B-31575, B-39477, FEBRUARY 29, 1944, 23 COMP. GEN. 632

B-31575, B-39477, FEBRUARY 29, 1944, 23 COMP. GEN. 632

CONTRACTS - RELEASES - EFFECT ON SUBSEQUENT CLAIMS WHERE A LUMP SUM CONSTRUCTION CONTRACT WAS TERMINATED FOR CONVENIENCE OF THE GOVERNMENT AND SETTLEMENT EFFECTED IN ACCORDANCE WITH A CONTRACT PROVISION WHICH CONTEMPLATED THE TRANSFER TO THE GOVERNMENT OF ALL MATERIALS, WORK IN PROCESS, ETC., ACQUIRED BY THE CONTRACTOR IN CONNECTION WITH THE CONTRACT WORK, AND PROVIDED FOR REIMBURSEMENT TO THE CONTRACTOR OF ALL ACTUAL EXPENDITURES MADE WITH RESPECT TO THE CONTRACT, PLUS A PORTION OF HIS ESTIMATED PROFIT, AN UNQUALIFIED RELEASE EXECUTED BY THE CONTRACTOR UPON FINAL SETTLEMENT OPERATES AS A BAR TO PAYMENT BY THE GOVERNMENT OF ANY FURTHER CLAIMS UNDER THE CONTRACT, WHETHER SUCH CLAIMS WERE INCLUDED OR EXCLUDED FROM THE SETTLEMENT AND WHETHER KNOWN OR UNKNOWN AT THAT TIME.

COMPTROLLER GENERAL WARREN TO THE GOVERNOR OF THE PANAMA CANAL, FEBRUARY 29, 1944:

THERE HAVE BEEN CONSIDERED YOUR TWO LETTERS DATED JANUARY 7, 1944, INVOLVING CERTAIN CLAIMS AGAINST THE GOVERNMENT ARISING OUT OF CONSTRUCTION WORK PERFORMED, IN THE ONE CASE, UNDER CONTRACT NO. PCLP 623, WITH NEVADA CONSTRUCTORS, INC., AND, IN THE OTHER, UNDER CONTRACT NO. PCLP -659, WITH ROSOFF PANAMA CONSTRUCTION COMPANY, INC. BY REASON OF THE SIMILARITY OF THE FACTS AND LEGAL ISSUES INVOLVED IN THESE TWO CASES THEY WILL BE CONSIDERED IN A SINGLE REPLY.

TREATING FIRST WITH THE MATTER INVOLVING THE NEVADA CONSTRUCTORS, INC., THE PERTINENT FACTS APPEAR AS FOLLOWS: ON SEPTEMBER 29, 1941, THE PANAMA CANAL ENTERED INTO CONTRACT NO. PCLP-623 WITH THE ABOVE NAMED CONTRACTOR FOR PROCESSING CONCRETE AGGREGATES FOR THE THIRD LOCKS PROJECT, AT GAMBOA AND MIRAFLORES, CANAL ZONE. PURSUANT TO A DIRECTIVE FROM THE SECRETARY OF WAR, THE CONTRACT WAS TERMINATED FOR CONVENIENCE OF THE GOVERNMENT, EFFECTIVE JUNE 1, 1942, AND SETTLEMENT ACCOMPLISHED IN ACCORDANCE WITH THE PROVISIONS OF ARTICLE II OF SUPPLEMENTAL AGREEMENT NO. 1 TO THE CONTRACT. SAID ARTICLE II PROVIDED FOR THE TRANSFER TO THE GOVERNMENT OF ALL MATERIALS, SUPPLIES, WORK IN PROCESS, FACILITIES, EQUIPMENT, ETC., ACQUIRED BY THE CONTRACTOR IN CONNECTION WITH THE PERFORMANCE OF THE CONTRACT WORK, AND FOR REIMBURSEMENT TO THE CONTRACTOR OF ALL ACTUAL EXPENDITURES CERTIFIED BY THE CONTRACTING OFFICER AS HAVING BEEN MADE WITH RESPECT TO THE CONTRACT. ALSO, PROVISION WAS MADE FOR THE PAYMENT OF PART OF THE PROFIT WHICH THE CONTRACTOR WOULD HAVE MADE ON THE CONTRACT BASED ON ESTIMATES OF THE PERCENTAGE OF COMPLETION OF THE CONTRACT. FINAL SETTLEMENT OF THE CONTRACT WAS EFFECTED ON NOVEMBER 20, 1942, INCLUDING THE EXECUTION BY THE CONTRACTOR OF A FORMAL RELEASE OF ALL CLAIMS AND DEMANDS AGAINST THE GOVERNMENT ARISING UNDER OR BY VIRTUE OF SAID CONTRACT.

