“[A] course of dealing can supply an enforceable term to a contract (or may even supplement or qualify that contract) provided that the conduct which identifies that course of dealing can reasonably be construed as indicative of the parties’ intentions — a reflection of their joint or common understanding.”
How later courts described this case
- “[A] course of dealing can supply an enforceable term to a contract (or may even supplement or qualify that contract) provided that the conduct which identifies that course of dealing can reasonably be construed as indicative of the parties’ intentions — a reflection of their joint or common understanding.”
- statute says cost data sometimes "need not" be submitted, not "shall not" be submitted, so demand for data upheld
Written by the judges who cited it.
The opinion
Davis, Judge,
concurring:
Joining in the court’s opinion, I add some further considerations which, as I see it, puncture this plaintiff’s claim even if one disagrees with the broader proposition that contracting officers have a general discretion to demand cost data whenever there is some preliminary reason to believe the demanded price may be excessive.
The contractor’s case rests at bottom on its argument that the regulation affirmatively gave it a flat exception from the cost data requirement because the price of the flux valve (the ML-1 model) was an established catalog price of commercial items sold in substantial quantities to the general public, or at least was “based upon” the “thin valve” which did meet those characteristics. One can accept arguendo the contention that items satisfying these specific criteria are automatically exempted from the cost data requirement without holding for this plaintiff. The Armed Services Board of Contract Appeals confronted the point by finding that m any event the particular standards (on which plaintiff relies) were not satisfactorily met. First, the Board found in effect that the ML-1, though a catalog item, was not sold in substantial quanties to the general public — without doubt this determination had solid support in the record. Second, the Board found in substance that the catalog price of the ML-1 was not “based upon” the price of the “thin valve”; for this finding the tribunal largely rested, and quite properly, on the express testimony of plaintiff’s marketing manager that the ML-1 price was not based on the price of the “thin valve” but on a number of factors. 1
Another part of the regulation secondarily invoked by plaintiff limits, in the case of substantially similar items not technically “based on” the price of a publicly vended catalog item, the requirement for cost or price data “to that pertaining to the differences between the items” (i.e. between the item in question and the “similar” item sold publicly in substantial quantities) but only “if this limitation is consistent *345 with assuring reasonableness of pricing result.” 2 On the basis of the factors alreadly mentioned plus the sole-source nature of the ML-1 and “the ability of the Air Force to obtain lower prices on the more complex thin unit,” the board permissibly concluded, in my opinion, that the contracting officer could permissibly determine that in this instance the limitation was not consistent with assuring reasonableness of pricing result — that unanswered questions of reasonability still remained, even though the ML-rl and the “thin” unit ■might be “similar.”
It follows that, even under the specific parts of the regulation on which plaintiff grounds its claim, it is not entitled to recover.
The Board referred to “the lack of any apparent relationship (confirmed by the quoted testimony of appellant’s marketing manager) between the price of the ML-1 and the price of the thin unit * *
This portion of the regulation provided (3.807.3(c)) : “Where an item is substantially similar to a commercial item for which there is an established catalog or market price at which substantial quantities are sold to the general public, but the offered price of the former is not considered to be based on the price of the latter in accordance with 3-807.1 (b) (2), any. requirement for cost or pricing data should be limited to that pertaining to the differences between the items if this limitation is consistent with assuring reasonableness of ‘pricing result’’ (emphasis added).