B-1752, MARCH 14, 1939, 18 COMP. GEN. 709

B-1752: Mar 14, 1939

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THE DATE OF SHIPMENT FROM THE NAMED SHIPPING POINT CONSTITUTES THE DELIVERY DATE FOR LIQUIDATED DAMAGE PURPOSES UNDER THE APPLICABLE LIQUIDATED DAMAGE CLAUSE NOTWITHSTANDING THE BID ACCEPTANCE WAS BASED UPON A BID PRICE F.O.B. A STIPULATION FOR DELIVERY "THE LATTER PART OF NOVEMBER" IS NOT SO INDEFINITE AS TO PRECLUDE ASSESSMENT OF LIQUIDATED DAMAGES FOR DELAY IN DELIVERY. THERE CAN BE NO DOUBT AS TO THE FINAL DATE BY WHICH DELIVERY WAS CONTEMPLATED. OTHERWISE UNEXCUSABLE DELAY IN DELIVERY BEYOND THE 30TH OF THE MONTH IS A DELAY FOR WHICH LIQUIDATED DAMAGES ARE ASSESSABLE. A CONTRACT POSSIBLE OF PERFORMANCE AT THE TIME IT WAS ENTERED INTO. MUST BE PERFORMED IN ACCORDANCE WITH ITS TERMS UNLESS PERFORMANCE IS RENDERED IMPOSSIBLE BY AN ACT OF GOD.

B-1752, MARCH 14, 1939, 18 COMP. GEN. 709

CONTRACTS - DAMAGES - LIQUIDATED - DELIVERY PROVISION CONSTRUCTION, UNFORESEEN DIFFICULTIES IN PERFORMANCE AND ABSENCE OF ACTUAL DAMAGE WHERE AN ACCEPTED BID SPECIFIED THAT DATE OF SHIPMENT FROM A NAMED SHIPPING POINT WOULD BE THE ,LATTER PART OF NOVEMBER" WITHOUT SPECIFYING A DELIVERY DATE AT DESTINATION, THE DATE OF SHIPMENT FROM THE NAMED SHIPPING POINT CONSTITUTES THE DELIVERY DATE FOR LIQUIDATED DAMAGE PURPOSES UNDER THE APPLICABLE LIQUIDATED DAMAGE CLAUSE NOTWITHSTANDING THE BID ACCEPTANCE WAS BASED UPON A BID PRICE F.O.B. DESTINATION. A STIPULATION FOR DELIVERY "THE LATTER PART OF NOVEMBER" IS NOT SO INDEFINITE AS TO PRECLUDE ASSESSMENT OF LIQUIDATED DAMAGES FOR DELAY IN DELIVERY, FOR WHILE THE LATTER PART OF NOVEMBER MIGHT COVER A DELIVERY EARLIER THAN NOVEMBER 30, THERE CAN BE NO DOUBT AS TO THE FINAL DATE BY WHICH DELIVERY WAS CONTEMPLATED, AND OTHERWISE UNEXCUSABLE DELAY IN DELIVERY BEYOND THE 30TH OF THE MONTH IS A DELAY FOR WHICH LIQUIDATED DAMAGES ARE ASSESSABLE. A CONTRACT POSSIBLE OF PERFORMANCE AT THE TIME IT WAS ENTERED INTO, AND CONTAINING NO PROVISION FOR EXCUSING DELAYS IN PERFORMANCE FOR ANY CAUSE, MUST BE PERFORMED IN ACCORDANCE WITH ITS TERMS UNLESS PERFORMANCE IS RENDERED IMPOSSIBLE BY AN ACT OF GOD, BY THE LAW, OR BY THE OTHER PARTY, UNFORESEEN DIFFICULTIES, HOWEVER GREAT, CONSTITUTING NO EXCUSE FOR NONPERFORMANCE, AND THE FACT THAT THE GOVERNMENT MAY NOT HAVE SUFFERED ANY ACTUAL DAMAGE BECAUSE OF DELAY IN PERFORMANCE IS IMMATERIAL UNDER A VALID AGREEMENT FOR LIQUIDATED DAMAGES.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF THE INTERIOR, MARCH 14, 1939:

THERE HAS BEEN RECEIVED YOUR LETTER OF FEBRUARY 21, 1939, AS FOLLOWS:

THE COMMISSIONER OF FINANCE OF THE VIRGIN ISLANDS, CHARLOTTE AMALIE, VIRGIN ISLANDS, HAS SUBMITTED TO THIS DEPARTMENT A SHORT FORM CONTRACT ENTERED INTO BY HIM WITH THE VIRGIN ISLANDS TOURIST COMPANY ON OCTOBER 17 LAST, IN WHICH THE CONTRACTOR AGREED TO MAKE DELIVERY OF ONE SANITARY GARBAGE TRUCK FOR THE SUM OF $2,373.

