SEPTEMBER 18, 1922, 2 COMP. GEN. 204

SEPTEMBER 18, 1922, 2 COMP. GEN. 204

DAMAGES, LIQUIDATED AND ACTUAL - CONTRACTS A PROVISION IN A CONTRACT AUTHORIZING THE GOVERNMENT TO GRANT ADDITIONAL TIME, OR IF NOT SATISFIED WITH THE PROGRESS OF THE WORK, TO TAKE THE WORK OUT OF THE CONTRACTOR'S HANDS AND COMPLETE THE SAME, CHARGING THE EXCESS COSTS THEREOF IN EITHER CASE AGAINST THE CONTRACTOR, IS NOT INCONSISTENT WITH A PROVISION IN THE SAME CONTRACT PROVIDING FOR THE PAYMENT BY THE CONTRACTOR OF LIQUIDATED DAMAGES FOR EACH DAY'S DELAY IN THE COMPLETION OF THE WORK BY THE CONTRACTOR WHEN NO EXTENSION IS GRANTED.

DECISION BY COMPTROLLER GENERAL MCCARL, SEPTEMBER 18, 1922:

THE W. M. SUTHERLAND BUILDING AND CONTRACTING CO., APPLIED FEBRUARY 8, 1922, FOR A REVIEW OF SETTLEMENT NO. 788653, DATED SEPTEMBER 3, 1921, WAR DEPARTMENT DIVISION OF THIS OFFICE, IN WHICH WAS DISALLOWED ITS CLAIM FOR $30,000, THE AMOUNT WITHHELD ON ACCOUNT OF LIQUIDATED DAMAGES IN FINAL SETTLEMENT UNDER ITS CONTRACT DATED SEPTEMBER 11, 1920, COVERING THE CONSTRUCTION OF CERTAIN STORAGE BUILDINGS AND OTHER FACILITIES AT OGDEN ARSENAL.

WITH RESPECT TO TIME OF COMPLETION AND LIQUIDATED DAMAGES ARTICLE 1 OF THE CONTRACT PROVIDED:

THE CONTRACTOR FURTHER AGREES TO HAVE COMPLETE AND READY FOR USE THE SEVEN STORAGE MAGAZINE BUILDINGS LOCATED ALONG STORAGE TRACK MARKED "D," ON OR BEFORE DECEMBER 11, 1920; TO HAVE COMPLETE AND READY FOR USE THE ADDITIONAL SEVEN STORAGE MAGAZINE BUILDINGS LOCATED ALONG STORAGE TRACK MARKED "C," ON OR BEFORE FEBRUARY 1ST, 1921; TO HAVE COMPETE AND READY FOR USE THE SEVEN STORAGE MAGAZINE BUILDINGS LOCATED ALONG STORAGE TRACK MARKED "B," ON OR BEFORE MARCH 1ST, 1921, AND TO HAVE ALL STORAGE MAGAZINES COMPLETE AND READY FOR USE BY APRIL 1ST, 1921.

THE CONTRACTOR FURTHER AGREES TO HAVE COMPLETE AND READY FOR USE ON OR BEFORE FEBRUARY 1ST, 1921, THE GARAGE, ALL OTHER BUILDINGS COMPLETED IN SUCH ORDER AS THE CONSTRUCTING QUARTERMASTER MAY DIRECT, AND TO HAVE THE ENTIRE PROJECT COMPLETE AND READY FOR USE ON OR BEFORE JUNE 1ST, 1921.

THE CONTRACTOR FURTHER AGREES, IN CASE OF FAILURE TO COMPLETE ANY OF THE ABOVE MENTIONED UNITS OF THE PROJECT WITHIN THE TIME ABOVE STIPULATED, TO FORFEIT TO THE UNITED STATES GOVERNMENT, AS LIQUIDATED DAMAGES, THE SUM OF TWO HUNDRED DOLLARS ($200.00) PER DAY FOR EACH AND EVERY DAY COMPLETION OF SAID UNITS IS DELAYED BEYOND THE TIME ABOVE STIPULATED.

DELAYS WERE REPORTED AND LIQUIDATED DAMAGES DEDUCTED AS FOLLOWS: CHART: FIRST UNIT, 7 MAGAZINE BUILDINGS, 45 DAYS, AT $200 -----------$ 9,000 SECOND UNIT, 7 MAGAZINE BUILDINGS, 18 DAYS, AT $200 ---------- 3,600 THIRD UNIT, 7 MAGAZINE BUILDINGS, 22 DAYS AT $200 ------------- 4,400 OTHER STORAGE BUILDINGS, 43 DAYS, AT $200 -------------------- 8,600 REMAINDER OF PROJECT, 22 DAYS, AT $200 ----------------------- 4,400

TOTAL ------------------------------------------ 30,000

IT APPEARS THAT THE CONTRACTOR ENDEAVORED IN GOOD FAITH TO COMPLETE THE WORK IN ACCORDANCE WITH THE SCHEDULE STIPULATED IN THE CONTRACT, AND THAT THE DELAYS WERE THROUGH NO FAULT OR NEGLIGENCE ON ITS PART.

