B-165078, OCT. 1, 1968

B-165078: Oct 1, 1968

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TO MISS UDOFF: REFERENCE IS MADE TO YOUR LETTER 121.16. YOU REQUEST OUR DECISION AS TO WHETHER THE VOUCHER MAY BE CERTIFIED FOR PAYMENT BECAUSE OF DOUBT WHETHER THE LIQUIDATED DAMAGES CLAUSE OF THE PURCHASE ORDER IS DEFECTIVE. IN THE EVENT THE DETERMINATION OF THE CONTRACTING OFFICER IS IN ERROR. NOTICE OF AWARD OF THE PURCHASE ORDER IS REPORTED TO HAVE BEEN RECEIVED BY THE CONTRACTOR ON DECEMBER 23. THAT THE CONSOLE WAS SHIPPED BY THE CONTRACTOR ON JULY 13. BECAUSE OF LOW VOLTAGE THE POWER SUPPLY FOR THE CONSOLE WAS REJECTED BY THE USING ACTIVITY AND ON AUGUST 25. THE CONSOLE WAS RETURNED FOR REPAIR OR REPLACEMENT. THE REPAIRED POWER SUPPLY WAS AGAIN RECEIVED AT NBS. WAS REJECTED FOR UNSPECIFIED REASONS BY THE USING ACTIVITY AND RETURNED TO THE CONTRACTOR ON SEPTEMBER 14.

B-165078, OCT. 1, 1968

TO MISS UDOFF:

REFERENCE IS MADE TO YOUR LETTER 121.16, DATED AUGUST 14, 1968, TRANSMITTING A VOUCHER IN THE AMOUNT OF $15,500, WITH SUPPORTING PAPERS, IN FAVOR OF THE INTERNATIONAL TELEPHONE AND TELEGRAPH CORPORATION (ITT), INDUSTRIAL PRODUCTS DIVISION, REPRESENTING FULL PAYMENT UNDER PURCHASE ORDER NO. S-350654-67. YOU REQUEST OUR DECISION AS TO WHETHER THE VOUCHER MAY BE CERTIFIED FOR PAYMENT BECAUSE OF DOUBT WHETHER THE LIQUIDATED DAMAGES CLAUSE OF THE PURCHASE ORDER IS DEFECTIVE, AS FOUND BY THE CONTRACTING OFFICER, SO AS TO PRECLUDE THE ASSESSMENT OF LIQUIDATED DAMAGES. YOU POINT OUT THAT, IN THE EVENT THE DETERMINATION OF THE CONTRACTING OFFICER IS IN ERROR, A QUESTION THEN ARISES AS TO THE PROPER METHOD OF COMPUTATION OF SUCH DAMAGES.

THE PURCHASE ORDER, AWARDED DECEMBER 20, 1966, REQUIRED ITT TO FURNISH ONE CATHODE RAY TUBE DISPLAY CONSOLE, F.O.B. NATIONAL BUREAU OF STANDARDS (NBS), GAITHERSBURG, MARYLAND, 5 MONTHS AFTER RECEIPT OF THE PURCHASE DOCUMENT. IN THIS RESPECT, PARAGRAPHS 5.5 AND 5.6 OF THE SPECIFICATIONS PROVIDED FOR THE FURNISHING OF THE CONSOLE IN A FULLY OPERATING CONDITION UPON DELIVERY AND READY FOR ACCEPTANCE TESTING 5 MONTHS AFTER RECEIPT OF THE ORDER.

NOTICE OF AWARD OF THE PURCHASE ORDER IS REPORTED TO HAVE BEEN RECEIVED BY THE CONTRACTOR ON DECEMBER 23, 1966, THEREBY ESTABLISHING A DELIVERY DATE, 5 MONTHS HENCE, OF MAY 23, 1967. IT APPEARS, HOWEVER, THAT THE CONSOLE WAS SHIPPED BY THE CONTRACTOR ON JULY 13, 1967, AND RECEIVED AT NBS ON JULY 21, 1967, A 59-CALENDAR-DAY DELAY. THEREAFTER, BECAUSE OF LOW VOLTAGE THE POWER SUPPLY FOR THE CONSOLE WAS REJECTED BY THE USING ACTIVITY AND ON AUGUST 25, 1967, AT ITT'S REQUEST, THE CONSOLE WAS RETURNED FOR REPAIR OR REPLACEMENT.

