B-92931, MARCH 24, 1950, 29 COMP. GEN. 388

B-92931, MARCH 24, 1950, 29 COMP. GEN. 388

CONTRACTS - LIQUIDATED DAMAGES - REMISSION OF BY THE COMPTROLLER GENERAL IN VIEW OF THE GOVERNMENT PRINTING OFFICE BEING UNDER THE LEGISLATIVE BRANCH OF THE GOVERNMENT, AND OF SECTION 309 (A) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949 DEFINING THE TERM "AGENCY HEAD" AS "THE HEAD OR ANY ASSISTANT HEAD OF ANY EXECUTIVE AGENCY," THE COMPTROLLER GENERAL IS NOT AUTHORIZED PURSUANT TO SECTION 306 OF THE ACT TO REMIT LIQUIDATED DAMAGES UNDER A GOVERNMENT PRINTING OFFICE CONTRACT ON THE BASIS OF THE PUBLIC PRINTER'S RECOMMENDATION.

COMPTROLLER GENERAL WARREN TO BLAKELY-OSWALD PRINTING COMPANY, MARCH 24, 1950:

BY LETTER DATED FEBRUARY 8, 1950, FROM THE ACTING PUBLIC PRINTER, THERE WAS TRANSMITTED YOUR LETTER OF JANUARY 30, 1950, WHEREIN CLAIM IS MADE FOR REFUND OF LIQUIDATED DAMAGES IN THE SUM OF $8,759.10 WHICH WAS DEDUCTED IN MAKING PAYMENT TO YOU FOR A QUANTITY OF CORPORATION INCOME TAX RETURN FORMS FURNISHED THE GOVERNMENT UNDER CONTRACT NO. GP-3713-A. IN THE SAID LETTER OF FEBRUARY 8, 1950, THE ACTING PUBLIC PRINTER RECOMMENDS THAT THE LIQUIDATED DAMAGES BE REMITTED BY THE COMPTROLLER GENERAL UNDER THE PROVISIONS OF SECTION 306, TITLE III, OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, 63 STAT. 396.

UNDER THE TERMS OF THE CONTRACT AS FINALLY CONSUMMATED, YOU AGREED TO DELIVER 4,720,500 CORPORATION INCOME TAX RETURNS, 1949, BY NOVEMBER 4, 1949. THE CONTRACT PROVIDES, IN PERTINENT PART, AS FOLLOWS:

LIQUIDATED DAMAGES: SHOULD THE CONTRACTOR DEFAULT ON THE SHIPPING SCHEDULE/S) AGREED TO AT THE TIME THE ORDER IS PLACED, LIQUIDATED DAMAGES OF 1 PERCENT (1 PERCENT) OF THE TOTAL COST OF THE ORDER WILL BE ASSESSED AGAINST THE CONTRACTOR FOR EACH DAY THE CONTRACTOR IS IN DEFAULT; PROVIDED, THAT THE AMOUNT SO COMPUTED SHALL BE NOT LESS THAN $2.50 NOR MORE THAN $500.00 PER DAY. FOR THE PURPOSE OF APPLYING LIQUIDATED DAMAGES, COMPLIANCE WITH DELIVERY SCHEDULE/S) WILL BE CONSIDERED FULFILLED IF CONTRACTOR HAS: (A) SHIPPED TOTAL QUANTITIES ORDERED FOR DELIVERY TO THE GOVERNMENT PRINTING OFFICE, WASHINGTON, D.C., ON OR BEFORE THE SCHEDULED DATES; AND (B) SHIPPED 90 PERCENT OR MORE OF THE TOTAL QUANTITIES ORDERED FOR DELIVERY TO EACH DESTINATION OTHER THAN THE GOVERNMENT PRINTING OFFICE, WASHINGTON, D.C., ON OR BEFORE THE SCHEDULED DATES. * * * THE CONTRACT FURTHER PROVIDES THAT "IN THE EVENT MATERIALS WHICH ARE TO BE FURNISHED BY THE GOVERNMENT PRINTING OFFICE ARE NOT FURNISHED AS SCHEDULED, THE DATE ON WHICH LIQUIDATED DAMAGES OR PENALTY PAYMENTS WOULD NORMALLY APPLY IF MATERIALS WERE FURNISHED ON SCHEDULE WILL BE EXTENDED BY THE NUMBER OF CALENDAR DAYS SUCH MATERIALS ARE WITHHELD FROM THE CONTRACTOR IN EXCESS OF THE STATED SCHEDULE. (ITALICS SUPPLIED.)

