JANUARY 9, 1924, 3 COMP. GEN. 406

JANUARY 9, 1924, 3 COMP. GEN. 406

CONTRACTS - LIQUIDATED DAMAGES - EXTENSIONS OF TIME THE FAILURE OF A CONTRACTOR TO APPLY FOR AN EXTENSION OF TIME FOR CAUSES COMING WITHIN THE CONTRACT TERMS UNTIL AFTER THE TIME FIXED FOR COMPLETION OF THE WORK DOES NOT NECESSARILY DEFEAT THE RIGHT TO SUCH EXTENSION IF THE APPLICATION THEREFOR IS FILED WITHIN A REASONABLE TIME AND PRIOR TO FINAL SETTLEMENT.

DECISION BY COMPTROLLER GENERAL MCCARL, JANUARY 9, 1924:

THE SECRETARY OF THE INTERIOR HAS REQUESTED REVIEW OF SETTLEMENT NO. C- 3054-I, THIS OFFICE, DATED OCTOBER 27, 1923, SUSPENDING CERTAIN VOUCHERS IN THE ACCOUNT OF ALMA L. TRUAX, SPECIAL FISCAL AGENT, UNITED STATES RECLAMATION SERVICE.

THE AMOUNTS SUSPENDED ARE FOR EXPENDITURES INCURRED ON CONTRACT CONSTRUCTION WORK FOR DITCHES FOR THE RECLAMATION SERVICE, AND CREDIT WAS WITHHELD BECAUSE THE APPLICATIONS FOR EXTENSION OF TIME FOR COMPLETION OF CONTRACTS WERE NOT MADE BEFORE DATE SPECIFIED FOR COMPLETION.

THERE IS A PROVISION IN EACH OF THE CONTRACTS WHICH DEFINES DELAYS AND IS AS FOLLOWS:

IF ANY DELAY IS CAUSED THE CONTRACTOR BY SPECIFIC ORDERS OF THE ENGINEER TO STOP WORK, OR BY THE PERFORMANCE OF EXTRA WORK ORDERED BY THE ENGINEER, OR BY THE FAILURE OF THE UNITED STATES TO PROVIDE MATERIAL OR NECESSARY INSTRUCTIONS FOR CARRYING ON THE WORK, OR TO PROVIDE THE NECESSARY RIGHT OF WAY OR SITE FOR INSTALLATION, OR BY UNFORSEEN CAUSES BEYOND THE CONTROL OF THE CONTRACTOR, SUCH DELAY WILL ENTITLE THE CONTRACTOR TO AN EQUIVALENT EXTENSION OF TIME, EXCEPT AS OTHERWISE PROVIDED IN PARAGRAPH 29. APPLICATION FOR EXTENSION OF TIME MUST BE APPROVED BY THE ENGINEER AND SHALL BE ACCOMPANIED BY THE FORMAL CONSENT OF THE SURETIES, BUT AN EXTENSION OF TIME, WHETHER WITH OR WITHOUT SUCH CONSENT, SHALL NOT RELEASE THE SURETIES FROM THEIR OBLIGATIONS, WHICH SHALL REMAIN IN FULL FORCE UNTIL THE DISCHARGE OF THE CONTRACT. IF DELAYS FROM ANY OF THE ABOVE- MENTIONED CAUSES OCCUR AFTER THE EXPIRATION OF THE CONTRACT PERIOD NO LIQUIDATED DAMAGES SHALL ACCRUE FOR A PERIOD EQUIVALENT TO SUCH DELAY.

