____________________________________________ MOTION TO DISMISS GRANTED: February 17, 1994 ____________________________________________ GSBCA 12642 SINGLETON CONTRACTING CORPORATION, Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. Wayne Singleton, Corporate Secretary, Singleton Contracting Corporation, Senoia, GA, appearing for Appellant. Kenneth E. Kendell, General Services Administration, Philadelphia, PA, counsel for Respondent. Before Board Judges DEVINE (presiding), HENDLEY, and BORWICK. HENDLEY, Board Judge. Parties entered into a contract under which appellant was to renovate a federally-owned building. Upon completion of performance, appellant signed a general release for all claims arising under the contract, as required under the contract. Shortly thereafter, appellant filed its notice of appeal electing the accelerated procedure. Appellant has alleged that respondent failed to make timely payments, and thus is required to pay appellant the required interest penalty under 3902 of the Prompt Payment Act. Respondent has filed a motion to dismiss the appeal based on two grounds: first, appellant's release bars any recovery and, second, appellant has failed to state a claim. Given our grant of respondent's motion on the basis of appellant's release, we need not reach the second ground. Background By letter dated October 7, 1992, appellant, Singleton Contracting Corp. (Singleton), was notified that it was awarded a contract by respondent, General Services Administration (GSA), for renovation of a portion of the Federal Executive Institute in Charlottesville, Virginia. Appeal File, Exhibit 2. As modified, the period of performance was to commence in December of 1992 and end on August 13, 1993. Id., Exhibit 1. Under the original contract, the address of the contractor was Senoia, Georgia. Appeal File, Exhibit 1. If a different address is to be used for Government remittances, it must be stated in the contract. Id. Until modified, the contract did not list a separate remittance address. Id. In a letter dated December 8, 1992, appellant advised respondent that a Mr. Chambers would be appellant's project manager and gave an address for the project manager in Farmville, Virginia. Appeal File, Exhibit 5. The letter also states that the manager is authorized to act for appellant on all administrative matters relative to the contract. Id. No other matters are addressed in the letter. Id. The letterhead is different from appellant's previous correspondence in that a Troy, Virginia address is inserted instead of the Senoia, Georgia address. Id. There is no mention in the body of the letter of the differing address, nor is attention drawn to it in any manner. Id. After contract performance had begun, appellant submitted an invoice for payment number 01. Appeal File, Exhibit 9. It is not possible to tell from the invoice on what date appellant submitted its request. However, appellant's letter demanding a final decision states that the invoice was "forwarded to [GSA] on 11 January 1993, and was received . . . on or about 14 January 1993." Id., Exhibit 4. The invoice simply refers to the contract number and requests payment of $19,000. Id. The letterhead address shown is Troy, Virginia. Id. Apparently the invoice was routinely routed to the GSA finance center in Ft. Worth, Texas for payment. According to appellant, the finance center returned the invoice on February 1, 1993, stating that "the contract must be modified to reflect the `remit to' address to be the same as that stated in the contract." Appeal File, Exhibit 4. A unilateral contract modification was issued by the contracting officer on February 8, 1993, changing contractor's remittance address to the Virginia address. Id., Exhibit 1. According to appellant, the "exact same proper invoice" was then resubmitted. Id., Exhibit 4. According to respondent, a "proper payment receipt was not received until March 3, 1993." Id., Exhibit 5. Respondent issued a check dated March 22, 1993, which was received by appellant sometime during the period April 10-13, 1993. Id. The Prompt Payment Act, 31 U.S.C.A. 3901-3907 (West Supp. 1993), is applicable to this contract. Section 3903 of the Act directs that regulations shall be prescribed to carry out the provisions of the statute. Id. The contract incorporates Federal Acquisition Regulation (FAR) clauses; consequently, the payment terms of the contract reflect the provisions of the statute. Appeal File, Exhibit 1. Per FAR 52.232-27 - Prompt Payment For Construction Contracts, the contract requires that an invoice include specific information, such as the address of the contractor's official to whom payment is to be made. Id. The payment address must be the same as that listed in the contract. Id. Under the terms of FAR 52.232-27, Appeal File, Exhibit 1, and the Prompt Payment Act, 31 U.S.C.A. 3901 (West Supp. 1993), a payment is deemed to have been made on the date a check for payment is dated. As noted above, respondent's check was dated March 22, 1993. FAR 52.232-27, as written in the contract, also states that normally the progress "payment due date shall be the 27th day after the date the Contractor's payment request is dated, provided a proper payment request is received . . . ." Appeal File, Exhibit 1. On June 18, 1993, appellant wrote a letter to respondent alleging that respondent owed penalty interest on $19,000 for the period January 29 to April 10, 1993. Appeal File, Exhibit 4. Appellant further asserted that, since interest had not been paid automatically, it was entitled to a penalty in accordance with the Prompt Payment Act. Id. Despite the unequivocal term of the contract (noted above), appellant also asserted that the Act required payment of invoices within fourteen calendar days of the Government's receipt.