IT IS CONTENDED BY CLAIMANT THAT THE QUOTED PROVISIONS OF THE CONTRACT, WHEN READ IN CONNECTION WITH ARTICLE 8 OF THE CONTRACT, CAN NOT BE CONSTRUED TO PROVIDE FOR LIQUIDATED DAMAGES; THAT IN VIEW OF THE PROVISIONS OF ARTICLE 8 OF THE CONTRACT RELATING TO THE GRANTING OF ADDITIONAL TIME THE ACTION OF THE QUARTERMASTER GENERAL IN RECOMMENDING THAT DAMAGES BE DEDUCTED ONLY FOR DELAYS SUBSEQUENT TO JUNE 1, 1921, IS AN EXTENSION OF TIME FOR COMPLETION OF ANY AND ALL UNITS TO JUNE 1, 1921; AND THAT THE QUOTED PROVISIONS WHEN PROPERLY CONSTRUED IN THE LIGHT OF THE PROPOSAL, INSTRUCTIONS TO BIDDERS, ETC., PROVIDE FOR DAMAGES ONLY FOR DELAYS SUBSEQUENT TO JUNE 1, 1921, THE DATE FIXED FOR FINAL COMPLETION.

ARTICLE 8 OF THE CONTRACT IS A GENERAL PROVISION IN THE PRINTED CONTRACT FORM AND READS AS FOLLOWS:

THAT IN CASE OF THE FAILURE OF SAID CONTRACTOR TO COMPLY WITH THE STIPULATIONS OF THIS CONTRACT ACCORDING TO THE TRUE INTENT AND MEANING THEREOF (INCLUDING THE REQUIREMENTS FOR PROGRESS OF PERFORMANCE TO THE SATISFACTION OF THE OFFICER IN CHARGE, OR HIGHER AUTHORITY), THEN THE CONTRACTING OFFICER, OR HIS SUCCESSOR, SHALL HAVE THE RIGHT TO COMPLETE THE WORK IN SUCH MANNER AS HE SHALL DEEM BEST FOR THE INTEREST OF THE PUBLIC SERVICE, EITHER BY DAY'S LABOR AND OPEN MARKET PURCHASE OF THE NECESSARY MATERIALS, OR BY CONTRACT, OR BOTH, AND TO USE FOR THAT PURPOSE THE CONTRACTOR'S MATERIALS AND APPLIANCES ON THE RESERVATION OR AT THE PLACE WHERE THE WORK IS BEING PERFORMED, AND ANY EXCESS OF COST RESULTING FROM SUCH FAILURE, INCLUDING ANY CHARGES ON ACCOUNT OF DELAY, SHALL BE CHARGED TO THE CONTRACTOR. IN EVENT, HOWEVER, OF THE GRANTING OF ADDITIONAL TIME FOR PERFORMANCE, THE COST OF INSPECTION AND OTHER EXPENSES AND DAMAGES (INCLUDING ANY LOSS OR DAMAGE TO THE WORK UNDER CONSTRUCTION BY FIRE OR OTHER CAUSES) TO THE UNITED STATES FROM AND AFTER THE DATE ORIGINALLY FIXED FOR COMPLETION UNTIL THE WORK SHALL HAVE BEEN SATISFACTORILY ACCOMPLISHED EXCEPT IN SO FAR AS THE SAME MAY ARISE FROM DELAYS FOR WHICH THE UNITED STATES IS RESPONSIBLE, AS DETERMINED IN EACH OF THESE PARTICULARS BY THE OFFICER IN CHARGE, OR HIGHER AUTHORITY, SHALL BE CHARGED TO THE CONTRACTOR AND MAY BE DEDUCTED FROM ANY MONEY DUE OR TO BECOME DUE SAID CONTRACTOR FROM THE UNITED STATES: PROVIDED, THAT WHERE ADDITIONAL TIME HAS BEEN GRANTED THE UNITED STATES SHALL ALSO HAVE THE RIGHT TO CAUSE THE REMAINING PART OF THE CONTRACT, OR ANY PORTION THEREOF, TO BE TAKEN FROM THE CONTRACTOR WHENEVER, IN THE OPINION OF THE OFFICER IN CHARGE, REASONABLE AND SATISFACTORY PROGRESS IS NOT BEING MADE, AND TO SECURE COMPLETION AT THE EXPENSE OF THE CONTRACTOR, INCLUDING CHARGES AS ABOVE ON ACCOUNT OF DELAY.