SUBSEQUENT TO SUCH FINAL SETTLEMENT AND EXECUTION OF AN UNQUALIFIED RELEASE BY THE CONTRACTOR, SEVERAL FREIGHT BILLS WERE RECEIVED BY THE CONTRACTOR COVERING AMOUNTS WHICH FOR ONE REASON OR ANOTHER HAD NOT BEEN INCLUDED IN THE FINAL SETTLEMENT. IT IS STATED IN YOUR LETTER RELATIVE TO THIS MATTER THAT IT APPEARS FROM AVAILABLE RECORDS THAT THE DELAYED SUBMISSION FOR PAYMENT OF THE FREIGHT BILLS OCCURRED WITHOUT FAULT OR NEGLIGENCE ON THE PART OF THE CONTRACTOR BUT THAT SINCE THE CONTRACTOR UNQUESTIONABLY IS LIABLE TO THE CARRIERS FOR THESE CHARGES-- REGARDLESS OF WHETHER THERE MIGHT HAVE BEEN UNTIMELY OR FAULTY BILLING -- NO ATTEMPT HAS BEEN MADE TO CONFIRM SUCH APPARENT LACK OF NEGLIGENCE ON THE PART OF THE CONTRACTOR. IT IS SUGGESTED, HOWEVER, THAT THE CONFUSION THEN EXISTING IN THE TRANSPORTATION FIELD WOULD SEEM TO ABSOLVE THE CONTRACTOR FROM ANY CHARGE OF NEGLIGENCE FOR THE FAILURE TO HAVE ASCERTAINED THE EXISTENCE OF THESE CHARGES AT THE TIME FINAL SETTLEMENT OF THE CONTRACT WAS EFFECTED.

ALSO, IT IS STATED THAT THE PANAMA CANAL WOULD HAVE BEEN DISPOSED TO REFER THESE UNPAID FREIGHT BILLS TO THE CONTRACTOR FOR PAYMENT BY IT TO THE CARRIERS WERE IT NOT FOR THE FACT "THAT THE RELEASE OPERATES AS A BAR TO MAKING PAYMENT TO THE CONTRACTOR FOR CHARGES OTHERWISE REIMBURSABLE BY THE GOVERNMENT EXCEPT FOR THE PROVISIONS OF THE RELEASE; " THAT SHOULD THE CONTRACTOR PAY SUCH CLAIMS, IT IS BELIEVED THAT SUBSTANTIAL JUSTICE REQUIRES THAT IT BE REIMBURSED THEREFOR BY THE GOVERNMENT; AND THAT SINCE THE CARRIERS PERFORMED SERVICES FOR WHICH THEY ARE ENTITLED TO REMUNERATION AND SINCE THE GOVERNMENT WAS THE ULTIMATE RECIPIENT OF SUCH SERVICES, IT IS BELIEVED THAT THE FREIGHT INVOICES CONSTITUTE A CLAIM IN EQUITY BY THE CARRIERS AGAINST THE GOVERNMENT. DECISION IS REQUESTED AS TO WHETHER, UNDER THE CIRCUMSTANCES APPEARING, ANY LEGAL OR EQUITABLE REMEDY EXISTS WHICH WOULD PERMIT DIRECT PAYMENT, OR REIMBURSEMENT TO THE CONTRACTOR, OF THE AMOUNT OF THE FREIGHT BILLS.

THE NATURE OF THE INVOLVED FREIGHT BILLS IS FULLY SET FORTH IN YOUR LETTER. BUT IN THE VIEW HEREINAFTER TAKEN WITH RESPECT TO THE LEGAL ISSUES OF THE MATTER, IT IS UNNECESSARY TO CONSIDER EITHER THE SUBSTANCE OR THE RESPECTIVE MERITS OF SUCH CLAIMS; AND IT WILL BE ASSUMED FOR PRESENT PURPOSES THAT HAD SUCH BILLS PREVIOUSLY BEEN PAID BY THE CONTRACTOR AND PRESENTED TO THE CONTRACTING OFFICER AT THE TIME FINAL SETTLEMENT WAS BEING NEGOTIATED, THEY WOULD HAVE BEEN INCLUDED THEREIN. ALSO, IT WILL BE ASSUMED--- SOLELY FOR THE PURPOSE OF THIS DECISION--- THAT THE CONTRACTOR WAS WITHOUT FAULT OR NEGLIGENCE IN THE FAILURE TO HAVE ASCERTAINED THE EXISTENCE OF THESE BILLS PRIOR TO FINAL SETTLEMENT AND THE EXECUTION OF AN UNQUALIFIED RELEASE.

