A-35152, MARCH 27, 1931, 10 COMP. GEN. 433

A-35152: Mar 27, 1931

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CONTRACTS - DELAY - DEFAULT - CLAIMS OF LABORERS AND MATERIALMEN UNDER THE STANDARD GOVERNMENT FORM OF CONTRACT THERE IS NO LEGAL AUTHORITY FOR THE REMISSION OF LIQUIDATED DAMAGES ACCRUED TO THE GOVERNMENT FOR DELAY IN THE WORK THEREUNDER. EXCEPTING FOR THE PERIOD OF DELAY SHOWN TO HAVE RESULTED FROM UNFORESEEABLE CAUSES BEYOND THE CONTROL AND WITHOUT THE FAULT OR NEGLIGENCE OF THE CONTRACTOR. OR UNLESS PERFORMANCE OF THE CONTRACT IS RENDERED IMPOSSIBLE BY THE ACT OF GOD. WHERE A CONTRACTOR COMPLETED ONLY A PORTION OF THE CONTRACT WORK AND DEFAULTED AS TO THE REMAINDER AND THE SURETY ON THE PERFORMANCE BOND DID NOT ELECT TO COMPLETE THE CONTRACT AND THE UNFINISHED WORK WAS AWARDED BY THE GOVERNMENT TO ANOTHER CONTRACTOR FOR COMPLETION AT A PRICE LESS LESS THAN THE ORIGINAL CONTRACT PRICE.

A-35152, MARCH 27, 1931, 10 COMP. GEN. 433

CONTRACTS - DELAY - DEFAULT - CLAIMS OF LABORERS AND MATERIALMEN UNDER THE STANDARD GOVERNMENT FORM OF CONTRACT THERE IS NO LEGAL AUTHORITY FOR THE REMISSION OF LIQUIDATED DAMAGES ACCRUED TO THE GOVERNMENT FOR DELAY IN THE WORK THEREUNDER, EXCEPTING FOR THE PERIOD OF DELAY SHOWN TO HAVE RESULTED FROM UNFORESEEABLE CAUSES BEYOND THE CONTROL AND WITHOUT THE FAULT OR NEGLIGENCE OF THE CONTRACTOR, OR UNLESS PERFORMANCE OF THE CONTRACT IS RENDERED IMPOSSIBLE BY THE ACT OF GOD, OF THE LAW, OR OF THE GOVERNMENT. WHERE A CONTRACTOR COMPLETED ONLY A PORTION OF THE CONTRACT WORK AND DEFAULTED AS TO THE REMAINDER AND THE SURETY ON THE PERFORMANCE BOND DID NOT ELECT TO COMPLETE THE CONTRACT AND THE UNFINISHED WORK WAS AWARDED BY THE GOVERNMENT TO ANOTHER CONTRACTOR FOR COMPLETION AT A PRICE LESS LESS THAN THE ORIGINAL CONTRACT PRICE, THE GOVERNMENT SUSTAINING NO FINANCIAL LOSS ON ACCOUNT OF SAID DEFAULT, ANY BALANCE DUE THE DEFAULTING CONTRACTOR FOR WORK COMPLETED BY HIM BEFORE THE DEFAULT IS PAYABLE TO HIM AND THE UNSATISFIED CLAIMS OF LABORERS AND MATERIALMEN MAY NOT BE PAID THEREFROM, THEIR RIGHTS BEING AGAINST THE CONTRACT AND THE SURETY NOT AGAINST THE UNITED STATES.

DECISION BY COMPTROLLER GENERAL MCCARL, MARCH 27, 1931:

THERE HAS BEEN PRESENTED TO THIS OFFICE FOR CONSIDERATION AND SETTLEMENT THE CLAIM OF ROBERT H. MCNEILL AND JOSEPH T. SHERIER, RECEIVERS OF THE MARYLAND-MONTGOMERY CO. (INC.), FOR THE SUM OF $4,918.05 AS BALANCE ALLEGED TO BE DUE SAID CORPORATION UNDER ITS WAR DEPARTMENT CONTRACT NO. W -977-ENG-315, DATED MAY 12, 1930, FOR THE CONSTRUCTION OF 15,000 TONS OF RIPRAP SEA WALL FOUNDATION ALONG THE ANACOSTIA RIVER AT WASHINGTON, D.C.