IT APPEARS THAT ON SEPTEMBER 6, 1967, THE REPAIRED POWER SUPPLY WAS AGAIN RECEIVED AT NBS; HOWEVER, ON SEPTEMBER 8 THE CONSOLE, WHICH HAD BEEN RECEIVED WITH THE POWER SUPPLY ON JULY 21, WAS REJECTED FOR UNSPECIFIED REASONS BY THE USING ACTIVITY AND RETURNED TO THE CONTRACTOR ON SEPTEMBER 14, 1967. ON JANUARY 9, 1968, THE CONSOLE WAS AGAIN RECEIVED BY NBS BUT ON JANUARY 16 THE USING ACTIVITY REPORTED THAT IT HAD A BURNT-OUT TUBE AND COULD NOT BE ACCEPTED UNTIL THE TUBE WAS REPLACED. THE CONTRACTOR EVIDENTLY INTENDED TO REPAIR THE CONSOLE AT NBS. HOWEVER, SOME TIME DURING MARCH 1968 THE CONTRACTOR REQUESTED NBS TO RETURN THE CONSOLE TO THE CONTRACTOR'S FACILITY FOR REPAIRS. ON MARCH 22, 1968, THE CONSOLE WAS RETURNED TO THE CONTRACTOR. ON APRIL 23, 1968, THE CONSOLE WAS FINALLY DELIVERED TO NBS AND ON JUNE 6, 1968, THE CONSOLE WAS SUCCESSFULLY TESTED AND ACCEPTED BY THE USING ACTIVITY.

BY LETTER DATED JULY 21, 1967, ITT REQUESTED WAIVER OF LIQUIDATED DAMAGES WHICH MAY HAVE ACCRUED ON ACCOUNT OF THE 59-DAY DELAY IN DELIVERY (MAY 24 THROUGH JULY 21, 1967), BECAUSE THE CONTRACTOR RECEIVED DURING THAT TIME AT LEAST 19 SEPARATE CONTRACTS WHICH CARRIED VARIOUS DEFENSE PRIORITIES UNDER THE DEFENSE PRODUCTION ACT OF 1950, 50 U.S.C. APP. 2071, AND BDSA DMS REG. 2, 32A CFR, CHAPTER VI. IT IS REPORTED IN THIS RESPECT THAT THE NBS PURCHASE ORDER CONTAINED NO SUCH PRIORITY. APPARENTLY, THIS INFORMATION WAS GIVEN FOR THE PURPOSE OF APPLYING THE PROVISION APPEARING AT 50 U.S.C. APP. 2157 (SECTION 707 OF THE DEFENSE PRODUCTION ACT OF 1950). THAT SECTION PROVIDES:

"NO PERSON SHALL BE HELD LIABLE FOR DAMAGES OR PENALTIES FOR ANY ACT OR FAILURE TO ACT RESULTING DIRECTLY OR INDIRECTLY FROM COMPLIANCE WITH A RULE, REGULATION, OR ORDER ISSUED PURSUANT TO THIS ACT * * *"

ON JULY 19, 1968, THE CONTRACTING OFFICER ISSUED NO-COST CHANGE ORDER S- 350654-67-1 TO PROVIDE FOR 59 ADDITIONAL DAYS OF PERFORMANCE TIME, OR TO JULY 21, 1967,"BECAUSE OF GOVERNMENT IMPOSED ADDITIONAL DEFENSE PRIORITY WORK CONSTITUTING EXCUSABLE DELAYS.' THEREAFTER, ON AUGUST 7, 1968, A SUCCESSOR CONTRACTING OFFICER ISSUED THE FOLLOWING FINDINGS AND DETERMINATIONS:

"FINDINGS:

"/1) THE CONTRACT WAS AWARDED TO THE LOW RESPONSIVE BIDDER, AND INCLUDED A DESIRED DELIVERY DATE OF FIVE MONTHS AFTER AWARD.