OF COURSE, IT MUST BE RECOGNIZED AT THE OUTSET THAT IF IT BE DETERMINED THAT THE RELEASE EXECUTED BY THE CONTRACTOR DOES IN FACT OPERATE AS A BAR TO MAKING PAYMENT TO THE CONTRACTOR FOR CHARGES OTHERWISE REIMBURSABLE BY THE GOVERNMENT, THE MATTER IS CONCLUDED BY SUCH DETERMINATION. THAT IS TO SAY, APPARENTLY IT IS CONCEDED THAT THE GOVERNMENT HAS NO DIRECT LEGAL OBLIGATION TO THE CARRIERS WITH RESPECT TO THESE FREIGHT BILLS. HENCE, IF IT BE CONCLUDED THAT UPON FINAL SETTLEMENT OF THE CONTRACT AND THE EXECUTION OF THE INVOLVED RELEASE BY THE CONTRACTOR, THE GOVERNMENT ACQUIRED A VALID DEFENSE TO FURTHER CLAIMS BY THE CONTRACTOR UNDER OR BY VIRTUE OF THE CONTRACT, THE VESTED RIGHTS THUS ACQUIRED MAY NOT BE WAIVED EITHER FOR THE PURPOSE OF REIMBURSING THE CONTRACTOR OR OF MAKING DIRECT SETTLEMENT WITH THE CARRIERS. SEE, GENERALLY, 14 COMP. GEN. 468.

IN A SENSE, IT COULD BE ARGUED THAT UPON TERMINATION OF THE CONTRACT, THE INDEBTEDNESS OF THE GOVERNMENT TO THE CONTRACTOR FOR AMOUNTS ACTUALLY EXPENDED BY THE CONTRACTOR WITH RESPECT TO THE CONTRACT WAS AN UNDISPUTED, LIQUIDATED SUM BY REASON OF THE PROVISIONS OF ARTICLE II OF SUPPLEMENTAL AGREEMENT NO. 1, AND THAT THE RELEASES EXECUTED BY THE CONTRACTOR UPON PAYMENT OF LESS THAN THE FULL AMOUNT OF SUCH INDEBTEDNESS WAS WITHOUT CONSIDERATION AND, THEREFORE, VOID. SEE UNITED STATES V. BOSTWICK, 94 U.S. 53; FIRE INSURANCE ASSOCIATION V. WICKHAM, 171 U.S. 564; AND OWENSBORO DITCHER AND GRADER CO. V. MARKHAM, 32 F.2D 564. HOWEVER, SUCH WAS NOT THE EFFECT OF THE CONTRACT TERMINATION NOR OF THE PROVISIONS RELATING TO FINAL SETTLEMENT. THE TERMS OF SAID ARTICLE II, EXPRESSLY REQUIRED THAT EACH ITEM FOR WHICH THE CONTRACTOR CLAIMED REIMBURSEMENT BE PASSED ON AND APPROVED BY THE CONTRACTING OFFICER. HENCE, IT MIGHT BE CONSIDERED THAT EACH EXPENDITURE FOR WHICH REIMBURSEMENT WAS MADE IN THE FINAL SETTLEMENT AND PAYMENT WAS IN DISPUTE AND UNLIQUIDATED UNTIL THE APPROVAL OF THE CONTRACTING OFFICER WITH RESPECT THERETO HAD BEEN OBTAINED.

