A-80697, AUGUST 18, 1938, 18 COMP. GEN. 181

A-80697: Aug 18, 1938

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CONTRACTS - INCREASED COSTS - EXTRA WORK - REJECTED CLAIM NOT REASSERTED UNTIL AFTER CONTRACT COMPLETION AND UNQUALIFIED ACCEPTANCE OF FINAL PAYMENT A CLAIM FOR ADDITIONAL COMPENSATION ON THE GROUND THAT THE MATERIAL ENCOUNTERED IN A CERTAIN AREA OF THE CONTRACT SITE WAS DIFFERENT FROM THAT INDICATED BY THE SPECIFICATIONS. HAD FOUND THAT THE CONTRACTOR'S CONTENTIONS WERE UNSUBSTANTIATED. THAT REMOVAL OF THE LAYER OF MATERIAL IN QUESTION COST MORE THAN COULD HAVE BEEN ANTICIPATED. PARTICULARLY SINCE THE CONTRACTING OFFICER IN REPORTING ON THE SUBSEQUENT CLAIM REASSERTED THAT THE CONDITIONS ENCOUNTERED WERE BUT SUCH AS THE CONTRACTOR HAD EVERY REASON TO EXPECT FROM THE DATA FURNISHED HIM. 1938: THERE IS BEFORE THIS OFFICE FOR CONSIDERATION YOUR REQUEST FILED FOR REVIEW OF SETTLEMENT DATED MARCH 18.

A-80697, AUGUST 18, 1938, 18 COMP. GEN. 181

CONTRACTS - INCREASED COSTS - EXTRA WORK - REJECTED CLAIM NOT REASSERTED UNTIL AFTER CONTRACT COMPLETION AND UNQUALIFIED ACCEPTANCE OF FINAL PAYMENT A CLAIM FOR ADDITIONAL COMPENSATION ON THE GROUND THAT THE MATERIAL ENCOUNTERED IN A CERTAIN AREA OF THE CONTRACT SITE WAS DIFFERENT FROM THAT INDICATED BY THE SPECIFICATIONS, IN CONNECTION WITH WHICH THE CONTRACTING OFFICER, AT THE TIME, AND HIS SUPERIOR OFFICER, UPON APPEAL, HAD FOUND THAT THE CONTRACTOR'S CONTENTIONS WERE UNSUBSTANTIATED, MAY NOT BE ALLOWED WHERE NOT AGAIN ASSERTED UNTIL AFTER COMPLETION OF THE WORK AND ACCEPTANCE BY THE CONTRACTOR OF FINAL PAYMENT AS CORRECT AND JUST WITHOUT ENTRY OF ANY PROTEST SO FAR AS CONCERNS THE COMPOSITION OF MATERIALS ENCOUNTERED AND WITHOUT RESERVATION OF RIGHT TO REASSERT THE CLAIM, NOTWITHSTANDING THE FINDING OF ANOTHER ADMINISTRATIVE OFFICER SUBSEQUENT TO THE REASSERTED CLAIM AND FOLLOWED BY HIS SUPERIOR OFFICERS, THAT REMOVAL OF THE LAYER OF MATERIAL IN QUESTION COST MORE THAN COULD HAVE BEEN ANTICIPATED, PARTICULARLY SINCE THE CONTRACTING OFFICER IN REPORTING ON THE SUBSEQUENT CLAIM REASSERTED THAT THE CONDITIONS ENCOUNTERED WERE BUT SUCH AS THE CONTRACTOR HAD EVERY REASON TO EXPECT FROM THE DATA FURNISHED HIM.

ACTING COMPTROLLER GENERAL ELLIOTT TO G. L. TARLTON, AUGUST 18, 1938:

THERE IS BEFORE THIS OFFICE FOR CONSIDERATION YOUR REQUEST FILED FOR REVIEW OF SETTLEMENT DATED MARCH 18, 1937, WHICH DISALLOWED YOUR CLAIM FOR $45,000 ADDITIONAL COMPENSATION IN CONNECTION WITH CONSTRUCTION OF LOCK NO. 1, BARREN RIVER, GREENCASTLE, KY. (CONTRACT W 559-ENG-3002, DATED FEBRUARY 15, 1933).

