B-170149, AUG. 11, 1970

B-170149: Aug 11, 1970

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REMANDING THE CASE TO THE CONTRACTING OFFICER FOR DETERMINATION UNDER THE DISPUTE CLAUSE OF WHETHER CONTRACTOR'S FAILURE TO DELIVER BY THE EXTENDED DELIVERY DATE IS RESULT OF EXCUSABLE DELAY. ACCARDI: REFERENCE IS MADE TO YOUR LETTER DATED JUNE 11. THE FACTS AND CIRCUMSTANCES GIVING RISE TO THE QUESTIONS PRESENTED ARE SET FORTH BELOW. FOREST SERVICE CONTRACT NO. 13-398 WAS AWARDED TO MOTOROLA COMMUNICATIONS AND ELECTRONICS. THE AWARD WAS FOR CERTAIN ITEMS INCLUDING ITEMS 39. 42 AND 44 WHICH ARE THE SUBJECT OF YOUR QUESTIONS. THE RECORD INDICATES THAT SINCE THE EQUIPMENT WAS TO BE DELIVERED TO SEVERAL FOREST SERVICE REGIONS. A CONTRACTING OFFICER'S REPRESENTATIVE WAS DESIGNATED FOR EACH REGION.

B-170149, AUG. 11, 1970

CONTRACTS -- LIQUIDATED DAMAGES DISPUTES DECISION HOLDING THAT THE GOVERNMENT DID WAIVE THE CONTRACT REQUIREMENT TO ASSESS LIQUIDATED DAMAGES BY EXTENDING THE DELIVERY DATE, BUT REMANDING THE CASE TO THE CONTRACTING OFFICER FOR DETERMINATION UNDER THE DISPUTE CLAUSE OF WHETHER CONTRACTOR'S FAILURE TO DELIVER BY THE EXTENDED DELIVERY DATE IS RESULT OF EXCUSABLE DELAY.

TO MR. ACCARDI:

REFERENCE IS MADE TO YOUR LETTER DATED JUNE 11, 1970, WITH ENCLOSURES, REQUESTING OUR DECISION AS AN AUTHORIZED CERTIFYING OFFICER PURSUANT TO 31 U.S.C. 82D CONCERNING THE PAYMENT OF A VOUCHER SUBMITTED TO YOU FOR PAYMENT BY THE CONTRACTING OFFICER'S REPRESENTATIVE. THE FACTS AND CIRCUMSTANCES GIVING RISE TO THE QUESTIONS PRESENTED ARE SET FORTH BELOW.

ON JUNE 4, 1969, FOREST SERVICE CONTRACT NO. 13-398 WAS AWARDED TO MOTOROLA COMMUNICATIONS AND ELECTRONICS, INC., 2000 "L" STREET, N.W., WASHINGTON, D. C., FOR F.M. RADIO EQUIPMENT AS LISTED ON THE BID SCHEDULE. THE AWARD WAS FOR CERTAIN ITEMS INCLUDING ITEMS 39, 42 AND 44 WHICH ARE THE SUBJECT OF YOUR QUESTIONS. THE RECORD INDICATES THAT SINCE THE EQUIPMENT WAS TO BE DELIVERED TO SEVERAL FOREST SERVICE REGIONS, A CONTRACTING OFFICER'S REPRESENTATIVE WAS DESIGNATED FOR EACH REGION. THE DUTIES OF THE "C.O.R.'S" WERE TO ISSUE PURCHASE ORDERS TO THE CONTRACTOR FOR THE APPROPRIATE BID ITEMS FOR THEIR RESPECTIVE REGIONS, TO INSPECT, ACCEPT AND MAKE PAYMENT THROUGH A LOCAL CERTIFYING OFFICER FOR THE DELIVERED EQUIPMENT. THE CONTRACTOR WAS INFORMED OF THESE DELEGATIONS BY THE CONTRACTING OFFICER'S LETTER OF JUNE 4, 1969.