"/2) THE CONTRACTOR INDICATED AND THE GOVERNMENT ACCEPTED A DELIVERY SCHEDULE OF FIVE MONTHS AFTER RECEIPT OF AWARD.

"/3) THE CONTRACTOR COMMENCED WORK ON TIME AND SUBSEQUENTLY EXPERIENCED DELAYS CAUSED BY NECESSARY REASSIGNMENT OF PERSONNEL TO DEFENSE WORK. RECEIVED A LARGE NUMBER OF DEFENSE PRIORITY CONTRACTS AFTER COMMENCING WORK ON THE NBS CONTRACT.

"/4) THE NBS CONTRACT CONTAINS NO PRIORITY RATING AND NO MEASURE OF URGENCY IS INDICATED OTHER THAN A LIQUIDATED DAMAGE CLAUSE.

"/5) THE CONTRACT CLAUSE REQUIRED DELIVERY WITHIN A SPECIFIED PERIOD BUT DOES NOT CLEARLY DEFINE WHAT CONSTITUTES DELIVERY IN REFERENCE TO THE LIQUIDATED DAMAGES. THIS IS NOT CLARIFIED IN THE SF 32 OR NBS FORMS INCLUDED IN THE CONTRACT. THE LIQUIDATED DAMAGES CLAUSE IS DEFECTIVE IN RESPECT TO CLARIFYING WHAT CONSTITUTES DELIVERY IN REFERENCE TO COMMENCING ASSESSMENT OF LIQUIDATED DAMAGES SHOULD THE CASE ARISE.

"/6) THE CONTRACTOR MADE DELIVERY AS REQUIRED BY THE CONTRACT, 59 CALENDAR DAYS LATE. DEFICIENCIES WERE LATER DISCOVERED AND SUBSEQUENTLY THE EQUIPMENT WAS RETURNED TO THE CONTRACTOR FOR CORRECTION AT NO ADDITIONAL COST TO THE GOVERNMENT.

"/7) THE EXACT NUMBER OF DAYS DELAY CAUSED BY EACH OF THE MANY PRIORITY CONTRACTS INVOLVED IS EXTREMELY DIFFICULT AND COMPLICATED TO DETERMINE BECAUSE THE CONTRACTS OVERLAP, SOME FOR SHORT PERIODS, SOME FOR EXTENDED PERIODS. THE NUMBER OF HOURS OF DIVERSION OF THE VARIOUS PEOPLE INVOLVED CAN BE DETERMINED ONLY BY FULL AUDIT, ANALYSIS AND EXTRAPOLATION OF INFORMATION FROM THE VARIOUS WORK SHEETS, TIME CARDS, PROJECT DATA CARDS AND PAYROLL DATA.

"DETERMINATION:

"/1) THE ANALYSIS OF PRIORITY LISTS SUBMITTED, AND THE CONTRACTOR'S EXPLANATIONS FOR DELAYS ENCOUNTERED, IS SUFFICIENTLY CLEAR AND ADEQUATE TO JUSTIFY AN EXTENSION OF 59 CALENDAR DAYS IN PERFORMANCE AND DELIVERY TIME UNDER THE CONTRACT.

"/2) THE LIQUIDATED DAMAGES CLAUSE IS DEFICIENT IN THAT IT DOES NOT CLEARLY DEFINE WHAT CONSITUTES DELIVERY OR INSPECTION AND ACCEPTANCE IN RELATION TO LIQUIDATED DAMAGES.

"/3) THE CONTRACT DELIVERY DATE MAY BE JUSTLY EXTENDED AND THE DELAY IS EXCUSABLE UNDER THE PROVISIONS OF THE CONTRACT.'

