B-147470, DEC. 27, 1961

B-147470: Dec 27, 1961

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TO THE SECRETARY OF THE NAVY: REFERENCE IS MADE TO LETTER OF OCTOBER 17. WAS EXTENDED TO FEBRUARY 28. MAINTENANCE RESPONSIBILITY WAS ACCEPTED AS OF FEBRUARY 28. THE "GENERAL PROVISIONS" WHICH WERE INCORPORATED IN THE CONTRACT BY REFERENCE CONTAINED EXPRESS STANDARD PROVISIONS RELATING TO "CHANGES. 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. WHILE UNDER THE FOREGOING GENERAL PROVISION A RELEASE IS NOT MANDATORY UNDER SECTION "F10.04 FINAL RELEASE" OF THE DEPARTMENT'S MANUAL ON CONTRACT ADMINISTRATION. A FINAL RELEASE FOR A LUMP-SUM CONTRACT IS REQUIRED SUBJECT TO THE STIPULATION THAT THE CONTRACTOR SHOULD BE PERMITTED TO LIST ANY EXCEPTION OR EXCEPTIONS THAT CLEARLY INDICATE THE BASIS FOR THE CONTRACTOR'S CLAIM.

B-147470, DEC. 27, 1961

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO LETTER OF OCTOBER 17, 1961, FROM THE ASSISTANT SECRETARY OF THE NAVY (INSTALLATIONS AND LOGISTICS), FORWARDING FOR CONSIDERATION THE CLAIM OF WELLS BENZ, INC. FOR ADDITIONAL COMPENSATION UNDER CONTRACT NBY-19494 FOR CONSTRUCTION OF SUPPLY DEPARTMENT FACILITY, TECHNICAL SHOPS AND CAFETERIA, NAVAL SUPPLY FACILITY, POINT ARGUELLO, LOMPOC, CALIFORNIA.

THE CONTRACT (STANDARD GOVERNMENT "CONSTRUCTION CONTRACT" STANDARD FORM 23 (REVISED MARCH 1953) ( AS AMENDED BY CHANGE ORDERS NUMBERED "A" THROUGH "G" PROVIDED FOR CONSTRUCTION OF THE INVOLVED FACILITIES FOR THE SUM OF $450,381. THE ORIGINAL COMPLETION DATE OF JULY 16,1959, WAS EXTENDED TO FEBRUARY 28, 1960, AND MAINTENANCE RESPONSIBILITY WAS ACCEPTED AS OF FEBRUARY 28, 1960.

THE "GENERAL PROVISIONS" WHICH WERE INCORPORATED IN THE CONTRACT BY REFERENCE CONTAINED EXPRESS STANDARD PROVISIONS RELATING TO "CHANGES," "CHANGED CONDITIONS" AND "DISPUTES.' THE "GENERAL PROVISIONS" ALSO INCLUDED CLAUSE 7 ENTITLED "PAYMENTS TO CONTRACTORS" WHICH PROVIDED IN GENERAL FOR PARTIAL PAYMENTS AS THE WORK PROGRESSED BUT DID NOT INCLUDE ANY REFERENCE TO THE TERM "FINAL PAYMENT" NOR PROVIDE A BASIS FOR DETERMINING THE "FINAL PAYMENT" AS SUCH OTHER THAN THE FOLLOWING PROVISIONS OF PARAGRAPH (D):

"/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. IF THE CONTRACTOR'S CLAIM TO AMOUNTS PAYABLE UNDER THE CONTRACT HAS BEEN ASSIGNED UNDER THE ASSIGNMENT OF CLAIMS ACT OF 1940, AS AMENDED (41 U.S.C. 15), A RELEASE MAY ALSO BE REQUIRED OF THE ASSIGNEE AT THE OPTION OF THE CONTRACTING OFFICER.'

