A-27947, OCTOBER 19, 1929, 9 COMP. GEN. 164

A-27947: Oct 19, 1929

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THE ADMINISTRATIVE FINDINGS OF FACTS AS TO THE CAUSES OF THE DELAY ARE FINAL AND CONCLUSIVE ON THE CONTRACTOR AND IN THE EVENT OF DISPUTE AS TO THE FACTS. WHEREIN WAS ALLOWED $10. IT IS CONTENDED THAT THE DEDUCTION OF $1. 350 WAS IMPROPER. THE SPECIFICATIONS ON WHICH BIDS WERE REQUESTED SET FORTH IN DETAIL THE REQUIREMENTS FOR THE CRANE. THAT IN EVENT THE WORK WAS NOT COMPLETED WITHIN THE TIME AGREED UPON THE CONTRACTOR SHOULD PAY TO THE UNITED STATES AS FIXED. LIQUIDATED DAMAGES THE SUM OF $50 FOR EACH CALENDAR DAY'S DELAY UNTIL THE WORK WAS SATISFACTORILY COMPLETED. PARAGRAPH 5 OF THE DIRECTIONS FOR THE PREPARATION OF THE CONTRACT PROVIDED THAT "IF IT IS DEEMED NECESSARY TO PROVIDE FOR LIQUIDATED DAMAGES FOR DELAY.

A-27947, OCTOBER 19, 1929, 9 COMP. GEN. 164

CONTRACTS - LIQUIDATED DAMAGES - DELAYS IN COMPLETION UNDER THE STANDARD FORM OF SUPPLY CONTRACT, USING THE LIQUIDATED DAMAGE STIPULATION, THE ADMINISTRATIVE FINDINGS OF FACTS AS TO THE CAUSES OF THE DELAY ARE FINAL AND CONCLUSIVE ON THE CONTRACTOR AND IN THE EVENT OF DISPUTE AS TO THE FACTS, THE ADMINISTRATIVE STATEMENT THEREOF MUST BE ACCEPTED. UNDER THE STANDARD FORM OF SUPPLY CONTRACT, NO REMISSION OF LIQUIDATION DAMAGES MAY BE MADE WHERE THE CONTRACTOR FAILED TO COMPLY WITH THE TERMS OF THE CONTRACT WITH RESPECT TO SUBMISSION OF A NOTIFICATION OF DELAYS WITHIN 10 DAYS FROM THE DATE THEREOF.

DECISION BY COMPTROLLER GENERAL MCCARL, OCTOBER 19, 1929:

THE HARNISCHFEGER SALES CORPORATION REQUESTED IN LETTER DATED JULY 23, 1929, WITH INCLOSURE OF COPY OF LETTER DATED MAY 9, 1929, REVIEW OF SETTLEMENT NO. 0208405, DATED JUNE 19, 1929, OF THIS OFFICE, WHEREIN WAS ALLOWED $10,500 AS THE PRICE STIPULATED IN CONTRACT I-132 IND-126, DATED AUGUST 23, 1928, FOR THE DELIVERY OF A 40-TON TRAVELING POWER HOUSE CRANE EQUIPPED WITH A 10-TON AUXILIARY HOIST AND CERTAIN SPECIFIED MISCELLANEOUS EQUIPMENT, TO THE UNITED STATES IRRIGATION SERVICE, COOLIDGE DAM PROJECT, ARIZONA, LESS $1,350 AS LIQUIDATED DAMAGES FOR 27 DAYS' DELAY IN THE DELIVERY THEREOF. IT IS CONTENDED THAT THE DEDUCTION OF $1,350 WAS IMPROPER.

