B-155833, APR. 9, 1965

B-155833, APR. 9, 1965

TO ROBERTSON, CHILDERS, BURKE AND DRACHMAN, ATTORNEYS AT LAW:

REFERENCE IS MADE TO YOUR LETTER DATED JANUARY 22, 1965, WITH ENCLOSURES, PRESENTING, IN BEHALF OF MURRAY J. SHIFF CONSTRUCTION COMPANY OF TUCSON, ARIZONA, A CLAIM IN THE AMOUNT OF $17,940, ARISING OUT OF CONTRACT NO. NBY -50033 (SPEC. NO. 50033/63 (, CONSTRUCTION OF WATER CONDITIONING PLANT SATURN S-II, SEAL BEACH, CALIFORNIA.

IT APPEARS FROM YOUR LETTER AND ENCLOSURES, AND AN ADMINISTRATIVE REPORT DATED MARCH 19, 1965, OF THE BUREAU OF YARDS AND DOCKS, DEPARTMENT OF THE NAVY, THAT A CONTRACT WAS AWARDED TO SHIFF ON APRIL 22, 1963, IN THE AMOUNT OF $490,420 FOR THE WATER CONDITIONING PLANT AT THE SATURN S-II FACILITY, SEAL BEACH, CALIFORNIA; THAT SHIFF HAD OTHER IMPORTANT CONTRACTS AT THE SAME SITE UNDER SIMILAR CONDITIONS; THAT ON JUNE 18, 1964, SHIFF WAS NOTIFIED BY ONE OF ITS SUBCONTRACTORS, TIDMARSH VENTURES, INCORPORATED, THAT IT INTENDED TO FILE A CLAIM IN BEHALF OF SUBCONTRACTOR, CHEM-PURE SERVICE COMPANY, FOR ADDITIONAL CHARGES FOR WORK PERFORMED UNDER THE CONTRACT AND REQUESTED THAT THIS ITEM BE LEFT OPEN. IT FURTHER APPEARS THAT ON JUNE 25, 1964, SHIFF FORWARDED THE LETTER TO THE RESIDENT OFFICER IN CHARGE, SEAL BEACH, CALIFORNIA, REQUESTING THE GOVERNMENT ,* * * TO HOLD THIS ITEM OPEN UNTIL ALL CORRESPONDENCE IS RECEIVED * * *.' NOTHING FURTHER WAS RECEIVED AND ON SEPTEMBER 12, 1964, SHIFF EXECUTED AN UNQUALIFIED FINAL RELEASE WHICH WAS PRESENTED TO, AND PROCESSED BY, THE OFFICER IN CHARGE OF CONSTRUCTION, SAN DIEGO, CALIFORNIA, WHO WAS UNAWARE OF SHIFF'S LETTER OF JUNE 25, 1964. SUBSEQUENTLY, SHIFF SUBMITTED THE CLAIM IN BEHALF OF TIDMARSH VENTURES, INCORPORATED AND CHEM-PURE SERVICE COMPANY IN THE AMOUNT OF $17,940 ON SEPTEMBER 24, 1964, WHICH WAS PROCESSED THROUGH NORMAL CHANNELS. THE OFFICER IN CHARGE DENIED THE CLAIM INASMUCH AS THERE WAS NO AUTHORITY TO SET ASIDE THE RELEASE AND CONSIDER THE CLAIM ON ITS MERITS.

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 EXECUTION. BUCKLEY V. BASFORD, 184 F.SUPP. 870; BUTCHER V. UNITED ELECTRIC COAL CO., 174 F.2D 1003; 45 AM.JUR. RELEASE SEC. 710; 30 COMP. GEN. 335.

THE CIRCUMSTANCES INCIDENT TO THE EXECUTION OF THE RELEASE AS REPORTED CLEARLY ESTABLISH THAT THE CLAIM FOR $17,940 WAS NOT WITHIN THE CONTEMPLATION OF THE PARTIES AT THE TIME OF ITS EXECUTION. THERE IS NOTHING BEFORE US TO INDICATE THAT AT THE TIME OF THE "FINAL PAYMENT" AND RELEASE THERE WAS ANY INTENTION OF THE PARTIES OTHER THAN THAT THE CONTRACTOR SHOULD BE PAID THE ENTIRE BALANCE DUE IT UNDER THE CONTRACT. SO FAR AS THE RECORD SHOWS THERE WAS NO DISAGREEMENT OR DISPUTE OR OCCASION FOR ANY COMPROMISE. THE FACTS AS REPORTED INDICATE THAT THERE WAS NO INTENTION ON THE PART OF SHIFF OR THE GOVERNMENT REPRESENTATIVES TO BAR ANY PROPER CLAIM SHIFF MIGHT HAVE AT THE TIME THE RELEASE WAS EXECUTED.

IN THE CIRCUMSTANCES OF THE PRESENT MATTER, WE ARE OF THE OPINION THAT THE RELEASE IN THIS INSTANCE NEED NOT BE REGARDED AS PRECLUDING CONSIDERATION OF THE ADDITIONAL AMOUNT CLAIMED IN BEHALF OF CHEM-PURE SERVICE COMPANY ON ITS MERITS.

ACCORDINGLY, THE CONTRACT MAY BE REOPENED FOR THIS PURPOSE, AND THE SECRETARY OF THE NAVY IS BEING ADVISED OF OUR DECISION. FURTHER CORRESPONDENCE ON THIS SUBJECT SHOULD BE DIRECTED TO THE OFFICER IN CHARGE OF CONSTRUCTION, SAN DIEGO, CALIFORNIA.