SECTION 45, FAILURE TO COMPLETE THE WORK IN THE TIME AGREED UPON:

SHOULD THE CONTRACTOR FAIL TO COMPLETE THE WORK IN THE TIME AGREED UPON IN THE CONTRACT OR IN SUCH EXTRA TIME AS MAY HAVE BEEN ALLOWED FOR DELAYS BY EXTENSIONS GRANTED AS PROVIDED IN THE CONTRACT, A DEDUCTION OF FIVE DOLLARS PER DAY FOR EACH SCHEDULE WILL BE MADE FOR EACH AND EVERY DAY, INCLUDING SUNDAYS AND HOLIDAYS, THAT SUCH SCHEDULE REMAINS UNCOMPLETED AFTER THE DATE REQUIRED FOR THE COMPLETION. THE SAID AMOUNTS ARE HEREBY AGREED UPON AS LIQUIDATED DAMAGES FOR THE LOSS TO THE UNITED STATES ON ACCOUNT OF ALL EXPENSES DUE TO THE EMPLOYMENT OF ENGINEERS, INSPECTORS, AND OTHER EMPLOYEES AFTER THE EXPIRATION OF THE TIME FOR COMPLETION AND ON ACCOUNT OF THE VALUE OF THE OPERATION OF THE IRRIGATION WORKS DEPENDENT THEREON, AND WILL BE DEDUCTED FROM ANY MONEY DUE THE CONTRACTOR UNDER THIS CONTRACT, AND THE CONTRACTOR AND HIS SURETIES SHALL BE LIABLE FOR ANY EXCESS.

IT IS NOW WELL SETTLED THAT EXTENSIONS OF CONTRACT TIME, WHETHER APPLIED FOR AND GRANTED BEFORE OR AFTER THE CONTRACT PERIOD HAS EXPIRED, ARE INOPERATIVE TO RELIEVE A CONTRACTOR FROM HIS CONTRACT LIABILITY FOR DAMAGE FOR DELAYS, UNLESS GRANTED BECAUSE OF, AND FOR A TIME EQUIVALENT TO, DELAYS OCCASIONED BY THE HAPPENING OF EVENTS WHICH THE CONTRACT RECOGNIZES AS EXCUSABLE.

IN THE INSTANT MATTERS THERE WERE DELAYS FOR WHICH COMPENSATING EXTENSIONS OF TIME MIGHT PROPERLY BE GRANTED UNDER THE TERMS OF THE CONTRACTS, AND THE MATTER FOR DETERMINATION IS WHETHER FAILURE TO MAKE FORMAL APPLICATION FOR SUCH EXTENSIONS BEFORE THE DATE FIXED BY THE CONTRACTS FOR COMPLETION OF THE WORK DEFEATS CONTRACTORS' RIGHTS TO SUCH EXTENSIONS.

THE CONTRACTS FIX NO TIME WITHIN WHICH REQUEST FOR EXTENSION OF TIME FOR DELAYS MUST BE MADE, AND NO TIME LIMIT HAVING BEEN AGREED UPON CONTRACTORS WERE ENTITLED TO A REASONABLE TIME AFTER THE DELAY OR DELAYS OCCURRED AND BEFORE FINAL SETTLEMENTS, DETERMINABLE FROM THE FACTS AND CIRCUMSTANCES.

CONTRACTORS WERE WATER USERS ON THE RECLAMATION PROJECT THEY WERE IMPROVING AND WERE IN A SENSE WORKING FOR THEMSELVES. IT MAY SAFELY BE ASSUMED THEY WOULD HAVE NO PURPOSE TO UNNECESSARILY DELAY COMPLETION OF THE IMPROVEMENT. WHILE IT APPEARS THEIR FORMAL REQUESTS FOR EXTENSIONS OF TIME WERE MADE IN EACH INSTANCE AFTER THE DATE FIXED FOR COMPLETION, FOUR IN EXCESS OF THIRTY DAYS AND APPROXIMATELY HALF IN LESS THAN SEVEN DAYS, ALL WERE MADE PRIOR TO FINAL SETTLEMENT AND APPEAR TO HAVE OCCASIONED NO LOSS OR INCONVENIENCE TO THE UNITED STATES. IN THE CIRCUMSTANCES APPEARING, I AM OF OPINION THE APPLICATIONS FOR EXTENSIONS OF TIME WERE MADE WITHIN A REASONABLE TIME AFTER THE OCCURRENCE OF THE EXCUSABLE DELAYS.

CREDITS OF THE ITEMS SUSPENDED WILL BE ALLOWED IN THE ACCOUNTS ACCORDINGLY.