IT APPEARS THAT SAID ROBERT H. MCNEILL AND JOSEPH T. SHERIER WERE APPOINTED RECEIVERS FOR THE MARYLAND-MONTGOMERY CO. (INC), BY ORDER OF THE SUPREME COURT OF THE DISTRICT OF COLUMBIA, DATED DECEMBER 23, 1930, IN EQUITY SUIT NO. 52251, WHEREIN HARRY W. STEPHENS, B. F. MITCHELL, AND GEORGE A. UNSINN, TRADING AS MITCHELL AND UNSINN, WERE PLAINTIFFS AND THE MARYLAND-MONTGOMERY CO., A CORPORATION, WAS THE THE DEFENDANT.

UNDER THE TERMS AND CONDITIONS OF THE SAID CONTRACT THE CONTRACTOR AGREED, FOR AND IN CONSIDERATION OF THE PAYMENT OF $2.74 PER TON, TO FURNISH ALL LABOR AND MATERIALS AND TO PERFORM ALL WORK REQUIRED FOR PLACING 15,000 TONS OF RIPRAP SEAL WALL FOUNDATION ALONG THE ANACOSTIA RIVER AT WASHINGTON, D. C., IN ACCORDANCE WITH THE SPECIFICATIONS, SCHEDULES, AND DRAWINGS THEREFOR ALL OF WHICH ARE MADE A PART OF THE CONTRACT; AND THAT SAID WORK WOULD BE COMMENCED WITHIN 15 CALENDAR DAYS AFTER DATE OF RECEIPT OF THE GOVERNMENT'S NOTICE TO PROCEED AND WOULD BE COMPLETED AS STATED IN PARAGRAPH 3 OF THE SPECIFICATIONS, IT SHOULD PAY AS LIQUIDATED DAMAGES THE SUM OF $25 FOR EACH CALENDAR DAY OF DELAY, EXCEPTING FOR THE DELAY THAT MAY BE DUE TO CAUSES WHICH ARE EXCUSABLE UNDER THE PROVISIONS OF ARTICLE 9 OF THE CONTRACT. SAID PARAGRAPH 3 OF THE SPECIFICATIONS PROVIDED:

3. COMMENCEMENT, PROSECUTION, AND COMPLETION.--- THE CONTRACTOR WILL BE REQUIRED TO COMMENCE WORK UNDER THE CONTRACT WITHIN FIFTEEN (15) CALENDAR DAYS AFTER RECEIPT BY HIM OF NOTICE TO PROCEED, TO PROSECUTE THE SAID WORK WITH FAITHFULNESS AND ENERGY, AT AN AVERAGE RATE OF NOT LESS THAN FIVE THOUSAND (5,000) TONS PER MONTH, AND TO COMPLETE IT WITHIN THE TIME DETERMINED BY APPLYING TO THE TOTAL QUANTITY OF MATERIAL TO BE PAID FOR ACTUALLY PLACED UNDER THE CONTRACT THE AVERAGE MONTHLY RATE ABOVE STIPULATED, TIME FOR COMPLETION TO BE COMPUTED FROM DATE OF RECEIPT OF NOTICE TO PROCEED.

IN CASE OF FAILURE ON THE PART OF THE CONTRACTOR TO COMPLETE THE WORK WITHIN THE TIME THUS DETERMINED AND AGREED UPON FOR ITS COMPLETION, THE CONTRACTOR SHALL PAY THE GOVERNMENT AS LIQUIDATED DAMAGES THE SUM OF TWENTY-FIVE DOLLARS ($25) FOR EACH CALENDAR DAY OF DELAY UNTIL THE WORK IS COMPLETED OR ACCEPTED.

THE CONTRACT PROVIDED:

ARTICLE 1. STATEMENT OF WORK--- THE CONTRACTOR SHALL FURNISH ALL LABOR AND MATERIALS, AND PERFORM ALL WORK REQUIRED FOR PLACING FIFTEEN THOUSAND (15,000) TONS, FORTY (40) PERCENT MORE OR LESS, OF RIPRAP SEA WALL FOUNDATION ALONG THE ANACOSTIAL RIVER AT WASHINGTON, D. C., FOR THE CONSIDERATION OF TWO DOLLARS AND SEVENTY-FOUR CENTS ($2.74) PER TON, IN STRICT ACCORDANCE WITH THE SPECIFICATIONS, SCHEDULES, AND DRAWINGS, ALL OF WHICH ARE MADE A PART HEREOF AND DESIGNATED AS FOLLOWS:

SPECIFICATIONS: WAR DEPARTMENT RECLAMATION OF ANACOSTIA RIVER FLATS, D.C.

