B-153704, OCT. 13, 1964

B-153704, OCT. 13, 1964

TO THE BOUTWELL COMPANY, INC.:

REFERENCE IS MADE TO YOUR LETTER OF MARCH 4, 1964, AND SUBSEQUENT CORRESPONDENCE CONCERNING YOUR REQUEST FOR FURTHER CONSIDERATION OF YOUR CLAIM IN THE AMOUNT OF $5,493.50, ALLEGED TO BE DUE UNDER ARMY CONTRACT NO. DA-92-144-ENG-90, WHICH CLAIM WAS DISALLOWED BY OUR SETTLEMENT DATED FEBRUARY 3, 1964.

THE CONTRACT WAS A LUMP-SUM AGREEMENT FOR ARCHITECT-ENGINEER SERVICES TO BE FURNISHED IN CONNECTION WITH THE REHABILITATION OF ROOFS AT THE KHARIAN CANTONMENT, KHARIAN, PAKISTAN. UNDER TITLE I OF THE CONTRACT, AS MORE SPECIFICALLY SET OUT IN APPENDIX "A," YOU AGREED TO FURNISH ALL DESIGN DRAWINGS, TECHNICAL PROVISIONS OF THE SPECIFICATIONS AND DETAILED COST ESTIMATES FOR THE REHABILITATION, OF THE ROOFS OF SOME 188 BUILDINGS AT KHARIAN CANTONMENT, AS WELL AS ANY OTHER BUILDINGS WHICH INDICATED A NEED FOR SIMILAR ROOF REHABILITATION, AT A COST OF $6,877. UNDER TITLE II OF THE CONTRACT THE GOVERNMENT HAD THE OPTION, IF EXERCISED WITHIN SIX MONTHS AFTER COMPLETION AND ACCEPTANCE OF THE WORK UNDER TITLE I, OF DIRECTING THE ARCHITECT ENGINEER BY A WRITTEN ORDER TO FURNISH THE NECESSARY PERSONNEL TO SUPERVISE THE CONSTRUCTION IN ORDER TO ASSURE THAT EVERY PART OF THE WORK WAS DONE IN ACCORDANCE WITH THE APPROVED DRAWINGS AND TO PERFORM NECESSARY SERVICES INCIDENTAL TO THE ABOVE SUPERVISION, AS ENUMERATED IN THE CONTRACT, INCLUDING THE PREPARATION OF LABOR ESTIMATES, PROGRESS REPORTS AND RECORD DRAWINGS SHOWING THE CONSTRUCTION AS ACTUALLY ACCOMPLISHED. AS ORIGINALLY EXECUTED THE CONTRACT CALLED FOR 16 MAN MONTHS OF TITLE II INSPECTION SERVICE AT A TOTAL COST OF $11,318.

NOTICE OF AWARD, SUBJECT TO THE OPTION UNDER TITLE II, AND NOTICE TO PROCEED WITH THE TITLE I WORK ONLY, AT A COST OF $6,877, WAS SENT TO YOU ON APRIL 17, 1962. ON JUNE 23, 1962, YOU WERE NOTIFIED OF THE AWARD TO YOU OF THE TITLE II PORTION OF THE SERVICES COVERED BY THE CONTRACT, IN THE AMOUNT OF $11,318, SUBJECT TO THE AVAILABILITY OF FUNDS PRIOR TO ISSUANCE OF NOTICE TO PROCEED, WHICH WAS ISSUED ON JULY 26, 1962, WITH A LIMITATION OF $6,000, WHICH AMOUNT WAS INCREASED TO THE CONTRACT FIGURE OF $11,318 BY NOTICE DATED SEPTEMBER 13, 1962.

ON NOVEMBER 12, 1962, THE CONSTRUCTION CONTRACTOR NOTIFIED THE AREA ENGINEER THAT THERE WAS A SERIOUS ERROR IN THE QUANTITY OF 3-PLY BUILT UP ROOFING SPECIFIED IN THE CONTRACT, WHICH WOULD NECESSITATE PROCUREMENT OF ADDITIONAL MATERIAL, AS WELL AS ADDITIONAL TIME TO COMPLETE THE WORK. THE CONSTRUCTION CONTRACT WAS SUBSEQUENTLY MODIFIED TO PROVIDE FOR INSTALLATION OF 1,227 ROOFING UNITS OF 100 SQUARE FEET EACH IN ADDITION TO THE 2,956 UNITS SPECIFIED IN YOUR ESTIMATE OF COST. YOU WERE NOTIFIED OF THE DISCREPANCY BY LETTER OF NOVEMBER 24, 1962, FROM THE CHIEF, CONSTRUCTION DIVISION, AND WERE REQUESTED TO PROVIDE YOUR COMMENTS AND TO INDICATE YOUR WILLINGNESS TO PERFORM THE ADDITIONAL TITLE II INSPECTION SERVICES CAUSED BY THE ERROR AT NO ADDITIONAL COST TO THE GOVERNMENT. YOUR REPLY DATED DECEMBER 4, 1962, TO THE DISTRICT ENGINEER, WHICH WAS SIGNED IN THE NAME OF THE COMPANY BY MR. W. H. BOUTWELL, PRESIDENT, WHO EXECUTED THE CONTRACT, YOU ACCEPTED FULL RESPONSIBILITY FOR THE ERROR AND STATED THAT WHILE YOU KNEW OF NO PRECEDENT FOR HOLDING AN ARCHITECT- ENGINEER PECUNIARILY LIABLE FOR SUCH AN ERROR IN COMPUTATION, NEVERTHELESS, IN KEEPING WITH YOUR POLICY TO PLACE SATISFACTION OF THE CLIENT ABOVE PROFIT, YOU WOULD AGREE TO PERFORM THE ADDITIONAL TITLE II INSPECTION SERVICES AT NO ADDITIONAL COST TO THE GOVERNMENT.

