B-106383, JANUARY 8, 1952, 31 COMP. GEN. 253

B-106383: Jan 8, 1952

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IS LIMITED TO CONTRACTS ENTERED INTO ON OR AFTER JULY 1. 1952: REFERENCE IS MADE TO LETTER OF NOVEMBER 1. THE WORK WAS ACTUALLY COMPLETED ON JUNE 10. FINAL PAYMENT OF THE CONSIDERATION SPECIFIED IN THE CONTRACT WAS MADE TO THE CONTACTOR ON D.O. IT IS RECOMMENDED THAT EQUITABLE RELIEF BE EXTENDED TO THE CONTRACTOR UNDER THE AUTHORITY VESTED IN THE COMPTROLLER GENERAL BY THE PROVISIONS OF SECTION 10 (A) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949. IT MAY BE POINTED OUT THAT AUTHORITY TO REMIT OR WAIVE LIQUIDATED DAMAGES UPON THE RECOMMENDATION OF THE HEAD OF THE DEPARTMENT OR AGENCY CONCERNED WAS CONFERRED UPON THE COMPTROLLER GENERAL BY THE CITED ACT WHICH WAS MADE EFFECTIVE JULY 1.

B-106383, JANUARY 8, 1952, 31 COMP. GEN. 253

CONTRACTS - LIQUIDATED DAMAGES - REMISSION OF BY THE COMPTROLLER GENERAL THE AUTHORITY CONFERRED UPON THE COMPTROLLER GENERAL BY SECTION 10 (A) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, AS AMENDED, TO REMIT OR WAIVE LIQUIDATED DAMAGES UNDER CONTRACTS, UPON THE RECOMMENDATION OF THE HEAD OF THE DEPARTMENT OR AGENCY CONCERNED, IS LIMITED TO CONTRACTS ENTERED INTO ON OR AFTER JULY 1, 1949, THE EFFECTIVE DATE OF THE ACT.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF THE INTERIOR, JANUARY 8, 1952:

REFERENCE IS MADE TO LETTER OF NOVEMBER 1, 1951, WITH ENCLOSURES, FROM THE SOLICITOR, DEPARTMENT OF THE INTERIOR, RECOMMENDING REMISSION OF LIQUIDATED DAMAGES WHICH ACCRUED UNDER CONTRACT NO. I-124-IND-480, DATED FEBRUARY 21, 1949, WITH DONALD G. HOWATT, YAKIMA, WASHINGTON.

ARTICLE 1 OF THE CONTRACT PROVIDED THAT THE CONTRACTOR SHOULD FURNISH ALL LABOR, MATERIAL, EQUIPMENT AND SERVICES FOR AND REASONABLY INCIDENTAL TO THE COMPLETE CONSTRUCTION OF A COTTAGE IN ACCORDANCE WITH SPECIFICATIONS REFERRED TO THEREIN AND MADE A PART OF THE CONTRACT. THE SAID ARTICLE 1 PROVIDED FURTHER THAT THE WORK SHOULD BE COMPLETED WITHIN SEVENTY (70) DAYS AFTER THE DATE OF RECEIPT OF NOTICE TO PROCEED. PARAGRAPHS 3 AND 4 OF GENERAL CONSTRUCTION INFORMATION INCLUDED IN THE SPECIFICATIONS, PROVIDED FOR LIQUIDATED DAMAGES AT $20 PER DAY OF DELAY AND SPECIFIED JUNE 15, 1949, AS THE DATE FOR COMPLETION OF THE WORK UNDER THE CONTRACT. LETTER OF MARCH 2, 1949, THE CONTRACTING OFFICER GAVE NOTICE TO PROCEED WITH THE WORK AND ADVISED THE CONTRACTOR THAT "ALL WORK MUST BE COMPLETED BY JUNE 15, 1949.' THE RECORD INDICATES THAT THAT THE CONTRACTOR RECEIVED NOTICE TO PROCEED ON MARCH 17, 1949, WHICH, ON THE BASIS OF THE PROVISION FOR COMPLETION WITHIN 70 DAYS, FIXED THE COMPLETION DATE AS MAY 26, 1949. THE WORK WAS ACTUALLY COMPLETED ON JUNE 10, 1949, AND FINAL PAYMENT OF THE CONSIDERATION SPECIFIED IN THE CONTRACT WAS MADE TO THE CONTACTOR ON D.O. VOUCHER 98937, JUNE 1949 ACCOUNTS OF H.D. MCINTOSH.

