B-171791, MAY 11, 1971

B-171791: May 11, 1971

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

PAYMENTS MADE ON ALL THREE AGREEMENTS WERE BASED ON THE MINIMUM DAILY GUARANTEE AND THIS INCLUDED THE DAILY AMOUNT DUE FOR MILEAGE. CLAIMANT CANNOT BE HEARD TO COMPLAIN THAT HE DID NOT READ THE CONTRACT AND IS NOT. KELLNER: REFERENCE IS MADE TO YOUR LETTER 6540 OF JANUARY 14. LYMAN UNDER THE THREE AGREEMENTS WAS DETERMINED BY COMBINING THE DAILY RATE COMPUTED TO THE NEAREST QUARTER DAY WORKED AND THE DAILY AMOUNT DUE FOR MILEAGE. PAYMENT WAS MADE IN THE AMOUNT OF THE MINIMUM DAILY GUARANTEE. THAT HE WAS OF THE UNDERSTANDING THAT HE WAS TO RECEIVE THE DAILY RATE PLUS THE DAILY AMOUNT DUE FOR MILEAGE. LYMAN WAS BASED ON THE MINIMUM DAILY PAYMENT GUARANTEE. WHICH IS EQUAL TO THE DAILY RATE.

B-171791, MAY 11, 1971

CONTRACTS - CLAIM FOR ADDITIONAL PAYMENTS DECISION DENYING CLAIM FOR ADDITIONAL PAYMENT OF $250.80 SUBMITTED BY LEONARD LYMAN INCIDENT TO THREE FIRE EQUIPMENT RENTAL CONTRACTS. PAYMENTS MADE ON ALL THREE AGREEMENTS WERE BASED ON THE MINIMUM DAILY GUARANTEE AND THIS INCLUDED THE DAILY AMOUNT DUE FOR MILEAGE. ALTHOUGH THE CONTRACTING OFFICER STATES THAT HE DID NOT SPEND SUFFICIENT TIME DISCUSSING THE TERMS OF THE NEW AGREEMENT FORM WITH CLAIMANT, IN THE ABSENCE OF FRAUD OR WILLFUL DECEIT, CLAIMANT CANNOT BE HEARD TO COMPLAIN THAT HE DID NOT READ THE CONTRACT AND IS NOT, CONSEQUENTLY, BOUND BY ITS TERMS. THE CLAIM FOR ADDITIONAL PAYMENTS MUST BE DENIED.

TO MR. KELLNER:

REFERENCE IS MADE TO YOUR LETTER 6540 OF JANUARY 14, 1971, CONCERNING THE CLAIM OF MR. LEONARD LYMAN FOR $250.80 ARISING UNDER THREE FIRE EQUIPMENT RENTAL CONTRACTS, AGREEMENTS 26-11-70 AND 26-9-70 DATED AUGUST 27, 1970, AND AN UNNUMBERED AGREEMENT DATED SEPTEMBER 3, 1970, WHICH THE CLAIMANT EXECUTED WITH THE FOREST SERVICE FOR THE USE OF EQUIPMENT ON THE CROSS CREEK FIRE AT THE LEWIS & CLARK NATIONAL FOREST.

THE DAILY PAYMENT DUE MR. LYMAN UNDER THE THREE AGREEMENTS WAS DETERMINED BY COMBINING THE DAILY RATE COMPUTED TO THE NEAREST QUARTER DAY WORKED AND THE DAILY AMOUNT DUE FOR MILEAGE. HOWEVER, AS IN ALL THREE CASES THE MINIMUM DAILY PAYMENT GUARANTEE PROVIDED FOR IN CLAUSE 8(D) OF THE AGREEMENTS EXCEEDED THE AMOUNT DUE AS COMPUTED, PAYMENT WAS MADE IN THE AMOUNT OF THE MINIMUM DAILY GUARANTEE. MR. LYMAN CONTENDS IN HIS LETTER OF OCTOBER 3, 1970, THAT HE WAS OF THE UNDERSTANDING THAT HE WAS TO RECEIVE THE DAILY RATE PLUS THE DAILY AMOUNT DUE FOR MILEAGE. THUS, SINCE THE PAYMENT TO MR. LYMAN WAS BASED ON THE MINIMUM DAILY PAYMENT GUARANTEE, WHICH IS EQUAL TO THE DAILY RATE, HE IS CLAIMING IN ADDITON THE DAILY AMOUNTS ALLEGEDLY DUE FOR MILEAGE.

AS NOTED BY YOU, IN THE PAST THE RENTAL OF FIRE EQUIPMENT WAS PAID FOR ON A 24-HOUR PER DAY DAILY RATE, PLUS A MILEAGE RATE, WITH NO PROVISION FOR COMPUTING PAYMENT DUE ON A QUARTER DAY BASIS EXCEPT FOR THE FIRST AND LAST DAYS. THIS METHOD OF PAYMENT, WHICH CORRESPONDS TO THE METHOD UNDER WHICH MR. LYMAN CONTENDS HE SHOULD HAVE BEEN PAID, WAS USED DURING THE PAST 10 YEARS. HOWEVER, A NEW FIRE EQUIPMENT RENTAL AGREEMENT, FORM 6300-23, WAS PUT INTO EFFECT ON A FOREST SERVICE-WIDE BASIS IN FEBRUARY 1970 AND THIS FORM WAS RECEIVED BY YOUR REGION IN APRIL 1970. IT WAS ON THIS NEW FORM THAT THE AGREEMENTS WITH MR. LYMAN WERE EXECUTED. THE CONTRACTING OFFICER STATES THAT BECAUSE OF THE EMERGENCY SITUATION EXISTING AT THE TIME OF THE EXECUTION OF THE AGREEMENTS, HE DID NOT SPEND SUFFICIENT TIME DISCUSSING THE TERMS INCORPORATED IN THE NEW FORM WITH MR. LYMAN. HE ASSUMED THAT THE CLAIMANT HAD READ AND UNDERSTOOD THE CHANGES MADE REGARDING PAYMENT FOR RENTALS, ALTHOUGH NOW IT APPEARS THAT THE CLAIMANT EITHER WAS NOT AWARE OF OR DID NOT UNDERSTAND THE NATURE OF THESE CHANGES. YOU QUESTION WHETHER THE FAILURE OF THE CONTRACTING OFFICER TO EXPLAIN THE CHANGES IS ENOUGH TO INVALIDATE THE CONTRACT AND ALLOW PAYMENT OF MR. LYMAN'S CLAIM.

THE ESTABLISHED RULE IS THAT IN THE ABSENCE OF FRAUD OR WILLFUL DECEIT, ONE WHO SIGNS A CONTRACT WHICH HE HAS HAD AN OPPORTUNITY TO READ AND UNDERSTAND IS BOUND BY THE TERMS OF THE CONTRACT, AND SUCH PERSON CANNOT BE HEARD TO COMPLAIN THAT HE DID NOT READ THE CONTRACT AND IS NOT, CONSEQUENTLY, BOUND BY ITS TERMS. ALLIED STEEL AND CONVEYORS, INC. V FORD MOTOR COMPANY, 277 F. 2D 907, 913-914 (1960).

CONSEQUENTLY, THE CLAIM OF MR. LYMAN FOR ADDITIONAL PAYMENT MUST BE DENIED.