THE GOVERNMENT PRINTING OFFICE HAS REPORTED THAT THE ORDER AND COPY WERE FURNISHED TO YOU BY THE GOVERNMENT SIX DAYS LATE AND THAT THE DELIVERY DATE WAS THEREFORE EXTENDED TO NOVEMBER 10, 1949, IN ACCORDANCE WITH THE CONTRACT TERMS. THE RECORD FURTHER SHOWS THAT FINAL DELIVERY UNDER THE CONTRACT WAS MADE TO THE COLLECTOR OF INTERNAL REVENUE, CHICAGO, ILLINOIS, ON DECEMBER 15, 1949, AND, SINCE THE FORMS DELIVERED TO THE CHICAGO DESTINATION PRIOR TO THAT DATE WERE NOT 90 PERCENT OF THE TOTAL QUANTITY ORDERED FOR DELIVERY TO THAT DESTINATION IT WAS DETERMINED THAT COMPLETE DELIVERY, AS DEFINED BY THE CONTRACT, WAS NOT MADE UNTIL DECEMBER 15, 1949. LIQUIDATED DAMAGES, THEREFORE, WERE ASSESSED FOR 35 DAYS' DELAY IN DELIVERY AT THE RATE OF $250.26 PER DAY OR $8,759.10.

IN YOUR LETTER OF JANUARY 20, 1950, YOU CONTEND THAT THE DELAY OF SIX DAYS BY THE GOVERNMENT IN FURNISHING THE ORDER AND COPY DISRUPTED THE PRODUCTION SCHEDULES OF YOUR PLANT, MAKING IT NECESSARY TO RUN THE JOB ALONG WITH INCREASING HOLIDAY BUSINESS; THAT NEW INQUIRIES HAD TO BE MADE FOR THE STOCK TO BE USED SINCE YOU HAD GONE PAST THE DEADLINE GIVEN YOU IN ORDER TO OBTAIN THE PAPER IN TIME FOR THE PRESS RUN; AND THAT THE PAPER MARKET TIGHTENED IN THE INTERIM WITH DELIVERIES FURTHER EXTENDED. OTHER WORDS, IT IS YOUR CONTENTION THAT THE ENTIRE 35 DAYS' DELAY IS ATTRIBUTABLE TO THE REPORTED DELAY OF SIX DAYS BY THE GOVERNMENT IN FURNISHING THE ORDER AND PROOFS.

UNDER THE EXPRESS TERMS OF THE CONTRACT IT WAS YOUR LEGAL DUTY TO COMPLETE DELIVERY OF THE TAX FORMS WITHIN THE TIME AGREED UPON OR ANY EXTENSION THEREOF. THE GOVERNMENT WAS OBLIGATED UNDER THE CONTRACT, IN THE EVENT IT DELAYED IN FURNISHING YOU MATERIALS, TO EXTEND THE DELIVERY TIME BY THE NUMBER OF CALENDAR DAYS IT DELAYED IN FURNISHING SAID MATERIAL. THIS WAS THE EXTENT OF THE GOVERNMENT'S UNDERTAKING. SINCE YOU WERE GRANTED AN EXTENSION OF TIME FOR DELIVERY FOR THE EXACT NUMBER OF CALENDAR DAYS IT IS REPORTED THAT THE GOVERNMENT DELAYED IN FURNISHING THE ORDER AND PROOFS AS EXPRESSLY PROVIDED BY THE CONTRACT, IT FOLLOWS THAT THERE IS NO LEGAL BASIS FOR ANY FURTHER EXTENSION. THAT IS TO SAY, THE CONTRACT PRESCRIBED THE EXTENT OF THE RELIEF TO WHICH YOU WOULD BE ENTITLED IN THE EVENT THE GOVERNMENT DELAYED IN FURNISHING THE ORDER AND PROOFS AND, UNDER SUCH CIRCUMSTANCES, THE TERMS OF THE CONTRACT ARE CONCLUSIVE ON THE PARTIES, IT BEING WELL SETTLED THAT, WHERE THE PARTIES HAVE MADE NO PROVISION FOR A DISPENSATION OR HAVE LIMITED THE EXTENT OF THE DISPENSATION TO BE GRANTED,"THE TERMS OF THE CONTRACT MUST PREVAIL.' UNITED STATES V. GLEASON, 175 U.S. 588, 602, AND COLUMBUS RY. AND POWER CO. V. COLUMBUS, 249 U.S. 399, 412.