DRAWING: ANACOSTIA PARK, D.C., RIPRAP FOUNDATION IN SECTION G, FEBRUARY 15, 1930, FILE B-56-220.

THE WORK SHALL BE COMMENCED WITHIN 15 CALENDAR DAYS AFTER DATE OF RECEIPT OF NOTICE TO PROCEED AND SHALL BE COMPLETED AS STATED IN PARAGRAPH 3 OF THE SPECIFICATIONS.

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 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 HEREOF: PROVIDED, THAT THE RIGHT OF THE LIQUIDATED DAMAGES BECAUSE OF ANY DELAYS IN THE COMPLETION OF THE WORK DUE TO UNFORSEEABLE 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 RESTRICTONS, 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.

ARTICLE 16. PAYMENTS TO CONTRACTORS.--- (A) UNLESS OTHERWISE PROVIDED IN THE SPECIFICATIONS, PARTIAL PAYMENTS WILL BE MADE AS THE WORK PROGRESSES AT THE END OF EACH CALENDAR MONTH, OR AS SOON THEREAFTER AS PRACTICABLE, ON ESTIMATES MADE AND APPROVED BY THE CONTRACTING OFFICER. IN PREPARING ESTIMATES THE MATERIAL DELIVERED ON THE SITE AND PREPARATORY WORK DONE MAY BE TAKEN INTO CONSIDERATION.

(B) IN MAKING SUCH PARTIAL PAYMENTS THERE SHALL BE RETAINED 10 PERCENT ON THE ESTIMATED AMOUNT UNTIL FINAL COMPLETION AND ACCEPTANCE OF ALL WORK COVERED BY THE CONTRACT: PROVIDED, HOWEVER, THAT THE CONTRACTING OFFICER, AT ANY TIME AFTER 50 PERCENT OF THE WORK HAS BEEN COMPLETED, IF HE FINDS THAT SATISFACTORY PROGRESS IS BEING MADE, MAY MAKE ANY OF THE REMAINING PARTIAL PAYMENTS IN FULL: AND PROVIDED FURTHER, THAT ON COMPLETION AND ACCEPTANCE OF EACH SEPARATE BUILDING, VESSEL, PUBLIC WORK, OR OTHER DIVISION OF THE CONTRACT, ON WHICH THE PRICE IS STATED SEPARATELY IN THE CONTRACT, PAYMENT MAY BE MADE IN FULL, INCLUDING RETAINED PERCENTAGES THEREON, LESS AUTHORIZED DEDUCTIONS.

(C) ALL MATERIAL AND WORK COVERED BY PARTIAL PAYMENTS MADE SHALL THEREUPON BECOME THE SOLE PROPERTY OF THE GOVERNMENT, BUT THIS PROVISION SHALL NOT BE CONSTRUED AS RELIEVING THE CONTRACTOR FROM THE SOLE RESPONSIBILITY FOR THE CARE AND PROTECTION OF MATERIALS AND WORK UPON WHICH PAYMENTS HAVE BEEN MADE OR THE RESTORATION OF ANY DAMAGED WORK OR AS A WAIVER OF THE RIGHT OF THE GOVERNMENT TO REQUIRE THE FULFILLMENT OF ALL THE TERMS OF THE CONTRACT.

(D) UPON COMPLETION AND ACCEPTANCE OF ALL WORK REQUIRED HEREUNDER, THE AMOUNT DUE THE CONTRACTOR UNDER THIS CONTRACT WILL BE PAID UPON THE PRESENTATION OF A PROPERLY EXECUTED AND DULY CERTIFIED VOUCHER THEREFOR, AFTER THE CONTRACTOR SHALL HAVE FURNISHED THE GOVERNMENT WITH A RELEASE, IF REQUIRED, OF ALL CLAIMS AGAINST THE GOVERNMENT ARISING UNDER AND BY VIRTUE OF THIS CONTRACT, OTHER THAN SUCH CLAIMS, IF ANY, AS MAY BE SPECIFICALLY EXCEPTED BY THE CONTRACTOR FROM THE OPERATION OF THE RELEASE IN STATED AMOUNTS TO BE SET FORTH THEREIN.

