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OVITRON CORP. v. GMC

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK


July 10, 1973

Ovitron Corp., Plaintiff,
v.
General Motors Corp., Defendant

Bonsal, D.J.

The opinion of the court was delivered by: BONSAL

BONSAL, D.J.

On September 14, 1967, plaintiff instituted this action under Section 4 of the Clayton Act (15 U.S.C. § 15) against the defendant. The amended complaint alleges that the Delco Electronics Division ("Delco") of defendant acquired or attempted to acquire monopoly power over a certain radio set (hereinafter referred to as the "Squad Radio"); that it did so by bidding a price in response to an invitation for bids issued by the United States Army Electronics Command ("USAECOM") on November 14, 1966, which bid was below its anticipated costs of production; that it submitted that bid with the intention of destroying competition; and that plaintiff was injured in its business as a result of the alleged conduct. Plaintiff further alleges that defendant's conduct violated §§ 1 and 2 of the Sherman Act (15 U.S.C. §§ 1 and 2), the law of unfair competition, and §§ 1 and 2 of the Indiana Statutes relating to combinations and monopolies (Burns Ind. Stat. §§ 23-116, 117, IC 1971, 24-1-2-1, 24-1-2-2), and seeks treble damages. Prior to trial, plaintiff abandoned its claim under the Indiana Statutes and § 1 of the Sherman Act.

 Plaintiff is a New York corporation having its principal place of business in Newburgh, New York. Its Standard Winding Division, also located in Newburgh, is engaged in the business of manufacturing commercial and military electronic equipment and components. Defendant, General Motors Corporation, is a Delaware corporation having its principal place of business in Detroit, Michigan. Its Delco division, located at Kokomo, Indiana, is engaged primarily in the business of manufacturing commercial radio and electronics equipment.

 All parties having waived a jury trial, this case was tried to the court on the issue of liability only on April 2-5 and 9-11, 1973. At the conclusion of plaintiff's case, the court granted defendant's motion to dismiss on the ground that plaintiff had failed to establish a prima facie case that it had suffered any injury to its business or property. As stated by Judge Bryan in denying defendant's motion for summary judgment:

 

"On the record before me on this motion, there is a genuine issue of fact as to whether the plaintiff would have been awarded the contract had defendant not bid below cost." Ovitron Corp. v. General Motors Corp., 295 F. Supp. 373, 379 (S.D.N.Y. 1969).

 See SCM Corp. v. Radio Corporation of America, 407 F.2d 166, 171 (2d Cir.) cert. denied, 395 U.S. 943, 23 L. Ed. 2d 461, 89 S. Ct. 2014 (1969); Bookout v. Schine Chain Theatres, Inc., 253 F.2d 292, 295 (2d Cir. 1958); Productive Inventions, Inc. v. Trico Products Corp., 224 F.2d 678, 679 (2d Cir. 1955), cert. denied, 350 U.S. 936, 100 L. Ed. 818, 76 S. Ct. 301 (1956); Momand v. Universal Film Exchanges, 172 F.2d 37, 43 (1st Cir. 1948), cert. denied, 336 U.S. 967, 69 S. Ct. 939, 93 L. Ed. 1118 (1949); Advance Business Systems & Supply Co. v. SCM Corp., 415 F.2d 55, 63 (4th Cir. 1969), cert. denied, 397 U.S. 920, 25 L. Ed. 2d 101, 90 S. Ct. 928 (1970); VTR, Inc. v. Goodyear Tire & Rubber Co., 303 F. Supp. 773, 780-784 (S.D.N.Y. 1969).

 Squad Radio

 The Squad Radio is a lightweight portable radio made for use by soldiers in the field, and consists of a receiver designated AN/PRR-9 and a transmitter designated AN/PRT-4. The receiver is an FM receiver operating on one channel at a frequency of 47-57 MC and weighs approximately 8 ounces with its battery. The transmitter is an FM transmitter which can operate on two discrete channels at a frequency of 47-57 MC and weighs approximately 18 ounces with its battery. The transmitter can operate over distances of up to one mile.

 The Squad Radio was developed by the United States Government and Delco over the period 1962-65. A development contract was awarded to Delco on August 23, 1962 and was completed about a year and a half later with about six to ten prototypes being manufactured by Delco. The development contract was followed by a Production Engineering Measurement Contract ("PEM Contract") which was awarded to Delco on June 30, 1964, and which provided that Delco would draw up a set of specifications describing the materials, test procedures, and construction plans for the Squad Radio; and deliver two engineering models of the radio, 30 production model transmitters, and 100 production model receivers. The Government accepted the prototypes manufactured by Delco.

 On June 27, 1966, Delco was awarded a negotiated contract for the manufacture of 5,690 receivers and 5,190 transmitters. Delco quoted a price of $285.11 per Squad Radio ($151.92 for the transmitter and $133.19 for the receiver), and delivered the Squad Radios between December 1966 and June 1967.