WHILE UNDER THE FOREGOING GENERAL PROVISION A RELEASE IS NOT MANDATORY UNDER SECTION "F10.04 FINAL RELEASE" OF THE DEPARTMENT'S MANUAL ON CONTRACT ADMINISTRATION, NAVDOCKS DP-AD-4, A FINAL RELEASE FOR A LUMP-SUM CONTRACT IS REQUIRED SUBJECT TO THE STIPULATION THAT THE CONTRACTOR SHOULD BE PERMITTED TO LIST ANY EXCEPTION OR EXCEPTIONS THAT CLEARLY INDICATE THE BASIS FOR THE CONTRACTOR'S CLAIM, SUCH AS ADDITIONAL COMPENSATION BASED ON DELAYS, VARYING INTERPRETATIONS OF THE SPECIFICATIONS, INTERFERENCE BY OTHER GOVERNMENT CONTRACTORS, INCREASE IN LABOR OR MATERIAL COSTS, OR OTHER CAUSES.

IT IS STATED IN THE LETTER OF OCTOBER 17, 1961, THAT BY COMMUNICATION OF AUGUST 12, 1959, THE CONTRACTOR NOTIFIED THE RESIDENT OFFICER IN CHARGE OF CONSTRUCTION (ROICC) THAT NO FURTHER WORK WOULD BE DONE UNDER CONTRACT NO. NBY-19494 PENDING ASSURANCE THAT AN EQUITABLE ADJUSTMENT WOULD BE MADE FOR ADDITIONAL COSTS INCURRED BECAUSE OF THE GOVERNMENT'S DIRECTION TO SUSPEND WORK DUE TO MISSILE FIRING; THAT BY TELEGRAM DATED AUGUST 12, 1959, THE ROICC GAVE SUCH ASSURANCE TO THE CONTRACTOR; AND THAT IN RESPONSE TO SUBSEQUENT LETTERS FROM THE CONTRACTOR DATED SEPTEMBER 15 AND 16, 1959, FORWARDING CLAIMS FOR STANDBY COSTS INCURRED DURING MISSILE DOWNTIME ON THE 3 CITED CONTRACTS, THE ROICC RELIED THAT SUCH CLAIMS WOULD BE CONSIDERED ON A CONTRACT BY CONTRACT BASIS AT SUCH TIMES AS ALL CLAIMS UNDER THE RESPECTIVE CONTRACTS HAD BEEN FINALIZED. IT IS STATED, HOWEVER, THAT WHILE IN ACCORDANCE WITH THE FOREGOING COMMITMENT CHANGE ORDERS WERE ISSUED ON CONTRACTS NUMBERED NBY-19561 AND 19485 PROVIDING FOR EQUITABLE ADJUSTMENTS FOR MISSILE DOWNTIME, THROUGH AN OVERSIGHT NO AMENDMENT WAS MADE ON CONTRACT NO. NBY-19494 FOR ANY ADJUSTMENT. THE RECORD SHOWS, HOWEVER, THAT BY LETTER DATED FEBRUARY 3, 1960, THE CONTRACTOR REQUESTED THE ROICC FOR AN EXTENSION OF TIME TO FEBRUARY 28, 1960, BY REASON OF ALERT DOWNTIME DELAYS AND BECAUSE OF OTHER DELAYS DUE TO LACK OF ELECTRIC POWER WHICH WAS TO HAVE BEEN SUPPLIED BY THE GOVERNMENT UNDER ANOTHER CONTRACT. PURSUANT TO SUCH REQUEST THE CONTRACT COMPLETION DATE WAS EXTENDED TO FEBRUARY 28, 1960, BY CHANGE ORDER "G" WITH THE STIPULATION THAT "THERE IS NO CHANGE IN THE CONTRACT ICE.'

