A-26020, APRIL 20, 1929, 8 COMP. GEN. 552

A-26020, APRIL 20, 1929, 8 COMP. GEN. 552

CONTRACTS - COMMENCEMENT - DELAYS WHERE A CONTRACT FOR PUBLIC WORK IS TO BEGIN ON A CERTAIN DATE AND THE GOVERNMENT IS DELAYED IN MAKING AVAILABLE ON THAT DATE THE WORK, THE MATTER IS NOT SO MUCH ONE OF LIQUIDATED DAMAGES AS THAT OF FIXING A NEW COMMENCEMENT DATE WITH THE CONSENT OF THE CONTRACTOR.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF WAR, APRIL 20, 1929:

REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 5, 1929, AS FOLLOWS:

THERE IS TRANSMITTED HEREWITH A FILE OF CORRESPONDENCE PERTAINING TO CONTRACTS NOS. W 626 QM-5311 AND W 626 QM-5312, WITH CHAS. CORY AND SON (INC.), DATED DECEMBER 3, 1928, THE FORMER CONTRACT IN THE SUM OF $3,325.00 COVERING THE FURNISHING AND INSTALLING OF THE CORY AERO AUTOMATIC FIRE DETECTING SYSTEM ON THE U.S.A.T.'KENOWIS," AND THE LATTER IN THE SUM OF $1,600.00 COVERING THE FURNISHING AND INSTALLING OF THE CORY ANTI-NOISE TELEPHONE SYSTEM ON THE SAME VESSEL.

BOTH CONTRACTS CONTAINED THE PROVISION IN ARTICLE 1 THAT THE WORK SHOULD COMMENCE ON JANUARY 4 AND BE COMPLETED BY FEBRUARY 16, 1929, AND LIQUIDATED DAMAGES WERE PROVIDED FOR IN CONTRACT NO. W 626 QM-5311 AT THE RATE OF $350.00 PER DAY, AND IN CONTRACT NO. W 626 QM-5312 AT THE RATE OF $200.00 PER DAY. IT WAS PROVIDED FURTHER IN ARTICLE 1 OF EACH CONTRACT THAT "LIQUIDATED DAMAGES SHALL NOT APPLY TO DELAYS FOR THE CONVENIENCE OF THE GOVERNMENT OR DUE TO ACTS OF GOD.'

THE ATTACHED CORRESPONDENCE SHOWS THAT THE DATES APPEARING IN THE CONTRACTS IN QUESTION FOR THE COMMENCEMENT AND COMPLETION OF THE WORK WERE BASED ON THE SAILING SCHEDULE IN FORCE AT THE TIME THE CONTRACTS WERE EXECUTED, BUT A REARRANGEMENT OF THE SCHEDULE BECAME NECESSARY PROVIDING THAT THE "KENOWIS" WOULD ARRIVE IN NEW YORK ON JANUARY 9 AND SAIL ON JANUARY 28, 1929. THIS SCHEDULE DOES NOT ALLOW THE TIME PROVIDED IN THE CONTRACTS FOR THE COMPLETION OF THE WORK THEREUNDER AND IT IS NOW PROPOSED TO TURN THE "KENOWIS" OVER TO THE CONTRACTOR FOR THE COMPLETION OF THE WORK ON OR ABOUT MAY 2, 1929.

IN THIS CONNECTION, IT WAS HELD IN DECISION OF THE COMPTROLLER GENERAL OF THE UNITED STATES DATED APRIL 2, 1927, 6 COMP. GEN. 650, ADDRESSED TO THE SECRETARY OF THE INTERIOR, THAT UNDER THE STANDARD GOVERNMENT FORM OF CONSTRUCTION CONTRACT ADMINISTRATIVE OFFICERS OR DISBURSING OFFICERS SHOULD NOT UNDERTAKE TO DETERMINE WHETHER LIQUIDATED DAMAGES DID OR DID NOT ACCRUE TO THE UNITED STATES. HOWEVER, IN DECISION DATED AUGUST 21, 1928, 8 COMP. GEN. 80, ADDRESSED TO THE SECRETARY OF AGRICULTURE, IT WAS HELD THAT, WHERE DELAYS UNDER THE CONSTRUCTION FORM OF CONTRACT ARE DUE TO WRITTEN ORDERS OF THE GOVERNMENT TO STOP WORK ON ACCOUNT OF WEATHER CONDITIONS, PROPER PROGRESS PAYMENTS MAY BE MADE WITHOUT DEDUCTION OF LIQUIDATED DAMAGES FOR THE PERIOD OF DELAY INCIDENT TO SUCH STOP ORDERS, AND THAT, FURTHER, IF IT IS DESIRED THAT FINAL PAYMENT ALSO BE MADE IN SUCH CASES WITHOUT DEDUCTION OF LIQUIDATED DAMAGES, THE TWO CONCLUDING SENTENCES OF ARTICLE 1 OF THE CONTRACT SHOULD STIPULATE THAT THE CONTRACT PERIOD OF TIME IS EXCLUSIVE OF ANY TIME THAT MAY INTERVENE BETWEEN THE EFFECTIVE DATE OF ORDERS OF THE GOVERNMENT TO SUSPEND OPERATIONS ON ACCOUNT OF WEATHER CONDITIONS AND THE EFFECTIVE DATE OF ORDERS TO RESUME THE WORK.