 Invitation for Bids

 On November 14, 1966, USAECOM issued an invitation for bids ("IFB") which sought alternate bids on a single-year procurement program of 3,200 Squad Radios ("Alternate A") and a multiyear program of 28,811 Squad Radios ("Alternate B"). Under both alternates, a test report of preproduction models was to be submitted 180 days after the date of the award document ("ADAD"). Alternate A called for the delivery of 3,200 Squad Radios beginning 360 ADAD and ending 510 days ADAD. Alternate B called for the delivery of 28,811 Squad Radios during three program years. Production under Alternate B was to begin 360 days ADAD with 3,200 Squad Radios to be produced during the first program year, 6,502 Squad Radios to be produced during the second program year, and 19,109 Squad Radios to be produced over the third program year. The bid instructions provided that the contract would be awarded on whatever basis, multiyear or single-year, which resulted in the lowest price per unit. Each bidder was supplied with a detailed set of specifications based on information furnished by Delco, including drawings of each component of the Squad Radio and identification of certain approved suppliers thereof.

 Sixteen bids were submitted in response to the IFB, which were opened on January 13, 1967. *fn1" Delco's bid of $273.10 per Squad Radio under Alternate A and $169.89 per Squad Radio for Alternate B were the lowest bids. Plaintiff was the second lowest bidder, with a bid of $279.40 per Squad Radio under Alternate A and $211.61 per Squad Radio under Alternate B. On February 28, 1967, Delco was awarded a contract under Alternate B at a price per Squad Radio of $169.75.

 Thereafter, Delco was awarded three additional negotiated contracts for the production of Squad Radios covering the production of 12,831 Squad Radios at prices ranging between $279.28 to $303.68 per Squad Radio.

 Plaintiff contends that the price bid by Delco in the amount of $169.89 in response to the IFB Alternate B was below its cost. In support of this contention, there were introduced Delco's cost estimate sheets and minutes of meetings where the cost of producing the Squad Radios was discussed. The cost estimate sheet received in evidence indicated a cost in excess of $170 per Squad Radio and contained a notation "170". Considerable testimony was developed at the trial to indicate that the $170 did not include an allowance for general burden and administrative expenses -- which was countered by evidence that Delco contemplated further savings in labor and material costs.

 From the evidence introduced at trial, plaintiff established a prima facie case that the Squad Radio is the relevant market for purposes of this litigation. There was testimony at trial that the Squad Radio had certain distinctive features from other radios in use at this time; that during the period 1966-72, it was the only approved radio for squad use; and that substantially all purchases of the Squad Radio were by the U.S. Military. See United States v. Grinnell Corp., 384 U.S. 563, 571-576, 16 L. Ed. 2d 778, 86 S. Ct. 1698 (1966); United States v. E.I. du Pont de Nemours & Co., 351 U.S. 377, 393, 100 L. Ed. 1264, 76 S. Ct. 994 (1956); Brown Shoe Co. v. United States, 370 U.S. 294, 325-328, 8 L. Ed. 2d 510, 82 S. Ct. 1502 (1962). The court further finds that plaintiffs established a prima facie case that Delco had monopoly power by reason of its earlier Government contracts which developed the Squad Radio, (United States v. Grinnell Corp., supra), and that plaintiff made out a prima facie case that its bid of $169.89 was below its projected cost estimates. United States v. Grinnell Corp., supra ; Schine Chain Theatres, Inc. v. United States, 334 U.S. 110, 120-21, 92 L. Ed. 1245, 68 S. Ct. 947 (1948); Ovitron Corp. v. General Motors Corp., supra at 378. However, in addition to establishing a prima facie case that defendant possessed monopoly power and bid below cost, plaintiff had the burden of making a prima facie showing that it was injured in its business and property. SCM Corp. v. Radio Corp. of America, supra ; Bookout v. Schine Chain Theatres, Inc., supra. Plaintiff contends that since it was the next lowest bidder, it would have received the contract automatically if it had not been for the Delco bid. However, this does not follow. The Armed Services Procurement Regulations ("ASPR") (32 C.F.R. Para. 1.902, et seq. (Jan. 1, 1967)) provide that the lowest bidder does not get the contract automatically, but that inquiry must be made to determine whether that bidder is able to comply with the delivery schedule, taking into consideration its capacity and its business commitments, whether it has the necessary technical skills and experience, whether it has adequate financial resources, and whether it has a satisfactory record of compliance with other Government contracts. Plaintiff failed to introduce any evidence on this score.

