A-65522, DECEMBER 18, 1935, 15 COMP. GEN. 533

A-65522: Dec 18, 1935

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CONTRACTS - LIQUIDATED DAMAGES - DELAYS IN DELIVERY - CONFLICTING DELIVERY DATES WHERE IN A CONTRACT FOR FURNISHING SUPPLIES TO THE GOVERNMENT CONTAINING A PROVISION FOR LIQUIDATED DAMAGES IN EVENT OF DELAY IN DELIVERY THE BLANK SPACE IN THE PRINTED PORTION OF THE CONTRACT REGARDING TIME OF DELIVERY AS FILLED IN IS IN CONFLICT WITH THE TIME SPECIFIED IN A SEPARATE TYPEWRITTEN PROPOSAL SIGNED BY THE CONTRACTOR AND SPECIFICALLY INCORPORATED IN THE CONTRACT. THE MATTER OF DELAY IN DELIVERY IS DETERMINED BY THE DATE SPECIFIED IN THE SIGNED TYPEWRITTEN PROPOSAL. ADMINISTRATIVE OFFICERS HAVE NO AUTHORITY TO RELIEVE CONTRACTORS FROM LIABILITY BECAUSE OF DELAYS IN DELIVERY UNDER CONTRACTS PROVIDING FOR LIQUIDATED DAMAGES IN CASE OF DELAY.

A-65522, DECEMBER 18, 1935, 15 COMP. GEN. 533

CONTRACTS - LIQUIDATED DAMAGES - DELAYS IN DELIVERY - CONFLICTING DELIVERY DATES WHERE IN A CONTRACT FOR FURNISHING SUPPLIES TO THE GOVERNMENT CONTAINING A PROVISION FOR LIQUIDATED DAMAGES IN EVENT OF DELAY IN DELIVERY THE BLANK SPACE IN THE PRINTED PORTION OF THE CONTRACT REGARDING TIME OF DELIVERY AS FILLED IN IS IN CONFLICT WITH THE TIME SPECIFIED IN A SEPARATE TYPEWRITTEN PROPOSAL SIGNED BY THE CONTRACTOR AND SPECIFICALLY INCORPORATED IN THE CONTRACT, THE MATTER OF DELAY IN DELIVERY IS DETERMINED BY THE DATE SPECIFIED IN THE SIGNED TYPEWRITTEN PROPOSAL. ADMINISTRATIVE OFFICERS HAVE NO AUTHORITY TO RELIEVE CONTRACTORS FROM LIABILITY BECAUSE OF DELAYS IN DELIVERY UNDER CONTRACTS PROVIDING FOR LIQUIDATED DAMAGES IN CASE OF DELAY.

DECISION BY COMPTROLLER GENERAL MCCARL, DECEMBER 18, 1935:

REVIEW HAS BEEN REQUESTED OF THE SETTLEMENT OF THIS OFFICE DISALLOWING CREDIT IN THE ACCOUNTS OF CAPT. J. G. SUCHER, UNITED STATES ARMY, FOR $325 PAID TO PRATT AND WHITNEY CO., SAN FRANCISCO, CALIF., UNDER CONTRACT W 146 ORD-76, THE DISBURSING OFFICER HAVING FAILED TO DEDUCT ANY LIQUIDATED DAMAGES, NOTWITHSTANDING THAT DELIVERY WAS NOT MADE WITHIN THE TIME SPECIFIED IN THE CONTRACT.

IT APPEARS THE PRATT AND WHITNEY CO. WAS OBLIGATED BY CONTRACT TO FURNISH TO THE GOVERNMENT ONE MILLING MACHINE AND ONE GRINDER IN ACCORDANCE WITH PLANS AND SPECIFICATIONS THEREFOR, FOR $4,677, THE CONTRACT PROVIDING THAT SHOULD THE CONTRACTOR FAIL TO COMPLETE THE DELIVERY OF THE ARTICLES PURCHASED WITHIN THE AGREED TIME, LIQUIDATED DAMAGES WOULD BE DEDUCTED FROM THE CONTRACT PRICE AT THE RATE OF $25 PER DAY FOR EACH DAY OF UNEXCUSED DELAY. WITH RESPECT TO THE TIME ALLOWED FOR DELIVERY, IT IS PROVIDED IN THE SPECIFICATIONS INCORPORATED IN THE CONTRACT AS FOLLOWS:

SEE OUR PROPOSAL ATTACHED, FORMING PART HEREOF.