TO GUARANTEE THE PERFORMANCE OF SAID CONTRACT, IN ACCORDANCE WITH THE CONDITION THEREOF, THE CONTRACTOR AS PRINCIPAL AND THE GUARDIAN CASUALTY CO. (A NEW YORK CORPORATION) AS SURETY EXECUTED A PERFORMANCE BOND IN THE SUM OF $21,000, DATED MAY 12, 1930, PAYABLE TO THE UNITED STATES OF AMERICA.

THE FACTS RELATIVE TO THE MATTERS INVOLVED IN THE CLAIM ARE STATED BY THE UNITED STATES ARMY DISTRICT ENGINEER IN CHARGE OF THE CONTRACT WORK, TO WIT, MAJ. J. D. ARTHUR, JR., SOUTH ATLANTIC DIVISION, CORPS OF ENGINEERS, UNITED STATES ARMY, IN HIS LETTER DATED JANUARY 28, 1931, TO THE CHIEF OF ENGINEERS, UNITED STATES ARMY, TO BE AS FOLLOWS:

1. THERE IS INCLOSED HEREWITH A VOUCHER IN FAVOR OF THE MARYLAND MONTGOMERY COMPANY (INC.) FOR FURNISHING AND PLACING RIPRAP STONEFOR SEA- WALL FOUNDATION IN ANACOSTIA RIVER, D.C., UNDER THEIR CONTRACT W 977-ENG- 315, DATED MAY 12, 1930, WITH REQUEST THAT IT BE SUBMITTED TO THE COMPTROLLER GENERAL OF THE UNITED STATES FOR APPROVAL BEFORE PAYMENT. THIS REPRESENTS FINAL PAYMENT UNDER THE CONTRACT WHICH WAS TERMINATED ON OCTOBER 21, 1930, UNDER AUTHORITY OF THE CHIEF OF ENGINEERS DATED OCTOBER 15, 1930, E.D. 3642 (ANACOSTA RIVER/-12.

3. NOTICE TO PROCEED WAS GIVEN TO THE CONTRACTOR ON JUNE 3, 1930, WHICH THEREBY FIXED JUNE 18 AS THE LIMITING DATE FOR COMMENCEMENT. BECAUSE OF THE FACT THAT THE CONTRACT WAS NEVER COMPLETED, THE DATE FROM WHICH LIQUIDATED DAMAGES WOULD ACCRUE IS NOT SUSCEPTIBLE OF DETERMINATION UNDER THE METHOD GIVEN IN THE SPECIFICATIONS. IN FACT, THE SPECIFICATIONS FAIL TO DEFINITELY COVER THE AMOUNT OF LIQUIDATED DAMAGES IN CASE OF CANCELLATION PRIOR TO COMPLETION.

4. THE LIQUIDATED DAMAGES DEDUCTED ON THE VOUCHER REPRESENT THE TIME ELAPSED BETWEEN THE DATE ON WHICH DELIVERY OF 15,000 TONS WOULD HAVE BEEN MADE AT THE RATE OF 5,000 TONS PER MONTH AND THE DATE ON WHICH THE CONTRACT WAS TERMINATED. THE CONTRACTOR, HOWEVER, FAILED TO MAINTAIN THE SPECIFIED RATE OF DELIVERY DURING THE ENTIRE TIME THAT THE CONTRACT WAS IN FORCE. DURING AN ELAPSED TIME OF 102 DAYS BETWEEN JUNE 18 AND SEPTEMBER 27 THE CONTRACTOR DELIVERED BUT 4,527.55 TONS OF RIPRAP WHICH PLACED THEM 75 DAYS BEHIND THE SCHEDULED TIME IN THEIR DELIVERIES. NO WORK WAS DONE BY THEM SUBSEQUENT TO SEPTEMBER 27.

5. THIS WORK HAS BEEN READVERTISED AND A BID RECEIVED CONSIDERABLY LOWER THAN THE PRICE CALLED FOR BY THE CONTRACT WITH THE MARYLAND MONTGOMERY COMPANY. THE UNITED STATES WILL, THEREFORE, SAVE CONSIDERABLE MONEY IN THE COMPLETION OF THIS CONTRACT, THERE BEING NO ADDITIONAL CHARGES FOR INSPECTION, SUPERINTENDENCE, OR OTHERWISE TO BE ASSESSED AGAINST THE MARYLAND-MONTGOMERY COMPANY DUE TO THEIR FAILURE TO COMPLETE THEIR CONTRACT.

