A-80669, OCTOBER 13, 1936, 16 COMP. GEN. 374

A-80669: Oct 13, 1936

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CONTRACTS - LIQUIDATED DAMAGES AND EXTENSIONS OF TIME - CONTRACTING OFFICERS' AUTHORITY THE AUTHORITY OF CONTRACTING OFFICERS TO GRANT AN EXTENSION OF TIME FOR THE COMPLETION OF A CONTRACT IS DERIVED FROM AND LIMITED BY THE TERMS OF THE CONTRACT. ARE LIMITED TO A DETERMINATION AND REPORT OF THE FACTS RELATING TO THE EXTENT AND CAUSES OF DELAYS. PROVISION IS MADE FOR LIQUIDATED DAMAGES FOR DELAYS IN COMPLETION EXCEPT FOR CAUSES AS SET FORTH IN THE CONTRACT. IF AN EXTENSION OF THE TIME FOR SUCH GIVING OF NOTICE IS FOUND JUSTIFIED AND IS GIVEN IN ACCORDANCE WITH THE CONTRACT TERMS. THE QUESTION WHETHER THE DELAY DID OR DID NOT CAUSE ANY ACTUAL DAMAGE IS NOT FOR CONSIDERATION IN CONNECTION WITH SUCH EXTENSIONS.

A-80669, OCTOBER 13, 1936, 16 COMP. GEN. 374

CONTRACTS - LIQUIDATED DAMAGES AND EXTENSIONS OF TIME - CONTRACTING OFFICERS' AUTHORITY THE AUTHORITY OF CONTRACTING OFFICERS TO GRANT AN EXTENSION OF TIME FOR THE COMPLETION OF A CONTRACT IS DERIVED FROM AND LIMITED BY THE TERMS OF THE CONTRACT, AND THEIR FUNCTIONS, AS TO LIQUIDATED DAMAGES, ARE LIMITED TO A DETERMINATION AND REPORT OF THE FACTS RELATING TO THE EXTENT AND CAUSES OF DELAYS, THE LEGAL DETERMINATION AS TO WHETHER, UNDER THE REPORTED FACTS, THE CONTRACTOR SHOULD BE CHARGED WITH LIQUIDATED DAMAGES FOR THE DELAYS IN PERFORMANCE BEING FOR DETERMINATION BY THE GENERAL ACCOUNTING OFFICE AND THE COURTS. WHERE, UNDER CONTRACTS FOR THE CONSTRUCTION OF BUILDINGS, PROVISION IS MADE FOR LIQUIDATED DAMAGES FOR DELAYS IN COMPLETION EXCEPT FOR CAUSES AS SET FORTH IN THE CONTRACT, UNLESS THE CONTRACTOR, WITHIN A STIPULATED TIME, WHICH MAY BE EXTENDED BY THE CONTRACTING OFFICER AS PROVIDED IN THE CONTRACT, NOTIFIES IN WRITING OF THE DELAYS, THE TIME FOR COMPLETION MAY BE EXTENDED IF FOUND JUSTIFIED, NOTWITHSTANDING CONTRACTOR FAILED TO MAKE NOTIFICATION WITHIN THE STIPULATED PERIOD, IF AN EXTENSION OF THE TIME FOR SUCH GIVING OF NOTICE IS FOUND JUSTIFIED AND IS GIVEN IN ACCORDANCE WITH THE CONTRACT TERMS, BUT THE QUESTION WHETHER THE DELAY DID OR DID NOT CAUSE ANY ACTUAL DAMAGE IS NOT FOR CONSIDERATION IN CONNECTION WITH SUCH EXTENSIONS.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE CHAIRMAN, THE UNITED STATES TEXAS CENTENNIAL COMMISSION, OCTOBER 13, 1936:

THERE HAS BEEN RECEIVED A LETTER DATED SEPTEMBER 14, 1936, FROM THE EXECUTIVE SECRETARY OF YOUR COMMISSION, AS FOLLOWS:

UNDER DATE OF FEBRUARY 25, 1936, A CONTRACT WAS ENTERED INTO BY AND BETWEEN THE UNITED STATES OF AMERICA AND THE TEXAS CENTENNIAL CENTRAL EXPOSITION FOR THE CONSTRUCTION OF A BUILDING TO HOUSE THE EXHIBITS OF THE GOVERNMENT OF THE UNITED STATES AT THE TEXAS CENTENNIAL CENTRAL EXPOSITION IN DALLAS, TEXAS, ACCORDING TO APPROVED PLANS AND SPECIFICATIONS, THIS CONTRACT BEING DESIGNATED TE-8, A DUPLICATE ORIGINAL OF WHICH IS ON FILE IN YOUR OFFICE.

