B-99759, FEBRUARY 14, 1951, 30 COMP. GEN. 345

B-99759, FEBRUARY 14, 1951, 30 COMP. GEN. 345

CONTRACTS - DAMAGES - LIQUIDATED - EXTENSIONS OF TIME - ASSESSMENT COMPUTATION A CONSTRUCTION CONTRACT PROVISION FOR EQUITABLE ADJUSTMENT OF THE CONTRACT, IN EVENT THE CONTRACTING OFFICER AUTHORIZES SPECIFICATION CHANGES AFFECTING THE TIME REQUIRED FOR ITS PERFORMANCE, CONTEMPLATES CHANGES AFFECTING THE ENTIRE CONTRACT WORK, AND THEREFORE AN EXTENSION OF TIME GRANTED A CONTRACTOR IN CONNECTION WITH AN AUTHORIZATION OF EXTRA WORK FOR A PORTION OF A CONTRACTED PROJECT APPLIES NOT ONLY TO THAT PORTION BUT ALSO TO THE ENTIRE CONTRACT, SO THAT THE LIQUIDATED DAMAGES CHARGEABLE UNDER THE CONTRACT IN EVENT OF DELAY IN COMPLETION OF THE WORK ARE FOR ASSESSMENT ON THE BASIS OF DELAY IN COMPLETION OF THE ENTIRE WORK AS MODIFIED BY THE CHANGE ORDERS.

ACTING COMPTROLLER GENERAL YATES TO FRANK T. GARTSIDE, DEPARTMENT OF THE INTERIOR, FEBRUARY 14, 1951:

REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 28, 1950, WITH ENCLOSURES, WHEREIN YOU REQUEST A DECISION AS TO WHETHER PAYMENT IS AUTHORIZED ON A VOUCHER SUBMITTED THEREWITH IN FAVOR OF THE ESTATE OF LEE T. TURNER IN THE AMOUNT OF $500, REPRESENTING 10 DAYS' LIQUIDATED DAMAGES AT $50 PER DAY DEDUCTED FROM PAYMENT NO. 6, WHICH WAS ASSESSED UNDER CONTRACT I-28NP-666, DATED DECEMBER 19, 1949.

UNDER THE TERMS OF THE CONTRACT, LEE T. TURNER AGREED TO FURNISH ALL MATERIALS AND PERFORM ALL WORK REQUIRED FOR SWIMMING POOL AND EQUIPMENT REVISIONS AT THE COOLIDGE AND FRANCIS RECREATION CENTERS, BOTH IN WASHINGTON, D.C., FOR THE SUM OF $59,170 AT THE COOLIDGE CENTER, AND $53,676 AT THE FRANCIS CENTER, IN ACCORDANCE WITH SPECIFICATIONS DATED OCTOBER 17, 1949, PAGES 1 THROUGH PARAGRAPH 12-4 ON PAGE 73, AMENDMENT NO. 1, DATED NOVEMBER 1, 1949, AND NUMEROUS CONTRACT DRAWINGS ATTACHED TO AND MADE A PART OF THE CONTRACT. IT WAS PROVIDED IN PARAGRAPH 3-1 OF SECTION 3 OF THE SPECIFICATIONS THAT THE CONTRACTOR WOULD BEGIN WORK WITHIN 10 DAYS AFTER THE DATE OF RECEIPT OF NOTIFICATION TO PROCEED, AND WOULD COMPLETE ALL OF THE WORK WITHIN 120 CALENDAR DAYS THEREAFTER. ALSO, BY PARAGRAPH 3-2 OF SECTION 3 OF THE SPECIFICATIONS, THE CONTRACTOR AGREED TO PAY TO THE GOVERNMENT, AS LIQUIDATED DAMAGES, THE SUM OF $50 PER DAY FOR EACH CALENDAR DAY'S DELAY.