CHANGE ORDERS WERE ISSUED ON JUNE 10 AND 20, 1969, INCREASING THE ITEMS AWARDED AND QUANTITIES. NO CHANGE WAS MADE IN THE CONTRACT TIME. ON JUNE 23, 1969, THE CONTRACTING OFFICER'S REPRESENTATIVE ISSUED PURCHASE ORDER NO. 2006 FOR CERTAIN OF THE BID ITEMS. ALL ITEMS ORDERED WERE SHIPPED, ACCEPTED AND PAID FOR IN ACCORDANCE WITH THE CONTRACT DELIVERY REQUIREMENTS EXCEPT FOR ITEMS 39, 42 AND 44. YOU STATE THAT THE SHIPPING DATE ON ITEMS 39 AND 42 WAS MARCH 26, 1970, AND FOR ITEM 44 THE SHIPPING DATE WAS MAY 1, 1970. THE CONTRACTOR'S INVOICES WERE FOR THE FULL CONTRACT PRICE.

PAGE 29 OF THE INVITATION STANDARD FORM 36, JULY 1966, PROVIDES IN PERTINENT PART AS FOLLOWS:

"DELIVERY

"'DELIVERY' AS USED HERE WILL BE CONSTRUED TO MEAN THE DATE THE EQUIPMENT IS TENDERED TO CARRIER FOR SHIPMENT FROM FACTORY. FOR THE PURPOSE OF DETERMINING COMPLIANCE WITH DELIVERY TERMS, THE CONTRACTOR SHALL SUBMIT TO THE PAYING OFFICES, TOGETHER WITH INVOICES FOR PAYMENT, SIGNED COPY OF CARRIER'S RECEIPT INDICATING THE DATE SHIPMENT WAS MADE FROM FACTORY.

"AFTER AWARD IS MADE TO A BIDDER, IF HE FAILS TO MAKE DELIVERY OF THE ABOVE ITEMS WITHIN THE TIME SPECIFIED, THERE WILL BE DEDUCTED FOR PAYMENT TO HIM, AS A LIQUIDATED DAMAGE, NOT AS A PENALTY, AN AMOUNT EQUAL TO 1/2 OF 1% OF THE BID PRICE OF THE UNDELIVERED PORTION OF THE ORDER FOR EACH CALENDAR DAY OF DELAY, INCLUDING SUNDAYS AND HOLIDAYS. DELIVERY TIME WILL BE RECKONED IN TERMS OF CALENDAR DAYS AFTER THE DATE OF RECEIPT BY THE BIDDER OF A PURCHASE ORDER. THE CALENDAR DAY IS THE SMALLEST UNIT OF TIME THAT WILL BE CONSIDERED. PURCHASE ORDERS WILL BE ISSUED AT TIME OF AWARD OR SHORTLY THEREAFTER BY THE CONTRACTING OFFICER OR HIS APPOINTED REPRESENTATIVES." BASED ON THE CONTRACT REQUIREMENTS AND THE CONTRACTOR'S RECEIPT OF THE PURCHASE ORDER ON JUNE 27, 1969, THE LATEST DELIVERY DATES PRIOR TO ASSESSING LIQUIDATED DAMAGES WERE AS FOLLOWS:

CONTRACT TIME PROJECTED DELIVERY DATE

ITEM 39-150 DAYS - JUNE 27 TO NOV. 25

ITEM 42-150 DAYS - JUNE 27 TO NOV. 25

ITEM 44-150 DAYS - JUNE 27 TO NOV. 25

BY LETTER DATED DECEMBER 10, 1969, THE CONTRACTOR REQUESTED AN EXTENSION OF CONTRACT TIME ON THE ITEMS IN QUESTION DUE TO SEVERAL MODIFICATIONS IN THE DESIGN MODEL REQUESTED BY MR. HOWARD WEBB, A FOREST SERVICE EMPLOYEE AT THE FOREST SERVICE ELECTRONICS CENTER IN BELTSVILLE, MARYLAND. THE RESPONSIBILITY OF THE BELTSVILLE CENTER WAS TO CONDUCT TESTS OF BASIC EQUIPMENT BEING BID ON PRIOR TO ACCEPTANCE BY THE FOREST SERVICE AND TO ISSUE A CERTIFICATION TEST REPORT USING THE FOREST SERVICE SPECIFICATIONS AS A MINIMUM STANDARD. YOU STATE THAT THERE WAS NO AUTHORITY FOR MR. WEBB TO REQUEST THE CONTRACTOR TO MAKE MODIFICATIONS TO THE EQUIPMENT. HOWEVER, THE CONTRACTING OFFICER CONCURRED IN THESE CHANGES BY HIS LETTER TO THE CONTRACTOR DATED FEBRUARY 5, 1970. IN THIS LETTER THE CONTRACTING OFFICER GRANTED A TIME EXTENSION AND ESTABLISHED MARCH 16, 1970, AS THE NEW DELIVERY DATE WITH THE STIPULATION THAT "NO DELIVERIES ARE TO BE MADE UNTIL THE SAMPLE UNITS HAVE BEEN INSPECTED AND YOU RECEIVE WRITTEN AUTHORIZATION FROM THE CONTRACTING OFFICER TO MAKE DELIVERY."

THE RECORD INDICATES THAT WRITTEN AUTHORIZATION TO SHIP THE EQUIPMENT WAS ISSUED BY THE CONTRACTING OFFICER BY LETTER DATED MARCH 16, 1970, THE SAME DATE THAT DELIVERY WAS REQUIRED BY THE CONTRACTING OFFICER'S LETTER OF FEBRUARY 5, 1970. A NOTE AT THE BOTTOM OF THE CONTRACTING OFFICER'S REPRESENTATIVE'S COPY OF THIS LETTER STATES: "THE MARCH 16 DELIVERY DATE IS STILL FIRM; LIQUIDATED DAMAGES WILL APPLY TO ANY UNITS NOT DELIVERED TO THE CARRIER BY MARCH 16, 1970."

BASED ON THE CONTRACTING OFFICER'S NOTE, THE CONTRACTING OFFICER'S REPRESENTATIVE COMPUTED LIQUIDATED DAMAGES AND DEDUCTED FROM THE CONTRACTOR'S INVOICE AS FOLLOWS:

ITEM 39 - 1/2 OF 1% PER DAY FOR PERIOD 3/16-3/25/70 (10 DAYS) ON $1,362 $68.10.

ITEM 42 - 1/2 OF 1% PER DAY FOR PERIOD 3/16-3/25/70 (10 DAYS) ON $1,319 $65.95.

ITEM 44 - 1/2 OF 1% PER DAY FOR PERIOD 3/16-4/30/70 (46 DAYS) ON $1,625 $373.75. ABOVE AMOUNTS BY INVOICES ARE AS FOLLOWS:

INV. NO. 6-9384-727, PAGE 3 - $1,362 LESS $68.10 $1,293.90

INV. NO. 6-9384-727, PAGE 4 - $1,319 LESS 65.95 1,253.05

INV. NO. 6-9384-727, PAGE 5 - $1,625 LESS 373.75 1,251.25

AMOUNT OF VOUCHER SUBMITTED FOR PAYMENT $3,798.20

IN VIEW OF THE ABOVE CIRCUMSTANCES, YOU REQUEST OUR DECISION REGARDING THE FOLLOWING QUESTIONS:

"1. DOES THE C.O.'S LETTER OF FEB. 5 WAIVE THE REQUIREMENT TO COMPUTE AND ASSESS LIQUIDATED DAMAGES FROM THE NOV. 25, 1969, DELIVERY DATE?

"2. IS THE ASSESSMENT OF LIQUIDATED DAMAGES BASED ON THE MARCH 16, 1970 DELIVERY DATE PROPER SINCE THE WRITTEN AUTHORIZATION TO EFFECT SHIPMENT WAS NOT ISSUED BY THE C.O. UNTIL MARCH 16 AND THERE APPEARS TO HAVE BEEN DELAY CAUSED BY THE GOVERNMENT?