THE SPECIFICATIONS ON WHICH BIDS WERE REQUESTED SET FORTH IN DETAIL THE REQUIREMENTS FOR THE CRANE, ETC., AND PROVIDED, IN PARAGRAPH 13, THAT IN EVENT THE WORK WAS NOT COMPLETED WITHIN THE TIME AGREED UPON THE CONTRACTOR SHOULD PAY TO THE UNITED STATES AS FIXED, AGREED, AND LIQUIDATED DAMAGES THE SUM OF $50 FOR EACH CALENDAR DAY'S DELAY UNTIL THE WORK WAS SATISFACTORILY COMPLETED, OR UNTIL SUCH TIME AS THE UNITED STATES MIGHT REASONABLY PROCURE THE COMPLETION OF THE WORK BY ANOTHER CONTRACTOR OR COMPLETE THE WORK ITSELF. PARAGRAPH 5 OF THE DIRECTIONS FOR THE PREPARATION OF THE CONTRACT PROVIDED THAT "IF IT IS DEEMED NECESSARY TO PROVIDE FOR LIQUIDATED DAMAGES FOR DELAY, THE FOLLOWING ARTICLE SHALL BE SUBSTITUTED FOR ARTICLE 5 AND PROSPECTIVE BIDDERS SO ADVISED.' THIS ARTICLE PROVIDED IN PART:

* * * THAT THE CONTRACTOR SHALL NOT BE CHARGED WITH LIQUIDATED DAMAGES OR ANY EXCESS COST WHEN THE DELAY IN DELIVERY IS 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 THE PUBLIC ENEMY, ACTS OF THE GOVERNMENT, FIRES, FLOODS, EPIDEMICS, QUARANTINE RESTRICTIONS, STRIKES, FREIGHT EMBARGOES, AND UNUSUALLY SEVERE WEATHER BUT NOT INCLUDING DELAYS CAUSED BY SUBCONTRACTORS: 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 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.

WHILE THIS ARTICLE FOR LIQUIDATED DAMAGES WAS NOT PHYSICALLY SUBSTITUTED FOR ARTICLE 5 IN THE PRINTED FORM FOR ACTUAL DAMAGES, IT MUST NEVERTHELESS, BE CONSIDERED A PART OF THE CONTRACT IN VIEW OF THE DIRECTIONS FOR THE PREPARATION OF THE CONTRACT PROMULGATED BY THE PRESIDENT, WHICH DIRECTIONS ARE PRINTED ON THE CONTRACT FORM, AND THE NOTIFICATION TO PROSPECTIVE CONTRACTORS THAT LIQUIDATED DAMAGES WOULD BE CHARGED FOR DELAY IN DELIVERY. WHILE IT IS DESIRABLE IN THE USE OF THE STANDARD FORM OF SUPPLY CONTRACT TO ELIMINATE ARTICLE 5 AND PHYSICALLY SUBSTITUTE THEREFOR THE ARTICLE FOR LIQUIDATED DAMAGES, WHEN LIQUIDATED DAMAGES INSTEAD OF ACTUAL DAMAGES ARE TO BE CHARGED FOR DELAYS, YET WHETHER THAT IS OR IS NOT DONE WHEN THE SPECIFICATIONS PROVIDE FOR LIQUIDATED DAMAGES THE PROVISIONS OF THE PRESCRIBED SUBSTITUTE FOR ARTICLE 5 RELATIVE TO THE CONDITIONS UNDER WHICH DAMAGES WILL NOT BE CHARGED ARE FOR APPLICATION.

THE CONTRACTOR AGREED TO COMPLETE THE WORK WITHIN 50 DAYS FROM DATE OF NOTIFICATION TO PROCEED. SUCH NOTIFICATION WAS GIVEN ON SEPTEMBER 7, 1928, THUS MAKING DELIVERY OF THE CRANE AND ITS EQUIPMENT DUE ON OR BEFORE OCTOBER 27, 1928, BUT DELIVERY WAS NOT MADE UNTIL NOVEMBER 23, 1928, RESULTING IN A DELAY OF 27 CALENDAR DAYS FOR WHICH THE ITEM OF $1,350 LIQUIDATED DAMAGES AT THE STIPULATED RATE OF $50 PER DAY WAS DEDUCTED IN THE SETTLEMENT OF JUNE 19, 1929.

