A-66240, OCTOBER 21, 1935, 15 COMP. GEN. 313

A-66240: Oct 21, 1935

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IS NOT A DELAY "DUE TO UNFORESEEABLE CAUSES BEYOND THE CONTROL AND WITHOUT THE FAULT OR NEGLIGENCE OF THE CONTRACTOR. LIQUIDATED DAMAGES ARE CHARGEABLE TO THE CONTRACTOR FOR SUCH DELAY IN COMPLETION. THE CONTRACT ALSO PROVIDED: THAT THE CONTRACTOR SHALL NOT BE CHARGED WITH LIQUIDATED DAMAGES * * * WHEN THE DELAY IN DELIVERY IS DUE TO UNFORESEEABLE CAUSES BEYOND THE CONTROL AND WITHOUT THE FAULT OR NEGLIGENCE OF THE CONTRACTOR. 000 UNDERSHIRTS WERE DUE FOR DELIVERY IN QUANTITY UNITS AS FOLLOWS: 45. IT APPEARS THAT THE CONTRACT WAS COMPLETED BY THE DELIVERY AND ACCEPTANCE OF 362. CONTENDING THAT ALL OF THE DELAYS WERE DUE TO CAUSES EXCUSABLE UNDER THE TERMS OF THE CONTRACT. ARE TO THE EFFECT THAT THE DELAYS IN THE DELIVERIES FOR WHICH LIQUIDATED DAMAGES HAVE BEEN CHARGED AGAINST CONTRACTOR.

A-66240, OCTOBER 21, 1935, 15 COMP. GEN. 313

CONTRACTS - LIQUIDATED DAMAGES - UNEXPECTED DELAYS IN OBTAINING NECESSARY MATERIALS THE UNEXPECTED DELAY OCCASIONED BY THE INABILITY OF A CONTRACTOR TO OBTAIN MATERIALS FOR PERFORMANCE OF THE CONTRACT WITHIN THE TIME FIXED FOR COMPLETION, DUE TO STRIKES IN THE PLANTS OF THE MANUFACTURERS FURNISHING THE MATERIALS, IS NOT A DELAY "DUE TO UNFORESEEABLE CAUSES BEYOND THE CONTROL AND WITHOUT THE FAULT OR NEGLIGENCE OF THE CONTRACTOR, INCLUDING * * * STRIKES," AS PROVIDED BY THE CONTRACT, EXCUSING NONPERFORMANCE, AND LIQUIDATED DAMAGES ARE CHARGEABLE TO THE CONTRACTOR FOR SUCH DELAY IN COMPLETION.

DECISION BY COMPTROLLER GENERAL MCCARL, OCTOBER 21, 1935:

THE ATLAS UNDERWEAR CO. (A CORPORATION) APPLIED AUGUST 22, 1935, FOR REVIEW OF THAT PART OF SETTLEMENT NO. 0370109, DATED AUGUST 14, 1935, WHICH DISALLOWED $5,665.77 OF ITS CLAIM FOR REMISSION OF THE LIQUIDATED DAMAGES CHARGED AGAINST IT ON ACCOUNT OF CERTAIN DELAYS IN COMPLETING PERFORMANCE OF WAR DEPARTMENT CONTRACT NO. W-669-ECF-127, DATED AUGUST 24, 1934, FOR 360,000 MIXED COTTON-WOOL UNDERSHIRTS.