THE CONTENTION WITH REFERENCE TO THIS ARTICLE IS IN SUBSTANCE THAT SINCE IT PROVIDES FOR ACTUAL DAMAGES, WHEREAS THE PROVISION HEREINBEFORE QUOTED PURPORTS TO PROVIDE FOR LIQUIDATED DAMAGES, THE TWO PROVISIONS ARE INCONSISTENT WITH EACH OTHER AND CAN NOT BE CONSTRUED TO PROVIDE FOR LIQUIDATED DAMAGES. IN SUPPORT OF THIS CONTENTION THE CLAIMANT CITES 23 COMP. DEC., 101, 24 ID., 170, AND PACIFIC HARDWARE AND STEEL COMPANY V. UNITED STATES, 48 CT.CLS., 399.

THE CONTRACT INVOLVED IN 23 COMP. DEC., 101. CONTAINED AN ARTICLE CORRESPONDING IN ALL RESPECTS TO THE ARTICLE HEREINBEFORE QUOTED, BUT CONTAINED NO PROVISION FOR LIQUIDATED DAMAGES. IT DID PROVIDE, HOWEVER, THAT THE STIPULATIONS THEREIN MADE WERE TO BE PERFORMED IN ACCORDANCE WITH THE CIRCULAR TO BIDDERS, ETC., WHICH "SO FAR AS THEY ARE APPLICABLE" WERE TO FORM A PART OF THE CONTRACT. THE QUESTION PRESENTED WAS WHETHER A PROVISION FOR LIQUIDATED DAMAGES IN THE PRINTED CIRCULAR TO BIDDERS WAS APPLICABLE TO THE CONTRACT SO AS TO AUTHORIZE DEDUCTION OF LIQUIDATED DAMAGES, AND IT WAS HELD THAT IT WAS NOT, UPON THE GROUND THAT SINCE THE FORMAL CONTRACT ITSELF PROVIDED FOR ACTUAL DAMAGES FOR THE SAME KIND OF DELAYS OR DELINQUENCIES FOR WHICH THE PROVISION IN THE CIRCULAR TO BIDDERS AUTHORIZED LIQUIDATED DAMAGES THE TWO PROVISIONS WERE INCONSISTENT WITH EACH OTHER, AND THEREFORE THE PROVISION IN THE CIRCULAR TO BIDDERS WAS INAPPLICABLE AND THAT THE ACTUAL DAMAGES COULD ONLY BE DEDUCTED.

IN 24 COMP. DEC., 170, THE CONTRACT CONTAINED A PROVISION FOR LIQUIDATED DAMAGES WITH A PROVISO READING AS FOLLOWS:

THAT IF THE ACTUAL DAMAGE TO THE GOVERNMENT CAUSED BY DELAY CHARGEABLE TO THE CONTRACTOR IS ASCERTAINABLE TO ITS SATISFACTION IT MAY DEBIT THE AMOUNT THEREOF AGAINST THE ACCOUNT OF THE CONTRACTOR IN LIEU OF THE LIQUIDATED DAMAGE SPECIFIED. IF IT IS DETERMINED THAT THERE WAS NO DAMAGE, NONE WILL BE IMPOSED.

IT WAS HELD THAT SINCE THE PROVISIONS MADE IT NECESSARY TO PROVE ACTUAL DAMAGES BEFORE LIQUIDATED DAMAGES COULD BE COLLECTED, THE CONTRACT COULD NOT BE CONSTRUED PROVIDING FOR LIQUIDATED DAMAGES.

THE CONTRACT INVOLVED IN THE CASE OF THE PACIFIC HARDWARE AND STEEL COMPANY V. UNITED STATES, CONTAINED A PROVISION FOR A DEDUCTION FROM THE CONTRACT PRICE AT THE RATE OF ONE-TENTH OF 1 PERCENT OF THE TOTAL COST OF THE UNDELIVERED MATERIAL FOR EVERY DAY OF DELAY BEYOND THE TIME FIXED FOR COMPLETION, WITH A PROVISO THAT WHEN NO DAMAGE OR INCONVENIENCE HAD BEEN SUFFERED BY THE GOVERNMENT AS A RESULT OF THE DELAY THE DEDUCTIONS MIGHT BE WAIVED. IT WAS HELD IN THAT CASE THAT THE CONTRACT PROVIDED FOR A PENALTY AND NOT FOR LIQUIDATED DAMAGES.

THE MATERIAL FACTS IN EACH OF THE CASES RELIED UPON ARE ESSENTIALLY DIFFERENT FROM THE FACTS IN THE CASE HERE PRESENTED. HERE A SPECIFIC PROVISION FOR LIQUIDATED DAMAGES WAS WRITTEN INTO THE FORMAL CONTRACT AND I THINK THERE CAN BE NO DOUBT AS TO THE INTENTION OF THE PARTIES TO PROVIDE FOR LIQUIDATED DAMAGES. THE PROVISION RELIED UPON TO DEFEAT THE LIQUIDATED DAMAGE PROVISION IS A PRINTED PROVISION IN THE CONTRACT FORM. IF THE TWO PROVISIONS CAN NOT BE SO CONSTRUED THAT BOTH CAN BE GIVEN EFFECT TO, THE PROVISION WHICH WAS INSERTED WITH REFERENCE TO THIS PARTICULAR CONTRACT MUST PREVAIL OVER THE PRINTED PROVISION WHICH WAS DESIGNED FOR USE IN CONTRACTS GENERALLY. BUT I DO NOT FIND THE TWO PROVISIONS SO INCONSISTENT THAT EFFECT CAN NOT BE GIVEN TO BOTH.