 Defendant, on the other hand, brought out evidence tending to show that the plaintiff had failed to meet its commitments under other Government contracts during the period here involved. Prior to the award of the IFB, plaintiff had been awarded two contracts by the military for the production of the AN/PRC 9A and 10A radios. The first contract was awarded on June 29, 1963 and the second contract was awarded on June 22, 1966 and modified on September 30, 1966 and November 30, 1966, which modifications increased the procurement. The total value of the second contract, including the modifications, was $1,994,760. Shortly before the award of the IFB, plaintiff had also been awarded contracts for the production of certain receivers and amplifiers. On February 20, 1967, eight days prior to the award of the IFB, plaintiff received from the Defense Supply Agency a letter dated February 16, 1967 affording plaintiff an opportunity to show cause why the June 22, 1966 contract should not be terminated for plaintiff's failure to meet the delivery schedule. Between July 5, 1966 and May 11, 1967, plaintiff was assessed liquidated damages on the contracts for the production of receivers and amplifiers for late deliveries. The testimony at trial indicates that a show cause letter and the assessment of liquidated damages were important adverse factors in the consideration of responsibility.

 There is also evidence that Delco had informed the Government prior to the invitation for bids that on the basis of its PEM Contract it was of the opinion that the price of the Squad Radios under the IFB should be less than $200. In light of this prior estimate, there is no evidence to show that the Government would have awarded the contract at the price bid by plaintiff. The ASPR provided that the Government could have rejected all of the bids in an invitation for bids where the price bid was unreasonable, where the needs of the Government could have been met by a less expensive article, or otherwise cancellation would have been in the best interest of the Government. (32 C.F.R. § 2.404 (Jan. 1, 1967)).

 Even if the defendant would be unable to rebut plaintiff's prima facie case that its bid was below cost, plaintiff has failed to produce any evidence to show that it would have been awarded the contract under the invitation for bids. Failing to establish this, it has failed to make out a prima facie case of injury to its business from the defendant's actions. SCM Corp. v. Radio Corp. of America, supra ; Bookout v. Schine Chain Theatres, Inc., supra.

 The foregoing, together with the attached findings of fact and conclusions of law, n.2 [Footnote Omitted] constitutes the court's findings of fact and conclusions of law. Rule 52(a), Fed. R. Civ. P.

 Settle judgment on notice.

 Findings of Fact and Conclusions of Law

 Introduction

 Plaintiff brought this action on September 27, 1967, claiming that the Delco Electronics Division of defendant General Motors Corporation acquired or attempted to acquire monopoly power over certain military radio equipment, that it did so by bidding a price in response to a certain invitation for bids which was below its anticipated costs of production and that it submitted that bid with the predatory intention of destroying competition. Plaintiff claimed that the alleged conduct constituted violations of Sections 1 and 2 of the Sherman Act (15 U.S.C. §§ 1, 2), the law of unfair competition and Sections 1 and 2 of the Indiana Statutes relating to combinations and monopolies (Burns Ind. Stat. §§ 23-116, 117 (1964)). As set forth in the Pre-trial Order herein dated June 12, 1972 ("PTO"), plaintiff has abandoned all claims based on Sections 1 and 2 of the Indiana Statutes and Section 1 of the Sherman Act.

 Plaintiff seeks relief under Section 4 of the Clayton Act (15 U.S.C. § 15), claiming that it was injured in its business and property as a result of the conduct alleged in that it claims that but for such conduct, plaintiff would have been awarded certain contracts for manufacture of the radio equipment in question.

 The action having come on for trial on all issues of liability before the Court without a jury, plaintiff having completed the presentation of its evidence as to liability, defendant having moved pursuant to Rule 41(b) of the Federal Rules of Civil Procedure for dismissal on the ground that upon the facts and the law plaintiff has shown no right to relief, the Court, having granted the motion, does hereby, pursuant to Fed. R. Civ. P. 52(a), make the following findings of fact and conclusions of law:

 Findings of Fact

 I. The Parties

 1. Plaintiff Ovitron Corporation is a New York corporation engaged in various lines of business having its principal place of business in Newburgh, New York. The Standard Winding Division of Ovitron is engaged in the business of manufacturing commercial and military electronic equipment and various other products. (PTO, p. 2, P 1)

 2. Defendant General Motors Corporation is a Delaware corporation having its principal place of business in Detroit, Michigan. The Delco Electronics Division of defendant ("Delco"), located in Kokomo, Indiana, is engaged primarily in the business of manufacturing commercial radio and electronics equipment. (PTO, p. 2, P 2)

 II. Invitation for Bids 0278

 3. The AN/PRT-4 radio transmitter and AN/PRR-9 radio receiver comprise a model of portable military radio ("PRT-4/PRR-9") manufactured for the United States armed forces. (PTO, p. 2, P 3) The PRT-4/PRR-9 was developed by Delco in cooperation with the United States Government during the period 1962-1965. Upon completion of development, Delco was awarded the initial contract for production of the unit in 1966. (PTO, p. 3, P 6; p. 8, P 26) Virtually all PRT-4/PRR-9 radios have been sold to the United States Government. (Tr. 540)

