ny ____________________________________________________ MOTION TO DISMISS GRANTED IN PART: December 11, 1995 ____________________________________________________ GSBCA 13332-COM GARZA CORPORATION, Appellant, v. DEPARTMENT OF COMMERCE, Respondent. Julie C. Dodge of Champion, Walker, Niermeyer & Dodge, Modesto, CA, counsel for Appellant. Cecilia R. Jones and F. Jefferson Hughes, Office of General Counsel, Department of Commerce, Washington, DC, counsel for Respondent. Before Board Judges PARKER and BORWICK. BORWICK, Board Judge. Respondent, Department of Commerce (DOC), moves to dismiss quantum adjustments in the second amended appeal complaint of appellant GARZA CORPORATION (GARZA) because those adjustments are separate claims barred by release. The claims for extended overhead, remission of liquidated damages, and direct costs associated with DOC's alleged delay providing temporary and permanent utilities in GARZA's "First Cause of Action" are not barred by the release. Those claims were explicitly excepted in the release as "Claim No. 1."[foot #] 1 The request for the direct costs associated with the utilities delay is not a separate claim; it is a request for an adjustment of quantum in "Claim No. 1" and is therefore not barred by the release. ----------- FOOTNOTE BEGINS --------- [foot #] 1 GARZA's original claim to the Board totalled $100,253.17. GARZA elected the accelerated procedure and waived its claim to any amount above $100,000; the case is therefore proceeding under the accelerated procedure. L.R. Davis & Co., _________________ AGBCA 82-230-1, 83-2 BCA 17,836. ----------- FOOTNOTE ENDS ----------- GARZA's additional claims, submitted to the contracting officer after the release, for: (1) $12,806.82 and $992.94 for alleged design changes to electrical systems, (2) a one-day extension of time for design changes, (3) $786.90 for the cost of electricity after respondent took beneficial occupancy, (4) a four-day extension of time for weather delays, and (5) all claims ("the reasonable value of materials") in GARZA's "Second Cause of Action" are barred by the release. Background 1. On December 20, 1993, by and through the Small Business Administration's "8(a)" program, GARZA was awarded contract 50WCNA406036, for construction of a Weather Forecast Office, located in the San Joaquin Valley, California. Appeal File, Exhibit 1. The contract completion date was three hundred days after receipt of the notice to proceed. Id., Exhibit 10. The contract incorporated by reference the Changes Clause at Federal Acquisition Regulation (FAR) 52.243-4 and the Suspension of Work Clause at FAR 52.212-12. Id. Exhibit 1 at F-1, I-3. 2. GARZA alleges that the contract required DOC to take the necessary steps to allow for both temporary and permanent access to local utilities in a timely manner. Second Amended Complaint 10. GARZA alleges that DOC's failure to take adequate measures to secure access for utility hookups resulted in the delay of completion of the project. Id. 12. 3. On February 10, 1995, Appellant submitted to the DOC contracting officer a request for equitable adjustment pursuant to FAR 52.243.3-7 for "excusable delays that were not the direct responsibility of the General Contractor." Appeal File, Exhibit 73. GARZA requested the following adjustment: 1/19/94 - 1/25/94- Temporary Power Delays 7 days 8/1/94 - 10/31/94 - Easement Grant Notifi- cation and Permanent Power Hook up Delay 92 days Total Extension of Time request 99 days GARZA CORPORATION requests an Equitable Ad- justment for extended overhead: From 11/5/94 - 2/6/95 $59,423.89 Id. GARZA attached supporting documentation including correspon- dence between GARZA and Fluor-Daniel, DOC's construction manager, and invoices from the Southern California Edison Company, the local utility. Appeal File, Exhibit 73. 4. Appellant received no response to its request, and on February 28, 1995, GARZA filed its "Claim No. 1" with DOC. Complaint, Exhibit B; Appeal File, Exhibit 76. GARZA there stated, Under FAR 33.207 GARZA CORPORATION certifies that this claim is submitted in good faith and the attached supporting data is accurate and complete to the best of GARZA CORPORATION'S knowledge and belief and the amount requested accurately reflects the contract adjustment for which GARZA CORPORATION believes the Government is liable. In addition, according to FAR 33.208, GARZA CORPORATION requests interest on liquidated damages in the amounts of $13,000, beginning November 10, 1994, $5,500 begin- ning December 16, 1994 and $9,500 beginning January 9, 1995, for a total of $28,000, plus the payment of release of liquidated damages of $28,000, in addition, to the equitable adjustment amount of $59,423.89 and extension of time of 99 days, as supported in the following data and interest on the equitable adjustment of $59,423.89, starting today, February 28, 1995. Appeal File, Exhibit 76. The equitable adjustment amount re- ferred to the claim for extended overhead submitted to the contracting officer on February 10. Id., Exhibit 73. GARZA attached Fluor-Daniel's invoice records of approvals for the months of November, December and January, 1994. Id. 5. This certification was found defective by the Govern- ment. Appeal File, Exhibit 77. On March 9, GARZA recertified its claim, incorporating its request for equitable adjustment of February 10. Id., Exhibit 78. 