B-126595, FEBRUARY 6, 1956, 35 COMP. GEN. 446

B-126595: Feb 6, 1956

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THE AMOUNT WITHHELD REPRESENTS LIQUIDATED DAMAGES WHICH WERE ASSESSED UNDER THE TERMS OF THE INVITATION FOR BIDS. YOU STATE THAT COMPLETION OF THE WORK WAS DELAYED FOR REASONS NOT EXCUSABLE UNDER THE CONTRACT AND. 700 WAS WITHHELD FROM PAYMENTS TO THE CONTRACTOR. SINCE THE QUESTION OF LAW ACTUALLY IS BEFORE YOU IN CONNECTION WITH YOUR CERTIFICATION OF THE AMOUNT DUE THE REQUIREMENT THAT THE VOUCHER BE SUBMITTED WILL BE WAIVED IN THIS CASE. THE RIGHTS OF PARTIES TO A CONTRACT ARE GOVERNED BY THE TERMS OF THE CONTRACT AND NOT BY THE PRELIMINARIES TO IT. AN INVITATION FOR BIDS IS CONSIDERED AS SUCH A PRELIMINARY WHERE AS IN THE INSTANT CASE AN EXPRESS WRITTEN CONTRACT IS ENTERED INTO. THE MERE INCLUSION OF A PROVISION FOR LIQUIDATED DAMAGES IN THE INVITATION WILL NOT SUBJECT THE CONTRACTOR TO AN ASSESSMENT THEREFOR UNLESS SUCH PROVISION IS INCLUDED.

B-126595, FEBRUARY 6, 1956, 35 COMP. GEN. 446

CONTRACTS - DAMAGES - LIQUIDATED OR ACTUAL - ACCOMPANYING PAPERS INTERPRETATION AN INVITATION WHICH INCLUDED A LIQUIDATED DAMAGE PROVISION NOT IN THE CONTRACT MAY NOT BE CONSIDERED A PART OF THE CONTRACT UNDER A GENERAL PROVISION WHICH INCORPORATED "ACCOMPANYING APERS" AND THE ASSESSMENT OF LIQUIDATED DAMAGES AGAINST THE CONTRACTOR FOR AN INEXCUSABLE DELAY

WOULD BE CONTRARY TO THE ACTUAL DAMAGE PROVISION INCLUDED IN THE CONTRACT.

TO J. C. BECKERLEY, DEPARTMENT OF THE INTERIOR, FEBRUARY 6, 1956:

YOUR LETTER OF AUGUST 10, 1955, REFERENCE 5.20D-1, REQUESTS OUR DECISION AS TO THE PROPRIETY OF PAYMENT OF $1,700 WITHHELD FROM THE AMOUNT OTHERWISE DUE MR. W. H.' TUBBY" SMITH UNDER CONTRACT NO. 14-11 008-13. THE AMOUNT WITHHELD REPRESENTS LIQUIDATED DAMAGES WHICH WERE ASSESSED UNDER THE TERMS OF THE INVITATION FOR BIDS, NO PROVISION FOR LIQUIDATED DAMAGES HAVING BEEN INCLUDED IN THE BODY OF THE CONTRACT.

YOU STATE THAT COMPLETION OF THE WORK WAS DELAYED FOR REASONS NOT EXCUSABLE UNDER THE CONTRACT AND, IN ACCORDANCE WITH THE LIQUIDATED DAMAGES PROVISION OF THE INVITATION, $1,700 WAS WITHHELD FROM PAYMENTS TO THE CONTRACTOR.

UNDER SECTION 3 OF THE ACT OF DECEMBER 29, 1941, 55 STAT. 876, 31 U.S.C. 82D, CERTIFYING OFFICERS MAY APPLY FOR A DECISION BY THE COMPTROLLER GENERAL ON ANY QUESTION OF LAW INVOLVED IN A PAYMENT ON "ANY VOUCHERS PRESENTED TO THEM FOR CERTIFICATION.' A REQUEST FOR DECISION UNDER THAT SECTION MUST BE ACCOMPANIED BY THE VOUCHER IN QUESTION. 21 COMP. GEN. 1128. NO VOUCHER ACCOMPANIED YOUR SUBMISSION, BUT SINCE THE QUESTION OF LAW ACTUALLY IS BEFORE YOU IN CONNECTION WITH YOUR CERTIFICATION OF THE AMOUNT DUE THE REQUIREMENT THAT THE VOUCHER BE SUBMITTED WILL BE WAIVED IN THIS CASE.

THE RIGHTS OF PARTIES TO A CONTRACT ARE GOVERNED BY THE TERMS OF THE CONTRACT AND NOT BY THE PRELIMINARIES TO IT. CALLAHAN CONSTRUCTION CO. V. UNITED STATES, 47 C.1CLS. 177. AN INVITATION FOR BIDS IS CONSIDERED AS SUCH A PRELIMINARY WHERE AS IN THE INSTANT CASE AN EXPRESS WRITTEN CONTRACT IS ENTERED INTO. MANUFACTURERS' CASUALTY INSURANCE CO. V. UNITED STATES, 105 C.1CLS. 342. THEREFORE, THE MERE INCLUSION OF A PROVISION FOR LIQUIDATED DAMAGES IN THE INVITATION WILL NOT SUBJECT THE CONTRACTOR TO AN ASSESSMENT THEREFOR UNLESS SUCH PROVISION IS INCLUDED, SPECIFICALLY OR BY REFERENCE, IN THE ENSUING CONTRACT.