THE CONTRACTOR HAS CONTENDED THAT NO LIQUIDATED DAMAGES SHOULD BE DEDUCTED FOR THE REASON THAT THE DELAYS WERE DUE TO UNFORESEEABLE CAUSES BEYOND ITS CONTROL AND WITHOUT ITS FAULT, WITH THE SUGGESTION THAT THEY RESULTED FROM THE FAILURE OF THE GOVERNMENT TO GIVE THE DIMENSIONS OF THE BUILDING IN WHICH THE CRANE WAS TO BE USED, AND TO CHANGES MADE BY THE GOVERNMENT IN THE SPECIFICATIONS. HOWEVER, IT APPEARS THAT THE DIMENSIONS OF THE BUILDING WERE FURNISHED WITH THE ADVERTISEMENT AND SPECIFICATIONS (DRAWING NO. AB-100, DATED MAY 25, BEING REFERRED TO) AND WERE A PART OF THE CONTRACTOR'S PROPOSAL. WHILE APPROVAL OF THE CLEARANCE DRAWINGS WAS NOT MADE UNTIL OCTOBER 10, 1928, ANY DELAY RESULTING THEREFROM WAS DUE TO THE CONTRACTOR'S FAILURE TO FURNISH THE DRAWINGS IN ACCORDANCE WITH THE SPECIFICATIONS. THEY WERE APPROVED BY TELEGRAPH THE DAY THEY WERE RECEIVED. WITH RESPECT TO DELAYS ALLEGED TO HAVE RESULTED FROM CHANGES AND CORRECTIONS OF THE PLANS AND SPECIFICATIONS, IT IS TO BE NOTED THAT THE FIRST CHANGE WAS THAT OF SUBSTITUTING 200-VOLT FOR 440 VOLT METERS, AND IN TELEGRAM OF SEPTEMBER 7, 1928, THE CONTRACTOR AGREED TO MAKE THE SUBSTITUTION WITHOUT CHANGING PRICE OR MOTOR SIZE. IN TELEGRAM OF OCTOBER 8, 1928, THE CONTRACTOR ADVISED THAT IT COULD INCREASE THE LIFT OF THE HOIST TO 50 FEET WITHOUT EXTRA CHARGE OR DELAY, AND IN TELEGRAM OF OCTOBER 10, 1928, SUCH CHANGE WAS AUTHORIZED. THEREFORE, IT WOULD APPEAR THAT THE GOVERNMENT WAS NOT RESPONSIBLE FOR ANY PART OF THE DELAY. BUT, BE THAT AS IT MAY, THE CONTRACTOR FAILED TO SUBMIT WRITTEN NOTICE OF THE DELAY WITHIN 10 DAYS FROM THE BEGINNING THEREOF, AS REQUIRED BY THE TERMS OF THE CONTRACT AS A PREREQUISITE TO REMISSION OF DAMAGES FOR DELAY. HAVING FAILED TO COMPLY WITH THE TERMS OF THE CONTRACT IN THIS RESPECT, THE CONTRACTOR IS NOT ENTITLED TO REMISSION OF LIQUIDATED DAMAGES. SEE 4 COMP. GEN. 135; PLUMLEY V. UNITED STATES, 226 U. S. 545. FURTHERMORE, THE CONTRACT MAKES MAKES THE FINDINGS OF THE CONTRACTING OFFICER RELATIVE TO THE FACT OF DELAY AND THE CAUSES THEREOF BINDING AND CONCLUSIVE ON THE CONTRACTOR IN THE ABSENCE OF AN APPEAL TO THE SECRETARY OF THE INTERIOR WITHIN 30 DAYS FROM THE DATE THEREOF; AND IN THIS CASE THE FINDING OF THE CONTRACTING OFFICER WAS ADVERSE TO THE CONTRACTOR'S CLAIM AND THERE WAS NO APPEAL TO THE SECRETARY OF THE INTERIOR WITHIN THE TIME ALLOWED BY THE CONTRACT THEREFOR. THEREFORE, THE CONTRACTOR IS BOUND BY THE FINDINGS OF THE CONTRACTING OFFICER. SEE PENN BRIDGE COMPANY V. UNITED STATES, 59 CT.CLS. 892, AND DECISIONS THEREIN CITED.

UPON REVIEW THE SETTLEMENT MAKING DEDUCTION OF $1,350 FOR LIQUIDATED DAMAGES AT THE STIPULATED RATE OF $50 A DAY FOR 27 DAYS' DELAY IN THE DELIVERY OF THE CRANE, MUST BE, AND IS, SUSTAINED.