A-1908, JULY 16, 1924, 4 COMP. GEN. 58

A-1908: Jul 16, 1924

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LIQUIDATED DAMAGES - PUBLIC BUILDING CONTRACTS THERE IS NO LAW THAT REQUIRES THE SECRETARY OF THE TREASURY TO CONTRACT FOR ALL REPAIRS TO PUBLIC BUILDINGS. 1924: THERE HAS BEEN PRESENTED FOR DECISION A QUESTION THAT HAS BEEN RAISED IN CONNECTION WITH TWO UNPAID VOUCHERS THAT WERE TRANSMITTED BY THE SECRETARY OF THE TREASURY FOR SETTLEMENT. SAID VOUCHERS ARE STATED IN FAVOR OF THE CITIZENS LUMBER CO. THE QUESTION INVOLVED IS AS TO WHETHER THIS METHOD OF PERFORMING THE WORK WAS LEGAL IN VIEW OF THE PROVISION IN SECTION 21 OF THE ACT OF JUNE 6. AS A MATTER OF PRACTICE CONTRACTS FOR THE CONSTRUCTION OF OR REPAIRS TO PUBLIC BUILDINGS UNDER THE CONTROL OF THE TREASURY DEPARTMENT ARE USUALLY LET TO PRIVATE CONCERNS AND THERE IS NO SPECIFIC REQUIREMENT IN THE ABOVE- QUOTED PROVISION OF LAW WHICH DIRECTS THAT SUCH WORK SHALL BE ACTUALLY PERFORMED BY CONTRACTORS AS DISTINGUISHED FROM DAY LABORERS.

A-1908, JULY 16, 1924, 4 COMP. GEN. 58

LIQUIDATED DAMAGES - PUBLIC BUILDING CONTRACTS THERE IS NO LAW THAT REQUIRES THE SECRETARY OF THE TREASURY TO CONTRACT FOR ALL REPAIRS TO PUBLIC BUILDINGS, IT BEING WITHIN HIS DISCRETION TO ACCOMPLISH SUCH REPAIRS BY THE PURCHASE OF MATERIALS AND HIRE OF LABOR HAVING DUE REGARD TO THE REQUIREMENT OF ADVERTISING UNDER SECTION 3709, REVISED STATUTES, BUT IF HE DOES CONTRACT FOR SUCH REPAIRS OR FOR CONSTRUCTION OF PUBLIC BUILDINGS THE PROVISIONS OF SECTION 21 OF THE ACT OF JUNE 6, 1902, 32 STAT. 326, REQUIRE THAT A STIPULATION FOR THE PAYMENT OF LIQUIDATED DAMAGES FOR DELAY BE INSERTED THEREIN.

DECISION BY ACTING COMPTROLLER GENERAL GINN, JULY 16, 1924:

THERE HAS BEEN PRESENTED FOR DECISION A QUESTION THAT HAS BEEN RAISED IN CONNECTION WITH TWO UNPAID VOUCHERS THAT WERE TRANSMITTED BY THE SECRETARY OF THE TREASURY FOR SETTLEMENT. SAID VOUCHERS ARE STATED IN FAVOR OF THE CITIZENS LUMBER CO. FOR $141.20 AND MERILL T. GALLIHER FOR $215, BOTH OF ASHEVILLE, N.C., FOR THE BALANCE ALLEGED TO BE DUE FOR CERTAIN BUILDING MATERIALS FURNISHED THE GOVERNMENT DURING THE MONTHS OF FEBRUARY, APRIL, AND MAY, 1923, FOR USE IN MAKING REPAIRS TO THE UNITED STATES VETERANS' BUREAU HOSPITAL AT OTEEN, N.C.

THE SECRETARY OF THE TREASURY ON JUNE 8, 1922, AUTHORIZED THE WORK TO BE DONE BY THE PURCHASE OF MATERIALS AND HIRE OF LABOR TO ACCOMPLISH THE CONTEMPLATED REPAIRS TO THE HOSPITAL BUILDING, APPROPRIATION THEREFOR BEING CONTAINED IN THE ACT OF FEBRUARY 17, 1922, 42 STAT. 384. THE QUESTION INVOLVED IS AS TO WHETHER THIS METHOD OF PERFORMING THE WORK WAS LEGAL IN VIEW OF THE PROVISION IN SECTION 21 OF THE ACT OF JUNE 6, 1902, 32 STAT. 326, WHICH PROVIDES:

THAT IN ALL CONTRACTS ENTERED INTO WITH THE UNITED STATES, AFTER THE DATE OF THE APPROVAL OF THIS ACT, FOR THE CONSTRUCTION OR REPAIR OF ANY PUBLIC BUILDING OR PUBLIC WORK UNDER THE CONTROL OF THE TREASURY DEPARTMENT, A STIPULATION SHALL BE INSERTED FOR LIQUIDATED DAMAGES FOR DELAY; * * * AND IN ALL SUITS HEREAFTER COMMENCED ON ANY SUCH CONTRACTS OR ON ANY BOND GIVEN IN CONNECTION THEREWITH IT SHALL NOT BE NECESSARY FOR THE UNITED STATES, WHETHER PLAINTIFF OR DEFENDANT, TO PROVE ACTUAL OR SPECIFIC DAMAGES SUSTAINED BY THE GOVERNMENT BY REASON OF DELAYS, BUT SUCH STIPULATION FOR LIQUIDATED DAMAGES SHALL BE CONCLUSIVE AND BINDING UPON ALL PARTIES.