6. On April 10, 1995, Debra Garza, the President of GARZA, signed a release of claims for the contract. Appeal File, Exhibit 80. The release provides that GARZA "hereby releases the United States from any and all claims arising under or by virtue of said contract or any modification or change thereof except as follows." Id. In the line on the form for exception from the release, GARZA put: "Claim #1 -$28,000 Liquidated Damages, $59,423.89 Equitable Adjustment plus all interest due." Id. 7. By letter dated April 27, 1995, the Contracting Officer denied GARZA's claim in full. Appeal File, Exhibit 81; Com- plaint, Exhibit C. In its denial letter, the contracting officer described GARZA's claim: "[GARZA] is requesting $89,423.89 plus interest ($59,432.89 (sic) for extended overhead and $28,000.00 for retained liquidated damages) as purported cost to GARZA caused by these alleged delays." Id. 8. By letter dated May 25, 1995, GARZA attempted to unilaterally void its release of claims by sending it back to Fluor Daniel with the word "VOID" stamped repeatedly on it. Appeal File, Exhibit 82. 9. By letter dated May 25, 1995, appellant submitted "Request for Change, GARZA CORPORATION Number GC001." Appeal File, Exhibit 83; Complaint, Exhibit D. GARZA requested $12,- 806.28 for materials, labor and associated costs for the redesign of the electrical main service and installation of re-design, and sixty-four days extension of time on the contract. 10. By letter dated May 25, 1995, appellant submitted "Request for Change, GARZA CORPORATION GC002." Appeal File, Exhibit 84; Complaint, Exhibit E. GARZA requested $992.94, and a time extension of one day, because of a necessary change in the dimension of the transformer pad due to Fluor Daniel's alleged design error. Id. 11. By letter dated May 26, 1995, appellant submitted "Request for Change, GARZA CORPORATION GC003." Appeal File, Exhibit 85; Complaint, Exhibit I. There, GARZA requests reim- bursement of costs for electricity in the weather forecast office. Id. 12. By letter dated May 30, 1995, appellant submitted "Request for Change, GARZA CORPORATION GC004." Appeal File, Exhibit 86; Complaint, Exhibit F. GARZA requested $20,110.94 for "costs for the generators and personnel to maintain the genera- tors for construction of the Weather Forecast Office, due to temporary power not being hooked up." Id. 13. By letter dated June 1, 1995, appellant resubmitted a request requesting a four-day extension of time due to "rainouts" of "key subcontractors." The rain supposedly took place on September 23 and September 28, 1994. Appeal File, Exhibit 87; Complaint, Exhibit G. 14. In its Second Amended Complaint, 16, GARZA states: Request for payment due under the contract was given by virtue of Appellant's Claim No. 1 in the amount of $100,253.17 as follows: a) For the release of wrongfully assessed liquidated damages in the sum of $28,000.00, plus interest at the legally chargeable rate; and b) For an equitable adjustment in the sum of $72,- 253.17, being acknowledged by the Contracting Officer as damages for 1) extended overhead and 2) as costs to Appellant caused by the delays alleged in Appellant's Claim No. 1 . . . . Complaint 16 a). GARZA seeks extended overhead for ninety-nine days of delay from January 19, 1994 to January 25, 1994 for "holdup resulting from the delay in temporary power hookup" (seven days) and delay from August 1, 1994 through October 31, 1994 for the "holdup resulting from the delay in notification of the grant of easement to the utility company and resulting delays in permanent power hookup" (ninety-two days)." Id. As extended overhead for the delay, GARZA seeks $37,- 706.17.[foot #] 2 Id. 15. GARZA also seeks $12,806.28 for miscellaneous alleged design changes, $992.94 and a one-day extension of time for alleged changes in the design of the transformer pad, $786.90 for reimbursement of electricity after DOC took beneficial occupancy, and $20,110.94 for costs expended on generators and personnel to maintain the generators due to delay in the electrical power hookup. Complaint, 16 b). 