6. THE VOUCHER HAS BEEN SIGNED BY RECEIVERS FOR THE CONTRACTOR APPOINTED UNDER AN ORDER OF THE COURT, A TRUE COPY OF WHICH IS INCLOSED. A LETTER FROM THE RECEIVERS OBJECTING TO DEDUCTION OF LIQUIDATED DAMAGES IS ALSO INCLOSED.

IT APPEARS, HOWEVER, THAT THE CHIEF OF ENGINEERS, UNITED STATES ARMY, DOES NOT CONCUR IN SAID STATEMENT OF FACTS SUBMITTED BY MAJOR ARTHUR WITH REFERENCE TO THE EXTENT OF THE CONTRACTOR'S DELAY IN PERFORMANCE OF THE WORK, AND IN A LETTER TO THIS OFFICE DATED FEBRUARY 13, 1931, RELATIVE THERETO, SAID CHIEF OF ENGINEERS STATED:

1. A STRICT CONSTRUCTION OF THE TERMS OF PARAGRAPH 3 OF THE SPECIFICATIONS WOULD SEEM TO ALLOW THE CONTRACTOR 1 MONTH FOR EACH 5,000 YARDS ACTUALLY PLACED. DATE SET FOR COMMENCEMENT WAS JUNE 18, 1930. PLACED 4,527.55 TONS PRIOR TO DATE OF TERMINATION OF THE CONTRACT ON OCT. 21, 1930. FOR THIS AMOUNT OF WORK HIS TIME ALLOWANCE WOULD BE 27.4 DAYS. THE TOTAL ELAPSE OF TIME DURING THIS PERIOD WAS 125 DAYS. HE WOULD THEREFORE BE LIABLE FOR LIQUIDATED DAMAGES FOR 97.6 DAYS, INSTEAD OF 34 DAYS AS COMPUTED BY THE DISTRICT ENGINEER.

THE EVIDENCE SHOWS THAT THE CONTRACTOR DEFAULTED IN PERFORMANCE OF ITS SAID CONTRACT, AND SAME WAS TERMINATED BY THE GOVERNMENT ON OCTOBER 21, 1930; THAT THE SURETY ON THE CONTRACTOR'S PERFORMANCE BOND ELECTED NOT TO COMPLETE THE UNFINISHED RIPRAP FOUNDATION WORK, NECESSITATING THE SUBSEQUENT COMPLETION THEREOF BY THE GOVERNMENT, THROUGH ANOTHER CONTRACTOR; AND THAT THERE ARE NO EXCESS COSTS OR EXPENSES CHARGEABLE AGAINST THE ORIGINAL CONTRACTOR, OR ITS SURETY, ON ACCOUNT OF SAID DEFAULT, EXCEPTING THE ACCRUED LIQUIDATED DAMAGES RESULTING FROM DELAYS IN PERFORMANCE IN ACCORDANCE WITH THE TERMS OF THE CONTRACT.

WITH REFERENCE TO THE QUESTION OF LIQUIDATED DAMAGES, WHERE A CONTRACTOR DEFAULTS, OR ABANDONS ITS CONTRACT, NECESSITATING THE TERMINATION THEREOF BY THE GOVERNMENT AND THE SUBSEQUENT COMPLETION OF THE WORK BY ANOTHER CONTRACTOR, OR BY THE GOVERNMENT, THE UNITED STATES IS ENTITLED TO THE ACCRUED LIQUIDATED DAMAGES PROVIDED BY THE CONTRACT TO THE DATE OF SUCH TERMINATION, FOR THE UNEXCUSED DELAYS IN PERFORMANCE OF THE WORK. SEE 7 COMP. GEN. 409; AND 8 ID. 268. IN THE INSTANT CASE THE GOVERNMENT'S NOTICE TO CONTRACTOR TO PROCEED WITH THE WORK APPEARS TO HAVE BEEN RECEIVED BY THE CONTRACTOR ON JUNE 3, 1930. UNDER THE TERMS OF THE CONTRACT THE WORK SHOULD HAVE BEEN COMMENCED WITHIN 15 CALENDAR DAYS THEREAFTER, OR BY JUNE 18, 1930, AND SAME SHOULD HAVE BEEN PROSECUTED AT AN AVERAGE MONTHLY RATE OF NOT LESS THAN 5,000 TONS UNTIL COMPLETION. APPEARS, HOWEVER, THAT THE CONTRACTOR FAILED TO MAINTAIN THE REQUIRED AVERAGE MONTHLY RATE OF TONNAGE. IN FACT, CONTRACTOR NEVER COMPLETED SUCH REQUIRED AVERAGE MONTHLY RATE DURING THE PERIOD OF TIME IN WHICH IT WAS ENGAGED ON SAID WORK. THE RECORD SHOWS THAT THE QUANTITIES OF WORK COMPLETED BY THE CONTRACTOR, UNDER SAID CONTRACT, AGGREGATED 3,036.27 TONS DURING THE MONTH OF AUGUST, 1930, AND 1,491.28 TONS DURING THE MONTH OF SEPTEMBER, 1930. THUS, THE TOTAL RIPRAP WORK COMPLETED BY THE CONTRACTOR WAS 4,527.55 TONS.