SUBPARAGRAPH (B) OF ARTICLE 5 OF THE GENERAL PROVISIONS, ENTITLED "INSPECTION," PROVIDED THAT THE GOVERNMENT HAD THE RIGHT TO REJECT OR REQUIRE THE CORRECTION OF SUPPLIES DETERMINED TO BE DEFECTIVE OR OTHERWISE NOT IN CONFORMITY WITH THE SPECIFICATIONS, AT THE CONTRACTOR'S EXPENSE. SUBPARAGRAPH (C) FURTHER PROVIDED THAT ACCEPTANCE OR REJECTION OF THE SUPPLIES WOULD BE MADE AS PROMPTLY AS PRACTICABLE AFTER DELIVERY. THE DELAYS-LIQUIDATED DAMAGES CLAUSE PRINTED ON THE FACE PAGE OF THE CONTRACT PROVIDED THAT:

"DELAYS -- LIQUIDATED DAMAGES. AFTER AWARD IS MADE TO A BIDDER, IF HE FAILS TO MAKE DELIVERY WITHIN THE TIME SPECIFIED IN HIS BID, THERE WILL BE DEDUCTED FROM PAYMENT TO HIM, AS A LIQUIDATED DAMAGE, NOT AS A PENALTY, AN AMOUNT OF $50.00 PER DAY FOR EACH CALENDAR DAY OF DELAY, IN TERMS OF CALENDAR DAYS AFTER THE DATE OF RECEIPT BY THE BIDDER OF PURCHASE ORDER AND SHIPPING INSTRUCTIONS, OR OTHER FORMAL NOTICE TO PROCEED. THE CALENDAR DAY IS THE SMALLEST UNIT OF TIME THAT WILL BE CONSIDERED.'

ARTICLE 11 (A) OF THE GENERAL PROVISIONS OF THE PURCHASE ORDER RESERVED TO THE GOVERNMENT THE RIGHT TO TERMINATE THE CONTRACT IN WHOLE OR IN PART "/I) IF THE CONTRACTOR FAILS TO MAKE DELIVERY OF THE SUPPLIES * * * WITHIN THE TIME SPECIFIED HEREIN OR ANY EXTENSION THEREOF.' SUBPARAGRAPH (C) OF ARTICLE 11 PROVIDED THAT THE CONTRACTOR SHALL NOT BE LIABLE FOR EXCESS COSTS IF THE FAILURE TO PERFORM ARISES OUT OF CAUSES BEYOND THE CONTROL AND WITHOUT THE FAULT OR NEGLIGENCE OF THE CONTRACTOR. SUBPARAGRAPH (F) OF ARTICLE 11 WAS AMENDED TO PROVIDE AS FOLLOWS:

"/F) (I) IN THE EVENT THE GOVERNMENT EXERCISES ITS RIGHT OF TERMINATION AS PROVIDED IN PARAGRAPH (A) ABOVE, THE CONTRACTOR SHALL BE LIABLE TO THE GOVERNMENT FOR EXCESS COSTS AS PROVIDED IN PARAGRAPH (B) ABOVE AND, IN ADDITION FOR LIQUIDATED DAMAGES, IN THE AMOUNT SET FORTH ELSEWHERE IN THIS CONTRACT, AS FIXED, AGREED, AND LIQUIDATED DAMAGES FOR EACH CALENDAR DAY OF DELAY, UNTIL SUCH TIME AS THE GOVERNMENT MAY REASONABLY OBTAIN DELIVERY OR PERFORMANCE OF SIMILAR SUPPLIES OR SERVICES.

"/II) IF THE CONTRACT IS NOT SO TERMINATED, NOTWITHSTANDING DELAY AS PROVIDED IN PARAGRAPH (A) ABOVE, THE CONTRACTOR SHALL CONTINUE PERFORMANCE AND BE LIABLE TO THE GOVERNMENT FOR SUCH LIQUIDATED DAMAGES FOR EACH CALENDAR DAY OF DELAY UNTIL THE SUPPLIES ARE DELIVERED OR SERVICES PERFORMED.