 4. On November 14, 1966, the United States Army Electronics Command ("USAECOM") issued Invitation for Bids DAAB05-67-B-0278 ("IFB 0278") seeking sealed competitive bids for manufacture of the PRT-4/PRR-9 radio. IFB 0278 sought bids on a singleyear procurement program of 3,200 units of the PRT-4/PRR-9 ("Alternate A") and a multiyear program of 28,811 units ("Alternate B"). Production under the multiyear procurement program was to commence 360 days after award of the contract and extend over a period of three "program years". 3,200 of the 28,811 units were to be produced during the first program year, 6,502 units during the second program year and 19,109 units during the third program year. (PTO, pp. 3-4, P 7, 8)

 5. The date for opening the sealed bids tendered in response to IFB 0278 was first set for December 14, 1966, but later adjourned until January 13, 1967. Bids in response to IFB 0278 were received from 16 companies: Arvin Industries, Inc., Columbus, Ohio; Bristol Electronics, Inc., New Bedford, Massachusetts; Cosmos Industries, Brooklyn, New York; Delco Electronics Division of General Motors Corporation, Kokomo, Indiana; DMI Cossor Electric Ltd., Dartmouth, Nova Scotia; Duffers Associates, Inc., Troy, New York; Electrospace Corp., Glen Cove, New York; Lear Siegler, Inc., Anaheim, California; Magnavox Co., Fort Wayne, Indiana; Manst Corp., Bethesda, Maryland; Memcor, Inc., Huntington, Indiana; Motorola, Inc., Chicago, Illinois; Oklahoma Aerotronics, Hartshone, Oklahoma; Ovitron Corporation, Newburgh, New York; Spencer Kennedy Labs, Boston, Massachusetts; Symmetrics Corp. of Florida, Satellite Beach, Florida. (PTO, pp. 4-5, P 12-14)

 6. Delco's bids of $273.10 per unit on the single-year Alternate A and of $169.89 per unit on the multi-year Alternate B were the lowest bids submitted. Delco's submission on Alternate B included a provision reducing the bid to $169.75 if the Government were to waive certain testing requirements known as "first article" tests in light of Delco's past experience as a developer and initial producer of the PRT-4/PRR-9. (PTO, p. 3, P 6; pp. 4-5, P 12; pp. 7-8, P 23-27)

 7. On the single-year Alternate A, Ovitron submitted a bid of $279.40, or $273.81 if payment were made within 20 days. On the multiyear Alternate B, Ovitron submitted a bid of $211.61 per unit, or $207.37 if payment were made within 20 days. Ovitron's bids on both alternates were the next lowest to the Delco bids. (PTO, p. 5, P 13)

 8. On February 28, 1967, USAECOM awarded Delco contract No. DAAB05-67-C-0161 for the multiyear Alternate B ("contract 0161") at a unit price of $169.75. (PTO, p. 5, P 15)

 9. In promulgating IFB 0278, the United States Government reserved the right to accept whatever bid was most advantageous to the Government and to reject any or all bids and cancel the solicitation. IFB 0278 provided:

 "The Government reserves the right to reject any or all bids and to waive informalities and minor irregularities in bids received.

 ". . .

 "The contract will be awarded to that responsible bidder whose bid conforming to the Invitation for Bids, will be most advantageous to the Government, price and other factors considered." (Ex. 153)

 III. Criteria Applied in Evaluating Prospective Contractors

 10. The Armed Services Procurement Regulations ("ASPR") caution against the award of contracts on the basis of the lowest price alone and emphasize that various factors are to be taken into account in deciding to whom a government contract is to be awarded:

 "The award of a contract to a supplier based on lowest evaluated price alone can be false economy if there is subsequent default, late deliveries, or other unsatisfactory performance resulting in additional procurement or administrative costs. While it is important that Government purchases be made at the lowest price, this does not require an award to a marginal supplier solely because he submits the lowest bid or offer." (32 CFR § 1.902 (Jan. 1, 1967))

 11. The Regulations further mandate that a detailed inquiry be undertaken to determine whether a potential producer possesses the capability or responsibility to produce the particular product in question. In making this determination, the Government takes into account many factors, including, inter alia, (1) whether the producer is able to comply with the required delivery schedule, taking into consideration the producer's capacity and all his business commitments, (2) whether the producer has the necessary technical skills, (3) whether the producer has the necessary organization, experience, operational controls, production control procedures and quality assurance measures, (4) whether the producer has the necessary production and technical equipment, (5) whether the producer has adequate financial resources and (6) whether the producer has a satisfactory record of integrity. (32 CFR § 1.903 (Jan. 1, 1967))

 12. It is not uncommon for the Government to reject bids because of the contractor's failure to demonstrate its capability to produce the particular product in question. See, e.g., Comp. Gen. B-159642, 11 CCF P 80,711 (Oct. 12, 1966), (adequate financial resources); Comp. Gen. B-167686, 14 CCF P 83,112 (Oct. 14, 1969), Comp. Gen. B-158249, 11 CCF P 80,335 (Mar. 11, 1966) (ability to comply with the required delivery schedule); Comp. Gen. B-169357, 14 CCF P 83,572 (Apr. 30, 1970) (organization, experience, operational controls); Comp. Gen. B-159917, 11 CCF P 80,814 (Nov. 30, 1966) (adequate equipment).

