B-123965, AUG. 25, 1955

B-123965: Aug 25, 1955

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TO ALLEN ENGINEERING COMPANY: FURTHER REFERENCE IS MADE TO YOUR LETTER DATED APRIL 19. WHEREIN THERE WAS DISALLOWED YOUR CLAIM FOR AN ADDITIONAL AMOUNT ALLEGED TO BE DUE UNDER CONTRACT NO. HOY-76745 IN VIEW OF AN ERROR WHICH YOU STATE WAS MADE IN THE BID ON WHICH THE CONTRACT WAS AWARDED. UPON BEING ADVISED AT THAT TIME BY THE CONTRACTING OFFICER THAT SEVERAL COURSES OF ACTION WERE AVAILABLE. THE CONTRACT WAS ENTERED INTO ON MARCH 16. THE WORK WAS COMPLETED AND FINAL PAYMENT MADE ON OR ABOUT JANUARY 20. YOU FILED A CLAIM FOR THE ADDITIONAL AMOUNT ALLEGED TO BE DUE WHICH WAS DISALLOWED IN THE SETTLEMENT OF FEBRUARY 9. SINCE THE DEPARTMENT OF THE NAVY WAS AWARE OF YOUR APPEAL PRIOR TO THE SIGNING OF THE FINAL VOUCHER AND THE RELEASE.

B-123965, AUG. 25, 1955

TO ALLEN ENGINEERING COMPANY:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED APRIL 19, 1955, WITH ENCLOSURE, REQUESTING REVIEW OF SETTLEMENT DATED FEBRUARY 9, 1955, WHEREIN THERE WAS DISALLOWED YOUR CLAIM FOR AN ADDITIONAL AMOUNT ALLEGED TO BE DUE UNDER CONTRACT NO. HOY-76745 IN VIEW OF AN ERROR WHICH YOU STATE WAS MADE IN THE BID ON WHICH THE CONTRACT WAS AWARDED.

IT APPEARS THAT IN RESPONSE TO A REQUEST DATED FEBRUARY 27, 1953, FOR VERIFICATION OF YOUR BID OF $16,817 TO INSTALL STOCKBIN LIGHTING IN BUILDING NO. 401 AND PERFORM OTHER RELATED AND MISCELLANEOUS WORK AT THE BARSTOW ANNEX, SAN FRANCISCO MARINE CORPS DEPOT OF SUPPLIES, BARSTOW, CALIFORNIA, YOU ALLEGED THAT AN ERROR HAD BEEN MADE IN THE BID IN THAT YOU HAD FAILED TO INCLUDE OVERHEAD AND PROFIT IN THE AMOUNT OF $2,522. UPON BEING ADVISED AT THAT TIME BY THE CONTRACTING OFFICER THAT SEVERAL COURSES OF ACTION WERE AVAILABLE, YOU ELECTED TO ENTER INTO A CONTRACT, PERFORM THE WORK SPECIFIED THEREUNDER AND FILE A SUBSEQUENT CLAIM WITH THE GENERAL ACCOUNTING OFFICE FOR THE AMOUNT OF THE OMITTED ITEMS. THE CONTRACT WAS ENTERED INTO ON MARCH 16, 1953. THE WORK WAS COMPLETED AND FINAL PAYMENT MADE ON OR ABOUT JANUARY 20, 1954. IT APPEARS FURTHER THAT ON JANUARY 7, 1954, YOU EXECUTED AND DELIVERED TO THE GOVERNMENT A RELEASE IN CONSIDERATION OF, AND TO BECOME EFFECTIVE UPON, FINAL PAYMENT BEING MADE TO YOU. THEREAFTER BY LETTER DATED APRIL 2, 1954, YOU FILED A CLAIM FOR THE ADDITIONAL AMOUNT ALLEGED TO BE DUE WHICH WAS DISALLOWED IN THE SETTLEMENT OF FEBRUARY 9, 1955, FOR THE REASONS SET FORTH THEREIN.

YOUR REQUEST FOR REVIEW OF THE SETTLEMENT APPEARS TO BE BASED PRIMARILY ON YOUR CONTENTION THAT, SINCE THE DEPARTMENT OF THE NAVY WAS AWARE OF YOUR APPEAL PRIOR TO THE SIGNING OF THE FINAL VOUCHER AND THE RELEASE, YOU DID NOT REALIZE THAT YOU WERE GIVING UP YOUR RIGHTS FOR RENEGOTIATION; ALSO, THAT BEING A SMALL COMPANY YOU COULD NOT AFFORD TO HAVE THE FINAL PAYMENT WITHHELD FOR AN INDEFINITE PERIOD OF TIME.