"/III) THE CONTRACTOR SHALL NOT BE LIABLE FOR LIQUIDATED DAMAGES FOR DELAYS DUE TO CAUSES WHICH WOULD RELIEVE HIM FROM LIABILITY FOR EXCESS COSTS AS PROVIDED IN PARAGRAPH (C) OF THIS CLAUSE.'

ARTICLE 12 OF THE GENERAL PROVISIONS, ENTITLED "DISPUTES," PROVIDED:

"/A) EXCPET AS OTHERWISE PROVIDED IN THIS CONTRACT, ANY DISPUTE CONCERNING A QUESTION OF FACT ARISING UNDER THIS CONTRACT WHICH IS NOT DISPOSED OF BY AGREEMENT SHALL BE DECIDED BY THE CONTRACTING OFFICER, WHO SHALL REDUCE HIS DECISION TO WRITING AND MAIL OR OTHERWISE FURNISH A COPY THEREOF TO THE CONTRACTOR. THE DECISION OF THE CONTRACTING OFFICER SHALL BE FINAL AND CONCLUSIVE UNLESS, WITHIN 30 DAYS FROM THE DATE OF RECEIPT OF SUCH COPY, THE CONTRACTOR MAILS OR OTHERWISE FURNISHES TO THE CONTRACTING OFFICER A WRITTEN APPEAL ADDRESSED TO THE SECRETARY.'

ALTHOUGH NOT SPECIFICALLY SO STATED, THE QUESTION IS WHETHER "DELIVERY" WAS IN FACT MADE WITHIN THE CONTEMPLATION OF THE DELAYS LIQUIDATED DAMAGES CLAUSE NOTWITHSTANDING THAT THE CONSOLE WAS THEREAFTER REJECTED ON SEVERAL OCCASIONS BY THE GOVERNMENT BECAUSE OF DEFECTS. WE HAVE HELD THAT, IN THE ABSENCE OF JUDICIAL PRECEDENT TO THE CONTRARY,"DELIVERY" OF ARTICLES NOT MEETING THE CONTRACT SPECIFICATIONS IS NOT "DELIVERY" WITHIN THE MEANING OF THE DEFAULT ARTICLE, AND THAT A FAILURE TO DELIVER CONFORMING ARTICLES WITHIN THE TIME REQUIRED IS AN ADEQUATE BASIS FOR DEFAULT TERMINATION. COMP. GEN. 823, 827-829. IN 47 COMP. GEN. 263, 269, WE MADE THE FOLLOWING STATEMENTS WHICH ARE PARTICULARLY PERTINENT HERE:

"THE PURPOSE OF THE STIPULATION FOR LIQUIDATED DAMAGES WAS TO COMPENSATE THE GOVERNMENT FOR DELAY IN GETTING ACCEPTABLE CIRCUIT BREAKERS INTO OPERATION WHERE THEY WERE INTENDED TO BE USED AND THE CONCOMITANT DELAY IN MOVING EXISTING CIRCUIT BREAKERS TO ANOTHER POINT WHERE THEY WERE NEEDED. THE MERE SHIPMENT OR DELIVERY OF CIRCUIT BREAKERS WHICH WERE SO DEFECTIVE IN BASIC DESIGN AS TO PRECLUDE ANY POSSIBILITY OF THEIR ACCEPTANCE COULD HAVE NO EFFECT UPON THE DAMAGES ACCRUING TO THE GOVERNMENT AND TO ADOPT SUCH AN INTERPRETATION AS YOU PROPOSE WOULD VIRTUALLY NULLIFY THE LIQUIDATED DAMAGE PROVISION.