 13. Another factor given important consideration by the Government is whether the producer has a satisfactory record of performance. Contractors who are seriously deficient in current contract performance are, in the absence of evidence that such deficiencies are due to factors beyond the contractor's control, presumed to be unable to meet the satisfactory performance requirement. (32 CFR § 1.903-1 (Jan. 1, 1967)) In determining whether a prospective contractor has a satisfactory record of performance, Government contracting personnel would inquire into the failure of the contractor to make timely deliveries under current contracts and the facts and circumstances underlying such failure. (Tr. 885-886) The failure to comply with delivery schedules under current contracts is an adverse factor in assessing whether a prospective producer would be a responsible contractor. See, e.g., Comp. Gen. B-161494, 12 CCF P 81,432 (Oct. 23, 1967), Comp. Gen. B-161167 to 161170, 12 CCF P 81,150 (June 9, 1967), Comp. Gen. B-151579, 9 CCF P 72,235 (July 12, 1963).

 14. Contracts entered into pursuant to ASPR may contain liquidated damage provisions requiring the contractor to pay liquidated damages if the contractor's delivery or performance is delinquent. (32 CFR § 1.310 (Jan. 1, 1967)) The collection of liquidated damages pursuant to such contractual provisions is a rare event and evinces serious governmental dissatisfaction with the contractor. (Tr. 891-894) The collection of liquidated damages is an important adverse factor in assessing whether a prospective producer would be a responsible contractor. (Tr. 894) The officer charged with the duty of assessing a contractor's responsibility would inquire into the facts and circumstances underlying the collection of liquidated damages to determine whether such facts and circumstances reflected adversely on the prospective producer's capability to produce and timely deliver the product in question. (Tr. 893-94, 1011)

 15. If a producer is failing to meet delivery schedules or performance requirements under current contracts, governmental contracting personnel may issue "show cause" or "endangering performance" letters which notify the contractor that the Government is considering the termination of the contract for default. The issuance of such letters with respect to contracts currently being performed by a producer is considered an adverse factor in assessing the responsibility of that producer. (Tr. 898) See, e.g., Comp. Gen. B-157730, 11 CCF P 80,200 (Dec. 14, 1965). The officer charged with the duty of assessing a contractor's responsibility would inquire into the facts and circumstances underlying the issuance of such letters to determine whether such facts and circumstances reflected adversely on the producer's capability to produce the product in question. (Tr. 898, 1011)

 IV. The Evidence Does Not Establish That The Government Would Have Deemed Plaintiff a Responsible Producer of The PRT-4/PRR-9 or Determined That Award of Contract 0161 to Plaintiff Was Most Advantageous To The Government.

 16. Plaintiff's evidence does not establish that the Government would have deemed plaintiff a responsible producer capable of producing the PRT-4/PRR-9 or that the Government would have awarded contract 0161 to plaintiff even if it be assumed that its bid of $211.61 had been the lowest submitted and that that price had been deemed reasonable by the Government.

 17. Plaintiff chose to call no witness familiar with the skills, facilities or capabilities of Ovitron. Plaintiff introduced no evidence sufficient to persuade this Court that Ovitron could have satisfactorily demonstrated to the Government the requisite ability to comply with the delivery schedule under contract 0161. It introduced no evidence as to the number or experience of the engineering or other technical personnel at Ovitron. It introduced no evidence as to the extent or nature of the production and technical facilities available at Ovitron. It introduced no evidence as to the organization, operational controls, production control procedures or quality assurance measures at Ovitron. It introduced no evidence that Ovitron possessed adequate financial resources to support performance of contract 0161. It introduced no evidence that Ovitron possessed during the relevant period the productive resources required pursuant to ASPR or that it could acquire such resources. Plaintiff's failure to offer such evidence warrants the drawing of inferences adverse to its responsibility and capability to produce the PRT-4/PRR-9. See, e.g., N. Sims Organ & Co. v. SEC, 293 F.2d 78, 80-81 (2d Cir. 1961), cert. denied, 368 U.S. 968, 7 L. Ed. 2d 396, 82 S. Ct. 440 (1962); Charles of the Ritz Distributors Corp. v. FTC, 143 F.2d 676, 679 (2d Cir. 1944); Noce v. Kaufman, 2 N.Y. 2d 347, 353, 161 N.Y.S.2d 1, 141 N.E.2d 529 (1957).