YOUR CLAIM IS BASED ON THE CONTENTION THAT THE EARTH EXCAVATED BY YOU WAS NOT OF THE SAME COMPOSITION AS DESCRIBED IN THE PLANS AND SPECIFICATIONS BUT WAS IN LARGE PART OF A KIND AND VARIETY MORE DIFFICULT TO REMOVE, THUS NECESSITATING EXTRA WORK AND TIME IN ACCOMPLISHING THE CONTRACT PURPOSE. AS TO EVERY ITEM OF YOUR CLAIM--- EXCEPT AN ITEM OF $1,800 FOR ALLEGED EXTRA WORK IN REMOVING A LAYER OF SAND AND GRAVEL SAID TO HAVE BEEN ENCOUNTERED AT ABOUT ELEVATION 390-- THE CONTRACTING OFFICER, THE DIVISION ENGINEER, THE CHIEF OF ENGINEERS, AND THE SECRETARY OF WAR ARE SHOWN AS UNANIMOUSLY IN AGREEMENT THAT THE MATERIAL ENCOUNTERED WAS NOT ESSENTIALLY DIFFERENT FROM THAT TO BE EXPECTED. IT APPEARS CLEAR, THEREFORE, THAT ALL ITEMS OF YOUR CLAIM (EXCEPT THE ONE OF $1,800) ARE CONTROLLED BY ARTICLE 15 OF THE CONTRACT WHICH PROVIDED THAT FINDINGS MADE BY THE CONTRACTING OFFICER AND APPROVED BY THE HEAD OF THE DEPARTMENT RELATIVE TO DISPUTED QUESTIONS OF FACT SHOULD BE FINAL AND CONCLUSIVE UPON THE PARTIES TO THE CONTRACT. ACCORDINGLY, DISALLOWANCE OF THESE ITEMS MUST BE, AND IS, SUSTAINED.

WITH RESPECT TO THE ITEM OF $1,800 THE FOLLOWING APPEAR TO BE THE FACTS:

ON JULY 8, 1933, FORMAL APPLICATION WAS MADE BY YOU FOR ADDITIONAL COMPENSATION ON THE GROUND THAT MATERIAL ENCOUNTERED IN A CERTAIN AREA OF THE CONTRACT SITE WAS DIFFERENT FROM THAT INDICATED BY THE SPECIFICATIONS. THE CONTRACTING OFFICER FOUND AGAINST YOUR CONTENTIONS AND UPON APPEAL TO THE CHIEF OF ENGINEERS HIS FINDING WAS SUSTAINED ON SEPTEMBER 12, 1933.

ON APRIL 6, 1934, YOU SUBMITTED ANOTHER CLAIM FOR ADDITIONAL COMPENSATION AGAIN CONTENDING THAT THE MATERIAL ENCOUNTERED IN THE UPPER APPROACH TO THE LOCK DIFFERED FROM THAT INDICATED BY THE SPECIFICATIONS. THE CONTRACTING OFFICER STATES IN REPORT OF DECEMBER 24, 1935, THAT "THE AREA AFFECTED BY THE NEW CLAIM IS INCLUDED WITHIN THE AREA AFFECTED BY THE ORIGINAL CLAIM.' THUS, IT APPEARS THAT THIS SECOND CLAIM RELATED TO THE SAME GENERAL AREA AS THE FIRST BUT IS RESTRICTED TO THE UPPER APPROACH. IN THE CASE OF THIS SECOND CLAIM THE CONTRACTING OFFICER ALSO FOUND AGAINST YOUR CONTENTION, AND UPON APPEAL HIS DECISION WAS AFFIRMED BY THE CHIEF OF ENGINEERS. THE ASSISTANT SECRETARY OF WAR APPROVED THIS ADVERSE FINDING ON JULY 13 OR 14, 1934. IN THE MEANTIME, THE LOCK HAD BEEN COMPLETED ON MAY 23, 1934, AND CHECK NO. 43592, DATED JUNE 6, 1934, WAS ISSUED IN FINAL PAYMENT UNDER THE CONTRACT. SO FAR AS THE RECORD SHOWS, THIS AMOUNT WAS ACCEPTED BY YOU AS CORRECT AND JUST AND WITHOUT ENTRY OF ANY PROTEST SO FAR AS CONCERNS THE COMPOSITION OF MATERIALS ENCOUNTERED.