THIS CONTRACT BEARS THE NOTATION OF THE CONTRACTOR TO THE EFFECT THAT THE TRUCK WOULD BE SHIPPED THE LATTER PART OF NOVEMBER 1938, BUT IN EXPLANATION OF A DELAY IN SHIPMENT, THE CONTRACTOR HAS SUBMITTED TWO LETTERS OF DECEMBER 15, 1938, AND JANUARY 16, 1939, INDICATING THAT WHILE ITS PRINCIPAL, THE FORD MOTOR COMPANY, ORIGINALLY AGREED TO MAKE SHIPMENT LATE IN NOVEMBER, THIS WAS FOUND IMPOSSIBLE DUE TO THE FACT THAT THE TYPE OF TRUCK ORDERED WAS NOT THEN IN STOCK AND AVAILABLE FOR SHIPMENT. AS A RESULT, IT WAS NOT SHIPPED UNTIL DECEMBER 24, AND NOT DELIVERED IN THE VIRGIN ISLANDS UNTIL DECEMBER 30, 1938.

THE COMMISSIONER OF FINANCE HAS CALLED ATTENTION TO THE FACT THAT ALTHOUGH THE SPECIFICATIONS IN THIS CASE PROVIDE FOR LIQUIDATED DAMAGES AT THE RATE OF $10 FOR EACH CALENDAR DAY OF DELAY IN MAKING DELIVERY, HE ALSO POINTS OUT THAT THE DATE AGREED UPON FOR SHIPMENT WAS INDEFINITE, AND REPORTS THAT THE GOVERNMENT HAS SUFFERED NO ACTUAL DAMAGE BY REASON OF THIS DELAY IN DELIVERY.

IT IS REQUESTED THAT AN OPINION BE RENDERED AS TO WHETHER THE PENALTY FOR DELAY SHOULD BE IMPOSED IN THIS CASE, AND THAT THE ACCOMPANYING PAPERS BE RETURNED.

BY INVITATION OF SEPTEMBER 16, 1938, MAILED TO 14 DEALERS, AND BY NOTICES POSTED IN PUBLIC PLACES, THE DEPARTMENT OF FINANCE, ST. THOMAS, V.I., REQUESTED BIDS, SUBJECT TO CONDITIONS "ON THE REVERSE HEREOF," ON ONE SANITARY GARBAGE TRUCK, COMPLETELY EQUIPPED AND READY TO OPERATE IN ACCORDANCE WITH SPECIFICATIONS, WITH A CAPACITY OF 6-CUBIC YARDS. ALSO, PROVISION WAS MADE FOR AN ALTERNATE BID ON THE SAME TYPE OF TRUCK EQUIPPED WITH A BODY OF 8-CUBIC YARDS CAPACITY. THE INVITATION CONTAINED SPACES IN EACH INSTANCE FOR BID QUOTATIONS F.O.B. ST. THOMAS AND F.O.B. NEW YORK. PROSPECTIVE BIDDERS WERE ADVISED THAT "TIME OF DELIVERY WILL BE AN IMPORTANT FACTOR IN MAKING AWARD," AND PROVIDED:

LIQUIDATED DAMAGES.--- IF THE CONTRACTOR REFUSES OR FAILS TO MAKE DELIVERY OF THE MATERIALS OR SUPPLIES WITHIN THE TIME SPECIFIED, THE ACTUAL DAMAGE TO THE GOVERNMENT FOR THE DELAY WILL BE IMPOSSIBLE TO DETERMINE, AND IN LIEU THEREOF THE CONTRACTOR SHALL PAY TO THE GOVERNMENT, AS FIXED, AGREED, AND LIQUIDATED DAMAGES FOR EACH CALENDAR DAY OF DELAY IN MAKING DELIVERY $10.00: PROVIDED, THAT THE GOVERNMENT RESERVES THE RIGHT TO PURCHASE SIMILAR MATERIALS OR SUPPLIES IN THE OPEN MARKET AND TO CHARGE THE CONTRACTOR ANY EXCESS COST OCCASIONED THEREBY TOGETHER WITH LIQUIDATED DAMAGES ACCRUING UNTIL SUCH TIME AS THE GOVERNMENT MAY REASONABLY PROCURE SIMILAR MATERIAL OR SUPPLIES ELSEWHERE.

