The amici, American Transparents Plastic Corporation and Chicago Transparent Products, Inc., argue that final payment by the Government bars the assertion of a claim by either party to a Government contract. As authority for this proposition, the amici cite the cases of Gulf Western Industries, Inc. v. United States, 226 Ct.Cl. 159, 639 F.2d 732 (1980), and Dubois Construction Corp. v. United States, 120 Ct.Cl. 139, 98 F. Supp. 590 (1951). In Gulf Western the contract contained a Changes clause which provided that the contracting officer could receive and act upon any claim asserted prior to final payment, if the facts justified such action.
A charge of fraud must be substantiated by clear and convincing proof rebutting every presumption of honesty and fair dealing. DuBois Constr. Corp. v. United States, 120 Ct.Cl. 139, 175, 98 F. Supp. 590, 597 (1951). The degree of proof necessary to establish fraud demands more than a preponderance of the evidence, it demands "clear and convincing" evidence.
A finding of fraud must rest on something more substantial than suspicion or speculation. See Dubois Constr. Corp. v. United States, 98 F. Supp. 590, 597, 120 Ct.Cl. 139, 175 (1951); Terrill v. United States, 35 Ct.Cl. 218, 222 (1900). Indeed, even a hint of fraud will not support a finding of fraud, see Eastern School v. United States, supra, 381 F.2d at 434, 180 Ct.Cl. at 698, nor will the existence of fraud be presumed.
However, we have consistently held that "an experienced contractor cannot rely on government-prepared specifications where, on the basis of the government furnished data, he knows or should have known that the prepared specifications could not produce the desired result for `* * * he has no right to make a useless thing and charge the customer for it.' R.M. Hollingshead Corp. v. United States, 111 F. Supp. 285, 286, 124 Ct.Cl. 681, 683 (1953)." J.D. Hedin Constr. Co. Inc. v. United States, supra, 347 F.2d at 241, 171 Ct.Cl. at 77; See also, Allied Contractors, Inc. v. United States, 381 F.2d 995, 1000, 180 Ct.Cl. 1057, 1064-1065 (1967); Beacon Constr. Co. of Mass. v. United States, 314 F.2d 501, 504, 161 Ct. Cl. 1, 7 (1963); Ring Constr. Corp. v. United States, 162 F. Supp. 190, 191-192, 142 Ct.Cl. 731, 734 (1958); Anthony M. Meyerstein, Inc. v. United States, 137 F. Supp. 427, 431, 133 Ct.Cl. 694, 700 (1956); DuBois Constr. Corp. v. United States, 98 F. Supp. 590, 594, 120 Ct.Cl. 139, 169 (1951); cf. Leal v. United States, 276 F.2d 378, 383, 149 Ct.Cl. 451, 460 (1960); Ragonese v. United States, 120 F. Supp. 768, 770-771, 128 Ct.Cl. 156, 162 (1954). The rationale of these two lines of cases is that the contractor can rely upon the Government's representations as to how a desired product should and can be made, unless he ought to know better.
Id. at 172, 34 S.Ct. 553. See Flippin Materials Co. v. United States, 312 F.2d 408, 413, 160 Ct.Cl. 357, 365 (1963), and cases cited therein at n. 8. Compare DuBois Constr. Corp. v. United States, 98 F. Supp. 590, 594, 120 Ct.Cl. 139, 168-169 (1951); Ross Eng'r Co. v. United States, 103 Ct.Cl. 185, 196-198 (1945), cert. denied 326 U.S. 735, 66 S.Ct. 45, 90 L.Ed. 438. II
Where a contract has been performed and a stipulated consideration has been paid, the general presumption is that the transaction is closed, and this presumption operates against the government as well as against private individuals. See Dubois Construction Corp. v. United States, 1951, 98 F. Supp. 590, 120 Ct.Cl. 139, and Poole Engineering Machine Co. v. United States, 57 Ct.Cl. 232, 234. Although the contract here contains language prescribing the legal consequences of final acceptance and payment, that effect being that it will not be reopened except upon evidence of fraud, collusion or obvious error, it is significant that ordinary rules of contract law, as applied to the facts here, are fatal to the government's argument.
There was ample information contained in the specifications and Navy drawings to enable plaintiff to prepare a bid, and the time allowed for preparation and submission thereof was reasonable and sufficient. The rule is that where the aggrieved party knows the actual state of affairs, representations contrary to the fact cannot be construed as warranties. DuBois Construction Corporation v. United States, 98 F. Supp. 590, 120 Ct.Cl. 139, 169 and cases cited therein. Therefore, it is apparent that there is no merit in plaintiff's claim on account of misrepresentation by defendant.
The plaintiff as a contractor was familiar with the conditions then existing, had visited the site, which it was required to visit by the terms of the contract, and in the circumstances the defendant could not be held to have warranted a sufficiency of labor. DuBois Construction Corp. v. United States, 98 F. Supp. 590, 120 Ct.Cl. 139. Plaintiff also complains of the regulations of the War Manpower Commission, but the record shows that the allocations and regulations controlling the use of manpower, as applied to the circumstances in this case, and to the conditions prevailing at the time, were reasonable and necessary.