THE FIRST PROVISION IS TO THE EFFECT THAT LIQUIDATED DAMAGES AT THE RATE OF $200 PER DAY SHALL BE DEDUCTED FOR EACH DAY'S DELAY IN COMPLETION OF THE WORK COVERED BY THE CONTRACT, WITH NO PROVISION FOR WAIVER OR REMISSION. THE SECOND PROVISION (ARTICLE 8) AUTHORIZES THE GOVERNMENT TO TAKE THE WORK OUT OF THE CONTRACTOR'S HANDS IN CASE OF THE FAILURE OF SAID CONTRACTOR TO COMPLY WITH THE STIPULATIONS OF THE CONTRACT ACCORDING TO ITS TRUE INTENT AND MEANING, INCLUDING THE REQUIREMENT FOR PROGRESS OF PERFORMANCE. CLEARLY THIS IS NOT IN CONFLICT WITH THE LIQUIDATED DAMAGE PROVISION. SAID ARTICLE 8 FURTHER PROVIDES THAT IN THE EVENT OF THE GRANTING OF ADDITIONAL TIME FOR PERFORMANCE THE COST OF INSPECTION AND OTHER EXPENSES AND DAMAGES TO THE UNITED STATES FROM AND AFTER THE DATE ORIGINALLY FIXED FOR COMPLETION UNTIL THE WORK SHALL HAVE BEEN SATISFACTORILY ACCOMPLISHED, EXCEPT IN SO FAR AS THE SAME MAY ARISE FROM DELAYS FOR WHICH THE UNITED STATES IS RESPONSIBLE AS DETERMINED IN EACH OF THESE PARTICULARS BY THE OFFICER IN CHARGE, OR HIGHER AUTHORITY, SHALL BE CHARGED TO THE CONTRACTOR AND MAY BE DEDUCTED FROM ANY MONEY DUE OR TO BECOME DUE SAID CONTRACTOR FROM THE UNITED STATES. NEITHER IS THIS PROVISION INCONSISTENT WITH THE LIQUIDATED DAMAGE PROVISION. READING ALL OF THE TIME AND DAMAGE PROVISIONS TOGETHER, THE CONTRACT CLEARLY PROVIDES FOR LIQUIDATED DAMAGES IN CASE THE CONTRACTOR IS PERMITTED TO CONTINUE THE WORK TO COMPLETION AS CONTEMPLATED UNDER THE ORIGINAL CONTRACT. FURTHER PROVIDES THAT THE GOVERNMENT MAY, FOR CERTAIN CAUSES, TAKE THE WORK OUT OF THE CONTRACTOR'S HANDS OR AFFIRMATIVELY GRANT ADDITIONAL TIME FOR PERFORMANCE, IN EITHER OF WHICH EVENTS THE LIQUIDATED DAMAGE PROVISION WOULD NOT APPLY. IN THE CASE HERE PRESENTED THE WORK WAS NOT TAKEN OUT OF THE CONTRACTOR'S HANDS AND NO ADDITIONAL TIME WAS GRANTED. THEREFORE, THE LIQUIDATED DAMAGE PROVISION IS THE EXCLUSIVE PROVISION FOR DETERMINING THE DEDUCTIONS TO BE MADE ON ACCOUNT OF DELAY IN COMPLETION OF PERFORMANCE AND FULL FORCE AND EFFECT THERETO CAN AND MUST BE GIVEN. WITH REFERENCE TO THE PRINCIPLES GOVERNING THE CONSTRUCTION OF DAMAGE PROVISIONS IN GOVERNMENT CONTRACTS SEE BETHLEHEM STEEL COMPANY V. UNITED STATES, 205 U.S., 105; MARYLAND DREDGING COMPANY V. UNITED STATES, 241 U.S., 361; WISE V. UNITED STATES, 249 U.S., 361; HATHAWAY AND COMPANY V. UNITED STATES, 249 U.S., 460.