IN THE AUDIT OF THE ABOVE CITED VOUCHER THE AUDIT DIVISION, GENERAL ACCOUNTING OFFICE, STATED AN EXCEPTION IN THE AMOUNT OF $300 REPRESENTING LIQUIDATED DAMAGES AT $20 PER DAY FOR 15 DAYS, ON THE BASIS THAT THE CONTRACT REQUIRED COMPLETION BY MAY 26, 1949. IN THE SOLICITOR'S LETTER OF NOVEMBER 1, 1951, IT IS RECOMMENDED THAT EQUITABLE RELIEF BE EXTENDED TO THE CONTRACTOR UNDER THE AUTHORITY VESTED IN THE COMPTROLLER GENERAL BY THE PROVISIONS OF SECTION 10 (A) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, AS AMENDED, 64 STAT. 591.

WITH RESPECT TO THE MATTER OF EQUITABLE RELIEF, IT MAY BE POINTED OUT THAT AUTHORITY TO REMIT OR WAIVE LIQUIDATED DAMAGES UPON THE RECOMMENDATION OF THE HEAD OF THE DEPARTMENT OR AGENCY CONCERNED WAS CONFERRED UPON THE COMPTROLLER GENERAL BY THE CITED ACT WHICH WAS MADE EFFECTIVE JULY 1, 1949. IT HAS BEEN HELD THAT CONTRACTS ENTERED INTO PRIOR TO JULY 1, 1949, DO NOT COME WITHIN THE AMBIT OF THE SAID STATUTE. THEREFORE, SINCE THE CONTRACT HERE INVOLVED WAS ENTERED INTO ON FEBRUARY 21, 1949, THE STATUTE WOULD NOT CONSTITUTE AUTHORITY TO WAIVE THE LIQUIDATED DAMAGES IN THIS CASE UNDER ANY CIRCUMSTANCES.

WITH RESPECT TO THE QUESTION AS TO WHETHER MAY 26 OR JUNE 15, 1949, SHOULD BE CONSIDERED AS THE FINAL DATE FOR COMPLETION OF THE WORK, IT IS WELL ESTABLISHED THAT IF THE LANGUAGE USED IN A CONTRACT IS AMBIGUOUS IN ANY RESPECT, THEN RESORT PROPERLY MAY BE HAD TO SURROUNDING CIRCUMSTANCES AND FACTS TO DETERMINE THE AGREEMENT WHICH THE PARTIES HAVE MADE. SEE UNITED STATES. V. BETHLEHEM STEEL COMPANY, 205 U.S. 105; UNITED STATES V. PECK, 102 U.S. 64; AND 20 COMP. GEN. 533, 537. THE TERMS OF THE PRESENT CONTRACT DO NOT CLEARLY EXPRESS THE INTENTION AND AGREEMENT OF THE PARTIES AS TO THE COMPLETION DATE. HOWEVER, THE RECORD, INCLUDING THE CONTRACTING OFFICER'S LETTER OF MARCH 2, 1949, REFERRED TO HEREINABOVE, WERE SUFFICIENT TO JUSTIFY THE CONTRACTOR IN PROCEEDING ON THE BASIS THAT THE CONTRACT FIXED THE COMPLETION DATE AS JUNE 15, 1949, AND THE CONTRACT WILL BE SO REGARDED.

ACCORDINGLY, UNDER THE CIRCUMSTANCES, THE EXCEPTION TAKEN TO VOUCHER 98937, JUNE 1949 ACCOUNTS OF H.D. MCINTOSH, WILL BE REMOVED. THE PAPERS ARE RETURNED HEREWITH AS REQUESTED.