F.O.B. POINT: BENICIA ARSENAL (ARMY POINT), CALIFORNIA.

IMPORTANT: TIME OF DELIVERY WILL BE A FACTOR IN PLACING AWARD HEREUNDER. IT IS REQUIRED THAT ALL MATERIALS LISTED HEREON BE RECEIVED AT BENICIA ARSENAL BY JUNE 1ST, 1934.

THE PROPOSAL REFERRED TO ABOVE AS BEING ATTACHED AND FORMING A PART OF THE CONTRACT IS TYPEWRITTEN, SIGNED BY THE CONTRACTOR, ATTACHED TO THE PRINTED FORM OF CONTRACT, AND PROVIDES:

WE CAN COMPLETE DELIVERY WITHIN TIME SPECIFIED, JUNE 1, 1934, PROVIDING WE RECEIVE CONTRACT OR NOTICE OF AWARD WITHIN 10 DAYS FROM OPENING OF BIDS ON APRIL 3, 1934, FOR WHICH TIME WE HAVE RESERVED MATERIAL IN STOCK AND IN PROCESS OF MANUFACTURE SUBJECT TO YOUR ORDER.

THERE IS ALSO IN THE CONTRACT A PROVISION AS FOLLOWS:

DELIVERY PROPOSED BY BIDDER.--- DELIVERY WILL BEGIN IN--- CALENDAR DAYS FROM RECEIPT OF NOTICE TO PROCEED AND BE COMPLETED WITHIN 45 CALENDAR DAYS AFTER RECEIPT OF SUCH NOTICE, COUNTING SUNDAYS AND HOLIDAYS.

ALL OF WHICH IS ON PRINTED FORM EXCEPT FIGURES 45 WHICH WERE INSERTED IN THE BLANK SPACE BY TYPEWRITER. THE CLAUSE AS TO LIQUIDATED DAMAGES IS AS FOLLOWS:

LIQUIDATED DAMAGES.--- THE TIME SPECIFIED BY THE CONTRACTOR FOR THE COMPLETE PERFORMANCE OF THIS CONTRACT BEING ONE OF THE MATERIAL CONSIDERATIONS INDUCING ITS EXECUTION BY THE GOVERNMENT, AND THE AMOUNT OF DAMAGE WHICH THE GOVERNMENT WILL SUSTAIN IN CASE OF THE FAILURE OF THE CONTRACTOR TO MAKE DELIVERIES OF ARTICLES OR COMPLETE THE WORK CONTRACTED FOR WITHIN THE TIME SPECIFIED BEING DIFFICULT OF ASCERTAINMENT, THE CONTRACTOR WILL PAY TO THE GOVERNMENT, BY WAY OF LIQUIDATED AND ASCERTAINED DAMAGES, AND NOT AS A PENALTY, THE SUM OF TWENTY-FIVE DOLLARS ($25.00) FOR EACH CALENDAR DAY BEYOND THE DATE STATED IN HIS PROPOSAL WHICH HE MAY REQUIRE TO COMPLETE THE CONTRACT, TO COMPENSATE THE GOVERNMENT FOR ITS DELAYED POSSESSION, SUCH SUMS TO BE DEDUCTED FROM ANY PAYMENTS TO BE MADE CONTRACTOR, IF THE CONTRACTOR SHALL BE IN UNEXCUSED DEFAULT IN THE DELIVERY OF ARTICLES OR THE COMPLETION OF THE WORK IN STRICT ACCORDANCE WITH DATE SET FOR COMPLETION.