YOUR CLAIM OF APRIL 6, 1934, RELATING TO THE UPPER APPROACH TO THE LOCK, WAS THEN PENDING BUT THE ITEM OF $1,800 HERE UNDER CONSIDERATION WAS NOT A PART OF THAT CLAIM; IT INVOLVED A LAYER OF ASSERTED HARD MATERIAL ENCOUNTERED IN THE LOWER APPROACH. THE DIVISION ENGINEER REPORTED MARCH 27, 1936:

* * * THE CONTRACTOR WAS QUESTIONED REGARDING THIS MATERIAL IN THIS OFFICE AND HE STATED THAT THE LAYER WAS FROM 1 TO 3 INCHES THICK AND WAS FOUND ONLY IN THE LOWER APPROACH AND THE AREA OCCUPIED BY THE MAIN PORTION OF THE LOCK, BUT WAS NOT ENCOUNTERED IN THE UPPER APPROACH AREA. * * *

THE ITEM OF $1,800, THEREFORE, PRESUMABLY CONSTITUTED A PART OF YOUR EARLIER CLAIM OF JULY 8, 1933, WHICH, AS PREVIOUSLY NOTED, HAD BEEN DISAPPROVED BY THE CONTRACTING OFFICER AND HIS ACTION AFFIRMED BY THE CHIEF OF ENGINEERS SEVERAL MONTHS BEFORE (SEPTEMBER 12, 1933). ACCEPTING PAYMENT ON THE CHECK OF JUNE 6, 1934, YOU INDICATED NO INTENTION AND RESERVED NO RIGHT TO FILE A CLAIM FOR THIS ITEM OF $1,800 EMBRACED IN YOUR EARLIER CLAIM WHICH THEN HAD FOR NEARLY TEN MONTHS BEEN SETTLED.

THE COURT OF CLAIMS STATED IN POOLE ENGINEERING CO. V. UNITED STATES, 57 CT.CLS. 232, 234:

WHEN A CONTRACT HAS BEEN PERFORMED AND A STIPULATED CONSIDERATION HAS BEEN PAID THE GENERAL PRESUMPTION IS THAT THE TRANSACTION IS A CLOSED ONE. IF THERE BE CLAIMS ON THE PART OF THE GOVERNMENT WHICH SHOULD LIMIT THE AMOUNT OF A STIPULATED PAYMENT NECESSARY TO CLOSE THE TRANSACTION THEY ARE ASSERTED, AND, GENERALLY SPEAKING, ARE DEDUCTED IF THEY ARE KNOWN AT THE TIME. IF THERE ARE CLAIMS ON THE PART OF THE CONTRACTOR WHICH AFFECT THE AMOUNT DUE AND PAYABLE TO HIM UNDER THE TERMS OF THE CONTRACT, OR FOR AN ALLEGED BREACH OF IT, THEY SHOULD BE ASSERTED AT OR BEFORE THE TIME A SETTLEMENT IS MADE. THE GOVERNMENT IS ENTITLED TO KNOW, WHEN IT MAKES WHAT IT BELIEVES TO BE A FINAL PAYMENT ON ITS CONTRACT, WHAT CLAIMS A CONTRACTOR INTENDS TO ASSERT AGAINST IT ON ACCOUNT OF THE CONTRACT. IT IS ITS RIGHT TO KNOW WHETHER THE SUPPOSED FINAL PAYMENT IS IN FACT FINAL AND CONCLUSIVE. * * *

SEE, ALSO, EARLY AND DANIEL CO. V. UNITED STATES, 271 U.S. 140; FRANCIS V. UNITED STATES. 96 U.S. 354.