ACCORDINGLY, SINCE THE LIQUIDATED DAMAGES WERE COMPUTED AND DEDUCTED ON THE BASIS CONTEMPLATED AND PROVIDED FOR UNDER THE CONTRACT, THERE IS NO LEGAL BASIS FOR REFUNDING ANY PART THEREOF.

THE ACTING PUBLIC PRINTER STATES IN HIS LETTER THAT THE ONLY EXTENSION PERMITTED BY THE CONTRACT WAS GIVEN BUT RECOMMENDS REMISSION OF THE LIQUIDATED DAMAGES PURSUANT TO SECTION 306, TITLE III, OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, 63 STAT. 396, SUPRA, WHICH PROVIDES AS FOLLOWS:

WHENEVER ANY CONTRACT MADE ON BEHALF OF THE GOVERNMENT BY THE AGENCY HEAD OR BY OFFICERS AUTHORIZED BY HIM SO TO DO INCLUDES A PROVISION FOR LIQUIDATED DAMAGES FOR DELAY, THE COMPTROLLER GENERAL ON THE RECOMMENDATION OF THE AGENCY HEAD IS AUTHORIZED AND EMPOWERED TO REMIT THE WHOLE OR ANY PART OF SUCH DAMAGES AS IN HIS DISCRETION MAY BE JUST AND EQUITABLE.

SECTION 309 (A), TITLE III, OF THE ACT, 63 STAT. 397, PROVIDES THAT, AS USED IN THAT TITLE, THE TERM "AGENCY HEAD" SHALL MEAN "THE HEAD OR ANY ASSISTANT HEAD OF ANY EXECUTIVE AGENCY, AND MAY AT THE OPTION OF THE ADMINISTRATOR INCLUDE THE CHIEF OFFICIAL OF ANY PRINCIPAL ORGANIZATIONAL UNIT OF THE GENERAL SERVICES ADMINISTRATION.' SECTION 3 OF THE ACT, 63 STAT. 378, PROVIDES THAT, AS USED IN THE ACT,"A) THE TERM "EXECUTIVE AGENCY" MEANS ANY EXECUTIVE DEPARTMENT OR INDEPENDENT ESTABLISHMENT IN THE EXECUTIVE BRANCH OF THE GOVERNMENT, INCLUDING ANY WHOLLY OWNED GOVERNMENT CORPORATION.'

IT LONG HAS BEEN RECOGNIZED THAT THE GOVERNMENT PRINTING OFFICE IS UNDER THE LEGISLATIVE BRANCH OF THE GOVERNMENT. IN VIEW THEREOF, AND OF THE DEFINITION OF "AGENCY HEAD" CONTAINED IN SECTION 309 (A) OF THE ACT, IT MUST BE CONCLUDED THAT THE COMPTROLLER GENERAL IS NOT AUTHORIZED TO REMIT THE LIQUIDATED DAMAGES PURSUANT TO SECTION 306 ON THE BASIS OF THE PUBLIC PRINTER'S RECOMMENDATION.