A-86496, AUGUST 18, 1938, 18 COMP. GEN. 184

A-86496: Aug 18, 1938

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CONTRACTS - DAMAGES - LIQUIDATED - UNCONTEMPLATED WEATHER CONDITIONS - CONTRACTOR'S LIABILITY NOTWITHSTANDING GOVERNMENT DELAY BEYOND EXPECTED CONTRACT COMMENCEMENT PERIOD AMOUNT DEDUCTED AS LIQUIDATED DAMAGES FOR DELAY IN MAKING ALTERATIONS AND REPAIRS TO A LIGHTSHIP MAY NOT BE REMITTED BECAUSE OF THE GOVERNMENT'S FAILURE TO DELIVER THE VESSEL UNTIL LATER IN THE YEAR WHEN LESS FAVORABLE WEATHER CONDITIONS PREVAILED THAN IF DELIVERY HAD BEEN MADE AS EXPECTED BY THE CONTRACTOR BECAUSE THE INVITATION FOR BIDS INDICATED POSSIBLE DELIVERY "ABOUT FOUR WEEKS AFTER BIDS HAVE BEEN OPENED. UNLESS THE DELAY WAS DUE TO CERTAIN EXCUSABLE CAUSES. THE VESSEL WAS DELIVERED TO YOU ON NOVEMBER 6. THE RECORD SHOWS THAT THE WORK WAS NOT COMPLETED UNTIL FEBRUARY 6.

A-86496, AUGUST 18, 1938, 18 COMP. GEN. 184

CONTRACTS - DAMAGES - LIQUIDATED - UNCONTEMPLATED WEATHER CONDITIONS - CONTRACTOR'S LIABILITY NOTWITHSTANDING GOVERNMENT DELAY BEYOND EXPECTED CONTRACT COMMENCEMENT PERIOD AMOUNT DEDUCTED AS LIQUIDATED DAMAGES FOR DELAY IN MAKING ALTERATIONS AND REPAIRS TO A LIGHTSHIP MAY NOT BE REMITTED BECAUSE OF THE GOVERNMENT'S FAILURE TO DELIVER THE VESSEL UNTIL LATER IN THE YEAR WHEN LESS FAVORABLE WEATHER CONDITIONS PREVAILED THAN IF DELIVERY HAD BEEN MADE AS EXPECTED BY THE CONTRACTOR BECAUSE THE INVITATION FOR BIDS INDICATED POSSIBLE DELIVERY "ABOUT FOUR WEEKS AFTER BIDS HAVE BEEN OPENED," THE LESS FAVORABLE WEATHER CONDITIONS NOT BEING FOR CONSIDERATION AS ,UNUSUALLY SEVERE WEATHER" WITHIN THE CONTRACT LIQUIDATED DAMAGE PROVISION MERELY BECAUSE OF THE DELAY IN DELIVERY; THE WEATHER ENCOUNTERED IN PERFORMANCE OF THE CONTRACT NOT HAVING BEEN UNUSUALLY SEVERE FOR THAT PERIOD OF THE YEAR; THE INVITATION FOR BIDS DELIVERY STIPULATION BEING BUT AN EXPECTATION AND NOT A GUARANTEE; THE BID NOT HAVING BEEN QUALIFIED AS TO MAKE IT CONTINGENT ON DELIVERY WITHIN THAT TIME; THE EXPECTED DELIVERY PERIOD HAVING EXPIRED AT THE TIME OF EXECUTION OF THE CONTRACT WITHOUT PROTEST; AND THE CONTRACTOR HAVING VOICED NO OBJECTION AT THE TIME OF DELIVERY.

ACTING COMPTROLLER GENERAL ELLIOTT TO EAST COAST SHIPYARDS, INC., AUGUST 18, 1938:

YOUR LETTER OF JUNE 7, 1938, REQUESTS REVIEW OF SETTLEMENT NO. 0449294, DATED JUNE 15, 1937, WHICH DISALLOWED YOUR CLAIM FOR REMISSION OF $1,204.80 DEDUCTED AS LIQUIDATED DAMAGES FROM THE AMOUNT OTHERWISE DUE YOU UNDER CONTRACT NO. C3A-4307, DATED SEPTEMBER 25, 1936, FOR MAKING ALTERATIONS AND REPAIRS TO LIGHTSHIP NO. 87 FOR THE DEPARTMENT OF COMMERCE.

UNDER THE TERMS OF THE CONTRACT YOU AGREED, FOR THE CONSIDERATION SPECIFIED THEREIN, TO MAKE CERTAIN REPAIRS AND ALTERATIONS TO LIGHTSHIP NO. 87, WITHIN 60 CALENDAR DAYS AFTER THE DATE OF RECEIPT OF THE VESSEL. THE CONTRACT PROVIDED THAT IN THE EVENT OF DELAY IN COMPLETING THE WORK, LIQUIDATED DAMAGES WOULD BE ASSESSED AT THE RATE OF $37.65 PER DAY, UNLESS THE DELAY WAS DUE TO CERTAIN EXCUSABLE CAUSES, INCLUDING ACTS OF THE GOVERNMENT AND UNUSUALLY SEVERE WEATHER, AS SPECIFIED UNDER ARTICLE 9.

THE VESSEL WAS DELIVERED TO YOU ON NOVEMBER 6, 1936, THEREBY ESTABLISHING THE DUE DATE FOR COMPLETION OF THE WORK AS JANUARY 5, 1937. THE RECORD SHOWS THAT THE WORK WAS NOT COMPLETED UNTIL FEBRUARY 6, 1937, AFTER A DELAY OF 32 DAYS. YOU HAVE BEEN PAID THE AGREED CONTRACT PRICE LESS LIQUIDATED DAMAGES FOR 32 DAYS' DELAY AT $37.65 PER DAY, A TOTAL OF $1,204.80.