THE CONTENTION OF CLAIMANT RELATIVE TO THE EFFECT OF THE QUARTERMASTER GENERAL'S RECOMMENDATION IS NOT TENABLE BECAUSE NEITHER THE CONTRACTING OFFICER, THE QUARTERMASTER GENERAL, NOR ANY OTHER OFFICER OF THE GOVERNMENT GRANTED AN EXTENSION OF TIME IN THIS CASE. THE ACTION OF THE QUARTERMASTER GENERAL IN RECOMMENDING THAT LIQUIDATED DAMAGES BE CHARGED ONLY FOR THE DELAY SUBSEQUENT TO JUNE 1, 1921, WAS BASED UPON HIS CONSTRUCTION OF THE INTENT AND PURPOSE OF THE LIQUIDATED DAMAGE PROVISION AND NOT UPON AN EXTENSION OF TIME.

THE ONLY QUESTION LEFT FOR DETERMINATION IS AS TO THE PROPER CONSTRUCTION OR INTERPRETATION OF THE LIQUIDATED DAMAGE PROVISION. IT IS NOTED THAT SAID PROVISION CONSISTS OF THREE PARAGRAPHS. THE FIRST PARAGRAPH FIXES A SCHEDULE OF COMPLETION FOR THE 35 STORAGE MAGAZINE BUILDINGS; THAT IS TO SAY, IT PROVIDES SUBSTANTIALLY THAT 7 OF THESE BUILDINGS SHALL BE COMPLETED ON OR BEFORE DECEMBER 11, 1920, 7 ON OR BEFORE FEBRUARY 1, 1921, 7 ON OR BEFORE MARCH 1, 1921, AND "ALL STORAGE MAGAZINES" BY APRIL 1, 1921. THE REQUIREMENT THAT "ALL STORAGE MAGAZINES" BE COMPLETED BY APRIL 1, 1921, WOULD APPEAR TO BE IN CONFLICT WITH THE SPECIFIC REQUIREMENT AS TO 21 OF SAID MAGAZINES UNLESS THE TERM " ALL STORAGE MAGAZINES" IN THIS INSTANCE WAS INTENDED TO MEAN ONLY THE REMAINING 14 STORAGE BUILDINGS. THE SECOND PARAGRAPH PROVIDES A SCHEDULE FOR COMPLETION OF THE WORK OTHER THAN THE 35 STORAGE BUILDINGS AS FOLLOWS: THE GARAGE ON OR BEFORE FEBRUARY 1, 1921, AND ALL OTHER BUILDINGS IN SUCH ORDER AS THE CONSTRUCTING QUARTERMASTER MAY DIRECT. SAID PARAGRAPH FURTHER PROVIDES THAT THE ENTIRE PROJECT SHALL BE COMPLETED ON OR BEFORE JUNE 1, 1921. THEN FOLLOWS THE THIRD PARAGRAPH, WHICH READS:

THE CONTRACT FURTHER AGREES, IN CASE OF FAILURE TO COMPLETE ANY OF THE ABOVE-MENTIONED UNITS OF THE PROJECT WITHIN THE TIME ABOVE STIPULATED, TO FORFEIT TO THE UNITED STATES, AS LIQUIDATED DAMAGES, THE SUM OF TWO HUNDRED DOLLARS ($200) PER DAY FOR EACH AND EVERY DAY COMPLETION OF SAID UNITS IS DELAYED BEYOND THE TIME ABOVE STIPULATED. DID THIS PARAGRAPH CONTEMPLATE THAT EACH PORTION OF THE WORK FOR WHICH A SEPARATE COMPLETION DATE HAD BEEN PROVIDED IN THE SCHEDULE PRESCRIBED IN THE TWO PRECEDING PARAGRAPHS SHOULD BE REGARDED AS AN INDEPENDENT UNIT? AND WAS IT INTENDED TO PROVIDE THAT LIQUIDATED DAMAGES AT THE RATE OF $200 PER DAY SHOULD BE CHARGED WITH RESPECT TO EACH UNIT FOR EACH AND EVERY DAY'S DELAY BEYOND THE RESPECTIVE DATES FIXED FOR EACH, AS THOUGH THERE WERE A SEPARATE CONTRACT FOR EACH OF SAID UNITS? OR DOES IT MEAN THAT IF ANY PART OF THE WORK IS UNCOMPLETED ON JUNE 1, 1921, THE DATE SPECIFICALLY FIXED FOR COMPLETION OF "THE ENTIRE PROJECT," LIQUIDATED DAMAGES AT THE RATE OF $200 PER DAY WILL BE CHARGED FOR EACH DAY'S DELAY THEREAFTER?

IT IS NOTED THAT THE LANGUAGE OF THE PROVISION IS "IN CASE OF FAILURE TO COMPLETE ANY OF THE ABOVE-MENTIONED UNITS * * * WITHIN THE TIME ABOVE STIPULATED.' THE "TIME ABOVE STIPULATED" FOR COMPLETION OF THE ENTIRE PROJECT IS JUNE 1, 1921, AND SINCE THE PARAGRAPH DOES NOT STATE "TIME ABOVE STIPULATED FOR COMPLETION OF EACH UNIT" ITS INTENDED MEANING IS NOT CLEARLY EXPRESSED. IS THE "TIME" REFERRED TO JUNE 1, 1921, OR THE SCHEDULED DATED FOR THE VARIOUS UNITS, RESPECTIVELY? THE SAME LACK OF DEFINITENESS APPEARS IN THE CONCLUDING PART OF THE PARAGRAPH, TO WIT,"FOR EACH AND EVERY DAY COMPLETION OF SAID UNITS IS DELAYED BEYOND THE TIME ABOVE STIPULATED.'