ARTICLE 9 OF THE CONTRACT AND PARAGRAPH 3 OF THE SPECIFICATIONS, ABOVE QUOTED, CONTAIN THE AGREEMENT OF THE PARTIES RELATIVE TO THE LIQUIDATED DAMAGES TO BE CHARGED AGAINST THE CONTRACTOR IN THE EVENT OF UNEXCUSED DELAYS IN PERFORMANCE OF THE CONTRACT. WHILE SAID PARAGRAPH 3 OF THE SPECIFICATIONS INDICATES THAT THE STIPULATED PER DIEM RATE OF LIQUIDATED DAMAGES MIGHT HAVE BEEN INTENDED TO BE CHARGED AGAINST CONTRACTOR FOR ANY DELAY RESULTING FROM ITS FAILURE TO COMPLETE THE AVERAGE MONTHLY RATE OF 5,000 TONS OF RIPRAP WORK, THE LANGUAGE OF SAID PARAGRAPH DOES NOT CLEARLY SHOW THAT SUCH WAS THE INTENT. HOWEVER, INASMUCH AS SAID PARAGRAPH 3 OF THE SPECIFICATIONS IS PLAIN AS TO THE REQUIREMENT OF THE AVERAGE MONTHLY RATE OF WORK TO BE COMPLETED, TO WIT, 5000 TONS, OBVIOUSLY, UNDER THE TERMS OF THE CONTRACT, THE DATE FOR COMPLETION OF THE REQUIRED 15,000 TONS OF RIPRAP WORK WAS THREE MONTHS AFTER SAID COMMENCEMENT DATE, WHICH WAS SEPTEMBER 17, 1930. THE CONTRACTOR HAVING FAILED TO COMPLETE THE REQUIRED WORK WITHIN THE AGREED CONTRACT PERIOD OF TIME AND HAVING SUBSEQUENTLY DEFAULTED IN COMPLETING PERFORMANCE OF ITS CONTRACT, WHICH DEFAULT NECESSITATED TERMINATION OF THE CONTRACT BY THE GOVERNMENT ON OCTOBER 21, 1930, UNDER THE TERMS OF THE CONTRACT LIQUIDATED DAMAGES ACCRUED TO THE UNITED STATES, AS THEREIN PROVIDED, FOR THE DELAY OF 34 DAYS, FROM SEPTEMBER 17, THE DUE DATE FOR COMPLETION OF 15,000 TONS, TO OCTOBER 21, 1930, AT THE RATE OF $25 PER CALENDAR DAY, AMOUNTING TO $850.

