B-140019, JUL. 15, 1959

B-140019, JUL. 15, 1959

TO THE HONORABLE ROBERT E. MCLAUGHLIN, PRESIDENT, BOARD OF COMMISSIONERS OF THE DISTRICT OF COLUMBIA, WASHINGTON 4, D.C.:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 23, 1959, REQUESTING A DECISION AS TO WHETHER WILKINSON-S, WASHINGTON, D.C., IS ENTITLED TO REFUND OF AMOUNTS DEDUCTED ON ACCOUNT OF DELAY IN DELIVERY OF LOCKERS UNDER PURCHASE ORDER NO. 38479, DATED FEBRUARY 13, 1958.

THE PROCUREMENT OFFICE, GOVERNMENT OF THE DISTRICT OF COLUMBIA, BY INVITATION NO. 20245-JM, DATED JANUARY 21, 1958, REQUESTED BIDS, ON ALTERNATE BASES, FOR FURNISHING 354 LOCKERS TO THE D.C. GENERAL HOSPITAL. WITH RESPECT TO REQUIRED DELIVERY, PAGE 4 OF THE INVITATION PROVIDED AS FOLLOWS:

"TIME OF DELIVERY ESSENTIAL: TIME OF DELIVERY IS OF THE ESSENCE AND SHALL BE A FACTOR IN MAKING AWARD HEREIN. DELIVERY SHALL BE MADE AT DESTINATION WITHIN 45 CALENDAR DAYS FROM DATE OF PURCHASE ORDER. IF NO BIDS ARE RECEIVED OFFERING DELIVERY WITHIN THE TIME SPECIFIED HEREIN, AWARD MAY BE MADE TO THE LOWEST QUALIFIED BIDDER OFFERING THE SHORTEST DELIVERY TIME. IN THE EVENT A LOWER BID IS RECEIVED AND REJECTED SOLELY BECAUSE OF NONCONFORMANCE WITH THE DELIVERY TIME SPECIFIED HEREIN, THE CONTRACTOR WHO RECEIVES THE AWARD WILL NOT BE PAID IN EXCESS OF THE REJECTED LOW BID PRICE SHOULD HE NOT MAKE COMPLETE DELIVERY WITHIN THE STIPULATED TIME.'

ALSO, THE INVITATION PROVIDED THAT IN THE EVENT OF DELAY IN DELIVERY THE CONTRACTOR WOULD BE ASSESSED LIQUIDATED DAMAGES AT THE RATE OF $50 FOR EACH CALENDAR DAY OF DELAY EXCEPT THAT THE CONTRACTOR WAS NOT TO BE ASSESSED FOR ANY LIQUIDATED DAMAGES WHEN THE DELAY IN DELIVERY WAS DUE TO CAUSES BEYOND THE CONTROL AND WITHOUT THE FAULT OF THE CONTRACTOR.

THE LOWEST BID RECEIVED WHICH CONFORMED TO SPECIFICATIONS, EXCEPT AS TO REQUIRED DELIVERY TIME, WAS IN THE AMOUNT OF $5,751.54, LESS PROMPT PAYMENT DISCOUNT OF 1 PERCENT--- 10 DAYS, OR A NET OF $5,694.02, BUT DELIVERY TIME PROMISED WAS "45-60" DAYS. THE SECOND LOW BID IN THE AMOUNT OF $6,081 WAS SUBMITTED BY THE CLAIMANT, WILKINSON-S, AND IT PROMISED DELIVERY WITHIN 40 DAYS FROM DATE OF PURCHASE ORDER. PURCHASE ORDER NO. 38479 WAS DATED AND MAILED TO THE CLAIMANT ON FEBRUARY 13, 1958, THUS ESTABLISHING THE DATE OF COMPLETION AS MARCH 25, 1958. THE CONTRACT WAS NOT COMPLETED UNTIL APRIL 6, 1958, OR AFTER A DELAY OF 12 CALENDAR DAYS, FOR WHICH LIQUIDATED DAMAGES IN THE AMOUNT OF $600 WAS DEDUCTED IN MAKING PAYMENT. ALSO, THERE WAS DEDUCTED BECAUSE OF DELAY IN COMPLETION, THE AMOUNT OF $386.98, REPRESENTING THE DIFFERENCE BETWEEN THE LOW NET BID OF $5,694.02 AND THE CLAIMANT'S BID OF $6,081.

THE TERMS OF THE INVITATION WHICH BECAME A PART OF THE CONTRACT CLEARLY CONTEMPLATED THAT ANY BID WHICH DID NOT CONFORM TO THE REQUIRED DELIVERY TIME OF 45 CALENDAR DAYS WAS NOT FOR CONSIDERATION IN MAKING AWARD IF OTHER BIDS SO CONFORMING WERE RECEIVED. THE LOW BIDDER IN THIS CASE OFFERED DELIVERY WITHIN 45 TO 60 CALENDAR DAYS WHEREAS THE CLAIMANT OFFERED DELIVERY WITHIN 40 CALENDAR DAYS. WHILE WE HAVE HELD IN 28 COMP. GEN. 717 AND 33 COMP. GEN. 395 THAT IT MAY BE PROPER TO STIPULATE IN A CONTRACT AWARDED TO A PARTY OTHER THAN THE LOW BIDDER BECAUSE OF PROMISED EARLIER DELIVERY THAT IN THE EVENT THE CONTRACTOR FAILS TO MAKE DELIVERY WITHIN THE CONTRACT TIME HE SHOULD BE PAID THE PRICE QUOTED BY THE LOW BIDDER, IT DOES NOT APPEAR THAT THE CONTRACT PRICE SHOULD BE REDUCED TO THE REJECTED LOW BID PRICE IN THIS INSTANCE. WE BELIEVE THAT THE PROPER INTERPRETATION OF THE ABOVE QUOTED CLAUSE IS THAT REDUCTION OF THE ACCEPTED BID TO THE LOWEST BID PRICE ON ACCOUNT OF LATE DELIVERY CAN ONLY BE MADE IN A CASE WHERE THE ACCEPTED BID FAILED TO OFFER TO COMPLY WITH THE REQUIRED DELIVERY TERMS OF THE INVITATION. ASIDE FROM THIS OBJECTION, THIS CONTRACT PROVISION TAKES INTO ACCOUNT ONLY ONE ELEMENT OF POSSIBLE DAMAGE BY REASON OF DELAY IN DELIVERY WHILE THE USUAL LIQUIDATED DAMAGE CLAUSE PROVIDING FOR THE ASSESSMENT OF LIQUIDATED DAMAGES AT THE RATE OF $50 FOR EACH CALENDAR DAY OF DELAY COVERS ALL ELEMENTS OF POSSIBLE DAMAGES OCCASIONED BY DELAY.

IT IS STATED IN YOUR LETTER THAT THE CLAIMANT HAS NOT FURNISHED ANY REASONS THAT WOULD EXCUSE IT UNDER THE TERMS OF THE CONTRACT FOR ANY OF THE DELAY. ACCORDINGLY, THE CLAIMANT IS ENTITLED TO REFUND OF THE AMOUNT REPRESENTING THE DIFFERENCE BETWEEN ITS BID AND THAT OF THE LOW BIDDER BUT IS NOT ENTITLED TO REFUND OF THE AMOUNT OF $600 ASSESSED AS LIQUIDATED DAMAGES FOR THE 12 DAYS' DELAY.