A-10292, AUGUST 4, 1925, 5 COMP. GEN. 87

A-10292: Aug 4, 1925

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1925: THERE IS BEFORE THIS OFFICE FOR CONSIDERATION IN CONNECTION WITH THE AUDIT OF THE ACCOUNTS OF DISBURSING OFFICERS MAKING PAYMENTS UNDER CONTRACTS ENTERED INTO PURSUANT TO THE ACT OF JUNE 26. IT WILL BE OBSERVED THAT THE REQUIREMENT IS FOR THE CONTRACTOR TO MAKE DELIVERIES WITHIN A SPECIFIED NUMBER OF "WORKING DAYS" AFTER RECEIPT OF ORDERS AND THAT LIQUIDATED DAMAGES ARE TO BE DEDUCTED FOR "EACH DAY'S DELAY IN THE FULFILLMENT OF THE ORDER.'. A SOMEWHAT SIMILAR STIPULATION WAS CONSIDERED IN 2 COMP. THE REPAIRS WERE TO BE MADE WITHIN A CERTAIN NUMBER OF . LIQUIDATED DAMAGES WERE TO BE DEDUCTED "FOR EACH AND EVERY DAY'S DELAY" IN COMPLETING THE WORK. IT WAS THERE SAID: "IT IS CLEAR THAT IN CONTRACTING FOR THE WORK TO BE DONE WITHIN 18 "WORKING" DAYS AND PROVIDING FOR A FORFEIT OF $10 FOR "EACH AND EVERY DAY'S DELAY.

A-10292, AUGUST 4, 1925, 5 COMP. GEN. 87

CONTRACTS - LIQUIDATED DAMAGES WHERE CONTRACTS FOR THE FURNISHING OF ENVELOPES, ENTERED INTO PURSUANT TO THE ACT OF JUNE 26, 1906, 34 STAT. 476, REQUIRE THE DELIVERY OF THE ENVELOPES WITHIN A SPECIFIED NUMBER OF "WORKING DAYS" AFTER RECEIPT OF THE ORDER AND CONTAIN A PROVISION FOR THE DEDUCTION OF LIQUIDATED DAMAGES FOR "EACH DAY'S DELAY" IN DELIVERY, WORKING DAYS ONLY SHOULD BE COUNTED IN COMPUTING THE AMOUNT TO BE DEDUCTED, SUNDAYS AND HOLIDAYS BEING EXCLUDED.

DECISION BY ACTING COMPTROLLER GENERAL GINN, AUGUST 4, 1925:

THERE IS BEFORE THIS OFFICE FOR CONSIDERATION IN CONNECTION WITH THE AUDIT OF THE ACCOUNTS OF DISBURSING OFFICERS MAKING PAYMENTS UNDER CONTRACTS ENTERED INTO PURSUANT TO THE ACT OF JUNE 26, 1906, 34 STAT. 476, FOR THE FISCAL YEAR 1925 FOR ENVELOPES, THE QUESTION WHETHER LIQUIDATED DAMAGES FOR DELAYS IN DELIVERY SHOULD BE DEDUCTED FOR EACH CALENDAR DAY OF DELAY OR WHETHER SAME SHOULD BE DEDUCTED FOR EACH WORKING DAY OF DELAY.

SECTION 16 OF THE AWARD OF CONTRACTS FOR ENVELOPES FOR THE USE OF THE DEPARTMENTS OF THE GOVERNMENT DURING THE FISCAL YEAR BEGINNING JULY 1, 1924, AND ENDING JUNE 30, 1925, STIPULATES AS FOLLOWS FOR LIQUIDATED DAMAGES:

