KECO Industries, Inc. v. United States, 176 Ct. Cl. 983, 998 (Ct. Cl. 1966), was a case before the United States Court of Claims dealing with the procedure for handling contract adjustments when a contractor provides a substitution.
Defendant United States contracted with plaintiff to produce electric and gas refrigerators. The parties sought the intervention of the Court of Claims on two disputes:
The court granted judgment on the government's counterclaim, less the amount due plaintiff for spare parts and tools. The contract obligated plaintiff to furnish the parts and tools; however, by eliminating a profit factor, the chargeback for deleted parts and tools was reduced.
Despite defendant's design changes, damages for transportation fees were denied because the evidence did not establish that plaintiff could not have complied with the weight specifications. The change from gas to electric drives was not a breach because it was not a cardinal change. The resulting adjustment to the contract price urged by defendant in its counterclaim was correct because the changes did not increase plaintiff's losses or costs.