[Protest of DPSC Contract Award for Helmet Bags]

A-21386, FEBRUARY 21, 1928, 7 COMP. GEN. 505

STANDARD GOVERNMENT CONSTRUCTION CONTRACT - DELAYS - CONFLICTING SPECIFICATIONS IF A CONTRACTOR IS DELAYED IN COMPLETING THE WORK UNDER THE STANDARD GOVERNMENT CONSTRUCTION CONTRACT, NO AFFIRMATIVE ACTION ON THE PART OF THE ADMINISTRATIVE OFFICERS CONCERNED IS NECESSARY EXCEPT TO CANCEL THE CONTRACT FOR THE CAUSES SPECIFIED IN ARTICLE 9 THEREOF. WHERE THE CONTRACT IS NOT CANCELED, NO EXTENSION OF TIME IS NECESSARY OR PERMISSIBLE BUT THE FINAL SETTLEMENT VOUCHER WITH AN ADMINISTRATIVE REPORT OF THE FACTS OF DELAY AND RECOMMENDATIONS THEREON SHOULD BE TRANSMITTED TO THE GENERAL ACCOUNTING OFFICE FOR SETTLEMENT WHERE THE LIQUIDATED DAMAGES CURRENTLY DEDUCTED FOR THE DELAY WILL BE EITHER REFUNDED OR DISALLOWED AS THE FACTS FOUND BY THE ADMINISTRATIVE OFFICERS AND THE TERMS OF THE CONTRACT MAY REQUIRE. THE EXECUTIVE ORDER PROMULGATING THE STANDARD GOVERNMENT CONSTRUCTION CONTRACT FOR USE THROUGHOUT THE GOVERNMENT SERVICE SPECIFICALLY PROHIBITED ANY DEPARTURE THEREFROM EXCEPT WITH THE PRIOR APPROVAL OF THE DIRECTOR OF THE BUREAU OF THE BUDGET OBTAINED THROUGH THE INTERDEPARTMENTAL BOARD OF CONTRACTS AND ADJUSTMENTS AND ANY TERMS OF SPECIFICATIONS CONFLICTING WITH THE TERMS OF THE STANDARD GOVERNMENT CONSTRUCTION CONTRACT AND NOT HAVING SUCH PRIOR APPROVAL ARE ILLEGAL AND IMPOSE NO OBLIGATION ON THE UNITED STATES.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF THE INTERIOR, FEBRUARY 21, 1928:

IN CONNECTION WITH THE EXAMINATION OF STANDARD GOVERNMENT CONSTRUCTION CONTRACT, DATED MAY 12, 1927, WITH P. MANSON AND SON, FOR THE INSTALLATION OF A HYDROELECTRIC POWER PLANT AT METLAKATLA, ALASKA, THERE HAS COME TO MY ATTENTION A LETTER, DATED OCTOBER 21, 1927, FROM THE CONTRACTOR REQUESTING AN EXTENSION OF TIME FOR THE PERFORMANCE OF THE CONTRACT AND A LETTER, DATED NOVEMBER 7, 1927, FROM THE ACTING COMMISSIONER OF THE BUREAU OF EDUCATION, WHICH WAS APPROVED NOVEMBER 8, 1927, BY ASSISTANT SECRETARY JOHN H. EDWARDS, PURPORTING TO GRANT SUCH AN EXTENSION FROM NOVEMBER 10, 1927, TO AND INCLUDING DECEMBER 10, 1927, ON THE GROUND THAT THE WESTINGHOUSE ELECTRIC AND MANUFACTURING CO. HAD NOT DELIVERED A GENERATOR AS IT HAD AGREED TO DO. THERE HAS ALSO COME TO MY ATTENTION A PARAGRAPH ON PAGE 2 OF THE SPECIFICATIONS WHICH PROVIDES FOR A "PENALTY" OF $50 PER DAY FOR EACH AND EVERY DAY OF DELAY,"IF IT SHALL APPEAR THAT THE CONTRACTOR HAS NOT USED DUE DILIGENCE IN THE PROSECUTION OF THE WORK. EXTENSION OF TIME MAY BE ALLOWED FOR VALID REASONS FOR DELAYS OCCASIONED BY HAPPENINGS OUTSIDE OF THE CONTRACTOR'S CONTROL.'