IT IS STATED THAT ON MARCH 11, 1960, AND APRIL 12, 1960, THE CONTRACTOR SUBMITTED TO ROICC CLAIMS IN THE RESPECTIVE AMOUNTS OF $16,795.24 AND $15,535.80 AS ADDITIONAL COMPENSATION FOR ALERT DOWNTIME COSTS INCURRED DURING MISSILE FIRING. THE RECORD SHOWS THAT ON APRIL 21, 1960, WHILE THESE CLAIMS WERE PENDING THE CONTRACTOR EXECUTED A GENERAL RELEASE WITHOUT ANY EXCEPTION FOR SUCH CLAIMS AND THAT FINAL PAYMENT UNDER THE CONTRACT IN THE AMOUNT OF $1,800 WAS MADE ON APRIL 26, 1960, BY THE NAVAL REGIONAL ACCOUNTS OFFICE, SAN DIEGO, UNDER SYMBOL 60957. IN THE CONTRACTOR'S LETTER OF MAY 26, 1960, TO THE OICC IT IS STATED THAT PRIOR TO THE PROCESSING OF THE RELEASE ON APRIL 21, 1960, IT HAD SUBMITTED PROPOSALS FOR ADDITIONAL COMPENSATION FOR CHANGES IN THE ONTRACT; THAT THE OICC HAD AGREED SUCH ADDITIONAL COMPENSATION WAS DUE AND THAT IT WAS THE CONTRACTOR'S IMPRESSION THAT BY SIGNING THE RELEASE ALL PROPOSALS FOR ADDITIONAL COMPENSATION WHICH WERE THEN UNDER REVIEW WERE STILL IN EFFECT. AS TO THE INTENTIONS OF THE OICC IT IS STATED IN THE ASSISTANT SECRETARY'S LETTER THAT THE OICC HAS ADVISED THAT AT THE TIME HE PROCESSED THE RELEASE HE WAS AWARE OF THE OUTSTANDING CLAIMS SUBMITTED BY THE CONTRACTOR BUT THAT HE INADVERTENTLY OVERLOOKED THIS FACT IN PROCESSING THE FINAL RELEASE.

IN EXPLANATION OF THE CIRCUMSTANCES INCIDENT TO THE EXECUTION OF CHANGE ORDER "G" THERE HAS NOW BEEN RECEIVED A COMMUNICATION DATED DECEMBER 1, 1961, FROM THE DIRECTOR, SOUTHWEST DIVISION, BUREAU OF YARDS AND DOCKS, SAN DIEGO, CALIFORNIA, AS FOLLOWS:

"THE CONTRACTOR'S LETTER (OF FEBRUARY 3, 1960) REQUESTED CONSIDERATION OF AN EXTENSION OF CONTRACT TIME BY REASON OF ALERT/DOWNTIME DELAYS FOR THE BENEFIT OF THE GOVERNMENT AND ALSO FOR DELAYS DUE TO LACK OF ELECTRIC POWER TO HAVE BEEN SUPPLIED BY THE GOVERNMENT UNDER ANOTHER CONTRACT. HIS ENDORSEMENT OF 16 FEBRUARY,THE ROICC CONCURRED WITH THE REQUEST FOR TIME BASED ON THE FOREGOING REASONS.

"THE FINDINGS OF 16 MARCH 1960, WRITTEN FOR THE FILES, INDICATE THEREIN THE TIME OF THE CONTRACT HAD BEEN EXTENDED BY CHANGE ORDER "E" THROUGH 30 JANUARY 1960 AND THAT THE CONTRACT WAS COMPLETED ON 28 FEBRUARY 1960, REPRESENTING AN OVERRUN OF CONTRACT TIME OF 29 CALENDAR DAYS. THE CONTRACT RECORDS FURTHER INDICATED THE CONTRACTOR WAS DELAYED APPROXIMATELY 80 CALENDAR DAYS DUE TO LACK OF ELECTRIC POWER REQUIRED TO MAKE FINAL CHECKOUT OF ELECTRICALLY OPERATING EQUIPMENT, AND AS THIS PERIOD REPRESENTED THE GREATEST PORTION OF DELAY, THE FINDINGS WERE WRITTEN ON THIS BASIS AND CHANGE ORDER "G" AS A RESULT EXTENDED THE CONTRACT TIME 29 CALENDAR DAYS WITHOUT CONSIDERATION OF DOWNTIME/ALERT TIME.