MOREOVER, THE SETTLEMENT CONSISTED OF TWO PARTS: REIMBURSABLE ITEMS OF EXPENDITURE AND A PERCENTAGE OF PROFIT. SAID ARTICLE II PROVIDED THAT THE COMPUTATION OF PROFIT BY THE CONTRACTING OFFICER SHOULD BE BASED UPON AN ESTIMATE OF THE FULL AMOUNT OF PROFIT WHICH THE CONTRACTOR WOULD HAVE RECEIVED HAD THE CONTRACT BEEN COMPLETED AND UPON AN ESTIMATE OF THE PERCENTAGE OF COMPLETION OF THE CONTRACT, INCLUDING WORK PERFORMED AFTER TERMINATION. THUS, EVEN THOUGH THE PROFIT OF THE CONTRACTOR WAS TO BE ARRIVED AT UNDER A FORMULA SET FORTH IN THE CONTRACT, IT HARDLY COULD BE SAID THAT THE AMOUNT THEREOF WAS LIQUIDATED. AND SINCE THE PRESENCE OF UNLIQUIDATED OR DISPUTED ITEMS IN AN ACCOUNT RENDER THE ENTIRE ACCOUNT UNLIQUIDATED ( FULLER V. KEMP, 33 N.E. 1034), IT MUST BE CONCLUDED THAT ANY ARGUMENT TO THE EFFECT THAT THE RELEASE WAS WITHOUT VALID CONSIDERATION CANNOT BE SUSTAINED. CF. CHICAGO, MILWAUKEE, AND ST. PAUL RAILWAY COMPANY V. CLARK, 178 U.S. 353.

IF REGARD WERE CONFINED STRICTLY TO THE TERMS OF THE RELEASE, IT MIGHT BE CONTENDED THAT SAID RELEASE DOES NOT COMPREHEND AT LEAST SOME OF THE CLAIMS HERE INVOLVED. THE RELEASE READS:

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

FURTHERMORE, IT COULD BE CONTENDED THAT EVEN IF THE EXPRESS TERMS OF THE RELEASE BE FOR CONSIDERATION AS COVERING NOT ONLY SUCH CLAIMS AND DEMANDS AS WERE INCLUDED IN THE SETTLEMENT BUT ALSO THOSE EXCLUDED, OPERATION OF THE RELEASE SHOULD NOT BE EXTENDED TO CLAIMS AND DEMANDS NOT WITHIN COMPLETION OF THE PARTIES AT THE TIME IT WAS EXECUTED. CERTAINLY, THERE IS NO EVIDENCE OF RECORD TO INDICATE THAT IN NEGOTIATING FINAL SETTLEMENT OF THE CONTRACT EITHER THE GOVERNMENT OR THE CONTRACTOR HAD ANY KNOWLEDGE OF THE PARTICULAR ITEMS HERE INVOLVED. MOREOVER, IT APPEARS WELL RECOGNIZED THAT RELEASES GENERALLY ARE TO BE CONSTRUED AS LIMITED IN THEIR OPERATION TO CLAIMS AND DEMANDS CONTEMPLATED BY THE PARTIES AT THE TIME OF EXECUTION. SEE L. W. PACKARD AND CO. V. UNITED STATES, 66 C.1CLS. 184; THE ROSS CODDINGTON, 40 F.2D 260; SEAVER V. SNIDER, 122 PAC. 402. ALSO, SEE 13 COMP. DEC. 343; 19 ID. 464.

HOWEVER, EITHER OF SUCH CONSTRUCTIONS WOULD DO VIOLENCE TO THE OBVIOUS PURPOSE FOR WHICH THE RELEASE WAS EXECUTED--- WHICH PURPOSE MUST BE CONSIDERED AS CONTROLLING ITS OPERATION AND EFFECT. SEE ROWE V. RAND, 12 N.E. 377; WHITTEMORE V. JUDD LINSEED AND SPERM OIL CO., 27 N.E. 244; SHRIVER V. CARLIN AND FULTON CO., 141 A. 434. IT IS TO BE ASSUMED THAT THE FINAL SETTLEMENT IN THIS CONTRACT--- AS IN MOST CONTRACTS TERMINATED BY AGREEMENT OF THE PARTIES--- WAS THE CULMINATION OF A PERIOD OF NEGOTIATION BETWEEN THE PARTIES, WHEREIN SOME ITEMS OF EXPENDITURE OF PERHAPS DOUBTFUL MERIT WERE INCLUDED AND OTHERS EXCLUDED. AND WHEN FINALLY THE PARTIES FOUND THEMSELVES IN SUBSTANTIAL ACCORD AS TO THE AMOUNT WHICH WHEN PAID WOULD END ONCE AND FOR ALL THE GOVERNMENT'S OBLIGATIONS UNDER THE CONTRACT, PAYMENT WAS MADE AND A RELEASE EXECUTED. THUS, THE RELEASE WAS BY NO MEANS INTENDED ONLY AS A PART-WAY MEASURE BUT RATHER--- AS THE SUPREME COURT STATED IN UNITED STATES V. WM. CRAMP AND SONS CO., 206 U.S. 118--- "INDICATES A PURPOSE TO MAKE AN ENDING OF EVERY MATTER ARISING UNDER OR BY VIRTUE OF THE CONTRACT.' SEE, IN ADDITION, C. R. WILSON BODY COMPANY V. UNITED STATES, 59 C.1CLS. 611; FEDERAL MOTOR TRUCK CO. V. UNITED STATES, 71 C.1CLS. 545; 3 COMP. GEN. 380.