THE SCHEDULE ACCOMPANYING THE GOVERNMENT'S INVITATION TO BID INFORMED PROSPECTIVE BIDDERS THAT---

IT IS EXPECTED THAT THE ORDER TO PROCEED WITH THE WORK WILL BE ISSUED ABOUT FOUR WEEKS AFTER BIDS HAVE BEEN OPENED.

THE BIDS WERE OPENED ON AUGUST 17, 1936, BUT THE VESSEL WAS NOT DELIVERED TO YOU UNTIL NOVEMBER 6, 1936, OR APPROXIMATELY 11 1/2 WEEKS THEREAFTER. IT IS YOUR CONTENTION THAT THIS DELAY IN DELIVERING THE VESSEL TO YOU RELIEVES YOU FROM THE ASSESSMENT OF LIQUIDATED DAMAGES, IT BEING CLAIMED BY YOU THAT SUCH ACTION ON THE PART OF THE GOVERNMENT MADE IT NECESSARY FOR YOU TO PERFORM THE CONTRACT DURING THE WINTER MONTHS, UNDER ADVERSE WEATHER CONDITIONS WHICH DELAYED THE WORK, WHEREAS YOU HAD CONTEMPLATED PERFORMING THE CONTRACT DURING THE MONTHS OF SEPTEMBER AND OCTOBER 1936, WHEN MORE FAVORABLE WEATHER CONDITIONS PREVAILED. IN SUPPORT OF YOUR CONTENTION THERE HAVE BEEN FURNISHED CERTAIN CLIMATOLOGICAL DATA COVERING THE FALL AND WINTER OF 1936-37 AND YOU URGE THAT NO LIQUIDATED DAMAGES SHOULD BE ASSESSED FOR DAYS ON WHICH THE WEATHER WAS UNUSUALLY SEVERE, IN ACCORDANCE WITH ARTICLE 9 OF THE CONTRACT, YOUR CONTENTION BEING THAT THE TERM "UNUSUALLY SEVERE WEATHER" AS USED IN THE CONTRACT MEANS, UNDER THE CIRCUMSTANCES,"ANY DAY WHEN THE WEATHER WAS MORE COLD OR WET THAN WOULD HAVE BEEN EXPERIENCED IF THE VESSEL HAD BEEN RECEIVED" WITHIN 4 WEEKS AFTER THE DATE OF OPENING OF THE BIDS.

AT THE TIME BIDS WERE SOLICITED THE GOVERNMENT ANTICIPATED THAT IT WOULD BE IN A POSITION TO DELIVER THE VESSEL TO THE SUCCESSFUL BIDDER WITHIN 4 WEEKS AFTER BIDS WERE OPENED AND PROSPECTIVE BIDDERS WERE SO NOTIFIED. BUT THE GOVERNMENT'S STATEMENT WAS ONE OF EXPECTATION AND WAS NOT AN ABSOLUTE PROMISE. THERE WAS NO GUARANTEE THAT THE VESSEL WOULD BE DELIVERED WITHIN 4 WEEKS AND YOU DID NOT QUALIFY YOUR BID SO AS TO MAKE IT CONTINGENT ON DELIVERY OF THE VESSEL WITHIN THAT PERIOD OF TIME. FURTHERMORE, THE CONTRACT WAS EXECUTED BY YOU, WITHOUT PROTEST, ON SEPTEMBER 25, 1936, ALTHOUGH THE 4 WEEKS' PERIOD THEN HAD EXPIRED AND THE VESSEL HAD NOT BEEN TURNED OVER TO YOU. ALSO, YOU DID NOT OBJECT TO THE DELAY WHEN THE VESSEL WAS DELIVERED TO YOU ON NOVEMBER 6, 1936--- OR AT ANY TIME PRIOR THERETO--- BUT ON THE CONTRARY, IT APPEARS YOU IMMEDIATELY BEGAN PERFORMANCE OF THE CONTRACT. AT THAT TIME THE PERIOD DURING WHICH YOU STATE YOU CONTEMPLATED PERFORMING THE CONTRACT HAD PASSED AND YET YOU VOICED NO OBJECTION TO PERFORMANCE OF THE CONTRACT. AT THAT TIME THE PERIOD DURING WHICH YOU STATE YOU CONTEMPLATED PERFORMING THE CONTRACT HAD PASSED AND YET YOU VOICED NO OBJECTION TO PERFORMANCE OF THE CONTRACT. UNDER THE CIRCUMSTANCES YOUR ACTION IN EXECUTING THE CONTRACT AND PROCEEDING WITH PERFORMANCE THEREUNDER WAS CLEARLY A WAIVER OF ANY RIGHT YOU MIGHT OTHERWISE HAVE HAD BECAUSE OF THE FAILURE OF THE GOVERNMENT PROMPTLY TO DELIVER THE VESSEL TO YOU.

AS THE WEATHER CONDITIONS YOU ENCOUNTERED IN THE PERFORMANCE OF THE CONTRACT WERE NOT UNUSUALLY SEVERE FOR THAT PERIOD OF THE YEAR, IN THE LOCALITY IN WHICH THE WORK WAS PERFORMED, DELAYS WHICH MAY HAVE BEEN OCCASIONED THEREBY ARE NOT EXCUSABLE UNDER THE CONTRACT; AND SINCE IT DOES NOT APPEAR THAT THE DELAYS ARE OTHERWISE EXCUSABLE, THERE IS NO AUTHORITY FOR REMISSION OF THE LIQUIDATED DAMAGES WHICH LEGALLY ACCRUED TO THE UNITED STATES UNDER THE CONTRACT TERMS BECAUSE OF YOUR INEXCUSED DELAY IN COMPLETING PERFORMANCE THEREOF.