B-100263, FEBRUARY 1, 1951, 30 COMP. GEN. 335

B-100263, FEBRUARY 1, 1951, 30 COMP. GEN. 335

CONTRACTS - RELEASES -CONSTRUCTION A RELEASE OF CLAIMS ARISING UNDER A CONTRACT IS TO BE CONSTRUED AS LIMITED IN ITS OPERATION TO SUCH CLAIMS AND DEMANDS AS WERE CONTEMPLATED BY THE PARTIES AT THE TIME OF ITS EXECUTION, AND THEREFORE A RELEASE EXECUTED BY A CONTRACTOR AFTER ACCEPTANCE OF FINAL PAYMENT IN ACCORDANCE WITH A PAY ESTIMATE BY WHICH THE GOVERNMENT INTENDED TO REIMBURSE THE CONTRACTOR FOR ALL ITEMS ACTUALLY FURNISHED AND BY WHICH THE CONTRACTOR EXPECTED TO RECEIVE FULL PAYMENT THEREFOR NEED NOT BE CONSTRUED AS OPERATING TO PRECLUDE PAYMENT FOR AN ITEM ACTUALLY FURNISHED BUT WHICH THROUGH MUTUAL MISUNDERSTANDING, OVERSIGHT, OR MISTAKE WAS NOT LISTED ON THE FINAL PAY ESTIMATE.

COMPTROLLER GENERAL WARREN TO V. ZACHMAN, ATOMIC ENERGY COMMISSION, FEBRUARY 1, 1951:

REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 15, 1950, FF-1, WITH ENCLOSURES, TRANSMITTING A VOUCHER STATED IN FAVOR OF MR. ROBERT E. MCKEE, GENERAL CONTRACTOR, IN THE AMOUNT OF $3,886.62, REPRESENTING AN ADDITIONAL AMOUNT ALLEGED TO BE DUE UNDER ATOMIC ENERGY COMMISSION CONTRACT NO. AT (29-1/-763, DATED JUNE 28, 1949. YOU REQUEST A DECISION AS TO WHETHER UNDER THE FACTS AND CIRCUMSTANCES HEREINAFTER SET FORTH THE VOUCHER PROPERLY MAY BE CERTIFIED FOR PAYMENT.

UNDER THE CONTRACT IN QUESTION THE CONTRACTOR UNDERTOOK TO FURNISH NECESSARY MATERIALS AND LABOR FOR CONSTRUCTION OF SPECIFIED BUILDINGS AND FOR THE PERFORMANCE OF RELATED SERVICES IN AREA TA-36, LOS ALAMOS, NEW MEXICO, FOR AN ESTIMATED CONSIDERATION OF $837,300, AS ITEMIZED IN A UNIT PRICE SCHEDULE ATTACHED THERETO. ARTICLE 16 (D) OF THE CONTRACT PROVIDES:

(D) UPON COMPLETION AND ACCEPTANCE OF ALL WORK REQUIRED HEREUNDER, THE AMOUNT DUE THE CONTRACTOR UNDER THIS CONTRACT WILL BE PAID UPON THE PRESENTATION OF A PROPERLY EXECUTED AND DULY CERTIFIED VOUCHER THEREFOR, AFTER THE CONTRACTOR SHALL HAVE FURNISHED THE GOVERNMENT WITH A RELEASE, IF REQUIRED, OF ALL CLAIMS AGAINST THE GOVERNMENT ARISING UNDER AND BY VIRTUE OF THIS CONTRACT, OTHER THAN SUCH CLAIMS, IF ANY, AS MAY BE SPECIFICALLY EXCEPTED BY THE CONTRACTOR FROM THE OPERATION OF THE RELEASE IN STATED AMOUNTS TO BE SET FORTH THEREIN.

AFTER COMPLETION OF THE CONTRACT WORK THE CONTRACTOR ACCEPTED FINAL PAYMENT IN ACCORDANCE WITH PAY ESTIMATE NO. 10 (FINAL) PREPARED BY THE OFFICE OF ENGINEERING AND CONSTRUCTION, ATOMIC ENERGY COMMISSION, AND EXECUTED A GENERAL RELEASE DRAWN BY THAT OFFICE OF ALL CLAIMS ARISING UNDER AND BY VIRTUE OF THE SAID CONTRACT. THE INSTANT CLAIM REPRESENTS PAYMENT FOR 316.5 SQUARE YARDS OF CONCRETE SLABS FURNISHED BY THE CONTRACTOR FOR WHICH NO PAYMENT WAS RECEIVED.

