B-166581, APR. 29, 1969

B-166581: Apr 29, 1969

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SECRETARY: ENCLOSED IS A COPY OF A LETTER DATED MARCH 27. IT IS OUR INFORMAL UNDERSTANDING THAT THIS ACTION WAS SUGGESTED BY CENSUS BUREAU PERSONNEL RESPONSIBLE FOR ADMINISTERING THE CONTRACT. 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.'. WHETHER LIQUIDATED DAMAGES ARE LEGALLY ASSESSABLE IS A MATTER INITIALLY FOR DETERMINATION IN ACCORDANCE WITH THE TERMS OF THE CONTRACT BY THE CONTRACTING OFFICER. IT IS OUR UNDERSTANDING THAT THE CONTRACTING OFFICER HAS NOT DETERMINED WHETHER THE CIRCUMSTANCES SURROUNDING THE COMPANY'S DEFAULT WOULD RENDER ITS DELAY EXCUSABLE.

B-166581, APR. 29, 1969

TO MR. SECRETARY:

ENCLOSED IS A COPY OF A LETTER DATED MARCH 27, 1969, FROM HANDLING EQUIPMENT SALES COMPANY, C., BETHESDA, MARYLAND, IN WHICH THE COMPANY APPEALS THE DEDUCTION OF $1,070.42 AS LIQUIDATED DAMAGES FOR DELAYED DELIVERY UNDER CENSUS BUREAU CONTRACT NO. CC0-9299. IT IS OUR INFORMAL UNDERSTANDING THAT THIS ACTION WAS SUGGESTED BY CENSUS BUREAU PERSONNEL RESPONSIBLE FOR ADMINISTERING THE CONTRACT.

THE AUTHORITY OF OUR OFFICE TO REMIT LEGALLY ASSESSED LIQUIDATED DAMAGES EXISTS PURSUANT TO 41 U.S.C. 256A, 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.' WHETHER LIQUIDATED DAMAGES ARE LEGALLY ASSESSABLE IS A MATTER INITIALLY FOR DETERMINATION IN ACCORDANCE WITH THE TERMS OF THE CONTRACT BY THE CONTRACTING OFFICER, SUBJECT TO THE RIGHT OF APPEAL UNDER THE DISPUTES CLAUSE. IT IS OUR UNDERSTANDING THAT THE CONTRACTING OFFICER HAS NOT DETERMINED WHETHER THE CIRCUMSTANCES SURROUNDING THE COMPANY'S DEFAULT WOULD RENDER ITS DELAY EXCUSABLE, THEREBY PREVENTING THE ASSESSMENT OF LIQUIDATED DAMAGES, UNDER THE CRITERIA SET FORTH IN ARTICLE 11, PARAGRAPH (C), OF THE SUBJECT CONTRACT'S GENERAL PROVISIONS. WE BELIEVE IT WAS PROCEDURALLY INCORRECT FOR CENSUS BUREAU PERSONNEL TO ADVISE THE CONTRACTOR TO APPEAL TO THIS OFFICE BEFORE FINAL ADMINISTRATIVE DETERMINATION OF THE MERITS OF THE CONTRACTOR'S EXCUSE.

IF LIQUIDATED DAMAGES IN THE SUBJECT CASE ARE FINALLY DETERMINED TO BE LEGALLY ASSESSABLE, THEY MAY BE REMITTED BY OUR OFFICE PURSUANT TO 41 U.S.C. 256A, QUOTED ABOVE, UPON YOUR FAVORABLE RECOMMENDATION, PROVIDED, OF COURSE, IT PROPERLY MAY BE DETERMINED THAT SUCH ACTION IS JUST AND EQUITABLE. IN VIEW THEREOF, THE MATTER IS BEING REFERRED BACK FOR FURTHER CONSIDERATION BY YOUR DEPARTMENT.