UNDER THE PROVISIONS OF THE CONTRACT THE ATLAS UNDERWEAR CO. AGREED, FOR AND IN CONSIDERATION OF THE PAYMENT OF ITS BID PRICE OF 85 CENTS PER GARMENT, TO FURNISH AND DELIVER TO THE WAR DEPARTMENT QUARTERMASTERDEPOT, 1819 WEST PERSHING ROAD, CHICAGO, ILL., F.O.B. SAID DELIVERY POINT, 360,000 MIXED COTTON-WOOL UNDERSHIRTS, OF THE KINDS, QUALITY, AND SIZES STIPULATED, MANUFACTURED IN ACCORDANCE WITH THE SPECIFICATIONS THEREFOR, AS FOLLOWS: 12 1/2 PERCENT WITHIN 27 DAYS AFTER DATE OF THE CONTRACT, AND NOT LESS THAN 17 1/2 PERCENT EACH 7 DAYS THEREAFTER IN ORDER THAT THE CONTRACT BE COMPLETED BY OCTOBER 25, 1934. IN THE EVENT OF ANY DELAY IN THE DELIVERIES, THE CONTRACT PROVIDED THAT THE CONTRACTOR SHOULD PAY TO THE GOVERNMENT LIQUIDATED DAMAGES FOR EACH UNIT UNDELIVERED A SUM EQUAL TO ONE-FIFTH OF ONE PERCENTUM OF THE PRICE OF EACH UNIT FOR EACH DAY'S DELAY. THE CONTRACT ALSO PROVIDED:

THAT THE CONTRACTOR SHALL NOT BE CHARGED WITH LIQUIDATED DAMAGES * * * WHEN THE DELAY IN DELIVERY IS DUE TO UNFORESEEABLE CAUSES BEYOND THE CONTROL AND WITHOUT THE FAULT OR NEGLIGENCE OF THE CONTRACTOR, INCLUDING * * * STRIKES * * * BUT NOT INCLUDING DELAYS CAUSED BY SUBCONTRACTORS.

UNDER THE CONTRACT TERMS, THEREFORE, THE 360,000 UNDERSHIRTS WERE DUE FOR DELIVERY IN QUANTITY UNITS AS FOLLOWS: 45,000 ON OR BEFORE SEPTEMBER 27, 1934; 63,000 ON OR BEFORE OCTOBER 4, 1934; 63,000 ON OR BEFORE OCTOBER 11, 1934; 63,000 ON OR BEFORE OCTOBER 18, 1934; AND 63,000 ON OR BEFORE OCTOBER 25, 1934. IT APPEARS THAT THE CONTRACT WAS COMPLETED BY THE DELIVERY AND ACCEPTANCE OF 362,231 UNDERSHIRTS, SUCH DELIVERIES BEING MADE DURING THE PERIOD BEGINNING SEPTEMBER 20, 1934, AND ENDING DECEMBER 10, 1934.

CONTRACTOR HAS NOT QUESTIONED THE NUMBER OF DAYS OF THE DELAYS IN DELIVERIES BEYOND THE SAID SCHEDULE DATES UNDER THE CONTRACT, AS SHOWN BY THE ADMINISTRATIVE REPORTS. HOWEVER, THE CONTRACTOR DENIES LIABILITY FOR LIQUIDATED DAMAGES ON ACCOUNT OF THE DELAYS, CONTENDING THAT ALL OF THE DELAYS WERE DUE TO CAUSES EXCUSABLE UNDER THE TERMS OF THE CONTRACT.

THE FINDINGS OF FACT OF THE CONTRACTING OFFICER, WHICH THE CONTRACT MAKES CONCLUSIVE ON THE CONTRACTOR, ARE TO THE EFFECT THAT THE DELAYS IN THE DELIVERIES FOR WHICH LIQUIDATED DAMAGES HAVE BEEN CHARGED AGAINST CONTRACTOR, AMOUNTING TO $5,665.77, WERE CAUSED BY DELAY IN OBTAINING YARN AND THREAD, WHICH DELAY IS ALLEGED TO HAVE BEEN DUE TO LABOR STRIKES (1) AT THE MILLS OF THE LAWRENCE MANUFACTURING CO., AT LOWELL, MASS., THE MANUFACTURER FROM WHOM THE CONTRACTOR PURCHASED YARN FOR USE IN THE MANUFACTURE OF THE UNDERSHIRTS, AND (2) AT THE MILLS OF THE CHICKASAW THREAD CO., AT SHELBY, N.C., THE MANUFACTURER FROM WHOM THE CONTRACTOR PURCHASED THREAD FOR USE IN THE MANUFACTURE OF THE UNDERSHIRTS. IT IS THE CONTRACTOR'S CONTENTION THAT IT SHOULD BE RELIEVED OF THE $5,665.77 LIQUIDATED DAMAGES, INASMUCH AS THE DELAYS IN COMPLETING PERFORMANCE OF THE CONTRACT WERE CAUSED BY THE FAILURE OF THE TWO MILLS FROM WHICH IT PURCHASED RAW MATERIALS--- YARN AND THREAD--- PROMPTLY TO DELIVER REQUIRED MATERIALS IN ACCORDANCE WITH THEIR AGREEMENTS SO TO DO, ON ACCOUNT OF LABOR STRIKES WHICH CLOSED THE MILLS SEVERAL DAYS IN SEPTEMBER 1934, THUS REDUCING PRODUCTION AND SUSPENDING SHIPMENTS OF SUCH RAW MATERIALS TO THE CONTRACTOR.

