B-164834, SEPT. 10, 1968

B-164834, SEPT. 10, 1968

TO MR. JOSEPH M. MCCANN:

WE REFER TO YOUR LETTER OF AUGUST 16, 1968, AND THE LETTER OF JULY 9, 1968, WITH ENCLOSURES, FROM THE CONTRACTING OFFICER, RECOMMENDING REMISSION TO ERICSON MARINE, INC., OF LIQUIDATED DAMAGES UNDER CONTRACT NO. STL-E-68-168.

THE CONTRACT IN QUESTION CALLED FOR THE REMOVAL OF CERTAIN NAVIGATIONAL AID LIGHT BASES IN THE ST. LAWRENCE RIVER AND REQUIRED THE CONTRACTOR TO COMPLETE THE ENTIRE WORK WITHIN 30 CALENDAR DAYS FROM THE RECEIPT OF THE NOTICE TO PROCEED. THE CONTRACT FURTHER CONTAINED A CLAUSE REQUIRING LIQUIDATED DAMAGES TO BE ASSESSED AT THE RATE OF $25 FOR EACH CALENDAR DAY OF DELAY UNTIL THE WORK WAS COMPLETED. THE CONTRACT COMPLETION DATE WAS NOVEMBER 29, 1967, HOWEVER THE WORK WAS NOT COMPLETED UNTIL DECEMBER 9, 1967, AND $250 WAS THEREFORE WITHHELD FROM PAYMENT TO THE CONTRACTOR. CONCERNING THIS DELAY THE CONTRACTING OFFICER STATED: "FROM ORAL AS WELL AS WRITTEN REPORTS, I AM CONVINCED THAT THE CONTRACTOR DID EVERYTHING HE COULD BE REASONABLY EXPECTED TO DO TO ATTAIN A TIMELY COMPLETION. THE UNAVOIDABLE DELAY DUE TO MACHINERY BREAKDOWN DID EXTEND THE WORK INTO THE SEASON WHERE WEATHER CONDITIONS WERE MORE ADVERSE. THE CONTRACTOR DID DO DIVING WORK ON MANY BELOW FREEZING TEMPERATURE DAYS. "THERE WAS NO INCREASE IN COST TO THE CORPORATION DUE TO LATE COMPLETION. INSPECTION WAS SUPPLIED FROM THE MARINE DIVISION FOR ONLY THE DAYS ACTUALLY WORKED. ,IT IS CONSIDERED THAT CONDITIONS BEYOND THE CONTROL OF THE CONTRACTOR CAUSED DELAYS AGGREGATING MORE THAN THE TEN DAYS BY WHICH HE EXCEEDED THE CONTRACT COMPLETION DATE AND, THEREFORE, THAT THE CONTRACT SHOULD BE MODIFIED TO GRANT AN EXTENSION OF TEN CALENDAR DAYS TO THE CONTRACT FOR A COMPLETION DATE OF DECEMBER 9, 1967.'

BASED ON THE ABOVE QUOTED RECOMMENDATION, CHANGE ORDER NO. 1, DATED JANUARY 16, 1968, EXTENDED THE TIME FOR COMPLETION OF THE CONTRACT BY 10 CALENDAR DAYS.

WHILE 41 U.S.C. 256A AUTHORIZES AND EMPOWERS OUR OFFICE, ON THE RECOMMENDATION OF THE AGENCY CONCERNED, TO REMIT THE WHOLE OR ANY PART OF LIQUIDATED DAMAGES ASSESSED AGAINST A CONTRACTOR, THE EQUITABLE RELIEF CONTEMPLATED BY THE STATUTE WILL NOT BE INVOKED IN THE ABSENCE OF A DECISION BY THE CONTRACTING OFFICER THAT THE CONTRACTOR IS NOT ENTITLED TO AN EXTENSION OF THE CONTRACT COMPLETION DATE, AND IS THEREFORE LEGALLY LIABLE FOR LIQUIDATED DAMAGES UNDER THE TERMS OF THE CONTRACT. B-150121, NOVEMBER 13, 1962.

SINCE THE COMPLETION DATE OF THE INSTANT CONTRACT WAS EXTENDED 10 DAYS DUE TO UNAVOIDABLE DELAY, LIQUIDATED DAMAGES COULD NOT PROPERLY BE ASSESSED AGAINST THE CONTRACTOR AND THE AMOUNT WITHHELD TO COVER LIQUIDATED DAMAGES IS THEREFORE NOW PAYABLE TO THE CONTRACTOR AS MONEY DUE UNDER THE CONTRACT, RATHER THAN AS A REMISSION OF LIQUIDATED DAMAGES UNDER 41 U.S.C. 256A.

BASED ON THE FOREGOING, IT IS RECOMMENDED THAT THE $250 WITHHELD FROM THE CONTRACT PRICE BE PAID TO ERICSON MARINE, INC. ..END :