ARTICLE 9 OF THE STANDARD GOVERNMENT CONSTRUCTION CONTRACT IS AS FOLLOWS:

ARTICLE 9. DELAYS--- DAMAGES.--- IF THE CONTRACTOR REFUSES OR FAILS TO PROSECUTE THE WORK, OR ANY SEPARABLE PART THEREOF, WITH SUCH DILIGENCE AS WILL INSURE ITS COMPETITION WITHIN THE TIME SPECIFIED IN ARTICLE 1, OR ANY EXTENSION THEREOF, OR FAILS TO COMPLETE SAID WORK WITHIN SUCH TIME, THE GOVERNMENT MAY, BY WRITTEN NOTICE TO THE CONTRACTOR, TERMINATE HIS RIGHT TO PROCEED WITH THE WORK OR SUCH PART OF THE WORK AS TO WHICH THERE HAS BEEN DELAY. IN SUCH EVENT, THE GOVERNMENT MAY TAKE OVER THE WORK AND PROSECUTE THE SAME TO COMPLETION BY CONTRACT OR OTHERWISE, AND THE CONTRACTOR AND HIS SURETIES SHALL BE LIABLE TO THE GOVERNMENT FOR ANY EXCESS COST OCCASIONED THE GOVERNMENT THEREBY. IF THE CONTRACTOR'S RIGHT TO PROCEED IS SO TERMINATED, THE GOVERNMENT MAY TAKE POSSESSION OF AND UTILIZE IN COMPLETING THE WORK SUCH MATERIALS, APPLIANCES, AND PLANT AS MAY BE ON THE SITE OF THE WORK AND NECESSARY THEREFOR. IF THE GOVERNMENT DOES NOT TERMINATE THE RIGHT OF THE CONTRACTOR TO PROCEED, THE CONTRACTOR SHALL CONTINUE THE WORK, IN WHICH EVENT THE ACTUAL DAMAGES 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 UNTIL THE WORK IS COMPLETED OR ACCEPTED THE AMOUNT AS SET FORTH IN THE SPECIFICATIONS OR ACCOMPANYING PAPERS AND THE CONTRACTOR AND HIS SURETIES SHALL BE LIABLE FOR THE AMOUNT THEREOF: PROVIDED, THAT THE RIGHT OF THE CONTRACTOR TO PROCEED SHALL NOT BE TERMINATED OR THE CONTRACTOR CHARGED WITH LIQUIDATED DAMAGES BECAUSE OF ANY DELAYS IN THE COMPLETION OF THE WORK DUE TO UNFORESEEABLE CAUSES BEYOND THE CONTROL AND WITHOUT THE FAULT OR NEGLIGENCE OF THE CONTRACTOR, INCLUDING, BUT NOT RESTRICTED TO, ACTS OF GOD, OR OF THE PUBLIC ENEMY, ACTS OF THE GOVERNMENT, FIRES, FLOODS, EPIDEMICS, QUARANTINE RESTRICTIONS, STRIKES, FREIGHT EMBARGOES, AND UNUSUALLY SEVERE WEATHER OR DELAYS OF SUBCONTRACTORS DUE TO SUCH CAUSES: PROVIDED FURTHER, THAT THE CONTRACTOR SHALL WITHIN TEN DAYS FROM THE BEGINNING OF ANY SUCH DELAY NOTIFY THE CONTRACTING OFFICER IN WRITING OF THE CAUSES OF DELAY, WHO SHALL ASCERTAIN THE FACTS AND THE EXTENT OF THE DELAY, AND HIS FINDINGS OF FACTS THEREON SHALL BE FINAL AND CONCLUSIVE ON THE PARTIES HERETO, SUBJECT ONLY TO APPEAL, WITHIN THIRTY DAYS, BY THE CONTRACTOR TO THE HEAD OF THE DEPARTMENT CONCERNED, WHOSE DECISION ON SUCH APPEAL AS TO THE FACTS OF DELAY SHALL BE FINAL AND CONCLUSIVE ON THE PARTIES HERETO.

