipment used at maintenance depots to calibrate radio receiving equipment which is to be used in aircraft. The Modulator reproduces the signals generated by ground transmitters to aircraft in flight. Such signals are given to direct the course on which the plane is to fly.
     
      
       An Interval and Dwell Tester Is also an item of test equipment used in the testing of aircraft bomb release interval controls, involving both the foot spacing (“Interval,” i.e., the distance measured along the flight path between points of impact of two successive bombs) and time duration (“Dwell," i.e., the percentage of the time the bomb release is “on” to the total time between two successive bomb releases).
     
      
       Contract No. AF33(604)12150, dated October 24, 1955, was In the amount of $135,845, and provided for the production of 163 Modulators at the unit price of $815. Contract No. AF33(604) 13021, dated May 2, 1956, was in the amount of $110,025, and called for the production of 135 units at the same unit price. Contract No. AF33 (604) 14201, dated July 20, 1956, in the amount of $188,265, provided for the production of 231 units, also at the same unit price. All the contracts also provided for the furnishing of spare parts and certain engineering and maintenance data.
     
      
       Acronym for “Zero Indicator For Omni-Range.”
     
      
       Plaintiff originally had five months within which to submit the First Articles. The submission in October 1956, a year alter the first contract of October 1955, followed duly granted extensions of time to September 15, 1956.
     
      
       The contract provided that five units of every shipment, no matter how small or large the shipment was, would be subject to inspection by inspectors stationed at the plant. Plaintiff contends that defendant’s refusal to advance the $70,00.0 balance necessitated plaintiff’s' satisfying its current, continuous, needs for cash by constantly making small shipments (instead, of shipments in lots of 65, as the contract permitted), the payments for which constituted the only method plaintiff had for generating cash. Plaintiff complains that this caused a continuous disruption of its production line in order to permit numerous inspections.
     
      
       If plaintiff’s “breach” analysis on the first and third canses is erroneous and if instead, as defendant argues, administrative remedies were available, plaintiff’s failure to pursue such remedies would require the dismissal of such causes in any event.
     
      
       Pltf. Brief, p. 14.
     
      
       In a letter dated August 27, 1958, written to defendant In support of an application plaintiff Rad made on March 18, 1958, for relief under Title II of the First War Powers Act of 1941, in which plaintiff sought to recover its loss in the amount of $223,000 under the three Modulator contracts, plaintiff stated that “* * * the failure of the government to make the further advance payments agreed upon, delayed production under the contracts some additional seven months * * The first request for further funds which plaintiff specified it made and which was denied was on August 16,1957.
     
      
       For the full year 1956, plaintiff expended $12,928 for "Direct Labor,” $12,390 for “Engineering Labor,” $25,463 for “Manufacturing Overhead,” and $15,390 for “General and Administrative Expenses,” the four items totaling $66,171, Material costs for 1956, 1957, and 1958 totaled $316,324.
     
      
       Plaintiff makes no allowance for a reasonable testing period by defendant even had the First Articles originally been calibrated by plaintiff by the Zifor method. In the aforesaid application of March 18, 1958, which plaintiff made for relief under Title II of the First War Powers Act of 1941 for its loss under the three Modulator contracts, it stated that it “was subjected to a four months delay” because it was “required to acquire Zifor test equipment” A similar application plaintiff had filed on February 26, 1957, also was based on a four-month delay (such period apparently being attributable, however, to the period from the date the First Articles were submitted in October 1956 to the date they were approved in January 1957). Similarly, plaintiff's request of March 12, 1958, for an equitable adjustment based on the Zifor requirement also claimed only a four-month delay.
     
      
       Plaintiff testified that by April 17, 1957, when the Advance Payment Pool Agreement was executed, its capital had been depleted as a result of the six-month delay because its overhead continued; it was necessary to maintain its labor force; and contract supplies and materials had to be paid for. However, in its application of March 18, 1958, for relief under the First War Powers Act, plaintiff stated that in April 1957 it had available $190,000 under a V-loan from the First National Bank of Chicago, which loan was guaranteed by the Air Force, in addition to the funds made available under the Advance Payment Pool Agreement.
     
