B-153919, APR. 24, 1964

B-153919: Apr 24, 1964

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TO THE PUBLIC PRINTER: REFERENCE IS MADE TO YOUR LETTER OF APRIL 9. THE LIQUIDATED DAMAGES WERE ASSESSED BECAUSE THE CONTRACTOR DID NOT DELIVER THE RING BINDERS BY FEBRUARY 5. THE CONTRACTOR HAS EXPLAINED THAT IT WAS UNABLE TO COMPLETE SHIPMENT UNTIL FEBRUARY 24. BECAUSE THE SUPPLIER FROM WHICH IT USUALLY OBTAINS THE METAL PARTS FOR THE BINDERS WAS ON STRIKE AND THE ONLY OTHER SUPPLIER OF THOSE PARTS COULD NOT SHIP THE LAST PARTS TO IT IN TIME FOR IT TO MEET THE SCHEDULED DELIVERY. THE CONTRACTOR ADMITS THAT IT KNEW WHEN IT BID THAT ITS USUAL SOURCE WAS ON STRIKE. ONLY WHEN THE CONTRACTOR REALIZED THAT THE STRIKE WAS NOT BEING SETTLED IN TIME TO OBTAIN THE METAL PARTS FROM ITS USUAL SUPPLIER AND MAKE DELIVERY AS REQUIRED DID IT TURN TO THE SECOND SOURCE.

B-153919, APR. 24, 1964

TO THE PUBLIC PRINTER:

REFERENCE IS MADE TO YOUR LETTER OF APRIL 9, 1964, RECOMMENDING THAT AUTHORIZATION BE GRANTED UNDER 41 U.S.C. 256A FOR THE REMISSION TO FEDERAL LOOSE LEAF CORPORATION OF $506.18 ASSESSED AS LIQUIDATED DAMAGES UNDER JACKET 716-423, PURCHASE ORDER 47908, ISSUED JANUARY 17, 1964.

THE LIQUIDATED DAMAGES WERE ASSESSED BECAUSE THE CONTRACTOR DID NOT DELIVER THE RING BINDERS BY FEBRUARY 5, 1964, THE DELIVERY DATE SPECIFIED IN THE PURCHASE ORDER. THE CONTRACTOR HAS EXPLAINED THAT IT WAS UNABLE TO COMPLETE SHIPMENT UNTIL FEBRUARY 24, 1964, BECAUSE THE SUPPLIER FROM WHICH IT USUALLY OBTAINS THE METAL PARTS FOR THE BINDERS WAS ON STRIKE AND THE ONLY OTHER SUPPLIER OF THOSE PARTS COULD NOT SHIP THE LAST PARTS TO IT IN TIME FOR IT TO MEET THE SCHEDULED DELIVERY. THE CONTRACTOR ADMITS THAT IT KNEW WHEN IT BID THAT ITS USUAL SOURCE WAS ON STRIKE, BUT THAT IT EXPECTED THAT THE STRIKE WOULD BE SETTLED IN TIME TO OBTAIN THE METAL PARTS SO THAT DELIVERY COULD BE MADE AS REQUIRED. ONLY WHEN THE CONTRACTOR REALIZED THAT THE STRIKE WAS NOT BEING SETTLED IN TIME TO OBTAIN THE METAL PARTS FROM ITS USUAL SUPPLIER AND MAKE DELIVERY AS REQUIRED DID IT TURN TO THE SECOND SOURCE.

UNDER 41 U.S.C. 256A, THE COMPTROLLER GENERAL IS AUTHORIZED TO GRANT RELIEF FROM LIQUIDATED DAMAGES IN THOSE CASES WHERE IN HIS JUDGMENT THERE ARE STRONG AND PERSUASIVE EQUITIES IN THE CONTRACTOR'S FAVOR. 32 COMP. GEN. 67. THESE ARE NOT PRESENT HERE. THE STRIKE BEGAN 10 DAYS BEFORE THE CONTRACTOR PREPARED THE BID AND WAS STILL IN PROGRESS AT THE TIME OF BID OPENING ON JANUARY 15, 1964, AND AWARD ON JANUARY 17, 1964. THE CONTRACTOR HAD KNOWLEDGE OF THE STRIKE BUT EVEN AFTER AWARD CONTINUED TO BE HOPEFUL THAT THERE WOULD BE AN EARLY SETTLEMENT. IT SEEMS THAT THE CONTRACTOR WAS OVERLY OPTIMISTIC ABOUT A PRECARIOUS SITUATION AND THERE IS NO SHOWING THAT IT TOOK ANY STEPS TO ASCERTAIN WHAT WOULD BE THE LATEST DATE IT COULD PLACE AN ORDER WITH THE SECOND SOURCE AND STILL BE ABLE TO PERFORM ON TIME IN THE EVENT THE PLANNED SOURCE CONTINUED STRIKE-BOUND. IT APPEARS THAT ONLY WHEN IT REALIZED THAT THE STRIKE WAS NOT ENDING AS PROMPTLY AS IT HAD HOPED FOR DID IT TURN TO A SECOND SOURCE HOPING THAT THAT SOURCE WOULD BE ABLE TO HELP IT MEET ITS DEADLINE. FURTHER, BIDDING UPON A CONTRACT CONTAINING A LIQUIDATED DAMAGES ARTICLE PROVIDING THAT ONE OF THE CONDITIONS, AMONG OTHERS, FOR EXCUSABILITY FOR DELAY WILL BE THAT THE CAUSE BE "UNFORESEEABLE" SHOULD HAVE MADE IT APPARENT TO THE CONTRACTOR WHEN IT KNEW OF THE EXISTENCE OF THE STRIKE THAT THERE WERE ATTENDING ITS OFFER VERY DEFINITE OBSTACLES AND RISKS WHICH REQUIRED SPECIAL PRECAUTIONS TO BE OBSERVED.

IT IS OUR OPINION THAT THE CONTRACTOR DID NOT ACT AS PRUDENTLY AND WITH SUCH CARE AS SHOULD REASONABLY BE EXPECTED IN THE SITUATION WHICH IT WAS IN. THE CONTRACTOR'S PLIGHT THEREFORE SEEMS TO BE OF ITS OWN MAKING AND FAULT BECAUSE OF ITS FAILURE TO EMPLOY PROPER DILIGENCE.

THE REQUEST FOR REMISSION IS THEREFORE DENIED.