RELATIVE TO THE CONTENTION OF THE CONTRACTOR'S RECEIVERS THAT THE LIQUIDATED DAMAGES SHOULD BE REMITTED AS SAME ARE INEQUITABLE AND BEYOND THE TERMS OF THE CONTRACT, THERE WOULD SEEM TO BE NO BASIS FOR SUCH CONTENTION. GENERALLY, WHERE A PERSON BY HIS CONTRACT CHARGES HIMSELF WITH AN OBLIGATION POSSIBLE TO BE PERFORMED, HE MUST PERFORM IT, UNLESS ITS PERFORMANCE IS RENDERED IMPOSSIBLE BY THE ACT OF GOD, BY THE LAW, OR BY THE OTHER PARTY, IT BEING THE RULE THAT IN CASE A CONTRACTOR DESIRES TO BE EXCUSED FROM PERFORMANCE IN THE EVENT OF CONTINGENCIES ARISING, IT IS HIS DUTY TO PROVIDE THEREFOR IN HIS CONTRACT. PERFORMANCE IS NOT EXCUSED BY SUBSEQUENT INABILITY TO PERFORM, BY UNFORESEEN DIFFICULTIES, BY UNUSUAL OR UNEXPECTED EXPENSE, ETC., UNLESS THE CONTRACT SO PROVIDES. SEE 13 CORPUS JURIS 635. THE INSTANT CONTRACT MAKES NO PROVISION FOR REMISSION OF THE ACCRUED LIQUIDATED DAMAGES FOR DELAYS EXCEPTING AS PROVIDED IN ARTICLE 9 THEREOF FOR "UNFORESEEABLE CAUSES BEYOND THE CONTROL AND WITHOUT THE FAULT OR NEGLIGENCE OF THE TRACTOR.' THE EVIDENCE DOES NOT SHOW THAT ANY OF THE 34 DAYS OF DELAY WAS DUE TO CAUSES FOR WHICH THE CONTRACT PROVIDES THAT LIQUIDATED DAMAGES ARE NOT CHARGEABLE, NOR TO CAUSES RESULTING FROM AN ACT OF GOD, OF THE LAW, OR OF THE UNITED STATES. ON THE CONTRARY, THE EVIDENCE SHOWS THAT THE DELAY IN PERFORMANCE WAS THE FAULT OF THE CONTRACTOR IN FAILING TO COMMENCE THE WORK PROMPTLY AFTER THE GOVERNMENT'S NOTICE TO PROCEED AND TO DILIGENTLY AND EFFICIENTLY PROSECUTE SAME TO COMPLETION. FURTHERMORE, THE REQUIREMENT IN ARTICLE 9 OF THE CONTRACT, PROVIDING FOR THE DEDUCTION OF LIQUIDATED DAMAGES FOR DELAYS IN PERFORMANCE, THAT CONTRACTOR WITHIN 10 DAYS FROM THE BEGINNING OF ANY DELAYS SHALL NOTIFY THE CONTRACTING OFFICER IN WRITING OF THE CAUSES OF DELAY, HAS BEEN HELD TO BE A CONDITION PRECEDENT TO THE CONSIDERATION OF A CLAIM FOR THE REMISSION OF DAMAGES. SEE 8 COMP. GEN. 536; 9 ID. 164. THE CONTRACTOR DOES NOT APPEAR TO HAVE COMPLIED WITH SUCH CONDITION RELATIVE TO THE REQUIRED WRITTEN NOTICE OF THE DELAYS INVOLVED IN THIS CLAIM. THEREFORE, IN VIEW OF THE FACTS AND CIRCUMSTANCES, AND THE TERMS OF THE CONTRACT AS ABOVE SHOWN, THERE IS NO AUTHORITY TO REMIT ANY PART OF THE ACCRUED LIQUIDATED DAMAGES FOR THE 34 DAYS OF DELAY.

THE EVIDENCE SHOWS THAT THE ORIGINAL CONTRACTOR SATISFACTORILY COMPLETED 4,527.55 TONS OF THE REQUIRED RIPRAP SEA-WALL FOUNDATION UNDER ITS SAID CONTRACT. THEREFORE, IT IS ENTITLED TO PAYMENT THEREFOR AT THE CONTRACT PRICE OF $2.74 PER TON AMOUNTING TO $12,405.49, LESS THE $850 LIQUIDATED DAMAGES ACCRUED TO THE GOVERNMENT ON ACCOUNT OF THE UNEXCUSED DELAY IN PERFORMANCE OF THE WORK, AS ABOVE SHOWN, LEAVING $11,555.49 AS THE AMOUNT DUE FOR SAID COMPLETED WORK. CONTRACTOR APPEARS TO HAVE BEEN PAID THE SUM OF $7,487.44 FOR SERVICES UNDER THE CONTRACT. HENCE, THERE IS A BALANCE OF $4,068.05 REMAINING DUE TO SAID ORIGINAL CONTRACTOR.

THE GUARDIAN CASUALTY CO. (A NEW YORK CORPORATION), SURETY ON THE CONTRACTOR'S PERFORMANCE BOND, HAS PROTESTED THE PAYMENT TO THE CONTRACTOR, OR ITS RECEIVERS, OF ANY BALANCE FOUND TO BE DUE THE CONTRACTOR UNDER THE INVOLVED CONTRACT, ASSERTING THAT SUCH BALANCE, IF ANY, SHOULD BE APPLIED TO LIQUIDATE THE CLAIMS OF CERTAIN LABORERS AND MATERIAL MEN WHICH SAID CONTRACTOR HAS FAILED TO PAY AND FOR WHICH THE SURETY ON THE PERFORMANCE BOND IS LIABLE.