UNDER DATE OF MARCH 5, 1936, A SIMILAR CONTRACT WAS ENTERED INTO BY AND BETWEEN THE UNITED STATES OF AMERICA AND THE TEXAS CENTENNIAL CENTRAL EXPOSITION FOR THE CONSTRUCTION OF A BUILDING TO HOUSE A GOVERNMENT EXHIBIT OF THE PROGRESS AND DEVELOPMENT OF THE NEGRO AT THE TEXAS CENTENNIAL CENTRAL EXPOSITION, DALLAS, TEXAS, THIS CONTRACT BEING DESIGNATED TE-9 AND A DUPLICATE ORIGINAL WAS PLACED ON FILE IN YOUR OFFICE.

THE COMPLETION DATE FOR EACH OF THE ABOVE-MENTIONED BUILDINGS WAS DESIGNATED MAY 15, 1936. THE CONTRACTS FURTHER PROVIDE THAT LIQUIDATED DAMAGES MAY BE ASSESSED IN THE SUM OF $100.00 FOR EACH DAY THEREAFTER THAT THE WORK OF THE GENERAL CONTRACTOR REMAINS INCOMPLETE AND UNACCEPTABLE TO THE ARCHITECT.

ATTACHED ARE TWO LETTERS FROM THE TEXAS CENTENNIAL CENTRAL EXPOSITION UNDER DATE OF JULY 17, 1936, RESPECTING ACCEPTANCE OF THE COMPLETED BUILDINGS BY THE GOVERNMENT ON JULY 15, 1936, FOR THE FEDERAL EXHIBITS BUILDING AND JUNE 17, 1936, FOR THE FEDERAL NEGRO EXHIBITS BUILDING. THE LETTERS ALSO REQUEST THAT AN EXTENSION OF TIME BE GRANTED FROM THE COMPLETION DATE AS SPECIFIED IN THE CONTRACTS (MAY 15, 1936) TO ACTUAL COMPLETION DATES AS STATED ABOVE.

IN THE CASE OF THE FEDERAL BUILDING, THE GOVERNMENT SUFFERED NO LOSS AS A RESULT OF THIS DELAY AND IT IS THE EARNEST DESIRE OF THE CONTRACTING OFFICER AND MYSELF TO GRANT AN EXTENSION, IF IT MAY PROPERLY BE DONE.

IN THE CASE OF THE NEGRO BUILDING, THE DELAY DID NOT AFFECT IN ANY WAY THE OPENING OF THE BUILDING ON SCHEDULE TIME, WHICH WAS JUNE 19, AND THE CONTRACTING OFFICER AND I ARE BOTH WILLING ALSO TO ACCEDE TO AN EXTENSION IN THIS INSTANCE.

A DECISION IS, THEREFORE, REQUESTED IF, UNDER THE TERMS OF THE CONTRACTS, THE CONTRACTING OFFICER MAY LEGALLY GRANT THESE EXTENSIONS.

ALL EXTRA ORDERS UNDER THE CONTRACTS FOR THE FEDERAL BUILDINGS ARE NOW BEING PLACED IN ORDER FOR FORWARDING TO THE GENERAL ACCOUNTING OFFICE.

THE LETTERS MENTIONED IN THE ABOVE-QUOTED LETTER ARE SIGNED BY GEORGE L. DAHL, AS CENTENNIAL ARCHITECT AND TECHNICAL DIRECTOR, WHO, PRESUMABLY IS AN OFFICIAL OF THE TEXAS CENTENNIAL CENTRAL EXPOSITION.

THE LETTER RELATING TO CONTRACT TE-8 IS AS FOLLOWS:

IN ACCORDANCE WITH THE TERMS OF THE CONTRACT THE FEDERAL EXHIBIT BUILDING WAS DUE TO BE COMPLETED ON MAY 15, 1936. THE FACT OF THE MATTER, THE FEDERAL EXHIBIT BUILDING WAS IN SUCH SHAPE THAT THE UNITED STATES GOVERNMENT COULD OCCUPY THE BUILDING WITHOUT ANY INCONVENIENCE AND IT WAS OCCUPIED ON THAT DATE, BUT DUE TO CERTAIN EXTRA CHANGES, ETC., WE RECOMMEND THAT AN EXTENSION OF TIME FROM MAY 15, 1936, UNTIL JULY 15, 1936, BE GRANTED TO THE TEXAS CENTENNIAL CENTRAL EXPOSITION BECAUSE OF THE FOLLOWING CONDITIONS:

A. CHANGES IN KITCHEN: FINAL INSTRUCTIONS RECEIVED ON JUNE 20 AND FINAL CONSTRUCTION COMPLETED JULY 15.

B. EXTRA OCCASIONED BY THE ACHESON MAP MURALS.

C. CHANGE IN RECEPTION-ROOM DECORATIONS AND FLOOR COVERINGS.

D. EXTRA FOR FISH POOL IN DEPARTMENT OF COMMERCE SPACE.

E. FOUNDATION FOR TREASURY DEPARTMENT.

F. THRESHOLDS FOR DOORS NOS. 151, 152, 178, 179, AND 180.

G. EXTRA FOR WIRING TO EXHIBIT PARTITIONS.

H. EXTRA FOR SCREENS FOR WINDOWS OF OFFICES AND TOILETS.

I. CHANGES IN LOBBY INFORMATION BOOTH.

J. MECHANICAL CHANGES FOR EXHIBIT SECTION INCLUDING GAS PIPING, FIRE-HOSE CABINETS, AND SINKS.

K. EXTRA DRINKING FOUNTAINS.

L. EXTRA INVOLVING PLATFORM AND WALK FOR DOORS 179 AND 180.

M. EXTRA INVOLVING PURCHASE OF FLOOR LAMPS FOR OFFICES.

N. EXTRA FOR CLOSING UP THE REAR OF THE EAGLE AT TOP OF TOWER.

THE BUILDING HAS BEEN COMPLETED IN ACCORDANCE WITH PLANS AND SPECIFICATIONS AND AS PER CONTRACT, AND AS ARCHITECT FOR THE TEXAS CENTENNIAL CENTRAL EXPOSITION AND THE UNITED STATES GOVERNMENT, I RECOMMEND THAT YOU GRANT AN EXTENSION OF TIME AS NOTED ABOVE, AND ALSO GIVE FORMAL APPROVAL AND ACCEPTANCE OF THE BUILDING.

THE LETTER RELATING TO CONTRACT TF-9 IS AS FOLLOWS:

THE TEXAS CENTENNIAL CENTRAL EXPOSITION, CONTRACTING PARTY FOR THE UNITED STATES NEGRO EXHIBIT BUILDING, REQUESTS FINAL APPROVAL OF THE CENTENNIAL COMMISSION ON THE ABOVE MENTIONED BUILDING AS OF THE DATE OF JUNE 17, 1936.

THE CONTRACT DOCUMENTS CALL FOR COMPLETION ON MAY 15, 1936, BUT BECAUSE OF THE FOLLOWING CONDITIONS THE TEXAS CENTENNIAL CENTRAL EXPOSITION REQUESTS AN EXTENSION OF TIME FROM MAY 15, 1936, TO JUNE 17, 1936:

A. MISUNDERSTANDING IN FIRE-PROTECTION LINES.

B. MISUNDERSTANDING OF COLOR SCHEME AND INTERIOR PAINTING OF THE NEGRO EXHIBIT BUILDING.

C. ADDITIONAL WIRING REQUIRED FOR THE NEGRO EXHIBIT SECTION, AS STATED IN LETTER DATED JUNE 17, 1936, AND SIGNED BY WM. H. HARRIS, BUILDING SUPERINTENDENT.

THE BUILDING WAS COMPLETED AND READY FOR OCCUPANCY ON MAY 15, 1936. THE MISUNDERSTANDINGS AS MENTIONED ABOVE, BECAUSE OF THE ITEMS AS LISTED, DID NOT IN ANY WAY AFFECT THE OCCUPANCY OF THIS BUILDING, AND AS ARCHITECT FOR THE EXPOSITION AND THE FEDERAL GOVERNMENT, I RECOMMEND THAT YOU GIVE FORMAL ACCEPTANCE OF THIS BUILDING AS OF THE DATE OF JUNE 17, 1936, AND THAT THE EXTENSION OF TIME REQUESTED BE GRANTED, WITHOUT ANY LIQUIDATED DAMAGES.

ARTICLE 9 OF EACH CONTRACT CLEARLY PROVIDES THAT THE CONTRACTOR SHALL NOT BE CHARGED WITH LIQUIDATED DAMAGES FOR DELAYS RESULTING FROM CERTAIN "UNFORESEEABLE CAUSES BEYOND THE CONTROL AND WITHOUT THE FAULT OR NEGLIGENCE OF THE CONTRACTOR" PROVIDED, THE CONTRACTOR, WITHIN A STIPULATED PERIOD, NOTIFIES THE CONTRACTING OFFICER IN WRITING OF THE CAUSES OF THE DELAYS. UPON THE RECEIPT OF SUCH A NOTICE IT BECOMES THE DUTY OF THE CONTRACTING OFFICER, THE COMMISSIONER GENERAL FOR THE TEXAS CENTENNIAL EXPOSITION AND CELEBRATIONS, TO ASCERTAIN THE FACTS AND GRANT, OR REFUSE TO GRANT, AN EXTENSION OF TIME FOR COMPLETING THE CONTRACT ACCORDING TO WHETHER IN HIS JUDGMENT THE CAUSES OF THE DELAYS JUSTIFY AN EXTENSION--- QUESTION AS TO WHETHER THE DELAY DID OR DID NOT CAUSE ANY ACTUAL DAMAGE NOT BEING FOR CONSIDERATION.