AS A MATTER OF PRACTICE CONTRACTS FOR THE CONSTRUCTION OF OR REPAIRS TO PUBLIC BUILDINGS UNDER THE CONTROL OF THE TREASURY DEPARTMENT ARE USUALLY LET TO PRIVATE CONCERNS AND THERE IS NO SPECIFIC REQUIREMENT IN THE ABOVE- QUOTED PROVISION OF LAW WHICH DIRECTS THAT SUCH WORK SHALL BE ACTUALLY PERFORMED BY CONTRACTORS AS DISTINGUISHED FROM DAY LABORERS, ETC., OR THAT FORMAL CONTRACTS THEREFOR SHALL BE ENTERED INTO BY THE SECRETARY OF THE TREASURY. HOWEVER, SAID PROVISION DOES REQUIRE THAT WHEN CONTRACTS, FORMAL OR LESS FORMAL AGREEMENTS, ARE ENTERED INTO FOR SUCH WORK A STIPULATION FOR LIQUIDATED DAMAGES FOR DELAY ON COMPLETION SHALL BE INSERTED THEREIN.

WHILE SECTIONS 3663, 3733, AND 3734, REVISED STATUTES, AS AMENDED BY THE ACT OF JUNE 25, 1910, 36 STAT. 669, CONTAIN CERTAIN REQUIREMENTS AND RESTRICTIONS RELATIVE TO THE CONSTRUCTION AND REPAIR OF PUBLIC BUILDINGS, THERE DOES NOT APPEAR TO BE ANY LAW THAT SPECIFICALLY REQUIRES THE SECRETARY OF THE TREASURY TO CONTRACT WITH PRIVATE CONCERNS FOR THAT PURPOSE, AND THE ACT OF JUNE 6, 1902, SUPRA,MUST BE UNDERSTOOD AS RELATING TO BUILDING AND REPAIRING INVOLVING MAGNITUDE AS DISTINGUISHED FROM MINOR REPAIRS, THE ORDINARY AND PRACTICABLE METHOD OF DOING THE FORMER BEING BY WRITTEN CONTRACT AFTER COMPETITIVE BIDDING, AND WHILE NOT ABSOLUTELY EXCLUSIVE A DEPARTURE FROM SUCH A METHOD SHOULD BE EXCEPTIONAL AND JUSTIFIABLE ONLY UNDER CONDITIONS NECESSITATING OR PERMITTING NO OTHER COURSE.

UNDER THE AUTHORIZATION OF JUNE 8, 1922, THE SUPERINTENDENT OF THE UNITED STATES VETERANS' BUREAU HOSPITAL AT OTEEN, N.C., WAS DIRECTED TO PROCEED UNDER AN ALLOTMENT OF $61,200 BY THE PURCHASE AND HIRE METHOD TO OBTAIN PROPOSALS FOR THE MATERIALS REQUIRED AND EMPLOY THE NECESSARY LABOR TO CARRY OUT THE WORK PROVIDED FOR IN THE APPROPRIATION ACT REFERRED TO ABOVE. THE SUPERINTENDENT WAS ALSO AUTHORIZED TO INCUR EMERGENCY EXPENDITURES NOT TO EXCEED $200 PER WEEK BY OBTAINING THE LOWEST PREVAILING MARKET PRICES AFTER SECURING QUOTATIONS FROM SEVERAL FIRMS AND PLACING ORDERS WITH THE LOWEST BIDDER, AND WHEN LARGER QUANTITIES OF MATERIALS WERE REQUIRED, WRITTEN COMPETITIVE PROPOSALS WERE TO BE OBTAINED AND BIDS SUBMITTED TO THE DEPARTMENT FOR ACTION THEREON. THE WORK OF MAKING REPAIRS TO THE HOSPITAL WAS ACCOMPLISHED BY THIS MEANS AND PAYMENTS FOR ALL MATERIALS, EXCEPT THE ITEMS NOW CLAIMED, AND FOR THE NECESSARY LABOR APPEAR TO HAVE ALREADY BEEN MADE, AND AS THE REQUIREMENTS OF SECTION 3709, REVISED STATUTES, RELATIVE TO ADVERTISING APPEAR TO HAVE BEEN COMPLIED WITH IN CONNECTION WITH THE PURCHASE OF MATERIALS TO BE USED IN REPAIRING THE HOSPITAL, NO OBJECTION WILL NOW BE MADE TO THE PAYMENT OF THE OUTSTANDING ACCOUNTS FOR MATERIALS IF FOUND TO BE OTHERWISE CORRECT.

WHILE THE LAW REQUIRES A STIPULATION OF LIQUIDATED DAMAGES IN SUCH CONTRACTS, IT IS DIRECTORY AND THE FAILURE TO SO STIPULATE DOES NOT NULLIFY AGREEMENTS FULLY PERFORMED, ANY FAILURE TO SO PROVIDE BEING FOR CORRECTION BY THE SECRETARY OF THE TREASURY OR ACTION BY THE CONGRESS.