IT APPEARS THAT THE CONTRACTOR WAS GIVEN NOTICE TO PROCEED ON DECEMBER 27, 1949, THUS ESTABLISHING THE COMPLETION DATE FOR THE ENTIRE CONTRACT AS APRIL 26, 1950. HOWEVER, BY CHANGE ORDER NO. 1, DATED MARCH 15, 1950, CERTAIN ADDITIONS WERE ORDERED IN THE DRAWINGS AND SPECIFICATIONS, ENTAILING AN INCREASED COST WITH RESPECT TO THE WORK TO BE DONE AT THE COOLIDGE RECREATION CENTER SWIMMING POOL IN THE AMOUNT OF $7,404.08, AND AT THE FRANCIS CENTER IN THE AMOUNT OF $1,656,50, WHICH SUMS WERE TO BE ADDED TO THE COST OF THE CONTRACT, AND THE COMPLETION DATE OF THE CONTRACT WAS EXTENDED TO MAY 10, 1950.

ON MARCH 16, 1950, CHANGE ORDER NO. 2 WAS ISSUED, EMBODYING EXTRA WORK AT AN ADDITIONAL COST OF $291.63, BUT THERE WAS NO CHANGE IN THE COMPLETION DATE. AGAIN, BY CHANGE ORDER NO. 3, DATED MARCH 21, 1950, THE CONTRACTOR WAS DIRECTED TO RECONDITION THE SCUM GUTTER AT THE FRANCIS CENTER POOL AT AN INCREASED COST OF $2,479, AND FOR THE "OUTSIDE WORK" ON THAT SITE THERE WERE GRANTED AN ADDITIONAL TEN DAYS, THEREBY EXTENDING THE COMPLETION DATE TO MAY 20, 1950. AND, FINALLY, BY CHANGE ORDER NO. 4, THE IDENTICAL EXTRA WORK WAS DIRECTED TO BE PERFORMED AT THE COOLIDGE CENTER AT AN ADDED COST OF $848, AND THE COMPLETION DATE FOR THE "OUTSIDE WORK" AT THAT SITE WAS LIKEWISE EXTENDED TO MAY 20, 1950. IT IS STATED THAT ALL OF THE FOREGOING WORK WAS COMPLETED ON JUNE 13, 1950, AND FROM THE FINAL PAYMENT THERE WAS DEDUCTED THE SUM OF $1,700, REPRESENTING LIQUIDATED DAMAGES FOR 34 DAYS COVERING THE PERIOD FOR MAY 11 TO JUNE 13, 1950, BOTH DATES INCLUSIVE.

BY LETTER DATED OCTOBER 13, 1950, THE CONTRACTOR PROTESTED THE ASSESSMENT OF 34 DAYS, AND CONTENDED THAT IN VIEW OF THE EXTENSIONS OF TIME GRANTED IN CHANGE ORDERS NOS. 3 AND 4 THE LIQUIDATED DAMAGES SHOULD HAVE BEEN CALCULATED FROM MAY 21 INSTEAD OF MAY 11, 1950, THUS MAKING THE PERIOD OF DELAY 24 DAYS RATHER THAN 34 DAYS. IN REPLY THERETO, IN A LETTER DATED OCTOBER 24, 1950, YOU INFORMED THE CONTRACTOR THAT IT HAD BEEN YOUR POLICY TO MAKE EXTENSIONS APPLY TO SPECIFIC PARTS OF THE WORK WHEN IT WAS ADVANTAGEOUS TO THE PROSECUTION OF A CONTRACT TO DO SO, AND THAT SUCH A POLICY NEVER HAD BEEN QUESTIONED IN THE PAST; BUT SINCE THE QUESTION HAD NOW BEEN RAISED, YOU INFORMED THE CONTRACTOR THAT THE MATTER WOULD BE SUBMITTED TO THE GENERAL ACCOUNTING OFFICE FOR A DECISION. ACCORDINGLY, IN YOUR LETTER OF NOVEMBER 28, 1950, YOU POINTED OUT, IN SUPPORT OF YOUR PREVIOUS POSITION, THAT YOUR OFFICE WAS OF THE OPINION THAT MODIFICATIONS OF THE CONTRACT AS CONTAINED IN CHANGE ORDERS 3 AND 4 WERE PERMITTED UNDER ARTICLE 3 OF THE CONTRACT AND, ALSO, THAT YOU REGARDED THE THIRD SUBPARAGRAPH OF PARAGRAPH 3-1 OF THE SPECIFICATIONS AS AUTHORITY FOR GRANTING EXTENSIONS OF TIME LIMITED TO A PORTION OF THE WORK WHEN IT WAS DEEMED NECESSARY IN THE PUBLIC INTEREST. IN VIEW OF THE ABOVE, YOU PRESENT FOR DETERMINATION THE QUESTION OF WHETHER AN EXTENTION OF TIME FOR THE PERFORMANCE OF A PORTION OF A CONTRACTED PROJECT APPLIES ONLY TO THAT PORTION, OR WHETHER SUCH EXTENSION APPLIES TO THE ENTIRE CONTRACT.

