A-54226, MAY 5, 1934, 13 COMP. GEN. 325

A-54226: May 5, 1934

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CONTRACTS - LIQUIDATED DAMAGES - FUNCTIONS OF ADMINISTRATIVE OFFICERS RELATIVE TO DELAYS IN PERFORMANCE THE FUNCTIONS OF ADMINISTRATIVE OFFICERS WITH REFERENCE TO LIQUIDATED DAMAGES PROPERLY CHARGEABLE FOR DELAYS UNDER A CONTRACT ARE LIMITED TO A DETERMINATION AND REPORT OF THE FACTS RELATIVE TO THE EXTENT AND CAUSES OF THE DELAYS. THE QUESTION OF LAW AS TO WHETHER UNDER SUCH REPORTED FACTS THE CONTRACTOR SHOULD BE CHARGED WITH THE LIQUIDATED DAMAGES PROVIDED IN THE CONTRACT FOR THE DELAYS IN PERFORMANCE IS FOR DETERMINATION BY THE GENERAL ACCOUNTING OFFICE AND THE COURTS. UNDER THE TERMS OF THE CONTRACT THE LIQUIDATED DAMAGES FOR DELAYS IN DELIVERIES WERE FIXED AT . LIQUIDATED DAMAGES AT THE PER DIEM RATE SPECIFIED IN THE CONTRACT WOULD APPEAR TO HAVE ACCRUED TO THE GOVERNMENT FOR EACH DAY OF DELAY.

A-54226, MAY 5, 1934, 13 COMP. GEN. 325

CONTRACTS - LIQUIDATED DAMAGES - FUNCTIONS OF ADMINISTRATIVE OFFICERS RELATIVE TO DELAYS IN PERFORMANCE THE FUNCTIONS OF ADMINISTRATIVE OFFICERS WITH REFERENCE TO LIQUIDATED DAMAGES PROPERLY CHARGEABLE FOR DELAYS UNDER A CONTRACT ARE LIMITED TO A DETERMINATION AND REPORT OF THE FACTS RELATIVE TO THE EXTENT AND CAUSES OF THE DELAYS, AND THE QUESTION OF LAW AS TO WHETHER UNDER SUCH REPORTED FACTS THE CONTRACTOR SHOULD BE CHARGED WITH THE LIQUIDATED DAMAGES PROVIDED IN THE CONTRACT FOR THE DELAYS IN PERFORMANCE IS FOR DETERMINATION BY THE GENERAL ACCOUNTING OFFICE AND THE COURTS.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF THE TREASURY, MAY 5, 1934:

IN THE PREAUDIT OF A VOUCHER TRANSMITTED TO THIS OFFICE ON SCHEDULE 439, APPROVED BY C. FORSBURG, CHIEF, ACCOUNTS SECTION, UNITED STATES COAST GUARD, TREASURY DEPARTMENT, IN FAVOR OF THE INTERIOR STEEL EQUIPMENT CO., CLEVELAND, OHIO, FOR THE PAYMENT OF $65 FOR FURNISHING THE UNITED STATES COAST GUARD, WASHINGTON, D.C., ON FEBRUARY 12, 1934, WITH 250 PLAN GUIDES UNDER COAST GUARD CONTRACT THEREFOR DATED NOVEMBER 18, 1933, IT HAS COME TO MY ATTENTION THAT THE ADMINISTRATIVE OFFICER HAS APPROVED THE CLAIM FOR $61.03, THAT BEING THE FULL CONTRACT PRICE FOR THE SUPPLIES DELIVERED LESS A DISCOUNT OF 2 PERCENT FOR PROMPT PAYMENT, AMOUNTING TO $1.30, AND LESS $2.67 LIQUIDATED DAMAGES FOR 41 DAYS OF DELAY IN COMPLETING DELIVERIES OF THE SAID SUPPLIES.

UNDER THE TERMS OF THE CONTRACT THE LIQUIDATED DAMAGES FOR DELAYS IN DELIVERIES WERE FIXED AT ,5 PERCENT OF THE AMOUNT OF THE BID" FOR "EACH CALENDAR DAY OF DELAY," AND THERE APPEARS NO PROVISION IN THE CONTRACT FOR EXCUSING DELAYS IN DELIVERY OF THE SUPPLIES FOR ANY CAUSE. THEREFORE, LIQUIDATED DAMAGES AT THE PER DIEM RATE SPECIFIED IN THE CONTRACT WOULD APPEAR TO HAVE ACCRUED TO THE GOVERNMENT FOR EACH DAY OF DELAY. SEE 11 COMP. GEN. 386.