 18. Plaintiff's evidence is insufficient to establish that it could make the requisite demonstration of a satisfactory record of performance under its contracts during the relevant period. Rather, the quality of its performance of Government contracts indicated that plaintiff did not have a satisfactory record of performance, and governmental dissatisfaction with plaintiff's performance under current contracts rendered it highly doubtful that plaintiff would have met the requirement of demonstrating a satisfactory record of performance under 32 CFR § 1.903-1(c) (Jan. 1, 1967).

 19. The evidence shows that Ovitron was deficient in performing the only contract for the production of military radios which it held during the period immediately preceding award of contract 0161. Shortly before award of contract 0161 to Delco on February 28, 1967, Ovitron received a show cause letter dated February 16, 1967, notifying it that it had failed to meet the delivery schedule required by contract DA-36-039-AMC-09457(E) and that the Government was considering termination of that contract for default. (Ex. 265)

 20. Plaintiff received a show cause letter from the United States Government dated October 25, 1966, notifying it that it had failed to meet the delivery schedule required by contract N-150-8266 (Neg. 7274) and that the Government was considering terminating that contract for default. (Ex. Q)

 21. Plaintiff received a telegram from the United States Government dated February 20, 1967, notifying it that it had failed to meet the delivery schedule required by contract DSA 900-67-C-1558 and that the Government was desirous of canceling certain scheduled deliveries under that contract. (Ex. R)

 22. Plaintiff received a letter from the United States Government dated March 30, 1967, notifying it that it had failed to make delivery as required by purchase order DAAC-71-67-M5850 and that the Government might cancel the order because of such failure. (Ex. S)

 23. During the period from July 5, 1966, through May 11, 1967, plaintiff was assessed liquidated damages because of late deliveries on Government contract DA-36-039-AMC-08461(E) for the production of control receivers and contract DA-36-039-AMC-09360 for the production of certain amplifiers.Liquidated damages were refunded on one such contract in June 1967, four months after award of contract 0161 to Delco.(PTO, p. 18, P 55)

 24. Plaintiff attempted to show that it would have been awarded contract 0161 through the testimony of Mr. Selo J. Vitali, and certain documents offered by plaintiff in connection with such testimony. Mr. Vitali was educated as an accountant and worked in various aspects of Government contract administration from 1951 until 1967. Since 1967, he has been successively employed as director of Government contracts for Transdyne Corporation, a marketing representative for The Honeywell Corporation and, most recently, as a real estate broker. (Tr. 801, 807, 812)

 25. Mr. Vitali reviewed what purported to be a copy of plaintiff's bid in response to IFB 0278 and gave an opinion as to the bid's responsiveness. (Tr. 982-984) Concerning plaintiff's responsibility as a producer of the PRT-4/PRR-9, the testimony consisted of an opinion rendered on the basis of a hypothetical question. Mr. Vitali was asked to assume that a Government contractor had been granted certain contracts, which had been granted to plaintiff, and to opine on the responsibility of such a contractor. (Ex. 5, 229, 260, 261, 262 and 264; Tr. 987-992)

 26. Mr. Vitali had no personal knowledge of plaintiff's condition or productive resources. He had never visited any Ovitron plant or examined any of its facilities or financial reports. (Tr. 880) His duties while employed by the Government entailed no responsibilities with respect to PRT-4/PRR-9. His education as an accountant did not qualify him to express any opinion as to plaintiff's technical capability.

 27. Although Mr. Vitali testified that the collection of liquidated damages would be an important adverse consideration and that the underlying facts and circumstances would be investigated in assessing a contractor's responsibility, he had no knowledge of the facts and circumstances underlying the collection of liquidated damages from plaintiff during the period from July 5, 1966, through May 11, 1967. (Tr. 891-894, 1011, 1014)

 28. Although Mr. Vitali testified that the receipt of a show cause letter with respect to deficiencies in meeting a contractor's current contract obligations would be investigated in assessing the contractor's responsibility, he had no knowledge of the letters sent to plaintiff with respect to such deficiencies described in Finding Nos. 19, 20, 21 and 22 above. (Tr. 898, 1011-1014)

 29. Mr. Vitali testified that many factors are involved in deciding whether a bidder would be a responsible producer of any particular product and that all of the circumstances of any award would have to be considered. He testified that the circumstances underlying the granting or extension of a prior contract would be considered in evaluating the significance, if any, of such a prior contract with respect to the contractor's responsibility for a forthcoming award. (Tr. 1005) Among the circumstances of such a prior contract which would be considered are the similarity or dissimilarity of the products involved and the urgency of the Government's requirement for the product covered by the contract. (Tr. 1002-1003, 1010) If the requirement which led to the prior contract or extension had been urgent, the Government may have granted the contract even though the contractor's performance had been unsatisfactory. (Tr. 1010) Under such circumstances, the granting or extension of a contract would not indicate governmental satisfaction with the contractor's performance and such a governmental action would be of no significance in assessing the contractor's responsibility for a future award on another product. See, e.g., Comp. Gen. B-155078, 9 CCF P 72,836 (Dec. 1, 1964).