TAKING THE FIRST AND SECOND PARAGRAPHS OF THE PROVISION TOGETHER THEY PROVIDE A SCHEDULE FOR COMPLETION AS FOLLOWS: SEVEN STORAGE MAGAZINES BY DECEMBER 11, 1920; 7 STORAGE MAGAZINES BY FEBRUARY 1, 1921; GARAGE BY FEBRUARY 1, 1921; 7 STORAGE MAGAZINES BY MARCH 1, 1921; 14 (?) STORAGE MAGAZINES BY APRIL 1, 1921; OTHER BUILDINGS (ABOUT 25) AS CONSTRUCTING QUARTERMASTER MAY DIRECT.

IF THE LIQUIDATED DAMAGE PROVISION IS TO BE CONSTRUED AS RELATING TO THE SCHEDULE FOR COMPLETION OF THE DIFFERENT PORTIONS OF THE WORK RATHER THAN TO THE COMPLETION OF THE ENTIRE PROJECT, THEN IT WOULD HAVE TO BE HELD THAT DAMAGE AT THE RATE OF $200 PER DAY SHOULD BE CHARGED FOR DELAY IN COMPLETION OF THE GARAGE BY FEBRUARY 1, 1921, AS WELL AS FOR DELAY IN COMPLETION OF THE SEVEN STORAGE MAGAZINES REQUIRED TO BE COMPLETED ON SAID DATE, AND THAT THE DAMAGE PROVIDED WOULD APPLY TO FAILURE TO COMPLETE THE OTHER BUILDINGS AS DIRECTED BY THE CONSTRUCTING QUARTERMASTER, AS WELL AS THE FAILURE TO COMPLETE THE STORAGE MAGAZINES AND GARAGE BY THE DATES STIPULATED IN THE SCHEDULE. IN THIS CONNECTION IT IS NOTED THAT THE CONTRACT DOES NOT FIX A SEPARATE PRICE FOR EACH PORTION OF THE WORK FOR WHICH A SEPARATE COMPLETION DATE IS SCHEDULED, BUT FIXES A LUMP-SUM PRICE FOR THE ENTIRE WORK.

IN VIEW OF THE UNCERTAINTY ARISING FROM THE INDEFINITENESS IN THE LANGUAGE OF THE PARAGRAPH NOW UNDER CONSIDERATION, AS HEREINBEFORE INDICATED, IT IS NECESSARY AND PROPER TO CONSIDER THE CONTRACT AS A WHOLE, INCLUDING THE CIRCULARS TO BIDDERS, MEMORANDA, ETC., WHICH ARE EXPRESSLY MADE A PART THEREOF, FOR THE PURPOSE OF DETERMINING THE TRUE INTENT AND MEANING OF THE LANGUAGE USED IN SAID PARAGRAPH.

PARAGRAPH 1 OF THE ORIGINAL "CIRCULAR OF INFORMATION AND GENERAL INSTRUCTIONS TO BIDDERS," IN WHICH BIDS ON THIS WORK WERE SOLICITED, DIVIDED THE WORK INTO SIX CLASSES AS FOLLOWS:

1. THE CONSTRUCTION PROPER.

2. PLUMBING.

3. HEATING.

4. GAS PIPING.

5. ELECTRIC WIRING.

6. GAS OR ELECTRIC LIGHTING FIXTURES.

PARAGRAPH 4 CONTAINED THE FOLLOWING STIPULATIONS WITH REFERENCE TO TIME OF PERFORMANCE:

BIDDERS FOR CONSTRUCTION PROPER MUST STATE THE LEAST NUMBER OF DAYS, AFTER NOTIFICATION OF AWARD OF CONTRACT, IN WHICH THEY WILL AGREE TO COMMENCE THE WORK. BIDDERS MUST STATE IN THE PROPOSALS THE TIME IN WHICH THEY WILL COMPLETE EACH CLASS OF WORK. * * * WHILE TIME OF PERFORMANCE WILL BE CONSIDERED IN MAKING AWARD, YET IN STATING THE TIME BIDDERS SHOULD MAKE DUE ALLOWANCE FOR BOTH PROBABLE AND UNFORESEEN DIFFICULTIES THAT MAY BE ENCOUNTERED, AND THEY SHOULD MAKE NO PROPOSITION WHICH THEY ARE NOT POSITIVE, BEYOND QUESTION, THAT THEY CAN ABSOLUTELY FULFILL. NO CREDIT WILL BE GIVEN TO A BIDDER WHO, WITH VIEW TO DRAWING FAVORABLE ATTENTION TO HIS PROPOSAL, GIVES A TIME SO SHORT THAT IT WILL NOT BE REASONABLE AND PRACTICABLE FOR HIM TO COMPLETE THE CONTRACT, OR SEPARATE PART THEREOF, WITHIN THE LIMIT FOR SAME.