"A VALID CONTRACTUAL STIPULATION FOR LIQUIDATED DAMAGES WILL BE ENFORCED ACCORDING TO ITS TERMS, AND, THE PARTIES HAVING AGREED IN ADVANCE ON THE AMOUNT OF SUCH DAMAGES, THE QUESTION OF ACTUAL DAMAGES, OR THE AMOUNT THEREOF RESULTING FROM A BREACH OF THE CONTRACT, IS NOT FOR CONSIDERATION. SUN PRINTING AND PUBLISHING ASSOCIATION V MOORE, 183 U.S. 642; UNITED STATES V BETHLEHEM STEEL CO., 205 U.S. 105; WISE V UNITED STATES, 249 U.S. 361. A CONTRACT PROVISION FOR LIQUIDATED DAMAGES FOR REFUSAL OR FAILURE TO MAKE SHIPMENT WITHIN THE SPECIFIED TIME OBVIOUSLY CONTEMPLATES SHIPMENTS MEETING THE SPECIFICATIONS, AND LIQUIDATED DAMAGES ARE NOT EXCUSABLE BECAUSE MATERIALS WERE SHIPPED IF SAID MATERIALS PROVE ON INSPECTION TO BE UNACCEPTABLE. 15 COMP. GEN. 903; 17 ID. 354. UNDER A CONTRACT FOR THE PURCHASE OF CRANES BY THE GOVERNMENT PROVIDING FOR TESTING OF A COMPLETED CRANE BEFORE ACCEPTANCE, THE GOVERNMENT WAS NOT OBLIGATED TO ACCEPT DELIVERY OF PARTS FOR CRANES UNTIL ONE CRANE HAD BEEN ASSEMBLED AND SATISFACTORILY PASSED THE TESTS PROVIDED FOR. ANTHONY M. MEYERSTEIN, INC. V UNITED STATES, 139 CT. CL. 305. THE ESSENCE OF THE PROMISE OF A CONTRACT TO DELIVER ARTICLES IS THE ABILITY TO PROCURE OR MAKE THEM, AND A DELAY RESULTING FROM INABILITY TO MAKE THEM, HOWEVER DIFFICULT, IS NOT A CAUSE EXCUSING THE IMPOSITION OF LIQUIDATED DAMAGES STIPULATED FOR FAILURE. CARNEGIE STEEL CO. V UNITED STATES, 240 U.S. 156.'

THEREFORE, THE MERE RECEIPT OF A CONSOLE BY THE GOVERNMENT WHICH DEVIATED FROM THE SPECIFICATIONS IN THAT IT WAS NOT IN AN OPERATING CONDITION DID NOT CONSTITUTE "DELIVERY" WITHIN THE MEANING OF THE DELAYS-LIQUIDATED DAMAGES CLAUSE. RATHER,"DELIVERY" WITHIN THE CONTEMPLATION OF THE PURCHASE ORDER WAS NOT EFFECTED UNTIL APRIL 23, 1968, WHEN AN OPERABLE CONSOLE WAS RECEIVED BY THE GOVERNMENT. WHILE WE HOLD THAT THE DELAYS- LIQUIDATED DAMAGES CLAUSE IS LEGALLY SUFFICIENT AND DEFINITE FOR THE PURPOSES OF ASCERTAINING AND FIXING THE AMOUNT OF DAMAGES IN THE EVENT OF LATE DELIVERY, THE CONTRACTOR MAY NOT BE REGARDED AS RESPONSIBLE FOR THOSE DAYS OF DELAY CONSUMED BY THE GOVERNMENT IN INSPECTING THE CONSOLE FOR COMPLIANCE WITH THE PURCHASE ORDER. SEE, IN THIS REGARD, 47 COMP. GEN. 263, 266. IN CONNECTION WITH THE 59 DAYS OF DELAY WHICH WERE DETERMINED TO BE EXCUSABLE UNDER THE PROVISIONS OF THE PURCHASE ORDER BY THE CONTRACTING OFFICER, WE MUST ACCORD FINALITY TO THAT DETERMINATION UNDER THE DISPUTES CLAUSE, QUOTED ABOVE. SEE 33 COMP. GEN. 404. IN ALBINA MARINE IRON WORKS V UNITED STATES, 79 CT. CL. 714, 720, THE COURT HELD WITH REFERENCE TO A CONTRACTING OFFICER'S DETERMINATION THAT THE PLAINTIFF WAS NOT LIABLE FOR LIQUIDATED DAMAGES ON ACCOUNT OF DELAYED DELIVERY, AS FOLLOWS:

"* * * WHAT IS AN UNFORESEEABLE CAUSE OF DELAY IS A QUESTION OF FACT AND WHEN THE CONTRACTING OFFICER MADE HIS DECISION THAT THESE CAUSES WERE UNFORESEEABLE, THAT THE CONTRACTOR WAS NOT NEGLIGENT AND WAS WITHOUT FAULT IN RESPECT TO THEM, IT WAS A FINAL DISPOSITION OF THE MATTER. NEITHER FRAUD NOR BAD FAITH IS ALLEGED OR PROVEN. THE COURT CANNOT GO BEHIND THE DECISION OF THE CONTRACTING OFFICER WHERE THE CONTRACT MAKES HIM THE FINAL ARBITER OF THE FACTS OF THE CASE UNLESS THERE HAS BEEN FRAUD OR SUCH GROSS ERROR WHICH, IN EFFECT, WOULD IMPLY BAD FAITH. THE CASES IN THIS COURT AND THE SUPREME COURT SO HOLDING ARE NUMEROUS. KIHLBERG V UNITED STATES, 97 U.S. 398; UNITED STATES V GLEASON, 175 U.S. 588; PENN BRIDGE CO. V UNITED STATES, 59 C.CLS. 892. SEE ALSO CARROLL V UNITED STATES, 76 C.CLS. 103, WHERE ALL THE CASES ARE FULLY REVIEWED. THE ACTION OF THE COMPTROLLER GENERAL IN DENYING PLAINTIFF THE RELIEF GRANTED BY THE CONTRACTING OFFICER WAS WITHOUT WARRANT OF LAW. SEE SUN SHIP-BUILDING AND DRY DOCK COMPANY V THE UNITED STATES, 76 C.CLS. 154, 193.'

THE QUESTION WHETHER A DEFAULT IS EXCUSABLE UNDER A CONTRACT IS CLEARLY A QUESTION OF FACT, AND A DECISION THEREON IN FAVOR OF A CONTRACTOR BY EXTENDING THE TIME OF PERFORMANCE IS FINAL AND CONCLUSIVE, ABSENT A SHOWING THAT IT WAS FRAUDULENT, CAPRICIOUS, ARBITRARY, OR NOT SUPPORTED BY SUBSTANTIAL EVIDENCE UNDER 41 U.S.C. 321-322. SEE H AND H MANUFACTURING COMPANY, INC. V UNITED STATES, 168 CT. CL. 873, 877.

IN VIEW OF THE FINDINGS AND DETERMINATIONS, QUOTED ABOVE, AND THE PROVISION IN 50 U.S.C. APP. 2157, WE BELIEVE THAT THE DECISION TO EXTEND THE DELIVERY DATE FOR 59 DAYS WITHOUT LIABILITY TO THE CONTRACTOR IS NOT SUBJECT TO LEGAL OBJECTION. WE NOTE, HOWEVER, THAT THE FILE DOES NOT CONTAIN A FINDING AND DETERMINATION WITH RESPECT TO THOSE DAYS OF DELAY BEYOND THE 59 DAYS OF EXCUSED DELAY.

HENCE, THE VOUCHER MAY NOT BE CERTIFIED FOR PAYMENT AND PAYMENT UNDER THE PURCHASE ORDER MAY NOT BE MADE UNTIL THE CONTRACTING OFFICER DETERMINES THE AMOUNT OF LIQUIDATED DAMAGES, IF ANY, PROPERLY CHARGEABLE TO THE CONTRACTOR ON ACCOUNT OF THE DELAY IN DELIVERY ON AND AFTER THE 59 - DAY EXTENSION.

WE ARE RETURNING THE ENCLOSURES FORWARDED WITH YOUR LETTER OF AUGUST 14 WITH THE EXCEPTION OF THE FINDINGS AND DETERMINATIONS OF THE CONTRACTING OFFICER.