B-148266, DEC. 31, 1963

B-148266, DEC. 31, 1963

TO MILTON C. GRACE, ESQUIRE:

WE REFER TO YOUR CORRESPONDENCE SUBMITTED IN BEHALF OF TRIPLE "A" MACHINE SHOP, INC., PERTAINING TO THE CLAIM OF TRIPLE "A" FOR REFUND OF LIQUIDATED DAMAGES UNDER JOB ORDER NO. 25, ISSUED BY THE MILITARY SEA TRANSPORTATION SERVICE IN 1951.

BY OUR DECISION OF TODAY TO THE SECRETARY OF THE NAVY, COPY ENCLOSED, WE HAVE APPROVED, FOR PAYMENT TO THE PARTY WHO IS PRESENTLY ENTITLED TO MONIES DUE UNDER THE CONTRACT, THE AMOUNT OF $6,350--- WHICH WAS THE AMOUNT FOUND BY THE CONTRACTING OFFICER (FINDINGS OF FACT, DATED MAY 6, 1953) TO BE THE REASONABLE VALUE OF THE EXTRA WORK CLAIMED BY THE CONTRACTOR.

YOU CONTEND THAT IF THE CONTRACTOR'S CLAIM FOR EXTRA COMPENSATION IS VALID, PERFORCE, AS A MATTER OF LAW, LIABILITY FOR LIQUIDATED DAMAGES MUST FALL. YOU CITE THE OPINION OF THE CIRCUIT COURT IN THE CASE OF UNITED STATES V. AMERICAN SECURITY COMPANY, 322 U.S. 96, REPORTED AT 136 F.2D 437, WHICH STATES, ON P. 438, AS FOLLOWS:

"* * * BY ITS VERY NATURE A STIPULATION FOR LIQUIDATED DAMAGES HAS NO FORCE SAVE IN THE CONTINGENCY MADE THE SUBJECT OF THE SPECIAL AGREEMENT. TO EXTEND THE STIPULATION TO OTHER CONTINGENCIES BY A PROCESS OF REASONING OR BY ANALOGY WOULD AMOUNT TO A REWRITING OF THE TRACT.'

YOU ALSO CITE CORBIN, CONTRACTS, VOL. 5, SECTION 1072, PAGE 344, IN SUPPORT OF YOUR CONTENTION.

IN THE AMERICAN SECURITY CASE, SUPRA, THE SUPREME COURT HELD THAT UNDER THE GOVERNMENT CONSTRUCTION CONTRACT THERE INVOLVED, THE GOVERNMENT WAIVED ITS RIGHTS TO RECOVER LIQUIDATED DAMAGES FOR DELAY WHEN IT EXERCISED ITS OPTION UNDER THE CONTRACT TO TERMINATE THE CONTRACTOR'S RIGHT TO PROCEED. IT HAS BEEN HELD, HOWEVER, THAT WHERE THE GOVERNMENT CONTRACT PROVIDES FOR LIQUIDATED DAMAGES IN THE EVENT OF A TERMINATION, THE GOVERNMENT MAY CHARGE EXCESS COSTS, TOGETHER WITH LIQUIDATED DAMAGE. SEE WYOMING NATIONAL BANK OF WILKESBARRE, PENNSYLVANIA V. UNITED STATES. (COURT OF CLAIMS), 292 F.2D 511, 514.

ARTICLE 13 (J) OF THE MASTER CONTRACT--- THE LIQUIDATED DAMAGES PROVISION --- PROVIDES THAT THE CONTRACTOR SHALL PAY LIQUIDATED DAMAGES FOR DELAY IF HE FAILS TO COMPLETE THE PERFORMANCE WITHIN THE TIME SPECIFIED, OR ANY EXTENSION THEREOF. THE CONTRACTOR IS LIABLE, UNDER THE CONTRACT, TO PAY LIQUIDATED DAMAGES FOR DELAY IF IT EXCEEDS THE CONTRACT TIME, INCLUDING EXTENSIONS OF TIME; AND THE FACT THAT TRIPLE "A" PERFORMED EXTRA WORK UNDER THIS CONTRACT MAY ENTITLE IT TO AN EXTENSION OF TIME, BUT DOES NOT NECESSARILY MEAN THAT THE CONTRACTOR IS NOT LIABLE FOR LIQUIDATED DAMAGES.

TRIPLE "A" COMPLETED THE CONTRACT PERFORMANCE ON JULY 9, 1951, OR 20 DAYS AND 19 HOURS AFTER THE JUNE 18, 1951, SPECIFIED COMPLETION DATE. IT IS A QUESTION OF FACT, TO BE DETERMINED BY THE ADMINISTRATIVE AUTHORITY, WHETHER THE EXTRA WORK REQUIRED THE EXTRA 20 DAYS AND 19 HOURS SPENT ON PERFORMANCE BY THE CONTRACTOR.

IN VIEW OF THE FOREGOING, TRIPLE "A'S " CLAIM FOR REFUND OF LIQUIDATED DAMAGES MUST BE DENIED AT THIS TIME.