Settlement of Claim Arising Under GSA Contract

The General Services Administration (GSA) requested settlement of a claim arising from construction of a U.S. post office and court house in Juneau, Alaska. When the work was completed, GSA offered to pay the final amount due under the contract, but was informed that the contractor's right to payment had been assigned to a bonding company. Meanwhile, the City of Juneau obtained a judgment against the contractor for use and sales taxes due. The contractor sought reimbursement of the tax liability as an increase in the contract price under the terms of the contract. Although the contracting officer denied this relief, a judgment for partial reimbursement for the tax liability was recovered by the contractor in the Court of Claims. At this point, the contractor was no longer liable to the bonding company and requested the payment due from GSA. GSA responded that the claim was no longer timely. Counsel for the contractor stated that the request for payment was not a claim within the meaning of the statute and, in any event, the date of accrual was not more than 6 years because a claim accrues only when a request for payment is denied. GAO disagreed, holding that a claim represents a demand for payment and that the contractor could have obtained the money after the work was completed through the conditional release clause in the contract. Since the contractor sought and received relief in the Court of Claims, any further demands for payment were barred, and the claim was not for consideration.