[foot #] 1 Id. Appellant requested a formal contracting officer's decision on its claim.[foot #] 2 A final decision denying the claim was issued July 12, 1993. Id., Exhibit 5. Under the terms of the contract, after completion of and acceptance of the work, presentation of a properly executed payment voucher, and presentation of a release of all claims "other than claims specifically excepted from operation of the release," the Government was required to pay contractor the amount due. Appeal File, Exhibit 1; FAR 52.232-5. Appellant executed a Release of Claims, GSA Form 1142, dated October 8, 1993. Id., Exhibit 6. The form specifically states that ----------- FOOTNOTE BEGINS --------- [foot #] 1 The statute does require, in construction contracts, that interest penalty be paid on a progress payment unpaid for a period of more than fourteen days after receipt of a payment request, unless a longer period is specified in the solicitation, as it was in this case. 31 U.S.C.A. 3903 (West Supp. 1993); Appeal File, Exhibit 1. [foot #] 2 Appellant's letter, as well as its original complaint, claims interest penalty on all invoices it submitted under the contract. Appellant's Complaint, November 15, 1993; Appeal File, Exhibit 4. Appellant has verbally told the Board that, in this appeal, it is only pursuing its claim relative to the first invoice. Appellant's telephone conversation with Board, Jan. 18, 1994. ----------- FOOTNOTE ENDS ----------- Singleton "releases the United States from any and all claims arising under and by virtue of [the] contract or any modification or change thereto" except as listed. Id. The form lists no exceptions to the release and is signed by appellant's president and a witness. Id. In the space provided for exceptions is typed the word "None." Id. There is nothing in the record to indicate, nor has appellant alleged, that appellant lacked information necessary, at the time of signing the release, to know it had a reasonable basis for a claim or to preserve its right to file a claim. In fact, the basis of its request for a final decision is the same as the basis for its claim. Appellant filed a notice of appeal with the Board on October 13, 1993. Appeal File, Exhibit 7. The notice takes exception to the contracting officer's denial of "appellant's request for payment of interest and penalties under the Prompt Payment Act." Id. Appellant argues that respondent continued to consider its claim after appellant filed its appeal. Appellant's Response and Opposition to Respondent's Motion to Dismiss With Prejudice. In paricular, appellant points to respondent's issuance of a check in October, 1993, drawn in appellant's favor, and telephone calls received from respondent in January, 1994. Id.; Affidavit of Wayne Singleton (Jan. 14, 1994). Appellant further argues that, since it filed its appeal prior to respondent's final payment, appellant's release should not bar consideration of its claim. Appellant's Response and Opposition to Respondent's Motion to Dismiss With Prejudice. On October 29, 1993, respondent issued a check in the amount of $10.29 to appellant. Appellant's Response and Opposition to Respondent's Motion to Dismiss With Prejudice, Exhibit F. In a letter to the Board, respondent states that the check represents the amount to which respondent feels appellant is entitled (three days' interest on $19,000, the amount of invoice 01). Respondent's Letter (Jan. 14, 1994). Appellant states that it did not know why the check was tendered until the contracting officer contacted appellant in January, 1994.[foot #] 3 Affidavit of Wayne Singleton (Jan. 14, 1994). According to appellant, the contracting officer telephoned appellant, at the request of respondent's counsel, "to discuss the possibility of settling the pending appeal." Id. Appellant also states that it received another call from the contracting officer and one from respondent's counsel. Id. Discussion The policy behind a release is "finality." The primary purposes of a release are to finalize the rights of the parties and to evidence completion of performance. Dawson Construction Co., GSBCA 5611, et al., 83-1 BCA 16,160. Consequently, except ----------- FOOTNOTE BEGINS --------- [foot #] 3 This seems improbable; a reasonable response to receipt of a check for no apparent reason would be to inquire. ----------- FOOTNOTE ENDS ----------- in narrow circumstances, a release bars further consideration of a claim. Id. One exception to the rule is