"3. IN WHAT AMOUNT MAY THIS VOUCHER BE CERTIFIED FOR PAYMENT BASED ON QUESTIONS 1 AND 2?"

ON THE BASIS OF THE RECORD BEFORE US, IT APPEARS THAT THE CONTRACTING OFFICER'S LETTER OF FEBRUARY 5, 1970, DOES WAIVE THE REQUIREMENT TO COMPUTE AND ASSESS LIQUIDATED DAMAGES FROM THE NOVEMBER 25, 1969, DELIVERY DATE. THE CONTRACTING OFFICER'S INTENT TO EXTEND THE DELIVERY DATE IS ALSO EVIDENCED BY HIS NOTATION IN A LETTER TO THE CONTRACTOR THAT "THE MARCH 16 DELIVERY DATE IS STILL FIRM."

WITH RESPECT TO THE PROPRIETY OF ASSESSMENT OF LIQUIDATED DAMAGES BASED ON THE MARCH 16 DELIVERY DATE, WE BELIEVE THIS QUESTION IS PROPERLY FOR RESOLUTION BY THE CONTRACTING OFFICER UNDER THE DISPUTES CLAUSE OF THE GENERAL PROVISIONS OF THE CONTRACT, STANDARD FORM 32, JUNE 1964 EDITION, SINCE THE DETERMINATION OF THIS QUESTION IS A QUESTION OF FACT. IN HIS LETTER TO THE CONTRACTOR DATED FEBRUARY 5, 1970, THE CONTRACTING OFFICER STATES IN PERTINENT PART AS FOLLOWS:

"ON THE BASIS OF THE ABOVE INFORMATION, THE NEW DELIVERY DATE IS HEREBY ESTABLISHED AS MARCH 16, 1970. NO DELIVERIES ARE TO BE MADE UNTIL THE SAMPLE UNITS HAVE BEEN INSPECTED AND YOU RECEIVE WRITTEN AUTHORIZATION FROM THE CONTRACTING OFFICER TO MAKE DELIVERY." THE WRITTEN AUTHORIZATION TO THE CONTRACTOR REFERRED TO IN THE ABOVE-CITED LETTER WAS NOT ISSUED BY THE CONTRACTING OFFICER UNTIL MARCH 16, 1970. THEREFORE, THE FAILURE OF THE CONTRACTOR TO DELIVER ON MARCH 16, 1970, MAY BE THE RESULT OF AN EXCUSABLE DELAY WHICH PRESENTS A QUESTION OF FACT FOR RESOLUTION UNDER THE ADMINISTRATIVE PROCEDURES PRESCRIBED BY THE CONTRACT DISPUTES CLAUSE WHICH IS MADE PART OF THE CONTRACT. TO WHAT EXTENT, IF ANY, LIQUIDATED DAMAGES ARE PROPERLY ASSESSABLE DEPENDS UPON THE CONTRACTING OFFICER'S RESOLUTION OF THIS QUESTION. THE RECORD FURNISHED OUR OFFICE CONTAINS NO INDICATION THAT THE CONTRACTING OFFICER HAS EVER MADE A WRITTEN DETERMINATION OF THE FACTS CONCERNING THIS QUESTION OR THAT ANY FINDINGS HAVE BEEN FURNISHED TO THE CONTRACTOR. WHERE, AS IN THIS INSTANCE, A CONTRACT PROVIDES FOR A DECISION WITH RESPECT TO SPECIFIED MATTERS BY A DESIGNATED OFFICIAL, THE CONTRACTOR IS ENTITLED TO HAVE SUCH DECISION BY THE DESIGNATED OFFICIAL. SEE, B-169376, MAY 13, 1970, AND CASES CITED THEREIN.

ACCORDINGLY, THE FILES ARE RETURNED HEREWITH FOR FURTHER ADMINISTRATIVE DETERMINATION. IF YOU SHOULD HAVE DOUBTS OR QUESTIONS AS TO THE LEGAL PROPRIETY OF ANY PAYMENT WHICH MAY BE PROPOSED AS A RESULT THEREOF, YOU MAY RESUBMIT THE MATTER.