IT IS REQUESTED THAT AN ADVANCE DECISION BE RENDERED TO AS WHETHER IN A CASE SIMILAR TO THE ONE HERE UNDER DISCUSSION, WHERE DELAYS ARE DUE TO THE FAILURE OF THE GOVERNMENT TO MAKE AVAILABLE TO A CONTRACTOR THE VESSEL ON WHICH THE WORK IS TO BE PERFORMED, PAYMENT MAY BE MADE WITHOUT DEDUCTION OF LIQUIDATED DAMAGES, IF THE CONTRACT CONTAINS IN ARTICLE 1 A PROVISION LIKE THAT QUOTED ABOVE TO THE EFFECT THAT LIQUIDATED DAMAGES SHALL NOT APPLY TO DELAYS FOR THE CONVENIENCE OF THE GOVERNMENT OR DUE TO ACTS OF GOD. IN THE EVENT THAT SUCH A PROVISION IS NOT DEEMED SUFFICIENT TO ACCOMPLISH THIS PURPOSE, A DECISION IS REQUESTED AS TO THE ACTION NECESSARY TO PREVENT DELAY IN PAYMENT TO A CONTRACTOR WHO HAS NOT BEEN GIVEN AN OPPORTUNITY IN SUCH A CASE TO CARRY OUT HIS CONTRACT WITHIN THE CONTRACT PERIOD.

EACH OF THESE CONTRACTS STIPULATED IN ARTICLE 1 THAT THE WORK SHOULD COMMENCE ON JANUARY 4, 1929, AND SHOULD BE COMPLETED ON FEBRUARY 16, 1929. DUE TO THE INABILITY TO DELIVER THE VESSEL ON WHICH THE WORK WAS TO BE PERFORMED, THE GOVERNMENT HAS NOT COMPLIED WITH THE TERMS OF THE CONTRACT AND THE QUESTION IS ONE OF WHETHER A NEW DATE FOR THE COMMENCEMENT OF THE WORK MAY BE FIXED. THE INABILITY OF THE GOVERNMENT TO DELIVER THE VESSEL FOR THE WORK DOES NOT CONSTITUTE A DELAY WITHIN THE CONTEMPLATION OF EITHER ARTICLE 3 AS TO CHANGES OR ARTICLE 9 AS TO DAMAGES FOR DELAY, AND THE CONTRACTS ILLUSTRATE THE INADVISABILITY FOR STIPULATING AN EXACT DATE FOR COMMENCEMENT OF WORK WHEN THE WORK CONSISTS OF THE REPAIR, ETC., OF VESSELS WHICH ARE IN ACTIVE USE AND WHOSE OPERATIONS MAY NOT BE SUSPENDED AT THE TIME CONTEMPLATED DUE TO NECESSITY FOR THEIR CONTINUED USE. ARTICLE 1 OF THE CONTRACT SHOULD PROVIDE THAT THE WORK OF RESTORATION OR ADDITIONS TO VESSELS IN USE SHOULD COMMENCE WHEN THE VESSEL IS DELIVERED TO THE CONTRACTOR AND BE COMPLETED WITHIN A CERTAIN NUMBER OF DAYS THEREAFTER.

THE MATTER IS NOT ONE INVOLVING LIQUIDATED DAMAGES UNTIL THE GOVERNMENT MAKES IT POSSIBLE FOR THE CONTRACTOR TO COMMENCE WORK BY DELIVERING THE VESSEL. AFTER THE VESSEL HAS BEEN DELIVERED, OR MADE ACCESSIBLE TO THE CONTRACTOR FOR THE WORK, THEN THE CONTRACT PERIOD WILL BEGIN TO RUN. THE CONTRACTOR CONSENTS TO THE NAMING OF A DATE FOR COMMENCEMENT OF THE CONTRACT WORK, THERE WOULD APPEAR TO BE NO LEGAL OBJECTION THERETO WITH THE WORK TO BE COMPLETED WITHIN A PERIOD AFTER THE NEW DATE FOR COMMENCEMENT OF THE WORK EQUAL TO THE CONTRACT PERIOD FROM JANUARY 4, 1929, TO FEBRUARY 16, 1929. A COPY OF THE LETTER FIXING THE NEW DATE WITH THE CONTRACTOR'S ACCEPTANCE THEREON SHOULD BE FORWARDED TO THIS OFFICE FOR FILING WITH THE CONTRACT.