IT APPEARS FROM YOUR LETTER AND THE ENCLOSURE THERETO THAT NO PROVISION FOR PAYMENT FOR THE 316.5 SQUARE YEARS OF CONCRETE SLABS WAS INCLUDED IN THE FINAL PAY ESTIMATE ( NO. 10) FOR THE REASON THAT THE ARCHITECT- ENGINEERS ON THE CONTRACT WORK ADVISED THAT SUCH SLABS WERE APPURTENANCES TO BUILDINGS AND THEREFORE NOT COMPENSABLE. FURTHER, IT APPEARS THAT THE CONTRACTOR ACCEPTED THE FINAL PAYMENT AND EXECUTED THE RELEASE IN QUESTION UNDER THE MISTAKEN ASSUMPTION THAT PAYMENT FOR THE SAID SLABS WAS INCLUDED IN THE FINAL PAY ESTIMATE. SUBSEQUENTLY, UPON ASCERTAINING THE ERROR, THE CONTRACTOR CALLED THE MATTER TO THE ATTENTION OF THE ARCHITECT-ENGINEERS WHO RECOMMENDED THAT PAYMENT BE MADE TO THE CONTRACTOR FOR THE SLABS IN ACCORDANCE WITH ITEM 80 OF THE UNIT PRICE SCHEDULE OF THE CONTRACT, STATING THAT PAYMENT THEREFOR WAS NOT MADE UNDER THE ORIGINAL FINAL PAY ESTIMATE DUE TO AN ERROR ON THE PART OF BOTH THE GOVERNMENT AND THE CONTRACTOR. ITEM 80 OF THE UNIT PRICE SCHEDULE CALLED FOR AN ESTIMATED QUANTITY OF 320 SQUARE YARDS OF CONCRETE SLABS AT $12.28 PER SQUARE YARD.

IN THE CONSTRUCTION OF RELEASES, AS IN THE CONSTRUCTION OF CONTRACTS GENERALLY, THE INTENTION OF THE PARTIES IS OF PRIMARY SIGNIFICANCE, AND THE GENERAL RULES RELATIVE TO THE REFORMATION OF CONTRACTS APPLY LIKEWISE TO THE REFORMATION OF RELEASES; 53 C.J. 921, 922. ALSO, IT HAS BEEN HELD THAT A RELEASE IS TO BE CONSTRUED AS LIMITED IN ITS OPERATION TO SUCH CLAIMS AND DEMANDS AS WERE CONTEMPLATED BY THE PARTIES AT THE TIME OF ITS EXECUTION. SEE L. W. PACKARD AND CO. V. UNITED STATES, 66 C.1CLS. 184; THE ROSS CODDINGTON, 40 F.2D 280, 45 AM. JUR. 710.

AS POINTED OUT IN YOUR LETTER, THE EXECUTION OF THE RELEASE HERE INVOLVED APPEARS TO HAVE RESULTED FROM A MUTUAL MISUNDERSTANDING OR MISTAKE AS TO THE COMPLETENESS OF THE ITEMS LISTED ON THE FINAL PAY ESTIMATE. IT IS CLEAR THAT THE GOVERNMENT INTENDED TO REIMBURSE THE CONTRACTOR FOR ALL ITEMS INCLUDED ON THE UNIT PRICE SCHEDULE WHICH ACTUALLY WERE FURNISHED BY THE CONTRACTOR AND THAT THE CONTRACTOR EXPECTED TO RECEIVE PAYMENT AT THE CONTRACT PRICE FOR ALL ITEMS SO FURNISHED. IN VIEW OF SUCH MUTUAL MISUNDERSTANDING, OVERSIGHT, OR MISTAKE, THE RELEASE IN QUESTION NEED NOT BE CONSTRUED AS OPERATING TO PRECLUDE THE PAYMENT FOR THE 316.5 SQUARE YARDS OF CONCRETE SLABS FURNISHED.

ACCORDINGLY, THE VOUCHER, WHICH IS RETURNED HEREWITH, MAY BE CERTIFIED FOR PAYMENT, IF OTHERWISE CORRECT. THIS DECISION SHOULD BE CITED ON THE VOUCHER.