B-124579, SEPTEMBER 7, 1955, 35 COMP. GEN. 138

B-124579, SEPTEMBER 7, 1955, 35 COMP. GEN. 138

WAIVERS - AS BAR TO LATER ASSERTION OF WAIVED RIGHTS - ESTOPPEL; CONTRACTS - CONSTRUCTION - PRIOR NEGOTIATIONS MERGED IN WRITING CONSTRUCTION CONTRACTOR WHO IN OBTAINING EXTENSION OF PERFORMANCE TIME ON ACCOUNT OF GOVERNMENT DELAYS EXPRESSLY WAIVED ANY CLAIM ARISING THEREFROM IS ESTOPPED FROM LATER ASSERTING SUCH A CLAIM, EVEN IF IT IS DETERMINED THAT THERE WAS NO CONSIDERATION FOR THE WAIVER. CONSTRUCTION CONTRACTOR WHO IN EXECUTION OF CONTRACT MODIFICATION CLEARLY AND UNEQUIVOCALLY WAIVED ANY CLAIM ON ACCOUNT OF DELAYS OCCASIONED BY THE GOVERNMENT, MAY NOT LATER ASSERT SUCH A CLAIM ON THE BASIS OF PRIOR CORRESPONDENCE IN WHICH A RESERVATION TO THE MODIFICATION WAS MADE BY THE CONTRACTOR.

TO K. KITVIN AND SON, SEPTEMBER 7, 1995:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 20, 1955, REQUESTING REVIEW OF THE SETTLEMENT DATED JUNE 15, 1955, WHICH DISALLOWED YOUR CLAIM FOR $21,593.85 AS INCREASED COSTS ALLEGED TO HAVE BEEN INCURRED AS THE RESULT OF DELAYS BY THE GOVERNMENT IN CONNECTION WITH YOUR PERFORMANCE UNDER CONTRACT NO. DA-36-231-/AA II/-111, DATED JUNE 26, 1952.

THE CONTRACT REQUIRED YOU TO BEGIN WORK "WITHIN TEN (10) CALENDAR DAYS AFTER DATE OF RECEIPT OF WRITTEN NOTICE TO PROCEED" AND TO COMPLETE THE WORK WITHIN 150 DAYS AFTER SUCH DATE. IT PROVIDED FOR LIQUIDATED DAMAGES AT THE RATE OF $25 PER CALENDAR DAY OF DELAY NOT EXCUSABLE UNDER THE CONTRACT. THE RECORD SHOWS THAT YOU ACKNOWLEDGED RECEIPT OF NOTICE TO PROCEED ON OCTOBER 7, 1952, THUS FIXING THE COMPLETION DATE AS MARCH 6, 1953. BY MODIFICATION NO. 1 DATED NOVEMBER 24, 1952, YOU AGREED TO DELAY THE WORK UNDER ITEM 2 OF THE CONTRACT UNTIL FURTHER NOTICE, WITHOUT CHANGE IN THE CONTRACT PRICE. BY MODIFICATION NO. 2, DATED FEBRUARY 12, 1953, YOU AGREED TO CERTAIN CHANGES (ADDITIONS AND DELETIONS), IN THE WORK UNDER ITEM 2, WITHOUT CHANGE IN THE CONTRACT PRICE OR OTHER PROVISIONS OF THE CONTRACT. MODIFICATION NO. 3, DATED DECEMBER 11, 1953, WHICH YOU APPROVED, EXTENDED THE COMPLETION DATE TO DECEMBER 24, 1953, AND PROVIDED:

2. THE CONTRACTOR HEREBY WAIVES ANY CLAIM AGAINST THE GOVERNMENT HERETOFORE CONTEMPLATED OR NOW CONTEMPLATED BY REASON OF THE DELAY OCCASIONED BY THE GOVERNMENT IN COMPLETING THE WORK UNDER THE CONTRACT.