16. In its Second Cause of Action, GARZA alleges that within the last two years, GARZA rendered labor, services and materials "at the special request of respondent[s]," pursuant to its contract with GARZA, for which DOC "then and there" promised to pay appellant the reasonable value of such materials. Discussion The execution by a contractor of a release which is complete on its face reflects the contractor's unqualified acceptance and agreement with its terms and is binding on both parties. Gres- ham, Smith & Partners v. United States, 24 Cl. Ct. 796, 801 (1991); Clark Mechanical Contractors, Inc. v. United States, 5 Cl. Ct. 84, 86 (1984). A contractor who executes a general release is thereafter barred from maintaining a suit for damages or for additional compensation under the contract based upon events that occurred prior to the execution of the release. B.D. Click Co. v. United States, 614 F.2d 748, 756 (Ct. Cl. 1980). A contractor has the right to reserve claims from the operation of a release, but when it has failed to exercise that right, absent some vitiating or aggravated circumstance, the contractor is precluded from maintaining a suit based on events which occurred prior to the execution of the release. Clark Mechanical Contrac- tors, 5 Cl. Ct. at 86. In Clark Mechanical Contractors, where a contractor signed a general release excepting two specified types of claims, the contractor was barred from bringing a claim, which was not excepted, reflecting increased costs for a special purchase requested by the Government. Id. GARZA's "voiding" the release of claims before submitting its equitable adjustment request for the additional chages has no effect because a unilateral mistake does not void a release. H.L.C. & Associates Construction Co. v. United States, 367 F.2d 586 (Ct. Cl. 1966) (inadvertent execution of a general release by ----------- FOOTNOTE BEGINS --------- [foot #] 2 GARZA recalculated and reduced the extended overhead it seeks; its claim to the contracting officer for extended overhead was $59,423.89. Finding 4. ----------- FOOTNOTE ENDS ----------- the contractor's vice president was "unilateral mistake or omission" which was enforceable as written). A release, however, does not prevent a litigant from in- creasing its quantum during litigation of the excepted claim when the increase in quantum does not amount to a "new claim." Miya Brothers Construction Co. v. United States, 12 Cl. Ct. 142, 146 (1987). We consider GARZA's quantum adjustment for $20,110.94 for the direct cost of changes due to the delay in the utilities hookup to be part of "Claim No. 1" excepted in the release, rather than a new claim. In one case, a contractor amended its complaint to allege delay damages when it had submitted the direct costs, but not the delay damages, to the contracting officer. The board held that the delay damages arose out of the same claim as the changes claim: "delay costs are merely addi- tional areas of alleged damages all of which arose from the complaint which formed the basis of appellant's claims to the contracting officer." E.C. Schleyer Pump Co., ASBCA 33900, 87-3 BCA 19,986, at 101,264. This case presents the converse issue: does the quantum request for direct costs arise from the extended overhead claim for delay associated with lack of access to utilities? We think the same analysis applies here. The claim of $20,110.94 is a claim of direct costs arising from the utili- ties delay raised in GARZA's "Claim No. 1." GARZA's claims for $12,806.82 and $992.94 for alleged design changes to electrical systems, for the one-day time extension and the claim for $786.90 for the cost of electricity after respon- dent took beneficial occupancy were not included in "Claim No. 1," and are based on facts not arising from that delay. The same is true of GARZA's claim for a four-day extension of time for weather delays. The claim in the "Second Cause of Action" of the complaint, seeks the "reasonable value of materials," pursuant to an implied-in-fact contract between GARZA and DOC officials. This claim is also barred by the release. Decision Respondent's motion to dismiss is GRANTED IN PART. GARZA may maintain its claim for (1) a ninety-nine-day time extension due to alleged delay from lack of temporary and permanent utili- ties, (2) remission of liquidated damages of $28,000, (3) extend- ed overhead ($37,706.17) arising from that delay, and the direct costs ($20,110.94) associated with that delay. All are subsumed in "Claim No. 1," which was excepted from the release. The remaining claims are dismissed. ________________________________ ANTHONY S. BORWICK Board Judge I concur: _____________________________ ROBERT W. PARKER Board Judge