THE ROOFING MATERIAL SPECIFIED IN YOUR ESTIMATE AS BEING REQUIRED TO COMPLETE THE JOB HAD BEEN EXHAUSTED BY DECEMBER 20, 1962, AND MODIFICATION NO. 2 TO THE CONTRACT WAS ISSUED JANUARY 29, 1963, INCREASING THE AUTHORIZED INSPECTION SERVICES UNDER TITLE II TO APPROXIMATELY 21 5/10 MAN -MONTHS AND INCREASING THE AMOUNT PAYABLE THEREFOR TO $15,027, WHICH COVERED SERVICES THROUGH DECEMBER 20, 1962. THE ADDITIONAL ROOFING MATERIAL WHICH WAS ORDERED BY THE CONSTRUCTION CONTRACTOR IN ORDER TO COMPLETE THE PROJECT WAS RECEIVED THE LATTER PART OF JANUARY 1963 AND THE BALANCE OF THE ROOF REHABILITATION WAS ACCOMPLISHED DURING THE PERIOD FEBRUARY 1 THROUGH APRIL 30, 1963. HOWEVER, NO WRITTEN ORDER WAS ISSUED TO YOU PURSUANT TO THE CONTRACT FOR THE ADDITIONAL TITLE II SERVICES NECESSITATED BY THIS WORK DURING THIS PERIOD, BECAUSE NO REIMBURSEMENT WAS TO BE PROVIDED.

YOUR FINAL PAYMENT ESTIMATE WAS DATED MARCH 25, 1963, AND SHOWED A BALANCE DUE YOU OF $5,337.51. THIS AMOUNT WAS PAID TO YOU ON APRIL 9, 1963, AND WAS SUPPORTED BY A RELEASE DATED MARCH 25, 1963, WHICH RECITED THAT IN CONSIDERATION OF THE SUM OF $21,778, PAID OR TO BE PAID UNDER THE INVOLVED CONTRACT, YOU DID "REMISE, RELEASE, AND DISCHARGE THE GOVERNMENT, ITS OFFICERS, AGENTS, AND EMPLOYEES, OF AND FROM ALL LIABILITIES, OBLIGATIONS, CLAIMS AND DEMANDS WHATSOEVER UNDER OR ARISING FROM SAID CONTRACT, EXCEPT: NO EXCEPTIONS.'

PARTIES TO A CONTRACT MAY AGREE TO DO ANYTHING THAT IS POSSIBLE OF PERFORMANCE, PROVIDED IT IS NOT CONTRARY TO LAW OR PUBLIC POLICY. YOUR FAILURE TO PROPERLY DISCHARGE YOUR OBLIGATION UNDER TITLE I OF THE CONTRACT RESULTED IN CONSIDERABLE DELAY IN COMPLETION OF THE PROJECT AND AN INCREASE IN THE TOTAL ESTIMATED DIRECT COST OF OVER $30,000. IF, AS A RESULT OF THIS ERROR ON YOUR PART, YOU CHOSE TO AGREE TO PERFORM THE ADDITIONAL TITLE II INSPECTION SERVICES AT NO COST TO THE GOVERNMENT, YOU WERE FREE TO DO SO AND THERE WAS NO LACK OF CONSIDERATION THEREFOR. IN SO DOING, YOU WERE MERELY AGREEING TO PERFORM THE SERVICES WHICH YOU WERE OBLIGATED TO PERFORM, AT THE OPTION OF THE GOVERNMENT, FOR THE AMOUNT THAT IT WOULD HAVE COST THE GOVERNMENT IF YOUR ESTIMATE HAD NOT BEEN ERRONEOUS.