THE CONDITIONS ON THE REVERSE SIDE OF THE INVITATION INFORMED PROSPECTIVE BIDDERS THAT "THE GOVERNMENT RESERVES THE RIGHT TO REJECT ANY OR ALL BIDS, TO WAIVE ANY INFORMALITY IN BIDS * * *" AND THAT "TIME OF PROPOSED DELIVERY MUST BE STATED IN DEFINITE TERMS.'

CLAIMANT'S BID OF OCTOBER 10, 1938, SUBMITTED PURSUANT TO THE INVITATION FOR BIDS AND "SUBJECT TO ALL THE CONDITIONS THEREOF," BEING THE LOWEST RECEIVED, WAS ACCEPTED OCTOBER 17, 1938, AS TO ALTERNATE ITEM "NO. 1A--- $2,373.00," FOR DELIVERY F.O.B. ST. THOMAS, WITH THE DELIVERY OVISION,"SHIPMENT TO BE EFFECTED LATTER PART OF NOVEMBER 1938.'

BY LETTER OF DECEMBER 15, 1938, CLAIMANT STATED THAT IT WAS IN RECEIPT OF A CABLE FROM THE FORD MOTOR CO. ADVISING INABILITY TO MAKE DELIVERY ON THE S.S. ANGELINA BEFORE DECEMBER 24, AND REQUESTED THAT AN EXTENSION OF DELIVERY TIME BE GRANTED FOR THE FOLLOWING REASONS:

1. THE FORD COMPANY'S INDICATION TO US IN TELEGRAM AT TIME OF OPENING OF BID, STATED AN EXPECTED LATE NOVEMBER SHIPMENT AND ON THIS BASIS WE MENTIONED A LATTER PART NOVEMBER SHIPMENT.

2. IT IS OUR OPINION THAT MANUFACTURERS PREFERRED TO GIVE US THE BENEFIT OF DELIVERING A 1939 MODEL CHASSIS INSTEAD OF 1938 MODEL AND THIS HAS PROBABLY CAUSED THE DELAY WHEN IT DEVELOPED THAT THE 1939 MODEL DELIVERY WAS SOMEWHAT SLOWED UP FOR CERTAIN FACTORY REASONS.

3. WE HAD YOUR ACCEPTANCE ON THIS UNIT ON OCTOBER 17TH AND OUR ORDER WENT FORWARD BY AIR MAIL WITH REMITTANCE NEXT DAY ON OCTOBER 18TH.

4. IF THE UNIT IS SHIPPED BY ANGELINA ON THE 24TH INST., IT IS POSSIBLE TO GET A DELIVERY HERE BY CATHERINE ON DECEMBER 30TH.

THE EVIDENCE SHOWS THAT SHIPMENT OF THE TRUCK WAS MADE FROM THE UNITED STATES ON THE S.S. ANGELINA OF THE BULL INSULAR LINE DECEMBER 24, 1938, AND THAT DELIVERY WAS EFFECTED AT ST. THOMAS BY THE S.S. CATHERINE FROM SAN JUAN DECEMBER 30, 1938.

IN A LETTER OF JANUARY 16, 1939, REQUESTING THAT NO LIQUIDATED DAMAGES BE ASSESSED FOR THE DELAYED DELIVERY, CLAIMANT QUOTED FROM A LETTER RECEIVED FROM THE FORD MOTOR CO. IN EXPLANATION OF THE DELAY, AS FOLLOWS:

* * * THE DELAY WAS DUE TO THE FACT THAT AT THE TIME THE ORDER WAS SENT TO FACTORY WE WERE CHANGING MODELS. THE BODY WHICH YOU ORDERED IS NOT MANUFACTURED BY US AND WE HAD TO DEPEND ON BODY MANUFACTURER TO DELIVER THE BODY BEFORE WE COULD EFFECT SHIPMENT. BODY MANUFACTURER ALSO HAD TO WAIT UNTIL OUR 1939 MODELS WERE AVAILABLE SO THAT THEY COULD MAKE NECESSARY CHANGES IN THEIR 1938 MODELS SO THEY COULD BE INSTALLED ON OUR 1939 CHASSIS.

WHILE TIME OF DELIVERY WAS NOT STATED BY CLAIMANT IN DEFINITE TERMS AS WAS STIPULATED IN INSTRUCTIONS TO BIDDERS, THE CONTRACTOR DID SPECIFY THAT THE DATE OF SHIPMENT FROM NEW YORK WOULD BE THE "LATTER PART OF NOVEMBER 1938.' THE ACCEPTANCE OF ITEM 1A WAS BASED UPON THE BID PRICE OF $2,375 F.O.B. ST. THOMAS, BUT SINCE THE CONTRACTOR DID NOT SPECIFY A DELIVERY DATE AT ST. THOMAS, THE DATE OF SHIPMENT FROM NEW YORK CONSTITUTED DATE OF DELIVERY WITHIN THE MEANING OF THE LIQUIDATED DAMAGE CLAUSE.