PARAGRAPH 56, HEADED "FAILURE AND DELAYS OF CONTRACTOR," IS IDENTICAL WITH ARTICLE 8 OF THE FORMAL CONTRACT. THIS "CIRCULAR OF INFORMATION AND INSTRUCTIONS TO BIDDERS" CONTAINS NO STIPULATION WITH REFERENCE TO LIQUIDATED DAMAGES, BUT SUBSEQUENT LETTERS OF INSTRUCTION TO BIDDERS WERE ISSUED UNDER DATES OF AUGUST 12, 1920, AUGUST 21, 1920, AND AUGUST 26, 1920. EACH OF THESE LETTERS WAS ADDRESSED DIRECTLY TO CLAIMANT AND, PRESUMABLY, TO OTHER BIDDERS.

THE LETTER OF AUGUST 12, 1920, WAS ENTITLED "ADDITIONAL INSTRUCTIONS TO BIDDERS," AND READ AS FOLLOWS:

1. FOR YOUR INFORMATION AND GUIDANCE IN PREPARING BID ON CONSTRUCTION OF BUILDINGS AND UTILITIES AT THE OGDEN ARSENAL, OGDEN, UTAH, YOU ARE HEREBY ADVISED THAT A PENALTY OF $200 PER DAY FOR EACH AND EVERY DAY REQUIRED IN EXCESS OF THE TIME SPECIFIED IN BIDDING FOR COMPLETION OF THIS WORK WILL BE CHARGED AGAINST THE SUCCESSFUL CONTRACTOR.

2. YOU ARE FURTHER ADVISED THAT IT IS THE DESIRE OF THE GOVERNMENT TO HAVE THIS WORK COMPLETED NOT LATER THAN APRIL 1, 1921, AND WITH THE PROVISION THAT THE GOVERNMENT SHALL HAVE ACCESS TO EACH STORAGE BUILDING, FOR THE PURPOSE OF STORAGE, AS SOON AS COMPLETED.

3.THIS LETTER WILL BE CONSIDERED AS AN ADDENDA AND A PART OF "INSTRUCTIONS TO BIDDERS" GOVERNING CONDITIONS SURROUNDING THE LETTING OF CONTRACT FOR THE ABOVE-MENTIONED WORK.

THIS LETTER CONTAINED THE FIRST STIPULATION WITH REFERENCE TO LIQUIDATED DAMAGES; AND THAT IT CONTEMPLATED LIQUIDATED DAMAGES AT THE RATE OF $200 PER DAY FOR EACH AND EVERY DAY'S DELAY BEYOND THE DATE FIXED FOR FINAL COMPLETION OF THE ENTIRE PROJECT THERE WOULD APPEAR TO BE NO DOUBT.

THE LETTER OF AUGUST 21, 1920, CONTAINED NO MENTION OF LIQUIDATED DAMAGES, BUT STATED THAT IT WAS THE DESIRE OF THE GOVERNMENT TO HAVE AVAILABLE FOR STORAGE PURPOSES ONE SET OF STORAGE MAGAZINES SOON AFTER DECEMBER 1, 1920, THE OTHER SETS TO BE COMPLETED AS SOON THEREAFTER AS PRACTICABLE IN ORDER THAT THE GOVERNMENT MAY BEGIN THE TRANSPORTATION AND STORAGE OF MATERIALS AT THE EARLIEST POSSIBLE DATE. IT WOULD SEEM TO BE THE PLAIN PURPOSE OF THIS LETTER TO INFORM THE BIDDER THAT THE GOVERNMENT WOULD REQUIRE THAT THE 35 STORAGE MAGAZINES BE COMPLETED IN SETS AND THAT THEY BE FINISHED BEFORE THE OTHER BUILDINGS AND UTILITIES, THE REASON FOR GIVING THIS INFORMATION TO THE BIDDER BEING THAT THE ORDER IN WHICH THE GOVERNMENT REQUIRED COMPLETION OF THE DIFFERENT BUILDINGS OR SETS OF BUILDINGS WOULD GOVERN THE CONTRACTOR'S PLAN OF OPERATION AND MIGHT MATERIALLY AFFECT THE DATE OF FINAL COMPLETION OF THE ENTIRE PROJECT. THE CONTRACTOR SHOULD IGNORE THE GOVERNMENT'S EXPRESSED DESIRES IN THIS MATTER AND PLAN THE WORK WITH A VIEW SOLELY TO FINAL COMPLETION IN THE SHORTEST PRACTICABLE TIME WITHOUT REFERENCE TO THE STIPULATION AS TO ORDER OF COMPLETION THE GOVERNMENT WOULD HAVE THE RIGHT UNDER THE CONTRACT TO TAKE THE WORK OUT OF THE CONTRACTOR'S HANDS UNDER THE PROVISION IN THE CONTRACT WITH REFERENCE TO FAILURE TO COMPLY WITH THE REQUIREMENT AS TO PROGRESS OF PERFORMANCE.