IT APPEARS THE QUESTION FOR DETERMINATION HERE IS WHAT DATE FOR DELIVERY WAS "STATED IN" THE ,PROPOSAL" OF THE CONTRACTOR. THE CONTRACTOR BY HIS TYPEWRITTEN, SIGNED, ATTACHED PROPOSAL, WHICH WAS SPECIFICALLY INCORPORATED AS A PART OF THE CONTRACT, PROPOSED JUNE 1, 1934, AS THIS DATE. THE CONTRACT WITHOUT THE ATTACHED PROPOSAL CONTAINS CONFLICTING PROVISIONS AND THE ATTACHED PROPOSAL, WHICH BECAME A PART OF THE CONTRACT, WAS TYPEWRITTEN AND ADOPTED THE PROVISION IN THE SPECIFICATIONS FOR DELIVERY FOR JUNE 1, 1934.

THERE IS A RULE OF LONG STANDING THAT WHERE TWO PARAGRAPHS OF A CONTRACT- -- ONE PRINTED AND THE OTHER WRITTEN IN LONG HAND, OR TYPEWRITTEN, AS HERE --- ARE IN APPARENT CONFLICT WITH EACH OTHER, THE MATTER IN LONG HAND WRITING OR IN TYPEWRITING TAKES PRECEDENCE OVER THAT PRINTED, IT BEING CONSIDERED THE REAL INTENT OF THE CONTRACTING PARTIES IS EXPRESSED IN THE HAND OR TYPEWRITTEN PORTION OF THE AGREEMENT. SEE IN THIS CONNECTION, 14 COMP. DEC. 704 AND A-39138, NOVEMBER 11, 1931.

FURTHERMORE, IT WILL BE NOTED THAT THE PROVISION FIXING JUNE 1, 1934, FOR DELIVERY SPECIFIED THE PLACE OF DELIVERY AT BENICIA ARSENAL, CALIF., WHEREAS THE CONFLICTING PROVISION FOR DELIVERY, 45 DAYS AFTER DATE OF ACCEPTANCE, FIXES NO SPECIFIC PLACE FOR DELIVERY.

UNDER THESE CIRCUMSTANCES, IT APPEARS THE CONTRACTOR BECAME LIABLE FOR LIQUIDATED DAMAGES FROM JUNE 1, 1934, TO JUNE 4, 1934, THE DATE OF DELIVERY, THREE DAYS, AT $25 PER DAY, OR IN THE SUM OF $75.

THE CONTRACTING OFFICER CONTENDS THAT THE UNITED STATES HAD NO RIGHT TO DEDUCT OR COLLECT LIQUIDATED DAMAGES AS NO DAMAGES ACCRUED TO THE GOVERNMENT AND THAT THE CONTRACTOR WAS INFORMED IN ADVANCE THAT A DELAY INCIDENT TO THE LONGSHOREMEN'S STRIKE WOULD BE EXCUSED.

NO ADMINISTRATIVE OFFICER HAD THE RIGHT TO RELIEVE THE CONTRACTOR FROM LIABILITY INCURRED UNDER THIS WRITTEN CONTRACT FOR THIS OR ANY OTHER REASON, 5 COMP. GEN. 750; 14 ID. 469.

WHEN THE CONTRACTING PARTIES REASONABLY AGREE AND INCORPORATE IN A CONTRACT PROVISIONS FOR LIQUIDATED DAMAGES, NO SHOWING OF ACTUAL DAMAGES IS REQUIRED OR PERMITTED BEFORE ENFORCING THE LIQUIDATED DAMAGE PROVISION OF THE CONTRACT. FURTHERMORE, WHILE THE CONTRACT CONTAINS PROVISIONS EXCUSING THE CONTRACTOR FROM FAILURE TO PERFORM WITHIN THE TIME SPECIFIED WHEN SUCH FAILURE IS DUE TO STRIKES, THE BENEFIT OF SUCH PROVISION CANNOT BE CLAIMED UNLESS IT CAN BE SHOWN THAT THE STRIKES RELIED UPON DID ACTUALLY DELAY THE PERFORMANCE OF THE CONTRACT. THERE IS NO EVIDENCE IN THE RECORD OF ANY CONNECTION BETWEEN THE LONGSHOREMEN'S STRIKE AND THE DELAY IN COMPLETION OF THIS CONTRACT.

UPON REVIEW $250 IS CERTIFIED FOR CREDIT IN THE DISBURSING OFFICER'S ACCOUNT, THE DISALLOWANCE AS TO $75 BEING SUSTAINED.