IT HAS BEEN SUGGESTED THAT NO LIQUIDATED DAMAGES BE ASSESSED SINCE THE DELIVERY DATE WAS INDEFINITE AND BECAUSE THE GOVERNMENT SUFFERED NO DAMAGES AS A RESULT OF THE DELAY IN DELIVERY.

WITH RESPECT TO THE FIRST OF THESE CONTENTIONS, THERE CAN BE NO DOUBT AS TO THE FINAL DATE BY WHICH DELIVERY WAS CONTEMPLATED. WHILE "THE LATTER PART OF NOVEMBER" MIGHT COVER A DELIVERY EARLIER THAN NOVEMBER 30, IT COULD NOT HAVE CONTEMPLATED A DELIVERY AT A LATER DATE. IN THIS CONNECTION THERE IS FOR NOTING THAT THE COMMONLY ACCEPTED DEFINITION OF THE WORD "LATTER," AS SET FORTH IN WEBSTER'S NEW INTERNATIONAL DICTIONARY, IS "* * * BELONGING OR PERTAINING TO, THE END OF A PERIOD OF TIME; * * *.' ACCORDINGLY, THE LATEST DATE BY WHICH SHIPMENT WAS REQUIRED UNDER THE ABOVE QUOTED DATE OF SHIPMENT CLAUSE WAS NOVEMBER 30, 1938, AND SINCE SHIPMENT WAS NOT EFFECTED UNTIL DECEMBER 24, 1938, THERE OCCURRED A DELAY OF 24 DAYS FOR WHICH LIQUIDATED DAMAGES ACCRUED AT THE RATE OF $10 PER DAY, AMOUNTING TO A TOTAL OF $240.

AS TO THE CONTENTION THAT SINCE THE GOVERNMENT SUFFERED NO ACTUAL DAMAGES THE ASSESSMENT OF DAMAGES SHOULD BE WAIVED, YOUR ATTENTION IS INVITED TO THE FACT THAT THE CONTRACT IS AN ABSOLUTE UNDERTAKING, CONTAINING NO PROVISIONS FOR EXCUSING DELAYS IN PERFORMANCE FOR ANY CAUSE. IT IS WELL SETTLED THAT IF A PARTY CHARGES HIMSELF WITH AN OBLIGATION WHICH AT THE TIME WAS POSSIBLE OF PERFORMANCE, HE MUST ABIDE BY IT UNLESS PERFORMANCE IS RENDERED IMPOSSIBLE BY AN ACT OF GOD, BY THE LAW, OR BY THE OTHER PARTY. UNFORESEEN DIFFICULTIES, HOWEVER GREAT, WILL NOT EXCUSE PERFORMANCE UNLESS THE CONTRACT SO PROVIDES. WHERE THE PARTIES HAVE MADE NO PROVISION FOR A DISPENSATION THE TERMS OF THE CONTRACT MUST PREVAIL. SEE UNITED STATES V. GLEASON, 175 U.S. 588; CARNEGIE STEEL CO. V. UNITED STATES, 240 U.S. 156; COLUMBUS RY. POWER AND LIGHT CO. V. CITY OF COLUMBUS, 249 U.S. 399; AND 17 COMP. GEN. 901. THE FACT THAT THE GOVERNMENT MAY NOT HAVE SUFFERED ANY ACTUAL DAMAGES IS IMMATERIAL SINCE UNDER A VALID AGREEMENT FOR LIQUIDATED DAMAGES THE MATTER OF WHETHER THERE WERE ACTUAL DAMAGES OR THE AMOUNT THEREOF IS NOT FOR CONSIDERATION. SEE SUN PRINTING AND PUBLISHING ASSOCIATION V. MOORE, 183 U.S. 642; 10 COMP. DEC. 605; 13 ID. 853; 16 ID. 618; 19 ID. 278; 23 ID. 514; 2 COMP. GEN. 322; 5 ID. 363, 750; 16 ID. 918 AND 17 ID. 466.

ACCORDINGLY, YOU ARE ADVISED THAT IN MAKING PAYMENT UNDER THE CONTRACT ACCRUED LIQUIDATED DAMAGES IN THE AMOUNT OF $240 SHOULD BE DEDUCTED FROM THE CONTRACT PRICE.