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National Presto Industries, Inc. v. United States

United States Court of Claims
338 F.2d 99 (1964)

Written by Rich Walter, JD

Facts

National Presto Industries, Inc. (Presto) (plaintiff) contracted with the United States government (defendant) to make improved artillery shells for the Army. The government required Presto to make the shells using an experimental new production method. The contract contained no risk-allocation clause. Presto suspected that the new process might require expensive new grinders, which it did not have on hand. However, a short test phase did not reveal the need for such costly equipment. Once the test phase had ended, it was too late to raise the contract’s fixed per-unit price. As production progressed, Presto realized that the new grinders were essential. Presto bought the equipment and then petitioned the federal Court of Claims for reimbursement. The court submitted the case to a commissioner, whose findings as to the cost of reimbursement were ambiguous.

Rule of Law

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Issue

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Holding and Reasoning (Davis, J.)

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A "yes" or "no" answer to the question framed in the issue section;
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Dissent (Whitaker, J.)

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