A-17797, APRIL 2, 1927, 6 COMP. GEN. 650

A-17797: Apr 2, 1927

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

A CONTRACTOR IS CHARGEABLE WITH LIQUIDATED DAMAGES. WITH SUCH DILIGENCE AS WILL INSURE ITS COMPLETION WITHIN THE TIME SPECIFIED IN ARTICLE 1. IF THE CONTRACTOR'S RIGHT TO PROCEED IS SO TERMINATED. IN WHICH EVENT THE ACTUAL DAMAGES FOR THE DELAY WILL BE IMPOSSIBLE TO DETERMINE AND IN LIEU THEREOF THE CONTRACTOR SHALL PAY TO THE GOVERNMENT AS FIXED. AGREED AND LIQUIDATED DAMAGES FOR EACH CALENDAR DAY OF DELAY UNTIL THE WORK IS COMPLETED OR ACCEPTED THE AMOUNT AS SET FORTH IN THE SPECIFICATIONS OR ACCOMPANYING PAPERS AND THE CONTRACTOR AND HIS SURETIES SHALL BE LIABLE FOR THE AMOUNT THEREOF: PROVIDED. ATTENTION IS INVITED. IF THE CONTRACTOR IS UNWILLING TO ACCEPT SETTLEMENT ON THAT BASIS FINAL PAYMENT SHOULD NOT BE MADE BY A DISBURSING OFFICER BUT ALL PAPERS PERTAINING THERETO INCLUDING THE FINDINGS OF FACT BY THE CONTRACTING OFFICER AND THE ACTION OF THE HEAD OF THE DEPARTMENT THEREON IN CASE OF APPEAL.

A-17797, APRIL 2, 1927, 6 COMP. GEN. 650

STANDARD GOVERNMENT FORM OF CONSTRUCTION CONTRACT - LIQUIDATED DAMAGES ARTICLE 9 OF THE STANDARD GOVERNMENT FORM OF CONSTRUCTION CONTRACT DOES NOT REQUIRE THE FINDINGS OF FACT OF THE CONTRACTING OFFICER AS TO THE CAUSES OF DELAY TO BE APPROVED BY THE HEAD OF THE DEPARTMENT OR ESTABLISHMENT CONCERNED UNLESS THE CONTRACTOR WITHIN 30 DAYS FROM THE DATE OF SUCH FINDINGS SHOULD APPEAL THEREFROM. THE QUESTION WHETHER UNDER ARTICLE 9 OF THE STANDARD GOVERNMENT FORM OF CONSTRUCTION CONTRACT, A CONTRACTOR IS CHARGEABLE WITH LIQUIDATED DAMAGES, DEPENDS UPON THE TERMS OF THE CONTRACT AND THE FACTS AS FOUND BY THE CONTRACTING OFFICER AND PRESENTS A QUESTION OF LAW WHICH SHOULD NOT BE DETERMINED BY AN ADMINISTRATIVE OR DISBURSING OFFICER. LIQUIDATED DAMAGES SHOULD BE DEDUCTED FOR ALL DELAYS AND ANY CLAIMS FOR THE AMOUNT THEREOF SHOULD BE SUBMITTED TO THE GENERAL ACCOUNTING OFFICE FOR DIRECT SETTLEMENT.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF THE INTERIOR, APRIL 2, 1927:

THERE HAS BEEN RECEIVED YOUR LETTER DATED MARCH 17, 1927, REQUESTING DECISION WHETHER ARTICLE 9 OF THE STANDARD GOVERNMENT FORM OF CONSTRUCTION CONTRACT (NO. 23), APPROVED BY THE PRESIDENT, NOVEMBER 19, 1926, FOR USE ON AND AFTER JANUARY 1, 1927, REQUIRES THE FINDINGS OF THE CONTRACTING OFFICER AS TO THE FACTS OF DELAY TO BE APPROVED BY THE HEAD OF HIS DEPARTMENT WHEN THE CONTRACTOR HAS MADE NO APPEAL THEREFROM.

THE ARTICLE PROVIDES THAT:

ARTICLE 9. DELAYS--- DAMAGES.--- IF THE CONTRACTOR REFUSES OR FAILS TO PROSECUTE THE WORK, OR ANY SEPARABLE PART THEREOF, WITH SUCH DILIGENCE AS WILL INSURE ITS COMPLETION WITHIN THE TIME SPECIFIED IN ARTICLE 1, OR ANY EXTENSION THEREOF, OR FAILS TO COMPLETE SAID WORK WITHIN SUCH TIME, THE GOVERNMENT MAY, BY WRITTEN NOTICE TO THE CONTRACTOR, TERMINATE HIS RIGHT TO PROCEED WITH THE WORK OR SUCH PART OF THE WORK AS TO WHICH THERE HAS BEEN DELAY. IN SUCH EVENT, THE GOVERNMENT MAY TAKE OVER THE WORK AND PROSECUTE THE SAME TO COMPLETION BY CONTRACT OR OTHERWISE, AND THE CONTRACTOR AND HIS SURETIES SHALL BE LIABLE TO THE GOVERNMENT FOR ANY EXCESS COST OCCASIONED THE GOVERNMENT THEREBY. IF THE CONTRACTOR'S RIGHT TO PROCEED IS SO TERMINATED, THE GOVERNMENT MAY TAKE POSSESSION OF AND UTILIZE IN COMPLETING THE WORK SUCH MATERIALS, APPLIANCES, AND PLANT AS MAY BE ON THE SITE OF THE WORK AND NECESSARY THEREFOR. IF THE GOVERNMENT DOES NOT TERMINATE THE RIGHT OF THE CONTRACTOR TO PROCEED, THE CONTRACTOR SHALL CONTINUE THE WORK, IN WHICH EVENT THE ACTUAL DAMAGES FOR THE DELAY WILL BE IMPOSSIBLE TO DETERMINE AND IN LIEU THEREOF THE CONTRACTOR SHALL PAY TO THE GOVERNMENT AS FIXED, AGREED AND LIQUIDATED DAMAGES FOR EACH CALENDAR DAY OF DELAY UNTIL THE WORK IS COMPLETED OR ACCEPTED THE AMOUNT AS SET FORTH IN THE SPECIFICATIONS OR ACCOMPANYING PAPERS AND THE CONTRACTOR AND HIS SURETIES SHALL BE LIABLE FOR THE AMOUNT THEREOF: PROVIDED, THAT THE RIGHT OF THE CONTRACTOR TO PROCEED SHALL NOT BE TERMINATED OR THE CONTRACTOR CHARGED WITH LIQUIDATED DAMAGES BECAUSE OF ANY DELAYS IN THE COMPLETION OF THE WORK DUE TO UNFORESEEABLE CAUSES BEYOND THE CONTROL AND WITHOUT THE FAULT OR NEGLIGENCE OF THE CONTRACTOR, INCLUDING, BUT NOT RESTRICTED TO, ACTS OF GOD, OR OF THE PUBLIC ENEMY, ACTS OF THE GOVERNMENT, FIRES, FLOODS, EPIDEMICS, QUARANTINE RESTRICTIONS, STRIKES, FREIGHT EMBARGOES, AND UNUSUALLY SEVERE WEATHER OR DELAYS OF SUBCONTRACTORS DUE TO SUCH CAUSES: PROVIDED FURTHER, THAT THE CONTRACTOR SHALL WITHIN TEN DAYS FROM THE BEGINNING OF ANY SUCH DELAY NOTIFY THE CONTRACTING OFFICER IN WRITING OF THE CAUSES OF DELAY, WHO SHALL ASCERTAIN THE FACTS AND THE EXTENT OF THE DELAY, AND HIS FINDINGS OF FACTS THEREON SHALL BE FINAL AND CONCLUSIVE ON THE PARTIES HERETO, SUBJECT ONLY TO APPEAL, WITHIN THIRTY DAYS, BY THE CONTRACTOR TO THE HEAD OF THE DEPARTMENT CONCERNED, WHOSE DECISION ON SUCH APPEAL AS TO THE FACTS OF DELAY SHALL BE FINAL AND CONCLUSIVE ON THE PARTIES HERETO.

THIS ARTICLE DOES NOT CONTEMPLATE THAT THE FINDINGS OF THE CONTRACTING OFFICER AS TO THE FACTS RELATIVE TO THE CAUSES AND EXTENT OF DELAY SHALL BE APPROVED BY THE HEAD OF HIS DEPARTMENT UNLESS THE CONTRACTOR, WITHIN 30 DAYS FROM THE DATE OF SUCH FINDING OF FACT, SHOULD APPEAL THEREFROM TO THE HEAD OF THE DEPARTMENT OR ESTABLISHMENT CONCERNED.

ATTENTION IS INVITED, HOWEVER, THAT THE QUESTION WHETHER THE CONTRACTOR SHALL BE CHARGED WITH LIQUIDATED DAMAGES FOR THE DELAYS, DEPENDS UPON THE TERMS OF THE CONTRACT AND THE FACTS FOUND BY THE CONTRACTING OFFICER, OR BY THE HEAD OF THE DEPARTMENT ON APPEAL THEREFROM, AND PRESENTS A QUESTION OF LAW FOR DETERMINATION, IN THE FIRST INSTANCE, BY THIS OFFICE.

THEREFORE, ADMINISTRATIVE OR DISBURSING OFFICERS SHOULD NOT UNDERTAKE TO DETERMINE WHETHER LIQUIDATED DAMAGES DID OR DID NOT ACCRUE TO THE UNITED STATES UNDER THE STANDARD GOVERNMENT FORM OF CONSTRUCTION CONTRACT. BUT IN ALL CASES INVOLVING A DELAY IN COMPLETION OF THE WORK COVERED BY SUCH CONTRACTS DEDUCTION OF LIQUIDATED DAMAGES COVERING THE ENTIRE PERIOD OF DELAY, REGARDLESS OF CAUSE, SHOULD BE PROPOSED, AND IF THE CONTRACTOR IS UNWILLING TO ACCEPT SETTLEMENT ON THAT BASIS FINAL PAYMENT SHOULD NOT BE MADE BY A DISBURSING OFFICER BUT ALL PAPERS PERTAINING THERETO INCLUDING THE FINDINGS OF FACT BY THE CONTRACTING OFFICER AND THE ACTION OF THE HEAD OF THE DEPARTMENT THEREON IN CASE OF APPEAL, SHOULD BE TRANSMITTED TO THIS OFFICE FOR SETTLEMENT AS A CLAIM.