B-154311, AUG. 25, 1964

B-154311, AUG. 25, 1964

TO THE HONORABLE NAJEEB E. HALABY, ADMINISTRATOR, FEDERAL AVIATION AGENCY:

REFERENCE IS MADE TO LETTER DATED JULY 27, 1964, WITH ENCLOSURES, FROM MR. R. J. SHANK, ASSOCIATE ADMINISTRATOR FOR DEVELOPMENT, OF YOUR AGENCY, CONCERNING THE REQUEST OF THE SCHOUTEN CONSTRUCTION COMPANY, DENVER, COLORADO, FOR REMISSION ON AN EQUITABLE BASIS OF LIQUIDATED DAMAGES IN THE AMOUNT OF $6,125 ASSESSED BY THE WESTERN REGION, FEDERAL AVIATION AGENCY, UNDER CONTRACT NO. FA 4-10406.

IT APPEARS THAT THE CONTRACT WAS EXECUTED ON JULY 5, 1961, FOR THE CONSTRUCTION OF RADAR MICRO-WAVE (RML) FACILITIES AT FIVE SITES IN NEVADA AND CALIFORNIA, WITH WORK TO COMMENCE WITHIN 10 DAYS FROM AND INCLUDING THE EFFECTIVE DATE OF THE NOTICE TO PROCEED AND BE COMPLETED WITHIN 45 DAYS FROM AND INCLUDING THE EFFECTIVE DATE OF NOTICE TO PROCEED. NOTICE TO PROCEED WAS EFFECTIVE ON JULY 10, 1961, AND AUGUST 23, 1961, WAS ESTABLISHED AS THE CONTRACT COMPLETION DATE FOR EACH FACILITY. UNDER GENERAL CONDITION 7 AND GENERAL PROVISION 5 OF THE CONTRACT, LIQUIDATED DAMAGES IN THE AMOUNT OF $125 PER CALENDAR DAY FOR EACH DAY OF DELAY UNDER EACH JOB SITE WAS ESTABLISHED. NOTWITHSTANDING REVISED COMPLETION DATES AT THREE OF THE SITES DUE TO DIRECTED WORK STOPPAGES (UNDER GENERAL CONDITION 12), A TOTAL OF 49 DAYS OF DELAY SUBJECT TO LIQUIDATED DAMAGES WERE ACCUMULATED. IT IS REPORTED THAT THE SUM OF $6,125 (49 DAYS AT $125 PER DAY) WAS DEDUCTED FROM THE FIFTH PARTIAL PAYMENT, VOUCHER NO. 12-98, DATED NOVEMBER 2, 1962.

IT IS STATED IN THE CONTRACTING OFFICER'S REPORT ACCOMPANYING THE LETTER OF JULY 27, 1964, THAT IN RETROSPECT, IT APPEARS THAT THE CONTRACT CONSTRUCTION TIME ALLOWED MAY HAVE BEEN INADEQUATE SINCE BID INVITATIONS FOR ALL SIMILAR FACILITIES IN THE WESTERN REGION WERE CHANGED AFTER THIS PROJECT TO PROVIDE THAT CONSTRUCTION WOULD BE COMPLETED WITHIN 60 CALENDAR DAYS RATHER THAN 45 CALENDAR DAYS. IT ALSO IS STATED THAT THE CONTRACT WORK, IN ITS DESERT LOCALE WITH ATTENDANT JOB MOBILIZATION AND CONSTRUCTION PROBLEMS IN AREAS DISTANT FROM LABOR AND MATERIAL MARKETS, AND THE HIGH TEMPERATURES WHICH WERE ENCOUNTERED, ALTHOUGH NOT CONSIDERED A "CHANGED CONDITION," MADE COMPLIANCE WITH THE TIME PROVISIONS EXTREMELY DIFFICULT; THAT THE GOVERNMENT WAS NOT APPRECIABLY DAMAGED BY THE DELAYED COMPLETIONS ON THE THREE SITES CITED ABOVE; AND THAT THE EQUIPMENT INSTALLER DID NOT INCUR ADDITIONAL COSTS AS A RESULT OF THE DELAYED COMPLETIONS. IT IS FURTHER NOTED THAT THE CONTRACTOR'S REPRESENTATIVE HAS AGREED TO WITHDRAW ALL EXISTING CLAIMS NOW PENDING BEFORE THE FEDERAL AVIATION AGENCY CONTRACT APPEALS PANEL, IN THE EVENT HIS PETITION FOR REMISSION OF LIQUIDATED DAMAGES IS APPROVED. IN THIS CONNECTION IT IS STATED THAT THE AGENCY WOULD BENEFIT THEREBY BY CONCLUDING A CONTRACT APPEAL CASE WITHOUT THE EXPENDITURE OF ADDITIONAL TIME AND EXPENSE IN THE ADMINISTRATIVE HANDLING OF CLAIMS CONSIDERED TO BE UNFOUNDED IN FACT, AND THROUGH LITIGATION AFTER EXHAUSTION OF ADMINISTRATIVE REMEDIES.

IN VIEW OF ALL THE FACTS AND CIRCUMSTANCES OF RECORD, IT IS THE RECOMMENDATION OF YOUR AGENCY, IN ACCORDANCE WITH 41 U.S.C. 256A AND 259, THAT LIQUIDATED DAMAGES IN THE SUM OF $6,125, ASSESSED UNDER THE CONTRACT, BE REMITTED TO THE CONTRACTOR ON AN EQUITABLE BASIS, PROVIDED THE CONTRACTOR WITHDRAWS, WITH PREJUDICE, ALL CLAIMS, PAST, PRESENT, OR FUTURE, UNDER THE SUBJECT CONTRACT.

WE HAVE REVIEWED THE ADMINISTRATIVE REPORT AND DOCUMENTS ACCOMPANYING THE LETTER OF JULY 27, 1964, AND AGREE WITH THE RECOMMENDATION MADE. HOWEVER, WE FEEL THAT BEFORE WE PROPERLY MAY TAKE FORMAL ACTION IN THE MATTER, THE SCHOUTEN CONSTRUCTION COMPANY SHOULD FIRST WITHDRAW ALL ITS CLAIMS, WITH PREJUDICE, UNDER CONTRACT FA 4-10406, AS PROPOSED BY ITS ATTORNEYS. ACCORDINGLY, IT IS REQUESTED THAT YOUR AGENCY COMMUNICATE WITH OFFICIALS OF THE SCHOUTEN CONSTRUCTION COMPANY OR ITS ATTORNEYS AND INFORM THEM THAT IT WILL BE NECESSARY FOR THE CLAIMS TO BE WITHDRAWN WITH PREJUDICE BEFORE FORMAL REMISSION OF LIQUIDATED DAMAGES MAY BE MADE.

UPON RECEIPT OF ADVICE FROM YOUR AGENCY TO THE EFFECT THAT THE CLAIMS HAVE BEEN WITHDRAWN AS PROPOSED, OUR OFFICE WILL TAKE FORMAL ACTION IN REGARD TO REMISSION OF THE LIQUIDATED DAMAGES ASSESSED AGAINST SCHOUTEN CONSTRUCTION COMPANY AND REFUND TO THE COMPANY THE AMOUNT WITHHELD ON FIFTH PARTIAL PAYMENT, VOUCHER NO. 12-98, DATED NOVEMBER 2, 1962. WHEN THIS IS ACCOMPLISHED, YOU WILL BE SO ADVISED.