1 Board of Contract Appeals General Services Administration Washington, D.C. 20405 ____________________ DENIED: July 31, 1998 ____________________ GSBCA 14472 NORTH AMERICAN CONSTRUCTION CORPORATION, Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. Norman Reitmeyer, President of North American Construction Corporation, Austin, TX, appearing for Appellant. Thomas Hawkins, Office of Regional Counsel, General Services Administration, San Francisco, CA, counsel for Respondent. Before Board Judges HYATT, VERGILIO, and DeGRAFF. VERGILIO, Board Judge. The appellant, North American Construction Corporation, filed this appeal concerning a contract with the respondent, the General Services Administration (GSA). On behalf of a subcontractor, North American seeks to recover for asbestos insurance costs associated with changed work which, according to North American, were not priced in thirteen change orders. In each change order, North American released (with specified exceptions not here applicable) the Government from further liability and equitable cost adjustments attributable to the circumstances giving rise to the modification. No basis exists to treat the bilateral change orders as other than accords, with the resulting modified contract as establishing a final price for the work in question, or to limit the scope of the release language. Accordingly, the Board denies the appeal. Findings of Fact 1. On June 30, 1992, GSA awarded a contract to North American to provide a seismic up-grade and fire/safety work at a building in California. Exhibit 1 (all exhibits are in the appeal file). 2. The contract contains a section dealing with asbestos abatement procedures. In describing the work, the contract specifies that the "Contractor is to furnish all labor, materials, services, training, insurance, and equipment as needed to complete removal of asbestos-containing and -contaminated materials . . . . The Contractor shall follow all Federal, state and local ordinances, regulations or rules pertaining to asbestos, including its storage, transportation and disposal." Exhibit 1, Vol. II, 2085, 1.2.A (addendum 1). 3. During performance, it was determined that asbestos removal in addition to that covered in the contract was necessary. Several change orders were negotiated and issued as bilateral contract modifications signed by North American and GSA. Exhibits 5, 6, 11, 12, 14, 15, 17, 18, 21, 25, 26, 29, 30, 33, 34, 38, 39, 43, 44, 48, 49, 51, 52, 56. In increasing the scope of work under, and the price of, the contract, each relevant modification states that its purpose is to provide all labor, material, and equipment required to accomplish particular work. Each such modification includes the following language: In consideration of this modification agreed to as a complete and equitable adjustment of cost for the work incorporated in this change, the Contractor hereby releases the Government from any further liability under this contract and for any equitable cost adjustments attributable to the circumstances giving rise to this modification. Exhibits 6, 12, 15, 18, 26, 30, 34, 39, 44, 49, 52, 56. Further, each of these change orders specifies both that the modification provides for the release of claims by North American for that portion of the modification upon which agreement had been reached and that North American expressly reserves its right to seek a greater commission on subcontractor work than that compensated in the change order, and/or to seek compensation for impact (time and overhead costs) relating to the underlying project. Id. While one of the thirteen disputed change orders is not part of the record, North American does not contend that the language therein differs from that of the other orders. Exhibit 21. 4. North American utilized High Valley Inc. (HVI) to perform asbestos abatement work. North American seeks reimbursement of $34,856.09 from GSA for asbestos insurance costs HVI states it incurred, but for which it was not reimbursed, under thirteen particular change orders which contain the release language noted in the above finding. Exhibit 54. 5. North American does not maintain that it was under duress when it signed any modification which contains the release language and which does not reserve a right to pursue a claim for asbestos insurance costs. Rather, in its complaint, North American maintains that HVI would not have been able to continue on the project unless it could timely pay workers and suppliers. Thus, states North American, HVI was unable to object to the non- compensation of asbestos insurance costs and jeopardize receipt of pay for the labor and materials expended. In conclusion, "[u]nder these circumstances, [North American] could not, against [HVI's] wishes, reserve HVI's right to asbestos insurance costs." Complaint at 1 ( 2). 6. HVI contends that a construction manager utilized by GSA on the project informed HVI that it would not be reimbursed for asbestos insurance costs as a separate line item in change order proposals. HVI asserts that the individual informed HVI that insurance costs should be paid with HVI's profit. Exhibit 53. HVI, whose president was present during the negotiations which led to each of the relevant change orders, Exhibits 5, 11, 14, 17, 21, 25, 29, 33, 38, 43, 48, 51, has not demonstrated that it was unable to seek or obtain a profit which included an amount for the full recovery of the insurance costs or otherwise was unable to seek or obtain recovery for its asbestos insurance costs in the change orders at issue. HVI maintains that it obtained reimbursement for asbestos insurance as a separate line item of cost on change orders issued subsequent to those here at issue, only after it refused to perform the additional work without such compensation. 