B-125915, DEC. 9, 1955

B-125915, DEC. 9, 1955

TO SECRETARY OF THE NAVY:

YOUR LETTER OF OCTOBER 24, 1955, RECOMMENDS THE WAIVER, UNDER THE PROVISIONS OF SECTION 6 OF THE ARMED SERVICES PROCUREMENT ACT OF 1947, 62 STAT. 24 OF LIQUIDATED DAMAGES ASSESSABLE UNDER LEASE NOY/R/-47516 FOR DELAY BY THE LESSORS IN MAKING THE DEMISED PREMISES AVAILABLE FOR OCCUPANCY BY THE NAVY IN ACCORDANCE WITH THE TERMS OF THE LEASE.

ARTICLE VI OF THE LEASE AUTHORIZES THE UNITED STATES TO DEDUCT FROM RENT DUE OR TO BECOME DUE THE SUM OF YEN 121,525 FOR EACH DAY BEYOND OCTOBER 16, 1953,"REQUIRED BY THE LESSOR TO COMPLETE PREPARATION FOR OCCUPANCY.' YOUR LETTER INDICATES THAT OCCUPANCY WAS NOT POSSIBLE UNTIL JANUARY 15, 1954, REPRESENTING A DELAY OF 91 DAYS, WHICH WOULD ENTITLE THE UNITED STATES UNDER ARTICLE VI TO LIQUIDATED DAMAGES IN THE SUM OF YEN 11,059,775. YOU STATE, HOWEVER, THAT THE UNITED STATES SUFFERED NO ACTUAL DAMAGES BY REASON OF THE DELAY, AND YOU RECOMMEND THAT THE LIQUIDATED DAMAGES BE REMITTED, WITH THE UNDERSTANDING THAT UPON SUCH REMISSION, THE LEASE WILL BE MODIFIED TO PROVIDE THAT RENT SHALL NOT BE DUE FOR ANY PERIOD PRIOR TO JANUARY 15, 1954. UNDER THE LEASE AS WRITTEN RENT ACCRUED FROM OCTOBER 16, 1953, THE BEGINNING OF THE LEASE TERM.

SECTION 6 OF THE ARMED SERVICES PROCUREMENT ACT OF 1947, SUPRA, PROVIDES:

"WHENEVER ANY CONTRACT MADE ON BEHALF OF THE GOVERNMENT BY THE AGENCY HEAD OR BY OFFICERS AUTHORIZED BY HIM SO TO DO INCLUDES A PROVISION FOR LIQUIDATED DAMAGES FOR DELAY, THE COMPTROLLER GENERAL ON THE RECOMMENDATION OF THE AGENCY HEAD IS AUTHORIZED AND EMPOWERED TO REMIT THE WHOLE OR ANY PART OF SUCH DAMAGES AS IN HIS DISCRETION MAY BE JUST AND EQUITABLE.'

THE LEGISLATIVE HISTORY OF THE SECTION INDICATES THAT THE AUTHORITY TO REMIT WAS INTENDED FOR THE RELIEF OF CONTRACTORS FROM LIQUIDATED DAMAGES FOR DELAY IN PERFORMANCE WHERE SUCH DELAY OCCURRED DESPITE THE CONTRACTOR'S DUE DILIGENCE. SEE THE EXPLANATION BY THE CHAIRMAN OF THE HOUSE COMMITTEE IN CHARGE OF THE BILL, CONG. REC., MARCH 20, 1947, 80TH CONGRESS, 1ST SESSION, VOL. 93, PAGE 2321, AS FOLLOWS:

"SECTION 6 PERMITS THE COMPTROLLER GENERAL, ON THE RECOMMENDATION OF THE WAR AND NAVY DEPARTMENTS, TO REMIT SUMS DUE THE GOVERNMENT UNDER CONTRACTS PROVIDING FOR THE ASSESSMENT OF LIQUIDATED DAMAGES FOR DELAY IN PERFORMANCE. AS SOMETIMES HAPPENS DAMAGES ARE REQUIRED TO BE COLLECTED WHERE THE CONTRACTOR IS IN NO WISE RESPONSIBLE FOR THE DELAY AND THE GOVERNMENT HAS SUFFERED NO SUBSTANTIAL DAMAGE. IT IS ENTIRELY PROPER THAT THE COMPTROLLER GENERAL SHOULD HAVE THE AUTHORITY IN SUCH CASES TO REMIT THE DAMAGES DUE.'

WE HAVE CONSISTENTLY HELD THAT THE REMITTING AUTHORITY IN SECTION 6 AND THE EQUIVALENT PROVISION, SECTION 10 (A) OF THE ACT OF SEPTEMBER 5, 1950, 64 STAT. 591, ARE FOR APPLICATION ONLY WHERE STRONG AND PERSUASIVE EQUITIES EXIST ON BEHALF OF THE CLAIMANT, 32 COMP. GEN. 67; B-108033, APRIL 3, 1952. THE REMITTING AUTHORITY MAY NOT BE USED TO RELIEVE A CONTRACTOR FROM THE CONSEQUENCES OF HIS OWN NEGLIGENCE. B 101472, APRIL 13, 1951.

