Upon completion of performance, JMCA submitted claims for unreimbursed costs of the Artemis move, cost of facilities capital, additional sales tax, and unrecovered indirect costs--all in the amount of $577,000.
ES and JMCA argued that costs in excess of the allotted amount should be recovered because the notices filed by each of them were sufficient to satisfy the LOC and LOF clauses.
JMCA claimed facilities capital cost for its acquisition of the Artemis system, which was in excess of the allotted amount.
JMCA argued that it should recover sales tax for the Oak Ridge Artemis system.
In a cover letter to its August 1987 progress report, JMCA notified ES that its overhead rate assumed extension of the subcontract beyond the original termination date.
The board stated that (1) ES knew the true facts of JMCA's understated overhead; (2) ES intended JMCA to act on those erroneous facts as shown by the modifications ES agreed to; and (3) JMCA was not aware that the overhead rate was understated and, thus, had proceeded under a misunderstanding that the subcontract would be extended.