A REVIEW OF THE ENTIRE RECORD IN THE MATTER PRESENTS, IN THE FIRST INSTANCE, THE PERTINENT QUESTIONS AS TO THE LEGAL CONSEQUENCE TO BE ATTACHED TO THE SIGNING OF THE CONTRACT BY YOU SUBSEQUENT TO THE ALLEGATION OF THE ERROR IN YOUR BID. IN THIS CONNECTION, IT IS SHOWN THAT AFTER YOU HAD ALLEGED THAT AN ERROR HAD BEEN MADE IN THE BID YOU WERE ADVISED BY THE CONTRACTING OFFICER'S LETTER DATED MARCH 10, 1953, OF SEVERAL COURSES OF ACTION THAT WERE AVAILABLE TO YOU, INCLUDING YOUR RIGHT TO REQUEST THAT YOUR BID BE DISREGARDED AT THAT TIME. IT IS FURTHER SHOWN THAT NOTWITHSTANDING THIS YOU ELECTED TO, AND DID, EXECUTE A CONTRACT ON MARCH 16, 1953, TO PERFORM THE WORK COVERED THEREBY. HENCE, EVEN THOUGH AN ERROR WAS MADE IN YOUR BID AS ALLEGED, IT APPEARS THAT THERE IS FOR APPLICATION HERE THE PRINCIPLE LAID DOWN IN THE CASES OF THE MASSMAN CONSTRUCTION COMPANY, A CORPORATION V. THE UNITED STATES, 102 C.CLS. 699, AND THE BOARD OF TRUSTEES OF NATIONAL TRAINING SCHOOL FOR BOYS V. O. D. WILSON CO., INC., 133 F.2D 399. IN DENYING RELIEF IN BOTH OF THOSE CASES FOR THE AMOUNTS CLAIMED BY REASON OF ERRORS IN BIDS--- LATER ACCEPTED BY SUBSEQUENTLY EXECUTED CONTRACTS--- THE COURTS STATED, IN EFFECT, THAT WHERE THE CONTRACTOR, AS WELL AS THE GOVERNMENT, IS FULLY AWARE OF THE MISTAKE IN ITS BID AT THE TIME THE CONTRACT WAS SIGNED AND THE SIGNING BY THE CONTRACTOR WAS NOT IN ANY WAY INDUCED BY UNCONSCIONABLE CONDUCT--- FRAUD, MISTAKE, DURESS, ETC.--- ON THE PART OF THE GOVERNMENT OR BY ANY PROMISES FOR SUBSEQUENT RELIEF, THE CONTRACTOR CAN RECOVER NO MORE THAN THE CONTRACT PRICE. THE COURTS POINTED OUT THAT THE CONTRACTOR COULD NOT, ON ANY THEORY, CONTRACT, PERFORM, COLLECT THE FULL CONTRACT PRICE, AND THEN REPUDIATE THE CONTRACT AND RECOVER AS IF THERE HAD BEEN NO CONTRACT.

OF EQUAL IMPORTANCE IN THIS MATTER IS THE EFFECT TO BE GIVEN THE RELEASE SIGNED BY YOU UPON RECEIPT OF THE FINAL PAYMENT. AN EXAMINATION OF THE RELEASE REVEALS THAT IT CONTAINS NO EXCEPTIONS FROM THE OPERATION THEREOF. IT HAS BEEN HELD BY THE COURTS AND THIS OFFICE THAT THE ISSUANCE OF A RELEASE OF THIS NATURE GENERALLY RELEASES THE GOVERNMENT FROM ALL CLAIMS ARISING OUT OF AND BY VIRTUE OF THE CONTRACT AND THAT THE PARTY EXECUTING THE RELEASE RELINQUISHES ANY RIGHT IT OTHERWISE MIGHT HAVE HAD TO REIMBURSEMENT BY THE GOVERNMENT OF ANY CLAIM WITH RESPECT THERETO. UNITED STATES V. WM. CRAMP AND SONS CO., 206 U.S. 118; WM. CRAMP AND SONS CO. V. UNITED STATES, 46 C.CLS. 521; C. R. WILSON BODY CO. V. UNITED STATES, 59 C.CLS. 611. MOREOVER, WHILE THERE APPEARS TO EXIST SOME AUTHORITY TO ACCEPT, UNDER CERTAIN CONDITIONS, FROM THE TERMS OF A RELEASE THOSE MATTERS OR CLAIMS WHICH ARE UNKNOWN OR UNDISCLOSED AT THE TIME THE RELEASE IS ISSUED, SUCH PRINCIPLE WOULD NOT APPEAR TO BE APPLICABLE TO THE RELEASE HERE AT ISSUE. WHILE A FORMAL CLAIM WAS NOT EVEN MADE BY YOU PRIOR TO YOUR EXCHANGING OF THE RELEASE THE RECORD CLEARLY SHOWS, AND YOU ADMIT, THAT THE DEPARTMENT OF THE NAVY WAS AWARE OF YOUR INTENDED APPEAL PRIOR TO THE TIME THAT THE FINAL VOUCHER WAS SIGNED BY YOU. HENCE, IT CANNOT BE CONCLUDED THAT YOUR INTENTION TO FILE A SUBSEQUENT CLAIM FOR THE OVERHEAD AND PROFIT OMITTED FROM YOUR BID WAS UNKNOWN OR UNDISCLOSED. RATHER IT WOULD BE MORE REASONABLE TO CONCLUDE THAT THE EXECUTION OF THE RELEASE BY YOU UNDER SUCH CIRCUMSTANCES EVIDENCED AN INTENTION ON YOUR PART TO ABANDON ANY CLAIM OF THIS NATURE, PARTICULARLY WHEN MORE THAN TEN MONTHS HAD EXPIRED WITHOUT A FORMAL CLAIM HAVING BEEN MADE BY YOU.

ACCORDINGLY, THE SETTLEMENT OF FEBRUARY 9, 1955, IS SUSTAINED.

THE PAPERS FURNISHED BY YOU IN SUPPORT OF YOUR CLAIM ARE RETURNED HEREWITH IN ACCORDANCE WITH YOUR REQUEST.