B-150121, NOV. 13, 1962

B-150121, NOV. 13, 1962

TO THE SECRETARY OF THE INTERIOR:

REFERENCE IS MADE TO LETTER DATED OCTOBER 15, 1962, FROM THE ADMINISTRATIVE ASSISTANT SECRETARY, DEPARTMENT OF THE INTERIOR, CONCERNING BUREAU OF RECLAMATION CONTRACT NO. 14-06-600-4841, WITH AMERICAN LIGURIAN COMPANY, INC., FOR FURNISHING POTENTIAL TRANSFORMERS FOR THE SIOUX CITY SUBSTATION, MISSOURI RIVER BASIN PROJECT. PARAGRAPH 3 OF THE LETTER READS AS FOLLOWS:

"CIRCUMSTANCES INDICATE THAT PART OF THE DELAY COULD BE EXCUSED, SINCE THE CAUSES WERE BEYOND THE CONTROL AND WITHOUT FAULT OR NEGLIGENCE OF THE CONTRACTOR. HOWEVER, GRANTING RELIEF FOR THE FULL PERIOD WOULD CONSTITUTE A WAIVER OF LIQUIDATED DAMAGES. THE REGIONAL DIRECTOR HAS STATED THAT THE GOVERNMENT SUFFERED NO ACTUAL DAMAGES BY REASON OF THE DELAY AND THE EQUIPMENT WAS BOUGHT UNDER VERY FAVORABLE PRICES. ACCORDINGLY, WE RECOMMEND THAT THE CONTRACTOR BE GRANTED RELIEF FROM THE ASSESSMENT OF LIQUIDATED DAMAGES FOR THE FULL PERIOD OF THE DELAY.'

SECTION 256A OF TITLE 41, U.S.C. PROVIDES AS FOLLOWS:

"WHENEVER ANY CONTRACT MADE ON BEHALF OF THE GOVERNMENT BY THE HEAD OF ANY FEDERAL AGENCY, OR BY OFFICERS AUTHORIZED BY HIM SO TO DO, INCLUDES A PROVISION FOR LIQUIDATED DAMAGES FOR DELAY, THE COMPTROLLER GENERAL UPON RECOMMENDATION OF SUCH HEAD IS AUTHORIZED AND EMPOWERED TO REMIT THE WHOLE OR ANY PART OF SUCH DAMAGES AS IN HIS DISCRETION MAY BE JUST AND EQUITABLE.'

IT SEEMS EVIDENT THAT THE RELIEF AUTHORIZED BY THE ABOVE STATUTE WAS INTENDED TO BE SUPPLEMENTARY TO RATHER THAN IN LIEU OF ANY RELIEF CONTRACTORS MIGHT BE ENTITLED TO RECEIVE UNDER THE TERMS OF THEIR CONTRACTS. IN OTHER WORDS, THERE WOULD APPEAR TO BE NO DOUBT THAT THE STATUTORY PROVISIONS INVOLVED WERE DESIGNED FOR THE PURPOSE OF AFFORDING EQUITABLE RELIEF TO CONTRACTORS FROM THE ASSESSMENT OF LIQUIDATED DELAY DAMAGES ONLY IN THOSE INSTANCES WHERE THEY PROPERLY MIGHT NOT BE GRANTED AN EXTENSION OF TIME FOR PERFORMANCE UNDER THEIR CONTRACTS. THIS CONCLUSION FINDS SUPPORT IN THE LEGISLATIVE HISTORY OF THE SAID STATUTORY PROVISIONS. IT IS OUR VIEW, THEREFORE, THAT EQUITABLE RELIEF FROM THE ASSESSMENT OF LIQUIDATED DAMAGES UNDER THE AUTHORITY VESTED IN THIS OFFICE BY THE ABOVE-QUOTED STATUTE SHOULD NOT BE GRANTED TO CONTRACTORS UNLESS AND UNTIL ALL AVAILABLE ADMINISTRATIVE LEGAL REMEDIES UNDER THEIR CONTRACTS HAVE BEEN EXHAUSTED.

ACCORDINGLY, IN THE ABSENCE OF A FINDING OF FACT AND DECISION BY THE CONTRACTING OFFICER, AS CONTEMPLATED BY THE TERMS OF THE CONTRACT, THAT THE CONTRACTOR'S DELAY WAS NOT DUE TO EXCUSABLE CAUSES WITHIN THE MEANING OF PARAGRAPH 3 OF THE SPECIAL PROVISIONS OF THE CONTRACT, INDICATING THAT THE CONTRACTOR LEGALLY IS NOT ENTITLED TO AN EXTENSION OF TIME FOR PERFORMING THE CONTRACT, WE FEEL THAT WE WOULD NOT BE JUSTIFIED IN CONSIDERING THE QUESTION AS TO THE PROPRIETY OF WAIVING ANY PART OF THE LIQUIDATED DAMAGES INVOLVED, UNDER THE STATUTE IN QUESTION, SOLELY ON THE BASIS OF WHETHER IT WOULD BE EQUITABLE AND JUST TO DO SO.

IN VIEW THEREOF, THE ENTIRE FILE RELATIVE TO THE INSTANT CLAIM IS RETURNED HEREWITH FOR WHATEVER RECONSIDERATION YOU MAY WISH TO GIVE THE MATTER. IN THIS CONNECTION, WE BELIEVE THAT A RECOMMENDATION FOR REMISSION SHOULD STATE AS FULLY AS FEASIBLE THE FACTUAL BASIS FOR THE