 30. Referring to the hypothetical question which had been put, Mr. Vitali admitted that one of the contract awards posited was not relevant to assessing the technical capability of a potential producer of the PRT-4/PRR-9 because of the dissimilarity of the products involved. (Tr. 1004-1005) Certain of the other contract modifications posited in that hypothetical reflected the assignment of one of the highest military "priority designators", 02 (Ex. 262, 264), indicating that the contract modifications involved an urgent military requirement. (32 CFR § 3.202-2(f) (Jan. 1, 1967)) Mr. Vitali had no knowledge of the facts and circumstances underlying the award of the other contracts relied upon in rendering his opinion as to plaintiff's responsibility. (Tr. 1014)

 31. Because Mr. Vitali knew nothing about plaintiff's resources or condition, because he knew nothing of the PRT-4/PRR-9, because of the nature of the hypothetical question put to him by plaintiff, because of the conflicts in his testimony concerning responsibility and because of other aspects of such testimony before the Court, the opinion rendered as to responsibility has no probative value.

 32. The fact that plaintiff was granted contracts for other military products is insufficient to establish that plaintiff would have been deemed a responsible producer of the PRT-4/PRR-9 by the Government. As evidenced in Finding No. 30, one of the contract awards relied upon by plaintiff (Ex. 229) involved a product so dissimilar that plaintiff's witness denied its relevance. (Tr. 1004-1005) That contract was awarded on October 31, 1967, some eight months later than the award of contract 0161 to Delco -- a lapse of time so great as to cast yet further doubt on the relevance of that award. See, e.g., Brown v. LoGrasso, 203 App. Div. 50, 196 N.Y.S. 349 (4th Dep't 1922).

 33. The balance of the contracts relied upon by plaintiff consist of an award in June 1966 of contract DA-36-039-AMC-09457 for a certain quantity of AN/PRC-9 and 10 radios and certain modifications thereto (Ex. 5, 260, 261, 262 and 264). The contract award involved antedated the delinquencies referred to in Finding Nos. 19, 20, 21 and 22, and the show cause letter of February 16, 1967, referred to in Finding No. 19 (Ex. 265) reflected that the Government was contemplating termination of that very contract.

 34. Although some of the modifications were entered into at times more proximate to the award of contract 0161, the record reflects that some and perhaps all of the units so procured were urgently required by the Government and that plaintiff was an immediate source of those units, notwithstanding its poor performance. (Ex. 262, 264) Because of such urgency and because of the paucity of evidence regarding the facts and circumstances of those modifications and the products involved, no inference based upon them favorable to plaintiff's responsibility as a producer of the PRT-4/PRR-9 can properly be drawn. See, e.g., Comp. Gen. B-155078, 9 CCF P 72,836 (Dec. 1, 1964).

 35. The contractual awards relied upon by plaintiff, assessed in the context of the evidence indicating governmental dissatisfaction with plaintiff's performance, the lack or evidence concerning plaintiff's productive resources of its capability of producing the PRT-4/PRR-9 and the lack of evidence of the facts and circumstances underlying the awards relied upon, provide no sufficient basis for this Court to conclude that plaintiff would have been deemed a responsible producer of the PRT-4/PRR-9.

 36. Viewing the evidence bearing on plaintiff's capability as a whole, this Court finds that plaintiff has failed to prove that it would have been deemed a responsible contractor by the United States Government or that it would have made the requisite demonstration of satisfactory performance or productive capability.

 V. The Evidence Does Not Establish That Plaintiff Would Have Been Awarded Contract 0161 at the Price Bid.

 37. The Armed Services Procurement Regulations, as in effect at the time of award of contract 0161, empowered the Government to reject bids in a wide variety of circumstances including, inter alia, that "[all] otherwise acceptable bids received are at unreasonable prices"; that the "[bids] received indicate that the needs of the Government can be satisfied by a less expensive article differing from that on which the bids were invited"; or that "[for] other reasons, cancellation is clearly in the best interest of the Government." (32 CFR §§ 2.404-(b) (5), (6), (8) (Jan. 1, 1967)) The regulations further provide:

 "Any bid may be rejected if the contracting officer determines in writing that it is unreasonable as to price." (32 CFR § 2.404-2(e) (Jan. 1, 1967))

 38. As reflected in ASPR, one of the primary considerations leading to the rejection of bids for Government contracts is that the quoted prices for a product are in excess of governmental expectations. It is not uncommon for the Government, pursuant to 32 CFR § 2.404-1, to cancel a solicitation when bid prices exceed governmental expectations. See, e.g., Comp. Gen. B-160083, 11 CCF P 80,773 (Nov. 4, 1966); Comp. Gen. B-159665, 11 CCF P 80,479 (Oct. 24, 1966); Comp. Gen. B-159354, 11 CCF P 80,601 (Aug. 3, 1966); Comp. Gen. B-158749, 11 CCF P 80,399 (Apr. 21, 1966); Comp. Gen. B-157951, 11 CCF P 80,271 (Feb. 1, 1966).