THIS STIPULATION IS CLEAR AND UNAMBIGUOUS; THERE IS NO PROVISION WHATEVER THEREIN FOR THE GRANTING OF AN EXTENSION OF TIME BY ANY ADMINISTRATIVE OFFICER. IF THE CONTRACTOR DOES NOT COMPLETE THE WORK AS STIPULATED, THERE IS DEFAULT AND THE ARTICLE PROVIDES, FIRST, THAT THE GOVERNMENT MAY TERMINATE THE CONTRACT BY REASON OF SUCH DEFAULT, OR SECOND, PERMIT THE CONTRACTOR TO PROCEED WITH A STIPULATION FOR DEDUCTION OF LIQUIDATED DAMAGES UNLESS THE DELAYS RESULT FROM CAUSES SPECIFIED IN THE CONTRACT. THE FACTS OF SUCH DELAY ARE TO BE DETERMINED AS PROVIDED THEREIN AND A STATEMENT THEREOF SHOULD ACCOMPANY THE FINAL PAYMENT VOUCHER TO THIS OFFICE FOR DIRECT SETTLEMENT WHERE THE LEGAL QUESTION WILL BE DETERMINED WHETHER THE CONTRACTOR IS PROPERLY CHARGEABLE WITH LIQUIDATED DAMAGES. SEE DECISION TO YOU DATED APRIL 2, 1927, 6 COMP. GEN. 650.

ANY ACTION OF AN ADMINISTRATIVE OFFICER ATTEMPTING TO GRANT EXTENSIONS OF TIME UNDER THE STANDARD GOVERNMENT CONSTRUCTION CONTRACT CAN SERVE NO USEFUL PURPOSE AND OPERATES TO COMPLICATE MATTERS. THE CONFUSION IN ADMINISTRATIVE ACTION PROBABLY RESULTED FROM FAILURE TO APPRECIATE THE STIPULATIONS IN ARTICLE 9 OF THE CONTRACT AND BY THE INCLUSION OF THE ABOVE QUOTED LANGUAGE IN PARAGRAPH 8 OF THE SPECIFICATIONS. HOWEVER, ATTENTION IS INVITED TO THE DIRECTIONS CONTAINED IN THE EXECUTIVE ORDER FOR PREPARATION OF THE CONTRACT WHICH PROVIDE THAT "THERE SHALL BE NO DEVIATION FROM THIS STANDARD CONTRACT FORM, EXCEPT AS PROVIDED FOR IN THESE DIRECTIONS.'

THE ATTEMPTED INCLUSION OF A PROVISION IN THE SPECIFICATIONS AUTHORIZING A GRANT BY ADMINISTRATIVE OFFICERS OF EXTENSIONS OF TIME IS CONTRARY TO THE TERMS OF THE CONTRACT, IN DIRECT CONTRAVENTION OF THE ORDERS OF THE PRESIDENT PROMULGATING THE STANDARD GOVERNMENT CONSTRUCTION CONTRACT FOR USE THROUGHOUT THE GOVERNMENT SERVICE AND CAN NOT BE RECOGNIZED BY THIS OFFICE AS IMPOSING ANY LEGAL OBLIGATION ON THE UNITED STATES.

IT IS REQUESTED THAT ADMINISTRATIVE PROCEDURE, AS REFLECTED IN THIS CASE, BE DISCONTINUED, AND THERE ACCOMPANY TO THIS OFFICE THE FINAL PAYMENT VOUCHER A FULL STATEMENT OF ALL THE FACTS CONCERNING THE DELAY OF THE SUBCONTRACTOR IN FURNISHING THE ELECTRIC GENERATOR.