THE ACT OF AUGUST 13, 1894, 28 STAT. 278, AS AMENDED BY THE ACT OF FEBRUARY 24, 1905, 33 STAT. 811, UNDER WHICH THE PERFORMANCE BOND ON THE INVOLVED CONTRACT WAS EXECUTED, DOES NOT GIVE THE LABORERS AND MATERIAL MEN ANY RIGHTS AGAINST THE UNITED STATES, THEIR RIGHTS BEING AGAINST THE CONTRACTOR AND THE SURETY. WHERE THE CONTRACTOR COMPLETES ANY GOVERNMENT WORK BUT FAILS TO PAY THE CLAIMS OF LABORERS AND MATERIAL MEN, SAID ACT GIVES SUCH LABORERS AND MATERIAL MEN THE RIGHT TO MAINTAIN AN ACTION IN THE NAME OF THE UNITED STATES FOR THEIR OWN BENEFIT AGAINST THE CONTRACTOR AND THE SURETY ON HIS BOND. THE ACT, HOWEVER, DOES NOT ESTABLISH ANY PRIVITY BETWEEN THE UNITED STATES AND THE LABORERS AND MATERIAL MEN. HENCE, THERE ARE NO RIGHTS OF LABORERS OR MATERIAL MEN TO THE FUNDS HELD BY THE GOVERNMENT UNDER THE INVOLVED CONTRACT.

IT IS A WELL-SETTLED RULE THAT WHEN A CONTRACTOR COMPLETES ANY WORK UNDER AND IN ACCORDANCE WITH ITS CONTRACT IT IS ENTITLED TO BE PAID THEREFOR THE AMOUNT DUE FROM THE GOVERNMENT UNDER THE CONTRACT, REGARDLESS OF THE FACT THAT THERE MAY BE OUTSTANDING UNPAID CLAIMS FOR LABOR AND MATERIAL. THE GOVERNMENT IS UNDER NO OBLIGATION TO PROTECT THE SURETY ON A CONTRACTOR'S PERFORMANCE BOND IN SUCH A CASE. IN THIS CONNECTION SEE 3 COMP. DEC. 708; 17 ID. 80; 23 ID. 523; 24 ID. 185; 25 ID. 434; MANUSCRIPT DECISIONS OF APRIL 25 AND JUNE 4, 1929, IN A-26748; OF DECEMBER 6, 1929, IN A-26011; OF DECEMBER 23, 1929, IN A-28473; AND OF JULY 8, 1930, IN A-32168.

WHERE, AS IN THIS CASE, A CONTRACTOR COMPLETED ONLY A PORTION OF THE CONTRACT WORK AND DEFAULTED AS TO THE REMAINDER, AND THE SURETY ON THE PERFORMANCE BOND DID NOT ELECT TO COMPLETE PERFORMANCE OF THE CONTRACT, BUT SUCH UNFINISHED WORK WAS AWARDED BY THE GOVERNMENT TO ANOTHER CONTRACTOR FOR COMPLETION AT A PRICE LESS THAN THE ORIGINAL CONTRACT PRICE, AND THE GOVERNMENT SUSTAINED NO FINANCIAL LOSS ON ACCOUNT OF SAID DEFAULT, THERE IS NO AUTHORITY TO PAY UNSATISFIED CLAIMS OF LABORERS AND MATERIAL MEN OUT OF THE FUNDS DUE THE ORIGINAL CONTRACTOR FOR THE WORK IT COMPLETED UNDER THE CONTRACT.

THE FACTS AS DISCLOSED BY THE RECORD CLEARLY SHOW THAT THE RECEIVERS OF THE ORIGINAL CONTRACTOR ARE ENTITLED TO THE $4,068.05 BALANCE DUE TO IT UNDER THE SAID CONTRACT.

ACCORDINGLY, THERE IS CERTIFIED AS DUE TO ROBERT H. MCNEILL AND JOSEPH T. SHERIER, AS RECEIVERS OF THE MARYLAND-MONTGOMERY CO. (INC.), THE SUM OF $4,068.05 IN PAYMENT OF THE BALANCE DUE UNDER SAID CONTRACT, AND A CHECK THEREFORE WILL ISSUE IN DUE COURSE.