YOUR CLAIM WAS DISALLOWED FOR THE REASONS, AMONG OTHERS STATED IN THE SETTLEMENT OF JUNE 15, 1955, THAT YOU WAIVED ANY RIGHTS BY THE ABOVE- QUOTED PROVISION IN MODIFICATION NO. 3. YOU NOW CONTEND THAT THE STATEMENTS IN THE SETTLEMENT REFLECT THAT THE DISALLOWANCE OF YOUR CLAIM WAS BASED ON ERRONEOUS CONCLUSIONS OR INCOMPLETE INFORMATION AS TO THE FACTS INVOLVED. YOU ASSERT THAT MODIFICATION NO. 3 WAS SUBJECT TO THE RESERVATIONS SET OUT IN A LETTER OF DECEMBER 10, 1953, TO THE CONTRACTING OFFICER, INCLUDING YOUR "RIGHTS AS TO THE CLAIM SENT TO YOU ON 28TH MAY 1953," THAT CLAIM BEING FOR THE AMOUNT OF $20,653 FOR ADDITIONAL CHARGES AND COSTS OCCASIONED BY THE GOVERNMENT'S DELAYS.

IT IS A WELL SETTLED RULE OF CONSTRUCTION THAT PREVIOUS AND CONTEMPORARY NEGOTIATIONS ARE PRESUMED TO BE MERGED IN THE FORMAL WRITTEN AGREEMENT WHICH EXPRESSES THE FINAL UNDERSTANDING OF THE PARTIES THERETO. SEE BRAWLEY V. UNITED STATES, 96 U.S. 168; SIMPSON V. UNITED STATES, 172 U.S. 372. THE COURTS WILL CONSIDER PRELIMINARY NEGOTIATIONS OR CONTEMPORANEOUS PAPERS FOR THE PURPOSE OF EXPLAINING OR CLARIFYING ANY AMBIGUITY IN THE FORMAL CONTRACT ( DEUTSCHLE V. WILSON, 39 F.2D 06; VULCANITE PORTLAND CEMENT CO. V. UNITED STATES, 74 C.1CLS. 692, 706-707), BUT WILL NOT GENERALLY PERMIT SUCH PRELIMINARY NEGOTIATIONS OR CONTEMPORANEOUS PAPERS TO VARY THE CLEAR, UNEQUIVOCAL TERMS OF THE AGREEMENT AS FORMALLY EXECUTED. THE TERMS OF MODIFICATION NO. 3 ARE CLEAR AND UNEQUIVOCAL IN THAT FOR AND IN CONSIDERATION OF THE OTHER PROVISIONS RECITED IN THE MODIFICATION YOU WAIVED ANY CLAIM ON ACCOUNT OF DELAYS OCCASIONED BY THE GOVERNMENT. THUS, THE LETTER OF DECEMBER 10, 1953, WHICH WAS CONSIDERED AT THE TIME YOUR CLAIM WAS DISALLOWED, MAY NOT BE REGARDED AS CONSTITUTING A PART OF THE AGREEMENT SET OUT IN MODIFICATION NO. 3 OR AS A RESERVATION TO YOUR AGREEMENT TO THE CONDITIONS THEREIN. IN THIS REGARD YOUR ATTENTION IS INVITED TO THE FACT THAT YOU WERE ADVISED THAT A MODIFICATION WITH SUCH A RESERVATION WOULD NOT BE ACCEPTED BY THE GOVERNMENT.