IT IS TO BE NOTED THAT THE CONTRACT GRANTS TO THE CONTRACTING OFFICER THE EXCLUSIVE AUTHORITY TO ASCERTAIN THE FACTS AND TO GRANT SUCH EXTENSIONS; THAT THE ACTION OF THE CONTRACTING OFFICER IS FINAL AND CONCLUSIVE, SUBJECT ONLY TO APPEAL, WITHIN 30 DAYS, BY THE CONTRACTOR TO THE HEAD OF THE DEPARTMENT CONCERNED, THE UNITED STATES TEXAS CENTENNIAL COMMISSION; AND THAT THE STATED PERIOD OF 10 DAYS WITHIN WHICH THE CONTRACTOR MAY GIVE NOTICE OF THE DELAYS AND THE CAUSES THEREOF MAY BE EXTENDED BY THE CONTRACTING OFFICER WITH THE APPROVAL OF THE HEAD OF THE DEPARTMENT; AND THAT SUCH EXTENSION MAY BE GRANTED AT ANY TIME PRIOR TO THE DATE OF FINAL SETTLEMENT OF THE CONTRACT.

APPARENTLY NO NOTICE WAS GIVEN BY THE CONTRACTOR WITHIN 10 DAYS FROM THE BEGINNING OF ANY DELAY, NOR DOES IT APPEAR THAT ANY FINDING OR EXTENSION HAS BEEN MADE BY THE CONTRACTING OFFICER. ACCORDINGLY, UNLESS THE STIPULATED PERIOD FOR GIVING SUCH NOTICE BE EXTENDED BY THE CONTRACTING OFFICER WITH THE APPROVAL OF THE HEAD OF THE DEPARTMENT, AND UNLESS THE CONTRACTING OFFICER ASCERTAINS THE FACTS TO BE SUCH AS IN HIS JUDGMENT JUSTIFY, UNDER THE TERMS OF THE CONTRACT, THE EXTENSION OF THE TIME FOR COMPLETING THE CONTRACT OR CONTRACTS, THEN NO EXTENSION CAN BE MADE BY THE ADMINISTRATIVE OFFICE AND THERE CAN BE NO REMISSION OF THE LIQUIDATED DAMAGES.

THE AUTHORITY OF THE CONTRACTING OFFICER TO GRANT AN EXTENSION OF THE TIME FOR COMPLETING A CONTRACT IS DERIVED FROM AND LIMITED BY THE TERMS OF THE CONTRACT. WITH THE EXCEPTION OF THE ACTS THAT MAY BE PERFORMED BY ADMINISTRATIVE OFFICERS WITHIN THE LIMITS OF SUCH AUTHORITY, THEIR FUNCTIONS, IN CONNECTION WITH EXTENSIONS OF TIME AND LIQUIDATED DAMAGES, ARE LIMITED TO A DETERMINATION AND REPORT OF THE FACTS RELATING 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 LIQUIDATED DAMAGES PROVIDED IN THE CONTRACT FOR THE DELAYS IN PERFORMANCE, IS FOR DETERMINATION BY THE GENERAL ACCOUNTING OFFICE AND THE COURT.

AS NO FINDINGS OF FACTS HAVE BEEN PRESENTED, THE QUESTION INVOLVED MAY NOT BE ANSWERED SPECIFICALLY. YOU MAY BE ADVISED, HOWEVER, THAT THE STIPULATED TIME FOR THE COMPLETION OF THE CONTRACT WORK CANNOT BE EXTENDED IN CONNECTION WITH EITHER CONTRACT UNLESS THE FACTS AS DEFINITELY FOUND AND REPORTED BY THE CONTRACTING OFFICER ARE SUCH AS TO JUSTIFY HIM IN GRANTING, BY VIRTUE OF THE AUTHORITY VESTED IN HIM BY THE TERMS OF THE CONTRACT, AN EXTENSION OF THE TIME FOR THE COMPLETION OF THE CONTRACT.

IN VIEW OF ALL THE FACTS AND CIRCUMSTANCES APPEARING, IT IS SUGGESTED THAT THE CLAIM FOR FINAL PAYMENT BE TRANSMITTED TO THIS OFFICE FOR SETTLEMENT, ACCOMPANIED BY AN ADMINISTRATIVE REPORT SHOWING ALL ESSENTIAL FACTS RELATIVE TO THE DATE OF COMPLETION, SUBSTANTIAL AND FINAL; THE CONTRACTING OFFICER'S FINDINGS OF FACT AS TO THE PERIODS AND CAUSES OF DELAYS; EXTENSIONS OF TIME, IF ANY; PREVIOUS PAYMENTS UNDER THE CONTRACT; AND THE COMMISSION'S RECOMMENDATIONS.