ATTACHED TO THE SUBMITTED VOUCHER IS A STATEMENT SIGNED BY T. A. SHANLEY, CHIEF, OFFICE OF SUPPLIES AND ACCOUNTS, HEADQUARTERS, UNITED STATES COAST GUARD, TO THE EFFECT THAT THE PAYMENT OF 5 PERCENT PER DAY OF THE AMOUNT OF THE BID AS PROVIDED IN THE CONTRACT IS CONSIDERED EXCESSIVE, AND HE RECOMMENDS THAT SUCH PER DIEM DAMAGES BE REDUCED TO THE PER DIEM RATE OF ONE-TENTH OF 1 PERCENT OF THE AMOUNT OF THE BID, AS THERE WAS NO LOSS TO THE GOVERNMENT, AND INASMUCH AS THE FILE CASES FOR WHICH THE PLAN GUIDES WERE REQUIRED HAD NOT YET BEEN DELIVERED. IT APPEARS THAT IN ACCORDANCE WITH SUCH RECOMMENDATION THE ADMINISTRATIVE OFFICER HAS ATTEMPTED TO REDUCE THE LIQUIDATED DAMAGE PER DIEM RATE OF THE INVOLVED CONTRACT TO ONE -TENTH OF 1 PERCENT PER DAY AND HAS PROPOSED BY SAID EXECUTED VOUCHER TO RELIEVE THE CONTRACTOR FROM THE MAJOR PORTION OF THE ACCRUED LIQUIDATED DAMAGES. INASMUCH AS THE FUNCTIONS OF THE ADMINISTRATIVE OFFICERS, WITH REFERENCE TO THE LIQUIDATED DAMAGES TO BE CHARGED AGAINST A CONTRACTOR UNDER THE CONTRACT HERE INVOLVED, ARE LIMITED TO A DETERMINATION AND REPORT OF THE FACTS WITH REFERENCE TO THE EXTENT AND CAUSES OF THE DELAYS, WHILE THE QUESTION OF LAW AS TO WHETHER UNDER SUCH REPORTED FACTS THE CONTRACTOR SHOULD BE CHARGED WITH THE LIQUIDATED DAMAGES PROVIDED IN THE CONTRACT FOR THE DELAYS IN PERFORMANCE IS FOR DETERMINATION BY THIS OFFICE AND THE COURTS, THE ADMINISTRATIVE OFFICER'S ATTEMPTED REDUCTION OF THE CONTRACT PER DIEM RATE OF LIQUIDATED DAMAGES IN INSTANT CONTRACT WAS NOT PROPER OR EFFECTIVE.

THIS MATTER IS BROUGHT TO YOUR ATTENTION FOR SUCH PROCEDURE AS MAY BE DEEMED NECESSARY TO AVOID REPETITION OF THE ERRONEOUS ADMINISTRATIVE ACTION AS TO LIQUIDATED DAMAGES IN CASES WHERE THERE ARE DELAYS IN PERFORMANCE OF THE CONTRACTS.

THE CONTRACTING OFFICER'S FINDINGS OF FACT AS TO THE EXTENT OF THE DELAY IN PERFORMANCE OF THE CONTRACT OF NOVEMBER 18, 1933, AND AS TO THE CAUSES THEREOF SHOULD BE TRANSMITTED TO THIS OFFICE FOR CONSIDERATION AND DETERMINATION WHETHER THE CONTRACTOR IS CHARGEABLE UNDER THE LAW APPLICABLE TO THE FACTS WITH LIQUIDATED DAMAGES ON ACCOUNT OF SUCH DELAY OR ANY PART THEREOF. THE PRESENT RECORD INDICATES THAT THERE WERE 41 DAYS OF DELAY IN COMPLETING DELIVERIES UNDER THE CONTRACT AND THAT THE LIQUIDATED DAMAGES CHARGEABLE AGAINST THE CONTRACTOR EXCEED THE CONTRACT PRICE FOR THE SUPPLIES DELIVERED.