 40. The price of $211.61 bid by plaintiff was substantially in excess of the price at which contract 0161 was let and the price range which the record shows to have been anticipated. The record provides no basis for concluding that the Government would have deemed the price of $211.61 reasonable, given the quantities and conditions of the multiyear Alternate B of IFB 0278. Whether the Government would have awarded contract 0161 to Ovitron or any one else at a price of $211.61 is a matter of speculation.

 41. In lieu of awarding contract 0161 at a price of $211.61, the Government could have resorted to any one of a number of different options pursuant to ASPR. It could have canceled IFB 0278 and resolicited potential producers. (32 CFR § 2.404-1(b) (8) (Jan. 1, 1967); Comp. Gen. B-157700, B-157292, 11 CCF P 80,118 (Nov. 15, 1965)). It could have canceled the solicitation and abandoned or deferred the procurement. (32 CFR § 2.404-1(b) (3) (Jan. 1, 1967)) It could have canceled the solicitation and negotiated a contract directly with one or more producers. (32 CFR § 2.404-1(b) (8) (Jan. 1, 1967); Comp. Gen. B-163030, 12 CCF P 81,643 (Feb. 8, 1968)) It could have canceled the solicitation and procured another product. (32 CFR § 2.404-1(b) (5); Comp. Gen. B-159771, 11 CCF P 80,690 (Sept. 28, 1966)) It is not uncommon for the Government to cancel a solicitation for a particular product and resort to different products in the interest of securing suitable goods and services at the lowest overall cost to the Government. E.g., Comp. Gen. B-161877, 12 CCF P 81,253 (Aug. 3, 1967); Comp. Gen. B-160418, 12 CCF P 80,965 (Feb. 28, 1967); Comp. Gen. B-159771, 11 CCF P 80,690 (Sept. 28, 1966); Comp. Gen. B-158608, 11 CCF P 80,609 (July 29, 1966); Comp. Gen. B-143263, 7 CCF P 71,417 (Dec. 22, 1960); Comp. Gen. B-103380, 5 CCF P 61,284 (July 3, 1951).

 42. During the period prior to and at the time of IFB 0278, other models of military radio had been developed or were being manufactured which, like the PRT-4/PRR-9, were designed for use by the forward elements of the field army. (Tr. 546-50, 562, 608, 962, 1029) In addition, the United States Government frequently receives and evaluates unsolicited proposals from manufacturers of radio equipment which propose alternative products for use by the United States armed forces. (Tr. 1028-29, 1074-78) No evidence was introduced concerning the state of military thinking concerning the costs or relative desirability of these various models of military radios.

 43. No evidence was introduced which would lead this Court to conclude that the United States would have awarded contract 0161 to plaintiff or any one else at a price of $211.61 rather than resorting to procurement of some alternative product or to exercise of one of the alternative options described in Finding No. 41. Whether the Government would have awarded contract 0161 at a price of $211.61 rather than resorting to other alternatives is a matter of speculation.

 VI. Conclusion

 44. Whether plaintiff would have been awarded contract 0161 or any other contract for manufacture of the PRT-4/PRR-9 and whether plaintiff would have been deemed a responsible producer capable of producing the PRT-4/PRR-9 are matters of speculation not supported by the evidence before this Court.

 45. Upon consideration of all the evidence, this Court finds upon the facts and the law that plaintiff has not carried its burden of proving that it would, but for Delco's alleged conduct, have been awarded contract 0161 for the manufacture of the PRT-4/PRR-9 or any other contract for the manufacture of that unit.

 Conclusions of Law

 46. Delco's bid on IFB 0278 and the award of contract 0161 to Delco constituted acts in interstate commerce.

 47. This Court has jurisdiction over the subject matter of this action pursuant to 15 U.S.C. § 15, 28 U.S.C. § 1332 and principles of pendent jurisdiction.

 48. This Court has jurisdiction over the persons of Ovitron Corporation and General Motors Corporation, the parties hereto.

 49. Plaintiff bore the burden of proving that it sustained injury as the proximate result of some act of defendant.

 50. Plaintiff has failed to carry its burden of proving by a preponderance of the evidence that it was injured in its business or property by Delco's bid on IFB 0278 or by the award of contract 0161 to Delco.

 51. Plaintiff has failed to carry its burden of proving by a preponderance of the evidence that any act of defendant was the proximate cause of injury to plaintiff.

 52. Final judgment shall be entered dismissing on the merits and with prejudice this action, plaintiff's second amended complaint and each claim and cause of action asserted therein.

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