B-141033, FEB. 19, 1960

B-141033, FEB. 19, 1960

TO MR. SHINPACHIRO UEDA, PRESIDENT, NIPPON KENSETSU KOGYO COMPANY, LTD.:

REFERENCE IS MADE TO YOUR LETTER OF JANUARY 15, 1960, REQUESTING FURTHER CONSIDERATION OF YOUR CLAIM FOR THE SUMS OF $22,171.88, $43,301.07, AND $32,303.99 FOR EXTRA WORK ALLEGED TO HAVE BEEN PERFORMED UNDER CONTRACTS NOS. DA-92-557-FEC-10361, -10362, AND 10363, RESPECTIVELY, TOGETHER WITH THE SUM OF $26,847.60 CLAIMED TO BE DUE FOR THE CONSTRUCTION OF AN EXTERIOR DRAINAGE SYSTEM WHICH YOU STATE DOES NOT "PROPERLY BELONG TO ANY EXISTING CONTRACT BUT OUGHT TO BE COVERED BY A SEPARATE NEW CONTRACT.' ALSO, THERE HAS BEEN RECEIVED YOUR LETTER OF JANUARY 19, 1960, RELATING TO THE MATTER OF YOUR CLAIM.

IN YOUR LETTER OF OCTOBER 12, 1959, REQUESTING RECONSIDERATION OF THE SETTLEMENT DATED MARCH 26, 1959, BY WHICH OUR CLAIMS DIVISION DISALLOWED YOUR CLAIMS, YOU CONTENDED THAT THE RELEASES EXECUTED BY YOU WERE OBTAINED UNDER DURESS IN THAT UNLESS YOU EXECUTED THEM YOU WOULD NOT HAVE BEEN PAID YOUR EARNINGS UNDER THE CONTRACTS, WHICH YOU NEEDED TO SATISFY YOUR CREDITORS.

IN OUR DECISION OF NOVEMBER 4, 1959, HOLDING THAT THERE WAS NO BASIS FOR THE ALLOWANCE OF YOUR CLAIM, WE POINTED OUT THAT THE RELEASES WERE EXECUTED IN COMPLIANCE WITH THE REQUIREMENTS OF THE CONTRACTS AND WERE THUS FULLY EFFECTIVE AND ENFORCEABLE. IT WAS FURTHER POINTED OUT THAT UNDER ARTICLE 7 (D) OF THE CONTRACTS YOU HAD THE RIGHT TO RESERVE ANY CLAIMS FROM THE OPERATION OF THE RELEASES BUT THAT NO SUCH RESERVATIONS WERE MADE. ON THE BASIS OF THE RECORD, WE HELD THAT---

"IT CAN HARDLY BE QUESTIONED THAT THE VERY PURPOSE OF EVERY AND ANY UNCONDITIONAL RELEASE IS TO SETTLE ALL CLAIMS AND PUT THEM OUT OF THE POWER OF FURTHER QUESTION.'

RESPECTING YOUR CLAIM IN THE AMOUNT OF $26,847.60, FOR OUTDOOR DRAINAGE WORK, YOU MAINTAINED THAT SUCH WORK WAS UNRELATED TO ANY OF THE CONTRACTS INVOLVED AND THAT YOU SHOULD BE COMPENSATED FOR SUCH WORK INDEPENDENT OF SUCH CONTRACTS.

YOU NOW STATE, IN EFFECT, THAT YOU DO NOT QUESTION THE VALIDITY OF THE RELEASES AND NEITHER DO YOU NOW ASSERT THAT THEY WERE OBTAINED UNDER ECONOMIC DURESS; AND THAT THE ONLY PROPER AND APPROPRIATE WAY TO SOLVE THE "PRESENT DIFFICULTY" IS TO RELY UPON THE "PAPERS AND DOCUMENTS" EXCHANGED BETWEEN YOUR COMPANY AND THE GOVERNMENT. ALSO, YOU STATE THAT BY VIRTUE OF "ARTICLE 2 OF THE AMERICAN STATUTE OF PRIMARY WAR POTENTIAL" YOU ARE ENTITLED TO BE PAID FOR THE OUTDOOR DRAINAGE PERFORMED BY YOUR COMPANY PURSUANT TO THE "ORAL DEMAND" OF MR. SAMMONS.

THE RECORD INDICATES THAT IT WAS SEVERAL MONTHS AFTER THE RECEIPT OF FINAL PAYMENTS UNDER THE CONTRACTS IN JUNE, AUGUST, AND MAY 1952, RESPECTIVELY, THAT YOU SUBMITTED THE CLAIMS INVOLVED IN THIS CASE. THIS FACT, STANDING ALONE, WOULD PRECLUDE ANY ADDITIONAL ALLOWANCE UNDER THE CONTRACTS. IN AN OPINION RENDERED JANUARY 20, 1960, IN THE CASE OF P.L.S. COAT AND SUIT CORPORATION V. UNITED STATES, C.CLS. NO. 213-56, THE COURT OF CLAIMS HAD UNDER CONSIDERATION A CASE IN WHICH THE DELIVERIES UNDER THE CONTRACT INVOLVED WERE COMPLETED MAY 15, 1953, AND FINAL PAYMENT MADE ON JUNE 18, 1953. THE PLAINTIFF FILED A CLAIM WITH THE CONTRACTING OFFICER ON JANUARY 12, 1954, SOME SEVEN MONTHS AFTER FINAL PAYMENT. THE COURT HELD THAT THE CLAIM WAS NOT TIMELY FILED AND DISMISSED THE PETITION. THE CASE OF POOLE ENGINEERING AND MACHINE COMPANY V. UNITED STATES, 57 C.CLS. 232, THE COURT STATED:

"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 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. * * *"

RESPECTING YOUR CLAIM FOR THE OUTSIDE DRAINAGE WORK, WE MUST REFER YOU TO PAGE 2 OF OUR DECISION OF NOVEMBER 4, 1959, IN WHICH WE ADVISED YOU THAT MR. SAMMONS, THE SUPERVISING ENGINEER, PURSUANT TO WHOSE "ORAL DEMAND" YOU PERFORMED THE ALLEGED WORK, WAS WITHOUT OFFICIAL CAPACITY TO BIND THE GOVERNMENT AND THAT, THEREFORE, HIS ACTS COULD NOT SERVE AS THE BASIS FOR A CLAIM AGAINST THE UNITED STATES. IN THE CASE OF YURKASZ, ET AL. V. UNITED STATES, 109 F.2D 467, THE COURT HELD, QUOTING THE SYLLABUS:

"THE UNITED STATES IS NOT LIABLE ON EITHER QUANTUM MERUIT OR BUILDING CONTRACT FOR EXTRA WORK DONE AND MATERIALS FURNISHED BY CONTRACTORS, UNLESS CHARGES OR EXTRAS WERE AUTHORIZED BY PROPER GOVERNMENT OFFICIALS AND APPROVED AS PROVIDED BY CONTRACT.'

IN YOUR LETTER OF JANUARY 19, 1960, YOU SUGGESTED THAT YOUR CLAIM FOR THE OUTDOOR DRAINAGE WORK SHOULD BE ALLOWED ON THE BASIS OF THE AUTHORITY CONTAINED IN ARTICLE 2 OF THE "AMERICAN STATUTE OF PRIMARY WAR POTENTIAL.' YOU DID NOT FURNISH A CITATION TO THE INDICATED ACT, BUT IT IS ASSUMED THAT YOU INTENDED TO REFER TO TITLE II, SECTION 201 OF THE FIRST WAR POWERS ACT, 1941, APPROVED DECEMBER 18, 1941, 55 STAT. 839, UNDER WHICH ANY DEPARTMENT OF THE GOVERNMENT EXERCISING FUNCTIONS IN CONNECTION WITH THE PROSECUTION OF THE WAR EFFORT COULD ENTER INTO CONTRACTS AND AMENDMENTS OR MODIFICATIONS OF CONTRACTS THERETOFORE OR THEREAFTER MADE WITHOUT REGARD TO THE PROVISIONS OF LAW RELATING TO THE MAKING, PERFORMANCE, AMENDMENT, OR MODIFICATION OF CONTRACTS WHEN THE PRESIDENT DEEMED SUCH ACTION WOULD FACILITATE THE PROSECUTION OF THE WAR. OUR OFFICE HAS CONSISTENTLY HELD THAT THE PROVISIONS OF THE FIRST WAR POWERS ACT HAVE NO APPLICATION TO A CONTRACT WHICH HAS BEEN FULLY COMPLETED, THAT IS TO SAY, WHERE THE WORK HAS BEEN PERFORMED AND PAYMENT MADE THEREFOR, AS IN THE INSTANT CASE. IN ANY EVENT, THE AUTHORITY CONFERRED BY THAT ACT MAY BE EXERCISED ONLY BY THE CONTRACTING AGENCIES; AND NOT BY OUR OFFICE.

FINALLY, IT MAY BE SAID THAT THE RECORD SUBMITTED TO OUR OFFICE BY THE DEPARTMENT OF THE ARMY INDICATES THAT, SUBSEQUENT TO THE SUBMISSION OF YOUR CLAIMS, THAT DEPARTMENT REQUESTED THE COMMENTS OF MR. SAMMONS (NOW DECEASED) IN THE MATTER. IN A LETTER OF SEPTEMBER 10, 1955, TO THE JAPAN PROCUREMENT AGENCY, MR. SAMMONS MADE THE FOLLOWING STATEMENT:

"2. SUBSEQUENT TO A COMPLETE PERUSAL (SIC) OF ALL CLAIM DATA AND AN ONSITE INSPECTION OF ALL FINISHED WORK PERFORMED BY NIPPON KENSETSU KOGGO COMPANY ON CONTRACTS FEC 10361, 10362, 10363 AND 10365, IN THE COMPANY OF MR. OUSPONSKY AND MR. YOSHIWARA OF THE YOKOHAMA OFFICE J.P.A.THIS DATE, I, THE UNDERSIGNED UNEQUIVOCALLY STATE THAT "NO" ADDITIONAL WORK "OVER AND ABOVE" THAT CALLED FOR BY PLANS, SPECIFICATIONS AND ORIENTATION NOTES WAS PERFORMED ON ABOVE LISTED CONTRACTS.'

ON THE BASIS OF THE RECORD IN THIS CASE WE MUST AGAIN CONCLUDE THAT OUR OFFICE WOULD NOT BE ..END :