"THE CONTRACTOR'S LETTER OF 3 FEBRUARY 1960 REQUESTING CONSIDERATION OF TIME EXTENSION FOR ALERT/DOWNTIME DELAYS MAKES NO MENTION OF PROBABLE COSTS OR DAMAGES. ISSUANCE OF CHANGE ORDER "G" ON THE BASIS OF THE CONTRACTOR'S REQUEST, WHILE CONSIDERED ON THE DELAY FOR ELECTRICAL POWER, ALSO IS CONSTRUED TO HAVE CONSIDERED HIS APPLICATION FOR TIME EXTENSION ON THE ALERT/DOWNTIME DELAYS AS PER HIS REQUEST. CHANGE ORDER "G" WAS NOT A PART OF NOR INTENDED TO BE SETTLEMENT OF THE CONTRACTOR'S PENDING REQUEST FOR CONSIDERATION OF ADDITIONAL COMPENSATION FOR ALERT/DOWNTIME DELAYS.'

RELEASES, ALTHOUGH IN GENERAL TERMS, ORDINARILY ARE TO BE CONSTRUED AS LIMITED IN THEIR OPERATION TO CLAIMS AND DEMANDS CONTEMPLATED BY THE PARTIES AT THE TIME OF THEIR EXECUTION. BUCKLEY V. BASFORD, 184 F.SUPP. 870; BUTCHER V. UNITED ELECTRIC COAL CO., 174 F.2D 1003; 45 AM.JR. RELEASE SECTION 710; 30 COMP. GEN. 335.

THE CIRCUMSTANCES LEADING UP TO AND INCIDENT TO THE EXECUTION OF THE RELEASE AS REPORTED IN THE SUBMISSION REASONABLE ESTABLISH THAT THE CONTRACTOR'S CLAIMS IN AMOUNTS OF $16,795.24 AND $15,535.80 FOR ADDITIONAL COMPENSATION FOR ALERT DOWNTIME COSTS UNDER CONTRACT NO. NBY-19494 INCURRED DURING MISSILE FIRING FOR WHICH REIMBURSEMENT IS NOT CLAIMED WERE NOT WITHIN THE CONTEMPLATION OF THE PARTIES AT THE TIME THE RELEASE WAS EXECUTED. AS EARLY AS AUGUST 12, 1959, THE CONTRACTOR WAS ADVISED THAT IT WAS RECOGNIZED THAT THE CONTRACTOR HAD BEEN DELAYED AND HAD INCURRED ADDITIONAL COSTS DUE TO MISSILE FIRINGS AND THAT AN EQUITABLE ADJUSTMENT WOULD BE MADE. SUBSEQUENTLY, UPON THE FILING OF SPECIFIC CLAIMS FOR STANDBY COSTS INCURRED DURING MISSILE FIRING THE CONTRACTOR WAS ADVISED THAT SUCH CLAIMS WOULD BE CONSIDERED ON A CONTRACT-BY-CONTRACT BASIS WHEN ALL CLAIMS FOR THE RESPECTIVE CONTRACTS WERE FINALIZED. THERE IS NOTHING IN THE RECORD SHOWING ANY CLAIMS NOR IS THERE ANY INDICATION THAT THERE WAS ANY INTENTION TO BAR THE CONTRACTOR'S CLAIM FOR ADDITIONAL COSTS AT THE TIME OF THE EXECUTION OF THE RELEASE.

ACCORDINGLY, PAYMENT OF THE CLAIMS SUBMITTED BY THE CONTRACTOR FOR STANDBY COSTS INCURRED UNDER CONTRACT NO. NBY-19494 DURING MISSILE DOWNTIME IS AUTHORIZED IN SUCH AMOUNTS AS MAY BE ADMINISTRATIVELY DETERMINED TO BE DUE. SUCH PAYMENT MAY BE MADE WITHOUT AMENDING THE COMPLETED CONTRACT AS PROPOSED. A REFERENCE TO THIS DECISION, HOWEVER, SHOULD BE CITED ON THE PAYMENT VOUCHER. THE ENCLOSURES FORWARDED WITH THE LETTER OF OCTOBER 17, 1961, ARE RETURNED.