ALL ENVELOPES FOR DELIVERY IN WASHINGTON, D.C., SHALL BE DELIVERED WITHIN THE DOORS OF THE SPECIFIED DEPARTMENT WITHIN 35 WORKING DAYS AFTER RECEIPT OF THE ORDER BY THE CONTRACTOR, AND ALL ENVELOPES ORDERED FOR F.O.B. DELIVERY SHALL BE DELIVERED TO THE TRANSPORTATION COMPANY WITHIN 25 WORKING DAYS AFTER RECEIPT OF THE ORDER, EXCEPT WHEN ORDERED IN EXCESS OF 100,000 OF ONE FORM IN A SINGLE ORDER, IN WHICH CASE DELIVERIES SHALL COMMENCE WITHIN 35 OR 25 WORKING DAYS, RESPECTIVELY, FROM DATE OF RECEIPT OF ORDER AND CONTINUE AS FAST AS THE DEPARTMENT ORDERING THEM MAY REQUIRE. IF THE CONTRACTOR SHALL FAIL TO DELIVER AS ORDERED ANY OR ALL OF THE ENVELOPES AGREED BY HIM TO BE SUPPLIED UNDER HIS CONTRACT WITHIN THE TIME SPECIFIED HEREIN, UNLESS OTHERWISE SPECIFIED IN HIS CONTRACT, IN ACCORDANCE WITH THE CONDITIONS AND REQUIREMENTS OF HIS CONTRACT, THE HEAD OF THE DEPARTMENT OR OFFICE ORDERING SAID ENVELOPES IN MAKING PAYMENT THEREFOR MAY, IF IN HIS OPINION THE INTEREST OF THE GOVERNMENT HAS SUSTAINED ANY DAMAGE BY REASON OF SUCH DELAY, DEDUCT AS LIQUIDATED DAMAGES, IN LIEU OF ACTUAL DAMAGES, A SUM EQUAL TO TWO-TENTHS OF 1 PERCENT OF THE TOTAL AMOUNT WHICH WOULD BE PAYABLE THEREFOR, AT THE PRICE OR PRICES STIPULATED IN THE CONTRACT, FOR EACH DAY'S DELAY IN THE FULFILLMENT OF THE ORDER.

IT WILL BE OBSERVED THAT THE REQUIREMENT IS FOR THE CONTRACTOR TO MAKE DELIVERIES WITHIN A SPECIFIED NUMBER OF "WORKING DAYS" AFTER RECEIPT OF ORDERS AND THAT LIQUIDATED DAMAGES ARE TO BE DEDUCTED FOR "EACH DAY'S DELAY IN THE FULFILLMENT OF THE ORDER.' A SOMEWHAT SIMILAR STIPULATION WAS CONSIDERED IN 2 COMP. DEC. 72. THE REPAIRS WERE TO BE MADE WITHIN A CERTAIN NUMBER OF ,WORKING DAYS" AFTER DELIVERY TO THE CONTRACTOR OF THE VESSEL REQUIRING THE REPAIRS, AND LIQUIDATED DAMAGES WERE TO BE DEDUCTED "FOR EACH AND EVERY DAY'S DELAY" IN COMPLETING THE WORK. IT WAS THERE SAID: "IT IS CLEAR THAT IN CONTRACTING FOR THE WORK TO BE DONE WITHIN 18 "WORKING" DAYS AND PROVIDING FOR A FORFEIT OF $10 FOR "EACH AND EVERY DAY'S DELAY," THE SAME CHARACTER OF DAYS WAS INTENDED," AND IT WAS HELD THAT LIQUIDATED DAMAGES SHOULD BW DEDUCTED ON A WORKING-DAY BASIS. COMPARE 17 COMP. DEC. 728; 2 COMP. GEN. 323, 469.

IT SEEMS CLEAR HERE THAT THE SAME CHARACTER OF DAYS WAS INTENDED BY THE STIPULATION THAT DELIVERIES SHOULD BE MADE WITHIN A CERTAIN NUMBER OF "WORKING DAYS" AFTER RECEIPT OF THE ORDERS, AND THAT LIQUIDATED DAMAGES WOULD BE DEDUCTED FOR "EACH DAY'S DELAY" DETERMINED BY THE HEAD OF THE DEPARTMENT ORDERING THE ENVELOPES TO HAVE RESULTED IN DAMAGES TO THE UNITED STATES.

ACCORDINGLY, THE ACCOUNTS AND CLAIMS UNDER THE AWARD OF CONTRACTS FOR ENVELOPES FOR THE FISCAL YEAR 1925, INVOLVING LIQUIDATED DAMAGES, WILL BE AUDITED AND SETTLED ON A WORKING-DAY BASIS.