3 7. By letter dated December 5, 1997, the contracting officer denied the claim for allegedly unreimbursed asbestos insurance costs. Exhibit 55. North American filed this appeal with the Board on January 22, 1998. Discussion The appeal before the Board involves the ability of the contractor, North American, to recover from GSA those insurance costs said to have been incurred by a subcontractor, HVI, but which are said to remain uncompensated by GSA. Through the bilateral contract modifications, North American and GSA agreed upon a price to accomplish particular work and modified the contract accordingly. In each modification, North American expressly reserved its right to seek a contract adjustment for items other than that here at issue. Each modification, which altered the contract, represents an accord regarding the change order work and pricing which was incorporated into the contract. No basis exists to alter the fixed price negotiated to perform the contract, as modified by each change order. McLain Plumbing & Electrical Service, Inc. v. United States, 30 Fed. Cl. 70, 78-81 (1993). Further, the release language is clear and unambiguous. Despite reserving its right to seek additional compensation for specific matters, North American did not reserve its right to seek a price adjustment for asbestos insurance costs or increased subcontractor costs. See Adler Construction Co. v. United States, 423 F.2d 1362, 1364, 191 Ct. Cl. 607, 611 (1970) ("No matter how meritorious may be the claims not excepted by a contractor from the operation of a full, valid release under a Government contract . . ., they may not be judicially entertained later unless the release be found invalid or waived by subsequent conduct of the Government"); B.D. Click Co. v. United States, 614 F.2d 748, 756, 222 Ct. Cl. 290, 305 (1980) (in the context of a release signed with final payment, the court stated: "It is well settled that 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"). While North American contends that HVI was under duress to agree to each modification, it was North American and not HVI which signed each modification with release language. North American has not demonstrated that it signed any modification under duress. Fruhauf Southwest Garment Co. v. United States, 111 F. Supp. 945, 951, 126 Ct. Cl. 51, 62 (1953) (three necessary elements for duress are that one side involuntarily accepted the terms of another; that circumstances permitted no other alternative; and that the circumstances were the result of coercive acts of the opposite party); McLain, 30 Fed. Cl. at 82- 84. Further, the record does not demonstrate that North American could not have negotiated a reservation of claims for the asbestos insurance costs. Adler, 423 F.2d at 1364, 191 Ct. Cl. at 611 ("no conceivable economic coercion could invalidate a release where, as here, there is no evidence that plaintiff was restricted in the scope of his exceptions to the release"). In any event, the record does not demonstrate that the agreed upon price could not have included an amount for asbestos insurance costs, as a part of profit or otherwise. North American contends that California Civil Code, 1542 ("A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of 4 executing the release, which if known by him must have materially affected his settlement with the debtor"), should be applied "because HVI did not even know a claim existed for its asbestos insurance costs"--the construction manager "had so conned or 'persuaded' HVI that its asbestos insurance costs would not be paid, that HVI did not even submit asbestos insurance costs" for the change orders in question. Complaint at 3. North American has failed to demonstrate that the code provision applies to the contract between North American and GSA. Moreover, assuming the provision is applicable to a Government contract, North American has not demonstrated entitlement to relief in the context of a negotiated contract modification which specifies what may affect the price. The contract made clear that insurance was required for asbestos abatement work. HVI knew specifically, and North American knew indirectly, if not specifically, that insurance costs were associated with performing the change order work. In each instance, through the negotiated bilateral modifications, North American and GSA established a fixed price (subject to the limited right of North American to seek an adjustment) to perform the changed work. The release language assists in establishing the finality of the price; it is not an isolated or separate agreement to be used to undo the modification as North American suggests. No basis exists to reform the agreed-upon price. Decision The Board DENIES the appeal of North American. __________________________ JOSEPH A. VERGILIO Board Judge We concur: __________________________ __________________________ CATHERINE B. HYATT MARTHA H. DeGRAFF Board Judge Board Judge