THUS FAR THERE IS NOTHING TO INDICATE AN INTENT TO CHARGE LIQUIDATED DAMAGES FOR FAILURE TO COMPLY WITH THE REQUIREMENT AS TO PROGRESS OF PERFORMANCE, THE LIQUIDATED DAMAGE PROVISION, MENTIONED FOR THE FIRST TIME IN LETTER OF AUGUST 12, 1920, RELATING SOLELY TO FAILURE TO COMPLETE THE ENTIRE CONTRACT BY THE DATE TO BE FIXED THEREFOR.

THE LETTER OF AUGUST 26, 1920, WAS TO THE EFFECT THAT THE GOVERNMENT WOULD INSIST THAT ONE ROW OF SEVEN STORAGE MAGAZINES BE COMPLETED BY DECEMBER 1, OR SOON THEREAFTER, AND THAT THE REMAINING STORAGE MAGAZINES BE COMPLETED IN UNITS OF SEVEN EACH AS SOON THEREAFTER AS PRACTICABLE, AND THAT "WHILE THE GOVERNMENT MUST HAVE ALL STORAGE FACILITIES COMPLETE BEFORE APRIL 1, 1921, IT DOES NOT NECESSARILY FOLLOW THAT SUCH REQUIREMENTS WILL BE PLACED UPON THE CONTRACTOR FOR THE COMPLETION OF THE ENTIRE PROJECT.'

THE CONCLUDING PARAGRAPH OF THIS LETTER CLEARLY SHOWS THAT THE PURPOSE IN GIVING THE BIDDER THE REQUIREMENTS AS TO PROGRESS OF PERFORMANCE WAS TO ENABLE THE BIDDER TO TAKE SAID REQUIREMENTS INTO CONSIDERATION IN FIXING THE DATE OF FINAL COMPLETION. SAID PARAGRAPH READS:

THEREFORE, IN SUBMITTING YOUR BID AND STATING THE TIME OF COMPLETION, YOU ARE REQUESTED TO TAKE THIS MATTER INTO CONSIDERATION, WITH A VIEW THAT ALL STORAGE MAGAZINES MUST BE COMPLETED BY APRIL 1, 1921, AND THE ENTIRE PROJECT AS SOON THEREAFTER AS YOU DEEM PRACTICABLE, AND IN NO CASE LATER THAN JUNE 1, 1921.

CLAIMANT'S PROPOSAL DATED SEPTEMBER 4, 1920, WHICH WAS SUBMITTED IN THE LIGHT OF THE INSTRUCTIONS, INFORMATION, AND REQUIREMENTS HEREINBFORE INDICATED, CONTAINED ONLY THE FOLLOWING PROVISION WITH REFERENCE TO TIME OF COMPLETION OR DAMAGES FOR DELAY:

WE AGREE TO BEGIN CONSTRUCTION WORK WITHIN TEN (10) CALENDAR DAYS AFTER NOTICE OF AWARD OF CONTRACT. WE AGREE TO COMPLETE THE WORK ON WHICH WE BID ACCORDING TO THE TIME SET FORTH IN YOUR LETTER OF AUGUST 26, 1920.

READING THE THREE PARAGRAPHS HEREINBEFORE QUOTED FROM ARTICLE 1 OF THE FORMAL CONTRACT IN THE LIGHT OF THE INSTRUCTIONS, INFORMATION, AND PROPOSAL WHICH PRECEDED THE FORMAL CONTRACT AND IN CONNECTION WITH ARTICLE 8 OF SAID CONTRACT, I AM CONSTRAINED TO HOLD THAT THEIR PURPOSE AND EFFECT IS TO PROVIDE FOR LIQUIDATED DAMAGES AT THE RATE OF $200 A DAY FOR EACH DAY'S DELAY BEYOND JUNE 1, 1921, IN FINAL COMPLETION OF THE ENTIRE PROJECT.

THE WORK UNDER THE CONTRACT WAS FINALLY COMPLETED JUNE 23, 1921. THEREFORE THERE WAS DELAY OF ONLY 22 DAYS FOR WHICH LIQUIDATED DAMAGES AT THE RATE OF $200 A DAY WERE CHARGEABLE.

UPON A REVIEW OF THE MATTER, A DIFFERENCE OF $25,600, IS CERTIFIED DUE CLAIMANT.