ARTICLE 3 OF THE CONTRACT PROVIDES, IN PERTINENT PART, AS FOLLOWS:

ARTICLE 3. CHANGES.--- THE CONTRACTING OFFICER MAY AT ANY TIME, BY A WRITTEN ORDER, AND WITHOUT NOTICE TO THE SURETIES, MAKE CHANGES IN THE DRAWINGS AND/OR SPECIFICATIONS OF THIS CONTRACT AND WITHIN THE GENERAL SCOPE THEREOF. IF SUCH CHANGES CAUSE AN INCREASE OR DECREASE IN THE AMOUNT DUE UNDER THIS CONTRACT, OR IN THE TIME REQUIRED FOR ITS PERFORMANCE, AN EQUITABLE ADJUSTMENT SHALL BE MADE AND THE CONTRACT SHALL BE MODIFIED IN WRITING ACCORDINGLY. * * *

WITH RESPECT TO THE CONTENTION THAT YOUR OFFICE REGARDS THE THIRD SUBPARAGRAPH OF PARAGRAPH 3-1 OF THE SPECIFICATIONS AS AUTHORITY FOR GRANTING EXTENSIONS OF TIME LIMITED TO A PORTION OF THE WORK WHEN IT IS DEEMED NECESSARY IN THE PUBLIC INTEREST, THERE IS PARTICULARLY FOR NOTING THAT THE SAID SUBPARAGRAPH HAS REFERENCE TO AN EXTENSION OF TIME GRANTED DUE TO THE INABILITY OF THE CONTRACTOR TO SECURE MATERIALS IN TIME TO INSTALL WITHIN THE AGREED TIME LIMIT, AND MAKES NO REFERENCE TO AN EXTENSION OF TIME FOR ADDITIONAL WORK, AS HERE INVOLVED. ALSO, THE CONTRACT DID NOT PROVIDE FOR SEPARATE DATES FOR COMPLETION OF DIFFERENT PORTIONS OF THE WORK. FURTHERMORE, PARAGRAPH 3-2 OF SECTION 3 OF THE SPECIFICATIONS, SETTING FORTH THE MEASURE OF LIQUIDATED DAMAGES, CLEARLY PROVIDES FOR THE ASSESSMENT OF SUCH DAMAGES FOR DELAY IN COMPLETION OF THE ENTIRE WORK BEYOND THE TIME FIXED AND AGREED UPON IN PARAGRAPH 3-1, OR BEYOND SUCH TIME AS MAY BE ESTABLISHED BECAUSE OF JUSTIFIABLE EXTENSIONS OF TIME GRANTED PURSUANT TO ARTICLE 3 OF THE CONTRACT. UNDER SUCH CIRCUMSTANCES, ARTICLE 3 COULD HAVE CONTEMPLATED ONLY CHANGES AFFECTING THE ENTIRE CONTRACT WORK. HENCE, IT FOLLOWS THAT LIQUIDATED DAMAGES ARE FOR ASSESSMENT ON THE BASIS OF DELAY IN COMPLETION OF THE ENTIRE CONTRACT WORK AS MODIFIED BY THE CHANGE ORDERS.

ACCORDINGLY, THE VOUCHER, WHICH IS RETURNED HEREWITH, MAY BE CERTIFIED FOR PAYMENT, IF OTHERWISE CORRECT.