Volume 77 — Federal Supplement

<p>Special Findings of Fact</p> <p>1. The plaintiff is, and during all the times mentioned in these findings was, a corporation organized and existing under and by virtue of the laws of the State of Minnesota, having its principal office in Minneapolis, Minnesota.</p> <p>- 2. Beginning in the year 1922, and at all times mentioned in these findings, plaintiff has owned and operated, and still owns and operates a plant at Anoka, Minnesota, for the manufacture of sporting-type ammunition, consisting of shotgun shells and .22 calibre and air-rifle ammunition. The manufacture of shotgun shells and .22 calibre and air-rifle ammunition has always constituted and still constitutes plaintiff’s normal peacetime operation, and plaintiff has at no time engaged in the manufacture of any other product or in any other business except in connection with the performance of its contract with the United States of America hereinafter described, except that during the last war detonators and smoke bombs were manufactured at its Anoka plant.</p> <p>3. On July 14, 1941, plaintiff entered into a certain contract in writing with the United States, known and described and hereinafter referred to as Prime Contract W-ORD-527. Thereafter, from time to time, certain contracts and change orders, supplemental to said Prime Contract WORD-527, were entered into between plaintiff and the United States, amending the terms and conditions of the prime contract. The prime contract, as supplemented and amended, provided for the construction of a plant located at New Brighton, Minnesota, some thirteen miles distant from plaintiff’s plant at Anoka, the furnishing of management services in connection therewith, the procuring of production equipment, training of personnel, and the operation of the plant for the manufacture of small-arms ammunition, consisting of .30 and .50 calibre cartridges. This plant is designated in the prime contract, and is hereinafter referred to as the “Twin Cities Ordnance Plant.” The land, buildings, machinery and equipment comprising the same were at all times and still are owned by the United States. The operations at the Twin Cities Ordnance Plant were conducted independently and separately from and had no connection with the operations at Anoka. There was no exchange of materials between the two plants, nor exchange of workmen or personnel, and the two plants maintained separate hiring offices, separate pay rolls, separate cost records and separate bank accounts. Supplement No. 43, dated September 23, 1946, consisted of a settlement agreement pursuant to notice of termination for the convenience of the Government issued August 14, 1945. In said termination contract No. 43, plaintiff duly reserved the right to make the claim involved in this action.</p> <p>4. Pursuant to the terms of said prime contract and change orders amending and supplementing the same, defendant advanced funds to plaintiff, which were deposited in a special bank account or accounts separate from plaintiff’s general funds, known as the “advance fund,” and maintained as a revolving fund for the carrying out of the purposes of the contract. Expenses incident to the operation at the Twin Cities Ordnance Plant were paid by plaintiff out of this advance fund and plaintiff then in each instance requested reimbursement of the advance fund from the United States by presentation of vouchers for approval to the Contracting Officer or his representative in charge of operations, and if the vouchers were approved, reimbursement was made by the finance officer.</p> <p>5. The contract provided for compensation to plaintiff by the payment of a fixed fee for its services in connection with the construction, management and operation of the Twin Cities Ordnance Plant; and to reimburse plaintiff for all costs and expenditures in connection with such construction and operations.</p> <p>The contract provided, in part, as follows:</p> <p>“Article V-A — Reimbursement for Contractor’s Expenditures and Payment of Predetermined Fixed Amounts</p> <p>“(1) The Contractor shall be reimbursed in the manner hereinafter described for such of its actual expenditures in the performance of the work under this contract, and, with respect to Section 3d (2) hereof, paid the predetermined fixed amounts as may be approved or ratified by the Contracting Officer, and as are included in but not limited to the following items:</p> <p>“i. The cost of losses or expenses not compensated by insurance or otherwise (including settlements made with the written consent of the Contracting Officer) actually sustained by the Contractor in connection with the work and found and certified by the Contracting Officer to be just and reasonable, unless reimbursement therefor is expressly prohibited; provided that such reimbursement shall not include any amount for which the contractor would have been indemnified or compensated by insurance except for failure of tire Contractor to procure or maintain bonds or insurance in accordance with the requirements of the Contracting Officer. * * *</p> <p>“k. Payments made by the Contractor under the Social Security Act (employer’s contribution) and any disbursements required by law which the Contractor may be required on account of this contract to pay on or for any plant, equipment, process, organization, materials, supplies, or personnel; and, if approved in writing by the Contracting Officer in advance, permit and license fees and royalties on patents used including those owned by the Contractor. * * *</p> <p>“q. Disbursements incident to payment of pay rolls, including but not limited to, the cost of disbursing cash, necessary guards, cashiers and paymaster.* * *</p> <p>“r. Such other items as should, in the opinion of the Contracting Officer, be included in the cost of the work. When such item is allowed by the Contracting Officer, it shall be specifically certified as being allowed under this paragraph. * * *</p> <p>“5. No salaries of the Contractor’s executive officers or partners, no part of the expense incurred in conducting the Contractor’s main office or regularly established branch offices, and no overhead expenses of any kind, except as specifically authorized in Section 1 of this Article, shall be included in the cost of the work under this contract; nor shall any interest on capital employed or on borrowed money be included in the cost of the work. * * *</p> <p>“Article V — B—Payments Reimbursement for Cost</p> <p>“1. a. The Government will currently reimburse the Contractor for expenditures made in accordance with Article V-A of this Title V, upon certification and delivery to and verification by the Contracting Officer of the original signed pay rolls for labor, the original receipted invoices for materials, equipment, etc., or other original papers satisfactory to the Contracting Officer. Reimbursement will be made as promptly as possible, generally weekly, but may be made at more frequent intervals if the conditions so warrant. * * *</p>