IN 23 COMP. DEC. 424, IT WAS STATED:

IT CAN HARDLY BE QUESTIONED THAT THE PURPOSE OF A RELEASE IS TO SETTLE ALL CLAIMS BETWEEN PARTIES, EXCEPT SUCH AS MAY BE EXPRESSLY RESERVED THEREFROM, AND TO PUT IT OUT OF THE POWER OF ALL PARTIES TO THEREAFTER RAISE FURTHER QUESTIONS, FRAUD OR DURESS NOT BEING PRESENT. IF IT WERE OTHERWISE, A RELEASE WOULD BE NO MORE THAN A MERE RECEIPT, WHICH MAY BE EXPLAINED OR DISPUTED.

THE RELEASE WENT TO THE MATTER AS A WHOLE AND NOT TO ONE ITEM ANY MORE OR LESS THAN TO ANOTHER. THE PROBABILITY OF UNKNOWN MISTAKES ON EITHER SIDE, IN COMPUTING THE AMOUNT TO BE PAID, WOULD BE ONE OF THE VERY REASONS FOR INCLUDING IT IN THE LEGAL EFFECT OF THE RELEASE, RATHER THAN OF EXCLUDING IT THEREFROM, OTHERWISE NOTHING WOULD BE SETTLED AND ITS SUBSTANTIAL LEGAL EFFECT WOULD BE GONE--- THAT THE VERITY OF THE FACTS WAS TO BE TAKEN AS THEN STATED AND THAT THE PARTIES HAD AGREED ON ALL THAT WAS TO BE PAID AND TO FOREVER PUT IT OUT OF POWER TO COMPEL THE PAYMENT OF ANYTHING MORE.

ALSO, THE MERE FACT THAT CERTAIN PARTICULAR ITEMS OF EXPENDITURE WERE UNKNOWN AT THE TIME THE RELEASE WAS EXECUTED IS NOT CONCLUSIVE OF THE QUESTION WHETHER CLAIMS WITH RESPECT TO SUCH ITEMS ARE BARRED BY THE RELEASE. THUS, IN KIRCHNER V. NEW HOME SEWING MACHINE COMPANY, 31 N.E. 1104, THE COURT STATED:

* * * IT IS COMPETENT FOR A PARTY BY HIS OWN ACT TO FOREGO A RECOVERY FOR UNKNOWN AS WELL AS KNOWN CAUSES OF ACTION. CONSTRUING THE LANGUAGE OF A RELEASE, AS WE MUST, MOST STRONGLY AGAINST THE GRANTOR, IF WORDS ARE USED FAIRLY IMPORTING A GENERAL DISCHARGE, THEIR EFFECT CANNOT BE LIMITED BY THE BARE PROOF THAT THE RELEASOR HAD NO KNOWLEDGE OF THE EXISTENCE OF THE DEMAND IN CONTROVERSY. THE OPERATION OF SUCH AN INSTRUMENT CANNOT BE MADE TO DEPEND UPON ORAL TESTIMONY AS TO THE KNOWLEDGE OF THE CREDITOR, WHEN HE EXECUTED IT, OF THE LIABILITY WHICH HE SUBSEQUENTLY SEEKS TO ENFORCE. MIGHT HAPPEN THAT HE DID NOT THEN KNOW OR RECOLLECT THAT HIS DEBTOR OWED HIM ANYTHING, AND THE WRITING UNDER SUCH A CONSTRUCTION, WOULD BE WHOLLY INOPERATIVE, ALTHOUGH MANY CAUSES OF ACTION MAY HAVE AT THE TIME ACTUALLY EXISTED. * * * AND IN HYDE V. BALDWIN, 17 PICK. ( MASS.) 303, IT WAS HELD:

IN ORDER THAT A RELEASE OF ALL DEMANDS SHOULD OPERATE AS A RELEASE OF A PARTICULAR DEMAND OR INTEREST, IT IS NOT NECESSARY THAT THAT PARTICULAR DEMAND SHOULD HAVE BEEN IN THE MINDS OF THE PARTIES AT THE TIME OF ITS EXECUTION. IT SHOULD BE HELD TO EMBRACE ALL DEMANDS EMBRACED BY ITS TERMS, WHETHER PARTICULARLY CONTEMPLATED OR NOT.