YOUR LETTER ASSIGNS THE FOLLOWING REASONS FOR THE DELAY:

1. THE PRESENCE OF SQUATTERS WHO COULD NOT BE EJECTED FROM THE PREMISES UNDER ITALIAN LAW INTERFERED WITH THE WORK.

2. ADDITIONAL SHORING AND CONSTRUCTION NECESSITATED BY INFERIOR WALL BEARINGS.

3. TUFA STONE, UNEXPECTEDLY PRESENT IN THE SOIL, MADE EXCAVATION MORE DIFFICULT.

4. POOR PERFORMANCE BY SUBCONTRACTORS.

5. ALTERATIONS AND MODIFICATIONS REQUESTED BY THE MEDICAL OFFICER IN CHARGE AND ACCOMPLISHED BY THE LESSORS.

6. RECORD AND UNPRECEDENTED WEATHER CONDITIONS.

AS TO THE FIRST REASON, THERE IS NO INDICATION THAT THE LESSORS DID NOT KNOW OF THE PRESENCE OF THE SQUATTERS AND OF THE LAW AS TO THEM WHEN THEY ENTERED INTO THE LEASE AGREEMENT, OR THAT THE DIFFICULTY EXPERIENCED WAS NOT A HAZARD WHICH THEY MIGHT REASONABLY HAVE ANTICIPATED.

THE RECORD IS ALSO INSUFFICIENT TO ESTABLISH THAT THE LESSORS WERE NOT CHARGEABLE WITH NOTICE OF THE CONDITION OF THE DEFECTIVE WALL BEARINGS.

TUFA STONE IS DEFINED AS EITHER "A POROUS ROCK FORMED AS A DEPOSIT FROM SPRINGS OR STREAMS," OR "A ROCK COMPOSED OF THE FINER KINDS OF VOLCANIC DETRITUS.' THE PROXIMITY OF MOUNT VESUVIUS TO NAPLES WOULD INDICATE THAT THE PRESENCE OF TUFA STONE IN THE SOIL MIGHT REASONABLY BE ANTICIPATED, AND THERE IS NO SHOWING THAT IT WAS NOT KNOWN.

THE FOURTH REASON ASSIGNED FOR DELAY, POOR PERFORMANCE BY SUB CONTRACTORS, WOULD APPEAR, IN THE ABSENCE OF ANY INDICATION TO THE CONTRARY, TO BE THE RESULT OF FAILURE ON THE PART OF THE LESSORS TO EXERCISE DUE DILIGENCE IN THE SELECTION OF CONTRACTORS. IT HAS NOT BEEN OUR PRACTICE TO REMIT LIQUIDATED DAMAGES ON SUCH GROUNDS IN THE ABSENCE OF EVIDENCE THAT THE CONTRACTOR EXHAUSTED ALL REASONABLE MEANS OF PROCURING THE REQUIRED WORK.

ALL WORK TO BE PERFORMED UNDER THE AGREEMENT IS SET FORTH IN ATTACHMENT B TO THE LEASE. ARTICLE XV OF THE LEASE PROHIBITS ANY CHANGE IN THE LEASE PROVISIONS "UNLESS IT IS IN WRITING THE CONTENTS OF WHICH SPECIFICALLY AND UNEQUIVOCALLY REFER TO THIS LEASE AND IS SIGNED BY BOTH PARTIES TO THIS LEASE OR THEIR DULY AUTHORIZED REPRESENTATIVES.' THE RECORD DOES NOT CONTAIN ANY AMENDMENT TO THE LEASE MODIFYING THE WORK TO BE PERFORMED. THUS APPEARS THAT THE ALTERATIONS AND MODIFICATIONS PERFORMED AT THE REQUEST OF THE MEDICAL OFFICER IN CHARGE WERE UNAUTHORIZED, AND THERE IS IN ANY EVENT NO ADMINISTRATIVE RECORD FURNISHED EITHER AS TO THE EXTENT OF SUCH CHANGES OR THE DELAY CAUSED BY THEM.

THE SIXTH REASON FOR DELAY, RECORD AND UNPRECEDENTED ADVERSE WEATHER CONDITIONS, MIGHT JUSTIFY REMISSION OF DAMAGES. THERE IS, HOWEVER, NO INDICATION IN THE RECORD OF THE AMOUNT OF DELAY DIRECTLY ATTRIBUTABLE TO RECORD AND UNPRECEDENTED WEATHER CONDITIONS. IN THE ABSENCE OF ANY SPECIFIC FINDINGS AS TO SUCH CONDITIONS AND THE PERIOD OF DELAY COVERED BY THIS CAUSE AND THE AMOUNTS TO WHICH IT IS EQUITABLY FELT THE LESSORS ARE ENTITLED BY REASON OF SUCH CAUSE, NO REMISSION IS AUTHORIZED. B-108033, SUPRA. ON THE PRESENT RECORD WE DO NOT FIND THAT SUCH STRONG AND PERSUASIVE EQUITIES EXIST IN FAVOR OF THE LESSORS AS TO WARRANT THE REMISSION OF LIQUIDATED DAMAGES FOR DELAY. YOUR REQUEST FOR THE REMISSION OF DAMAGES FOR DELAY IN PERFORMANCE BY THE LESSORS UNDER LEASE NOY (R/- 47516 IS, THEREFORE, DENIED.