when the conduct of the parties evidences an intent to exclude or permit a claim, notwithstanding a written release. R.C. Hendrick & Son, Inc., GSBCA 5321, 79-2 BCA 13,996 (citing Winn-Senter Construction Co. v. United States, 110 Ct. Cl. 34 (1948)). This exception does not help appellant. Appellant maintains that respondent's efforts to settle the claim, after the filing of the appeal, evidences a continuing consideration of appellant's claim; thus, such conduct evinces an intent to exclude the claim from the general release. Appellant's contention ignores the basic public policy encouraging parties to resolve disputes short of litigation. There is nothing to suggest an unabated and continuing consideration of the claim after the contracting officer's final decision in the matter. Rather, the record suggests that once counsel for respondent became involved in the dispute, respondent reviewed the facts and circumstances surrounding payment request 01, and determined that a fair resolution would be to tender a check in the amount of $10.29 in interest penalty. At no time since the filing of the appeal has respondent abandoned its argument that appellant should not prevail. Instead, it has advanced concurrent theories in support of its position; an approach clearly permitted in adjudicative procedure. See Federal Rule of Civil Procedure 8(e)(2). Decision Based on the foregoing, respondent's motion to dismiss on the grounds that appellant's general release precludes further consideration of its claim is GRANTED. Consequently, we need not reach respondent's other basis for dismissal; i.e., failure to state a claim. ________________________________ JAMES W. HENDLEY Board Judge I concur: ______________________________ ANTHONY S. BORWICK Board Judge DEVINE, Board Judge (presiding), dissenting. I respectfully dissent from the majority opinion because it is wrong. The evidence shows that appellant's initial invoice had a remittance address different from the remittance address shown in the contract. It was therefore returned to appellant with the advice that appellant would have to seek a contract amendment to cure the difficulty. Appellant did so by telephone, and resubmitted the invoice. The amount in question, the sum of $l9,000, represented the initial progress payment on a renovation job that appellant was performing for the Government. A check in the appropriate amount was mailed to appellant in due course. However, appellant believed that the check was not mailed within the time frame specified in the Prompt Payment Act, and filed a claim with the contracting officer for the interest penalty which appellant believed was due it under the Act because of the tardy payment. The claim was denied by the contracting officer on the ground that the invoice had been paid within the time allowed by the Act. Approximately three months thereafter, Mr. J.A. Singleton, appellant's president, in connection with the final payment under the renovation contract, executed the release that the majority relies on. Five days later, Mr. Wayne Singleton, appellant's vice president and secretary, appealed the denial of appellant's claim for interest penalty. Seventeen days later, the Government issued a check payable to appellant in the amount of $10.29. Thereafter, appellant was advised by the contracting officer that the check represented 3 days interest penalty on the original payment of $l9,000. Apparently this was the contracting officer's view of the amount due. It is unclear exactly how the amount was calculated. It is clear that neither party believed that the release executed in connection with the final payment under the contract also released appellant's claim for interest penalty under the Prompt Payment Act. The language of the release itself did not go so far. It deals only with "claims arising under or by virtue of said contract." Appellant's claim arises under the terms of the Prompt Payment Act and not under the contract, even though the Act is incorporated into the contract. A delay in payment, such as will activate the Act, has nothing to do with the performance of the contract work. Certainly appellant did not believe that the release it signed had the effect ascribed to it by the majority. It continued to press its interest penalty claim. Nor did the Government believe the release covered the interest penalty sought by appellant. It paid a part of appellant's claim in complete derogation of the release. There would have been no need for the payment of $l0.29 if the contracting officer had believed that the release in question affected the claim. The check is clear proof that both parties were actively considering appellant's claim long after the execution of the final release. I conclude that the Government's motion should be denied on two grounds: because the release did not affect appellant's Prompt Payment Act rights which existed outside the contract, and because both parties continued to treat appellant's claim as subsisting despite the release, especially the Government when it issued its $l0.29 check. ________________________________ DONALD W. DEVINE Board Judge