IN THE CASE OF IN RE RIVEROLL, 38 F.2D 205, THE COURT SAID:

* * * IF THE CLAIM PRESENTED FOR APPROVAL WAS ENTIRELY SEPARATE AND DISTINCT FROM ANYTHING INVOLVED IN THE ACTION, SETTLEMENT, AND RELEASE, THERE MIGHT BE SOME BASIS FOR THE CONTENTION THAT THE GENERAL LANGUAGE OF THE RELEASE RELEASING THE BANKRUPT FROM ALL CLAIMS OR INDEBTEDNESS OR LIABILITY TO THE SYNDICATE WOULD NOT COVER SUCH A SEPARATE AND INDEPENDENT CLAIM ACCRUING TO THE SYNDICATE AFTER THE SETTLEMENT, BUT THE CLAIM CANNOT BE SO SEPARATED. * * *

THE LANGUAGE OF THESE CASES FINDS READY APPLICATION TO THE FACTS HERE. WHILE IT MAY BE TRUE THAT THE PARTIES DID NOT KNOW OF THE EXISTENCE OF CERTAIN UNPAID FREIGHT BILLS IN ARRANGING THE FINAL SETTLEMENT AND, THEREFORE, COULD NOT HAVE CONTRACTED SPECIFICALLY WITH REGARD TO THOSE PARTICULAR ITEMS IN THE EXECUTION OF THE RELEASE, IT IS REASONABLE TO DEDUCE FROM ALL THE CIRCUMSTANCES THAT THEY DID HAVE IN MIND AND DID CONTRACT WITH RESPECT TO ITEMS OF THE GENERAL CLASS OF THE FREIGHT CHARGES. CONSEQUENTLY, IT MUST BE HELD THAT BY THE EXECUTION OF THE RELEASE THE CONTRACTOR RELINQUISHED ANY FURTHER RIGHT TO REIMBURSEMENT BY THE GOVERNMENT OF CLAIMS FOR EXPENDITURES MADE BY REASON OF THE CONTRACT WORK, WHETHER INCLUDED OR EXCLUDED FROM THE SETTLEMENT AND WHETHER KNOWN OR UNKNOWN AT THAT TIME. CF. LANE V. WENTWORTH, 138 PAC. 468; SHANNON V. PRALL ET UX, 196 PAC. 35; HOUSTON V. TROWER, 297 F. 558; MILLER V. PERLROTH ET AL., 110 A. 535; PELTON WATER WHEEL COMPANY V. UNITED STATES, 55 C.1CLS. 31; P. H. MCLAUGHLIN AND COMPANY V. UNITED STATES, 36 C.1CLS. 138.

ACCORDINGLY, IT MUST BE CONCLUDED THAT, REGARDLESS OF THE REASONS FOR THE FAILURE OF THE CONTRACTOR TO HAVE SUBMITTED THE INVOLVED FREIGHT CHARGES TO THE CONTRACTING OFFICER PRIOR TO FINAL PAYMENT AND THE EXECUTION OF A RELEASE, THE OBLIGATIONS OF THE GOVERNMENT WITH RESPECT TO THE CONTRACT HAVE BEEN COMPLETELY SATISFIED AND IT IS BEYOND THE AUTHORITY OF ANY GOVERNMENT OFFICER TO WAIVE THE VESTED RIGHTS THUS ACQUIRED AND PAY EITHER DIRECTLY OR BY WAY OF REIMBURSEMENT ANY FURTHER CLAIMS WITH RESPECT TO THAT PART OF THE CONTRACT WHICH HAS BEEN TERMINATED AND SETTLED.

SINCE IT APPEARS THAT THE PERTINENT PROVISIONS OF CONTRACT NO. PCLP 659, WITH ROSSOFF PANAMA CONSTRUCTION COMPANY, INC., AS WELL AS THE TERMS OF THE RELEASE EXECUTED BY SAID COMPANY UPON FINAL SETTLEMENT OF THE CONTRACT, ARE SUBSTANTIALLY IDENTICAL WITH THOSE INVOLVED IN THE NEVADA CONSTRUCTORS, INC., MATTER, AND SINCE THE FACTS STATED IN YOUR LETTER WITH RESPECT TO THESE TWO CASES DO NOT DIFFER IN ANY MATERIAL RESPECT, THE SAME CONCLUSION IS REQUIRED WITH RESPECT TO THE RELEASE EXECUTED IN THAT CASE.