RELIEF FROM PAYMENT OF LIQUIDATED DAMAGES IS AUTHORIZED ONLY FOR THE CAUSES OF DELAY SPECIFIED IN THE CONTRACT AS EXCUSABLE, AND DELAYS OCCASIONED BY A LABOR STRIKE IN THE MILLS FROM WHICH CONTRACTOR OBTAINED THE YARN AND THREAD FOR USE IN THE MANUFACTURE OF THE UNDERSHIRTS FURNISHED THE GOVERNMENT ARE NOT SO SPECIFIED.

IT WAS THE CONTRACTOR'S RESPONSIBILITY TO PROVIDE ITSELF WITH THE MATERIALS NECESSARY FOR THE MANUFACTURE OF THE UNDERWEAR TO BE FURNISHED THE GOVERNMENT IN ACCORDANCE WITH THE PROVISIONS OF THE CONTRACT AND WITHIN THE PERFORMANCE PERIODS THEREIN SPECIFIED, AND THE MERE FACT THAT THE PARTICULAR MILLS FROM WHICH THE CONTRACTOR HAD INTENDED TO PURCHASE THE YARN AND THREAD MAY HAVE ENCOUNTERED STRIKES OR OTHER DIFFICULTIES DOES NOT EXCUSE THE CONTRACTOR. WHEN A CONTRACTOR ENTERS INTO A CONTRACT WITHOUT HAVING ON HAND MATERIAL NECESSARY TO THE PERFORMANCE OF SUCH CONTRACT, IT CANNOT BE SAID THAT UNEXPECTED DELAY IN OBTAINING SUCH MATERIAL IS DELAY DUE TO AN ,UNFORESEEABLE CAUSE" EXCUSING PERFORMANCE BY THE CONTRACTOR.

WITH REFERENCE TO CONTRACTOR'S CONTENTION THAT THE TWO MANUFACTURERS AT WHOSE PLANTS THE LABOR STRIKES OCCURRED ARE NOT SUBCONTRACTORS, INASMUCH AS NO PART OF THE GOVERNMENT CONTRACT WORK WAS SUBLET TO EITHER OF THEM, THAT POINT IS NOT MATERIAL BECAUSE REGARDLESS OF WHETHER SUCH MANUFACTURERS ARE OR ARE NOT TO BE CONSIDERED AS SUBCONTRACTORS THE DELAY WAS DUE TO THE CONTRACTOR'S FAILURE TO OBTAIN THE NECESSARY MATERIAL IN TIME, AND THAT CANNOT BE REGARDED AS AN UNFORESEEABLE CAUSE WITHIN THE MEANING OF THE CONTRACT. SEE A-26315, DATED MARCH 14, 1929; A-36619, DATED JUNE 17, 1931; A-41231, DATED MARCH 19, 1932; AND A-63634, DATED SEPTEMBER 19, 1935.

ACCORDINGLY, UPON REVIEW, THE SETTLEMENT OF AUGUST 14, 1935, DISALLOWING CONTRACTOR'S CLAIM FOR REMISSION OF THE $5,665.77 LIQUIDATED DAMAGES CHARGED AGAINST IT, MUST BE AND IS SUSTAINED.