IT IS STATED IN THE LETTER OF JULY 1, 1937, FILED BY YOUR ATTORNEY THAT "THE CONTRACTING OFFICER HAS FOUND AS A FACT THAT THE LAYER OF CEMENTED MATERIAL CONSISTING OF A THOUSAND CUBIC YARDS, HEREINBEFORE REFERRED TO, COST THE CONTRACTOR TO REMOVE $1,800.00 IN EXCESS OF THE CONTRACT PRICE.' THE RECORDS OF THIS OFFICE FAIL TO INDICATE THAT THE CONTRACTING OFFICER EVER FOUND AS A FACT THAT THIS MATERIAL COST YOU $1,800 TO REMOVE, OVER AND ABOVE THE CONTRACT PRICE. ON THE CONTRARY, IT APPEARS THAT WHEN YOUR REQUEST OF JULY 17, 1935, FOR REVIEW OF YOUR CLAIMS WAS RECEIVED BY THE CHIEF OF ENGINEERS HE DIRECTED THAT THE CONTRACTING OFFICER (WHO HAD PREVIOUSLY FOUND NO AMOUNT OF YOUR CLAIM PROPER FOR ALLOWANCE) GO INTO THE MATTER AGAIN AND PREPARE A REPORT "FULLY RESPONSIVE TO EACH AND EVERY ALLEGATION SET FORTH IN THE CLAIM.' THE CONTRACTING OFFICER REPORTED ON DECEMBER 24, 1935, THAT "I FEEL CONFIDENT THAT THE MATERIAL ENCOUNTERED BY THE CONTRACTOR ON THIS CONTRACT WAS EXACTLY WHAT HE HAD EVERY REASON TO EXPECT FROM THE DATA FURNISHED HIM.' WITH SPECIFIC REFERENCE TO THE ITEM OF YOUR CLAIM NOW UNDER CONSIDERATION HE STATED: "AT THE TIME THIS MATERIAL WAS ENCOUNTERED BY THE DREDGE THE CONTRACTOR'S SUPERINTENDENT, MR. J. J. GILMORE, STATED, THAT HE DID NOT THINK IT WAS IN A LARGE ENOUGH QUANTITY TO MATTER. THE MATERIAL BROKE UP READILY AND CAUSED VERY LITTLE, IF ANY, DAMAGE TO THE DREDGE.' SO FAR AS THE RECORDS OF THIS OFFICE DISCLOSE, THESE QUOTED STATEMENTS REPRESENT THE MOST RECENT STATEMENT OF THE CONTRACTING OFFICER'S VIEW OF THIS MATTER.

THE DIVISION ENGINEER AT CINCINNATI IN HIS REPORT OF MARCH 27, 1936, DID REACH THE CONCLUSION THAT REMOVAL OF THE LAYER OF MATERIAL IN QUESTION COST MORE THAN COULD HAVE BEEN ANTICIPATED AND THAT AN ADDITIONAL PAYMENT OF $1,800 WOULD BE JUSTIFIED. THIS FINDING WAS FOLLOWED BY THE CHIEF OF ENGINEERS IN HIS INDORSEMENT OF JUNE 5, 1936, AND BY THE SECRETARY OF WAR IN LETTER TO THIS OFFICE OF NOVEMBER 5, 1937. BUT AS PREVIOUSLY NOTED, THIS ITEM OF YOUR CLAIM APPARENTLY WAS NOT OPEN FOR RECONSIDERATION AFTER YOUR ACCEPTANCE OF FINAL PAYMENT WITHOUT INDICATION OF ANY INTENTION TO REQUEST FURTHER ACTION THEREON. SEE LOUISVILLE AND NASHVILLE R.R. V. UNITED STATES, 267 U.S. 395, 401 402. AS STATED BY THE COURT OF CLAIMS IN THE ABOVE CITED CASE OF POOLE ENGINEERING CO. V. UNITED STATES:

* * * IT HAS BEEN FREQUENTLY SAID THAT IF A PARTY KEEPS SILENT WHEN HE OUGHT TO SPEAK HE WILL NOT BE HEARD THEREAFTER TO SPEAK WHEN HE OUGHT TO REMAIN SILENT. * * *

UNDER ALL THE FACTS AND CIRCUMSTANCES OF THIS CASE IT MUST BE HELD THAT DISALLOWANCE OF YOUR CLAIM FOR ADDITIONAL COMPENSATION UNDER CONTRACT NO. W-559-ENG-3002, DATED FEBRUARY 15, 1933, WAS PROPER AND ACCORDINGLY IT MUST BE, AND IS, HEREBY SUSTAINED.