PARAGRAPH 5 (B) OF THE GENERAL PROVISIONS ( STANDARD FORM 23A) OF THE INSTANT CONTRACT MAKES THE CONTRACTOR AND HIS SURETIES LIABLE "IN THE AMOUNT SET FORTH IN THE SPECIFICATIONS OR ACCOMPANYING PAPERS, FOR FIXED, AGREED, AND LIQUIDATED DAMAGES.' ( ITALICS SUPPLIED.) HOWEVER, THE SPECIFICATIONS DO NOT SET FORTH ANY AMOUNT FOR, OR OTHERWISE REFER TO THE ASSESSMENT OF, LIQUIDATED DAMAGES. AS WE NOTED IN OUR DECISION OF JUNE 30, 1938, A-92802, IN REGARD TO A SIMILAR PROVISION, THE TERM "ACCOMPANYING PAPERS," WHILE ITS MEANING IS NOT CLEAR, IS NOT SO BROAD AS TO INCLUDE THE INVITATION FOR BIDS.

ADDITIONALLY, THE CONTRACT PROVIDES UNDER " STATEMENT OF WORK" THAT:

THE CONTRACTOR SHALL FURNISH ALL LABOR, EQUIPMENT, AND MATERIALS AND PERFORM THE WORK ABOVE DESCRIBED FOR THE AMOUNT STATED ABOVE IN STRICT ACCORDANCE WITH THE GENERAL PROVISIONS ( STANDARD FORM 23A),SPECIFICATIONS, SCHEDULES, DRAWINGS AND CONDITIONS ALL OF WHICH ARE MADE A PART HEREOF * * *. ( ITALICS SUPPLIED.)

THE DOCUMENTS MADE A PART OF THE CONTRACT BY THE ABOVE-QUOTED PROVISION APPEAR GENERALLY TO BE THOSE ENCOMPASSED IN THE TERM "ACCOMPANYING PAPERS.' IN ANY CASE, IT IS AXIOMATIC THAT THE WRITING SOUGHT TO BE INCORPORATED IN THE CONTRACT SHOULD BE REFERRED TO WITH SUFFICIENT CLARITY TO MAKE THE INCORPORATION APPARENT ON ITS FACE. CF. TAMPA SHIPBUILDING AND ENGINEERING CO. V. GENERAL CONSTRUCTION CO., 43 F.2D 309, 311. IT MAY BE CONCLUDED, THEREFORE, THAT NO LIQUIDATED DAMAGES PROVISION WAS MADE A PART OF THE CONTRACT.

A PROVISION FOR LIQUIDATED DAMAGES PROVISION WAS MADE A PART OF THE CONTRACT.

A PROVISION FOR LIQUIDATED DAMAGES FOR DELAY WAS CLEARLY INCLUDED IN THE INVITATION. IT WAS NOT, HOWEVER, INCLUDED IN THE CONTRACT. UNDER THE TERMS OF ARTICLE 5 (B) OF THE GENERAL PROVISIONS, WHERE LIQUIDATED DAMAGES ARE NOT SO FIXED, I.E., SET FORTH IN THE SPECIFICATIONS OR ACCOMPANYING PAPERS, THE CONTRACTOR SHALL BE LIABLE FOR ACTUAL DAMAGES. THE CONTRACT AS WRITTEN, THEREFORE, PROVIDES FOR THE ASSESSMENT, NOT OF LIQUIDATED, BUT OF ACTUAL DAMAGES FOR DELAY. A PROVISION FOR LIQUIDATED DAMAGES SETS THE AMOUNT RECOVERABLE AND PRECLUDES THE RECOVERY OF ANY OTHER AMOUNT. K. P. MINING CO. V. JACOBSON, 83 P. 728, 729. THE INCLUSION OF BOTH PROVISIONS, THEREFORE, WOULD BE CONTRADICTORY. SINCE THE PROVISION FOR ACTUAL DAMAGES IS IN THE BODY OF THE EXPRESS CONTRACT, WHILE THE LIQUIDATED DAMAGES PROVISION IS CONTAINED ONLY IN THE PRELIMINARY NEGOTIATIONS, AN INTERPRETATION OF THE CONTRACT TO INCLUDE THE LIQUIDATED DAMAGES PROVISION WOULD VIOLATE THE GENERAL RULE THAT NO RESORT MAY BE HAD TO EXTRINSIC EVIDENCE TO VARY OR CONTRADICT THE TERMS OF THE EXPRESS CONTRACT. CORBIN ON CONTRACTS 573; NORTHERN ASSURANCE CO. V. GRAND VIEW BUILDING ASSOCIATION, 183 U.S. 308, 318.

ON THE BASIS OF THE FOREGOING, A VOUCHER IN FAVOR OF THE CONTRACTOR FOR $1,700 WITHHELD AS LIQUIDATED DAMAGES MAY BE CERTIFIED FOR PAYMENT. HOWEVER, ACTUAL DAMAGES SUSTAINED BY THE GOVERNMENT, IF ANY, BY REASON OF THE CONTRACTOR'S DELAY FOR CAUSES NOT EXCUSABLE UNDER THE CONTRACT PROPERLY MAY BE SET OFF AGAINST THE AMOUNT REMAINING DUE PURSUANT TO PARAGRAPH 5 (B) OF THE CONTRACT.