A-30597, MARCH 11, 1930, 9 COMP. GEN. 398

A-30597: Mar 11, 1930

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SHOULD PERMIT SUCH DEDUCTIONS TO REMAIN IN THE APPROPRIATION CHARGED WITH THE BALANCE OF THE CONTRACT PRICE SO AS TO BE AVAILABLE FOR PAYMENT TO THE CONTRACTOR IN THE EVENT IT IS FINALLY CONCLUDED. THAT THE CONTRACTOR IS NOT CHARGEABLE WITH LIQUIDATED DAMAGES. WAS CHANGED TO READ IN SUBPARAGRAPH (B). THAT THE AMOUNT OF THE DEDUCTION WAS DEPOSITED AS MISCELLANEOUS RECEIPTS. PAYMENT BY A DISBURSING OFFICER IS IN NO SENSE FINAL. FOR UNDER THE LAW THE ACCOUNTS OF THE DISBURSING OFFICERS ARE SUBJECT TO AUDIT AND SETTLEMENT BY THE ACCOUNTING OFFICERS OF THE UNITED STATES AND A CONTRACTOR TO WHOM PAYMENTS ARE MADE BY A DISBURSING OFFICER MAY FILE A CLAIM IN THE GENERAL ACCOUNTING OFFICE FOR ADDITIONAL AMOUNTS ALLEGED TO BE DUE UNDER THE CONTRACT.

A-30597, MARCH 11, 1930, 9 COMP. GEN. 398

CONTRACTS - LIQUIDATED DAMAGES A DISBURSING OFFICER OF THE GOVERNMENT SHOULD NOT DEPOSIT TO THE CREDIT OF THE TREASURER OF THE UNITED STATES AMOUNTS DEDUCTED AS LIQUIDATED DAMAGES UNDER A CONTRACT, BUT SHOULD PERMIT SUCH DEDUCTIONS TO REMAIN IN THE APPROPRIATION CHARGED WITH THE BALANCE OF THE CONTRACT PRICE SO AS TO BE AVAILABLE FOR PAYMENT TO THE CONTRACTOR IN THE EVENT IT IS FINALLY CONCLUDED, UNDER THE TERMS OF THE CONTRACT AND THE FACTS OF DELAY, THAT THE CONTRACTOR IS NOT CHARGEABLE WITH LIQUIDATED DAMAGES.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF WAR, MARCH 11, 1930:

THERE HAS BEEN RECEIVED IN THIS OFFICE A COPY OF FINANCE BULLETIN NO. 4, DATED JANUARY 31, 1930, ISSUED BY THE CHIEF OF FINANCE, WAR DEPARTMENT, PUBLISHING A MEMORANDUM DATED JANUARY 27, 1930, FROM THE ADJUTANT GENERAL OF THE ARMY, TO THE EFFECT THAT A.R. 35-6040, DATED MARCH 24, 1922, WAS CHANGED TO READ IN SUBPARAGRAPH (B), AS FOLLOWS:

WHEN DAMAGES PROVIDED FOR IN CONTRACT.--- WHENEVER, UNDER A STANDARD GOVERNMENT FORM OF CONTRACT CONTAINING A PROVISION FOR LIQUIDATED DAMAGES, THE CONTRACTOR FAILS FOR ANY REASON TO EXECUTE COMPLETELY THE CONTRACT WITHIN THE PERIOD STIPULATED, THE DISBURSING OFFICER SHOULD CHARGE THE GROSS AMOUNT OF THE CONTRACT TO THE PROPER APPROPRIATION OR APPROPRIATIONS; MAKE DEDUCTION OF THE LIQUIDATED DAMAGES COVERING THE ENTIRE PERIOD OF DELAY, REGARDLESS OF CAUSE; AND DEPOSIT THE AMOUNT DEDUCTED AS LIQUIDATED DAMAGES TO THE CREDIT OF THE TREASURER OF THE UNITED STATES AS MISCELLANEOUS RECEIPTS. ANY PROTEST MADE BY THE CONTRACTOR AGAINST THE DEDUCTION OF LIQUIDATED DAMAGES SHOULD BE FORWARDED, TOGETHER WITH A STATEMENT OF ALL PAYMENTS MADE, CITATIONS TO ALL VOUCHERS, AND A DETAILED STATEMENT FROM THE CONTRACTING OFFICER, THROUGH THE CHIEF OF FINANCE, TO THE GENERAL ACCOUNTING OFFICE FOR SETTLEMENT AS A CLAIM. IN CONNECTION WITH SUCH CLAIM THE DISBURSING OFFICER SHOULD FURNISH INFORMATION, IF SUCH BE THE CASE, THAT THE AMOUNT OF THE DEDUCTION WAS DEPOSITED AS MISCELLANEOUS RECEIPTS, WITH APPROPRIATE CITATION TO THE MONTHLY ACCOUNT COVERING SUCH DEPOSIT.

WHERE THERE HAS BEEN DELAY OF A CONTRACTOR IN COMPLETION OF WORK OR DELIVERY OF SUPPLIES, THE DISBURSING CLERK SHOULD WITHHOLD FROM THE CONTRACTOR THE AMOUNT OF LIQUIDATED DAMAGES STIPULATED FOR THE DELAY. SEE 6 COMP. GEN. 650; 7 ID. 534; 8 ID. 13; ID. 623. HOWEVER, THE AMOUNT SO WITHHELD SHOULD NOT BE DEPOSITED BY THE DISBURSING OFFICER TO THE CREDIT OF THE TREASURER OF THE UNITED STATES AS MISCELLANEOUS RECEIPTS. PAYMENT BY A DISBURSING OFFICER IS IN NO SENSE FINAL, FOR UNDER THE LAW THE ACCOUNTS OF THE DISBURSING OFFICERS ARE SUBJECT TO AUDIT AND SETTLEMENT BY THE ACCOUNTING OFFICERS OF THE UNITED STATES AND A CONTRACTOR TO WHOM PAYMENTS ARE MADE BY A DISBURSING OFFICER MAY FILE A CLAIM IN THE GENERAL ACCOUNTING OFFICE FOR ADDITIONAL AMOUNTS ALLEGED TO BE DUE UNDER THE CONTRACT, AND IF, IN THE SETTLEMENT OF SUCH A CLAIM, IT SHOULD BE FOUND THAT THE CONTRACTOR IS ENTITLED TO BE PAID AN AMOUNT WITHHELD BY THE DISBURSING OFFICER, SAID AMOUNT WOULD BE PAYABLE UNDER THE APPROPRIATION UNDER THE AUTHORITY OF WHICH THE CONTRACT WAS MADE; HENCE, THE NECESSITY OF LEAVING IN THE APPROPRIATION THE AMOUNT WITHHELD BY THE DISBURSING OFFICER FROM THE CONTRACTOR. THE QUESTION AS TO THE FINAL DISPOSITION OF AMOUNTS SO WITHHELD BY THE DISBURSING OFFICER WILL BE FOR DETERMINATION BY THIS OFFICE.

ACCORDINGLY, YOU ARE ADVISED THAT THE PHRASE "AND DEPOSIT THE AMOUNT DEDUCTED AS LIQUIDATED DAMAGES TO THE CREDIT OF THE TREASURER OF THE UNITED STATES AS MISCELLANEOUS RECEIPTS" AND THE LAST SENTENCE OF THE UNITED STATES AS MISCELLANEOUS RECEIPTS" AND THE LAST SENTENCE OF THE ABOVE-QUOTED SUBPARAGRAPH OF FINANCE BULLETIN NO. 4 SHOULD BE DELETED.