      
       As noted (n. 9), in plaintiff’s letter of August 27, 1958, in support of its First War Powers Act application for relief, it specified August 16, 1957 as the date of its first request for further funds which was denied.
     
      
       The request for the equitable adjustment contains no breakdown or other computation as to the basis for the $25,000 figure. However, in a letter written on April 22, 1957, in support of a claim it had submitted for relief under the First War Powers Act, plaintiff claimed that “as a result of these changes [in the testing procedure],” it had suffered a loss of $128,423. Again no breakdown of this figure is set forth.
     
      
       Record, vol. 1, at 43.
     
      
      
         As of August 4, 1958, i.e., after plaintiff was put into involuntary bankruptcy, the unpaid balance of the V-loan was over $160,000.
     
      
       Record, vol. 4, at 589-92.
     
      
       Record, vol. 1, at 108.
     
      
       Record, vol. 2, at 163-64.
     
      
       Plaintiff’s letter of July 3, 1957, to defendant.
     
      
       Prior to the final extension, consideration was given to a default termination because of plaintiff’s delinquency in the submission of these Articles.
     
      
       See Phillips Construction Co. v. United States, 184 Ct. Cl. 249, 260, 394 F. 2d 834, 841 (1968). Also see Rubin, The Total Cost Method of Computing An Equitable Adjustment, 26 Red. B. J. 303, 307 (1966).
     
      
       Paragraph 4.1.1, headed “Preproduction Tests,” provided that such tests would be accomplished “to determine that the production equipment meets the requirements of this exhibit.” Paragraph 4.1.2, headed “Inspection Tests,” provided that such tests would be accomplished “to determine that they [the testers] are equivalent in performance and construction to the approved pre-production sample.” Paragraph (f) of Part I of the 'Schedule provided that such a sample would be lent by defendant to the contractor as a guide to assist in the fabrication of the testers.
     
      
       Paragraphs 4.3.2, 4.3.2.1, and 4.3.2.2 further provided that the preproduction test should include (a) “environmental tests,” including testing for humidity, temperature, and altitude, and (b) a “life test” covering “a period of 200 operating hours without requiring servicing.” In addition, the prepro-duction test was to include all of the tests described in the “Inspection Test" section.
     
      
       Plaintiff says it spent 800 hours on the various tests (i.e., 200 hours each on the humidity, temperature, and altitude tests) and that the then prevailing laboratory fee for such testing was $15 per hour.
     
      
       One hundred dollars a month for 18 months.
     
      
       The claim was a general one “to recover financial losses incurred” on the contract “due to acts of Government.” It was supplemented by a letter of September 24, 1957, claiming on a “total cost” basis, i.e., plaintiff’s costs were $39,306.62, and its contract receipts were $17,903.20, resulting in a “total loss” of $21,403.42, which plaintiff claimed.
     
      
       Record, vol. 1 at 116-17.
     
      
       The disposition of this claim on the merits makes it unnecessary to consider defendant’s further defense that plaintiff’s failure properly to exhaust the administrative remedies available to it under the “Changes” clause of the contract bars consideration of the claim by the court.
     
      
       The parties are in agreement that since this claim is grounded upon defendant’s delay in approving the First Article, the contract provided no administrative remedy for its disposition. The only delay cost here sought is this storage claim.
     
      
       Acronym for “Zero Indicator for Omni-Range.”
     
      
       Plaintiff presented an exhibit (Pltf. Er. 51), supported by testimony, and proposed a finding, with respect to the total costs it incurred for the period October 17, 1956, through April 17, 1957. (Defendant’s audit resulted in a different figure.) However, no finding is máde with respect thereto since plaintiff’s brief to the commissioner mates no mention thereof and bases no damage argument thereon. The only damages claimed in the brief relate to the combined first three causes of action and are based on the total amount expended throughout the entire contract period. Any damage argument based on costs incurred during the limited October 17, 1956-April 17, 1957 period is, therefore, deemed abandoned. In any event, the record also fails to show what, if any, part of such total expenditures during such period is attributable to any action on defendant’s part about which plaintiff complains.
     