IT APPEARS THAT PRIOR TO YOUR LETTER OF MAY 28, 1953, TO THE CONTRACTING OFFICER--- ALTHOUGH YOU REQUESTED EXTENSIONS OF TIME FOR PERFORMANCE ON ACCOUNT OF THE GOVERNMENT'S DELAYS--- YOU GAVE NO NOTICE THAT THE DELAYS WOULD INVOLVE ADDITIONAL COSTS FOR WHICH A CLAIM WOULD BE ASSERTED. THE RECORD INDICATES THAT YOU WERE DESIROUS OF SECURING THE AWARD OF THE CONTRACT HERE INVOLVED SINCE, AS STATED IN YOUR LETTER OF JANUARY 6, 1955, TO THE CONTRACTING OFFICER, YOU HAD GIVEN ASSURANCES TO THE POST ENGINEER IN PREAWARD CONFERENCES THAT THE WORK UNDER THE CONTRACT HERE INVOLVED COULD BE PERFORMED AT THE PRICE QUOTED BY YOU DUE TO THE FACT THAT IT COULD BE PERFORMED IN CONJUNCTION WITH OTHER CONTRACTS AWARDED TO YOU FOR WORK AT FRANKFORD ARSENAL. ALSO, THE RECORD INDICATES THAT YOU WERE ANXIOUS TO SECURE THE EXTENSION OF TIME FOR PERFORMANCE, REFLECTED IN MODIFICATION NO. 3, SINCE IT WOULD RELIEVE YOU OF LIABILITY FOR LIQUIDATED DAMAGES REGARDLESS OF WHETHER ANY PART OF THE DELAY WOULD BE EXCUSABLE UNDER THE TERMS OF THE CONTRACT. SUCH FACTS APPEAR TO WARRANT THE CONCLUSION THAT YOU REGARDED THE MODIFICATION AS FAVORING YOU, THAT IS, THAT THERE WAS SUFFICIENT CONSIDERATION FLOWING TO YOU TO RENDER YOUR WAIVER VALID AND BINDING. FURTHERMORE, THERE IS AMPLE PRECEDENT FOR THE CONCLUSION THAT YOUR EXECUTION OF THE MODIFICATION, UNDER THE CIRCUMSTANCES INVOLVED, CONSTITUTES AN ESTOPPEL, EVEN IF IT BE DETERMINED THAT THERE WAS NO ACTUAL CONSIDERATION FLOWING TO YOU FOR THE WAVIER. SEE CHARLOTTE HARBOR, ETC. R. CO. V. BURWELL, 48 SO. 213; MARFIELD V. CINCINNATI, ETC. TRACTION CO., 144 N.E. 689, 691; 67 C.J. 294 ET SEQ.

ASIDE FROM ANY QUESTION AS TO WAIVER OF YOUR CLAIM, THE ADMINISTRATIVE OFFICE HAS REPORTED THAT YOU DID NOT HAVE SUFFICIENT PERSONNEL AND EQUIPMENT TO PERFORM THE WORK UNDER ALL YOUR CONTRACTS AT FRANKFORD ARSENAL SIMULTANEOUSLY; THAT YOU DID, IN FACT, MOVE THE EQUIPMENT FROM ONE JOB TO ANOTHER, EXCEPT SOME FORM LUMBER WHICH WAS INSTALLED AND COULD NOT BE UTILIZED UNTIL ARMOR PLATE WAS SUPPLIED; AND, THEREFORE, THAT UNDER SUCH CIRCUMSTANCES THE DELAYS OCCASIONED BY THE GOVERNMENT ACTUALLY APPEARED TO BE HELPFUL TO YOU. FURTHERMORE, WHILE THE ADMINISTRATIVE AUDIT OF YOUR RECORDS INDICATED THAT YOU SUSTAINED A LOSS OF APPROXIMATELY $17,000 IN CONNECTION WITH PERFORMANCE UNDER CONTRACT NO. DA-36-231-/AA II/-111, THE RECORD REASONABLY WARRANTS THE CONCLUSION THAT SUCH LOSS OR AT LEAST A PART OF THAT LOSS WAS THE RESULT OF YOUR LOW BID PRICE. THIS REGARD, CONTRARY TO YOUR ASSERTIONS IN THE LETTER OF JUNE 20, 1955, THE CONTRACTING OFFICER HAS REPORTED THAT IN A PREAWARD CONFERENCE YOU DEFINITELY WERE ADVISED THAT YOUR BID OF $138,361 WAS $67,844 LESS THAN THE ENGINEER'S ESTIMATE OF THE COST AND THAT YOU WERE AFFORDED AN OPPORTUNITY TO WITHDRAW YOUR BID. SUCH REPORT IS SUPPORTED BY YOUR OWN STATEMENTS IN LETTER OF JANUARY 6, 1955, TO THE CONTRACTING OFFICER. ANY EVENT, THE CONTRACTING OFFICER HAS REPORTED THAT THE " ARMY AUDITORS WERE UNABLE TO ATTRIBUTE ANY OF THE CONTRACTOR'S LOSSES TO ANY DELAYS BY THE GOVERNMENT.'