DESPITE THE AGREEMENT IN YOUR LETTER OF DECEMBER 4, 1962, TO PERFORM THE EXTRA INSPECTION SERVICES AT NO ADDITIONAL COST TO THE GOVERNMENT, A LETTER WAS ADDRESSED TO THE AREA ENGINEER, PESHAWAR AREA, ON DECEMBER 17, 1962, BY MR. E. W. MCCURDY, WHO WAS APPARENTLY VICE PRESIDENT OF YOUR COMPANY, ASKING THAT YOU BE PERMITTED TO RESUME WORK ON FEBRUARY 1, 1963, UNDER A MODIFICATION TO THE CONTRACT, UTILIZING TWO ENGINEERS AT $75.00 PER DAY. HOWEVER, YOU DID NOT FOLLOW UP ON THIS REQUEST AND NO MODIFICATION OR OTHER ORDER, WRITTEN OR ORAL,WAS EVER ISSUED BY THE GOVERNMENT APPROVING PAYMENT FOR SERVICES BEYOND DECEMBER 21, 1962, THE ONLY SUBSTANTIVE MODIFICATION TO THE CONTRACT BEING NO. 2, REFERRED TO ABOVE, WHICH WAS BASED ON INFORMATION INCLUDED IN THE SAID LETTER OF DECEMBER 17. FURTHERMORE, IT IS REPORTED BY THE CONTRACTING OFFICER THAT WHILE THE ADDITIONAL TITLE II INSPECTION SERVICES WERE ACTUALLY BEING PERFORMED MR. BOUTWELL INDICATED TO GOVERNMENT PERSONNEL THAT HE WAS DOING SO ON A GRATIS BASIS.

A RELEASE ORDINARILY COVERS ALL SUCH MATTERS AS MAY FAIRLY BE SAID TO HAVE BEEN WITHIN THE CONTEMPLATION OF THE PARTIES WHEN IT WAS GIVEN, AND THIS INTENTION MUST BE COLLECTED FROM THE WORDS USED IN THE INSTRUMENT AND NOT FROM MATTERS DEHORS THE WRITING. 53 C.J. 58. A RELEASE CONFINED TO CLAIMS OR DEMANDS ARISING FROM OR RELATING TO A SPECIFIED MATTER OPERATES TO RELEASE ALL THE PARTICULAR CLAIMS OR DEMANDS PROPERLY EMBRACED IN THE SPECIFICATIONS. 53 C.J. 84. UNITED STATES V. WILLIAM CRAMP AND SONS SHIP AND ENGINE BUILDING CO., 206 U.S. 118. IF A DEMAND FALLS REASONABLY WITHIN THE TERMS OF THE RELEASE IT IS DISCHARGED THEREBY, WHETHER OR NOT IT WAS CONTEMPLATED BY THE PARTIES AND WHETHER OR NOT THEY WERE AWARE OF ITS EXISTENCE. ACCORDINGLY, A RELEASE OF EVERYTHING DUE OR TO BECOME DUE UNDER A SPECIFIC CONTRACT, IN WHICH THE PARTIES TO THE RELEASE ARE JOINTLY INTERESTED, RELEASES ALL BENEFITS THEREAFTER ACCRUING FROM IT, WHETHER THE PARTIES KNEW THAT THERE WOULD BE ANY SUCH BENEFIT OR NOT. 53 C.J. 85, AND CASES CITED THEREIN.

THE LANGUAGE OF THE RELEASE IN THIS INSTANCE WAS QUITE CLEAR, DISCHARGING THE GOVERNMENT OF AND FROM ALL CLAIMS AND DEMANDS WHATSOEVER UNDER OR ARISING FROM THE INVOLVED CONTRACT. MENS' INTENTIONS MAY ONLY BE GATHERED FROM THEIR WORDS AND ACTIONS, AND WHILE THE OFFICER EXECUTING THE RELEASE ON BEHALF OF YOUR COMPANY MAY HAVE HAD SOME MENTAL RESERVATIONS ABOUT THE SUBJECT MATTER, NO EXCEPTIONS WERE TAKEN THERETO DESPITE THE FACT THAT THE SERVICES FOR WHICH CLAIM IS NOW MADE HAD BEEN APPROXIMATELY TWO THIRDS COMPLETED ON THE DATE OF THE RELEASE, AND THE CIRCUMSTANCES GIVING RISE TO THE CLAIM WERE FULLY KNOWN. FURTHERMORE, IT APPEARS THAT THE FIRST FOR SUCH SERVICES WAS BY YOUR LETTER TO THE DISTRICT ENGINEER DATED NOVEMBER 28, 1963, NEARLY SEVEN MONTHS AFTER COMPLETION OF THE WORK. AS STATED IN 53 C.J. 28 "A RELEASOR WILL NOT BE PERMITTED TO AVOID THE EFFECT OF THE RELEASE MERELY BECAUSE AFTER EXECUTING IT HE REPENTS HIS ACTION.'

FOR THE REASONS STATED WE CONCLUDE THAT THERE HAD NOT BEEN ESTABLISHED AN OBLIGATION ON THE PART OF THE GOVERNMENT TO PAY FOR TITLE II SERVICES BEYOND DECEMBER 31, 1962, AND THE DISALLOWANCE ..END :