B-13589, DECEMBER 5, 1940, 20 COMP. GEN. 299

B-13589, DECEMBER 5, 1940, 20 COMP. GEN. 299

CONTRACTS - DAMAGES - LIQUIDATED - EXTENSIONS OF TIME WHERE A CONTRACT PROVIDES THAT THE CONTRACTING OFFICER MAY EXTEND THE TIME FOR PERFORMANCE IF NOTICE OF DELAY IS GIVEN BY THE CONTRACTOR WITHIN 10 DAYS FROM THE BEGINNING OF THE CAUSE OF DELAY, UNLESS, PRIOR TO THE DATE OF FINAL SETTLEMENT OF THE CONTRACT, THE CONTRACTING OFFICER SHALL, WITH THE APPROVAL OF THE HEAD OF THE DEPARTMENT, GRANT A FURTHER PERIOD OF TIME FOR SUCH NOTICE, THE ACTION OF AN AUTHORIZED REPRESENTATIVE OF THE HEAD OF THE DEPARTMENT IN GRANTING AN EXTENSION, PURSUANT TO A REQUEST MADE SUBSEQUENT TO THE 10-DAY PERIOD, BUT DURING THE LIFE OF THE CONTRACT, BASED ON FINDINGS AND RECOMMENDATIONS OF THE CONTRACTING OFFICER, WAIVED THE 10-DAY NOTICE REQUIREMENT, AND LIQUIDATED DAMAGES DEDUCTED FOR THE PERIOD OF THE EXTENSION MAY BE REFUNDED.

COMPTROLLER GENERAL WARREN TO CAPTAIN MARTIN LANTAU, UNITED STATES ARMY, DECEMBER 5, 1940:

THERE WAS RECEIVED BY REFERENCE FROM THE CHIEF OF FINANCE, YOUR LETTER DATED NOVEMBER 1, 1940, WITH ENCLOSURES, REQUESTING DECISION AS TO WHETHER YOU ARE AUTHORIZED TO MAKE PAYMENT OF A VOUCHER STATED IN FAVOR OF THE MANHATTAN CONSTRUCTION CO., MUSKOGEE, OKLA., FOR THE REMISSION OF LIQUIDATED DAMAGES, AMOUNTING TO $222, DEDUCTED IN MAKING PAYMENT FOR THE CONSTRUCTION OF POWDER AND AMMUNITION MAGAZINES UNDER CONTRACT NO. W-6579- QM-34, DATED OCTOBER 18, 1939.

UNDER THE TERMS OF THE CITED CONTRACT AGREED, FOR THE CONSIDERATION RECITED THEREIN, TO FURNISH THE MATERIALS AND PERFORM ALL WORK INCIDENT TO THE CONSTRUCTION AND COMPLETION OF TWO POWDER MAGAZINES AND SEVEN AMMUNITION MAGAZINES AT THE SAVANNA ORDNANCE DEPOT, ILLINOIS, TO BE IN STRICT ACCORDANCE WITH THE APPLICABLE SPECIFICATIONS, SCHEDULES AND DRAWINGS, MADE A PART THEREOF. WORK UNDER THE CONTRACT WAS TO HAVE BEEN COMMENCED WITHIN 15 CALENDAR DAYS AFTER RECEIPT OF NOTICE TO PROCEED AND TO HAVE BEEN COMPLETED WITHIN 270 CALENDAR DAYS AFTER RECEIPT OF SUCH NOTICE, TO WIT, ON OR BEFORE JULY 16, 1940. PARAGRAPH SC-2 OF THE SPECIFICATIONS PROVIDED FOR THE ASSESSMENT OF LIQUIDATED DAMAGES AT THE RATE OF $6 PER BUILDING FOR EACH CALENDAR DAY OF DELAY IN COMPLETION OF THE NECESSARY WORK. IT APPEARS THAT THE CONTRACT TIME FOR COMPLETION WAS EXTENDED 7 CALENDAR DAYS BY THE ISSUANCE OF CHANGE ORDER "B," DATED JULY 15, 1940, AND 30 ADDITIONAL DAYS BY AN EXTENSION ORDER ISSUED BY THE QUARTERMASTER GENERAL UNDER DATE OF APRIL 10, 1940.

YOU QUESTION THE VALIDITY OF THE 30-DAY EXTENSION GRANTED IN THE ORDER OF APRIL 10, 1940, FOR THE REASON THAT THE CONTRACTOR FAILED TO MAKE APPLICATION THEREFOR WITHIN 10 DAYS FROM THE COMMENCEMENT OF THE DELAY, AS PROVIDED FOR IN ARTICLE 9 OF THE CONTRACT, AND BECAUSE OF THE DOUBT WHICH EXISTED AS TO WHETHER THE ALLEGED SEVERE AND UNUSUAL WEATHER CONDITIONS, MADE THE SUBJECT OF THE CONTRACTOR'S REQUEST, DATED APRIL 1, 1940, AFFORDED A PROPER BASIS FOR AN EXTENSION OF THE PERFORMANCE PERIOD. THEREFORE, IN MAKING PAYMENT FOR THE WORK PERFORMED UNDER THE ABOVE CONTRACT, YOU DID NOT GIVE EFFECT TO THE 30 DAY EXTENSION GRANTED IN THE ORDER OF APRIL 10, 1940, BUT MADE A DEDUCTION OF $222 AS LIQUIDATED DAMAGES.

WHILE THE RECORD AS SUBMITTED BY YOU DOES NOT INDICATE THE DATE ON WHICH THE PROJECT WAS ACTUALLY COMPLETED, NOR THE TOTAL AMOUNT OF LIQUIDATED DAMAGES IMPOSED BECAUSE OF DELAYS IN THE COMPLETION THEREOF, IT IS UNDERSTOOD THAT THE ALLOWANCE OF THE 30-DAY EXTENSION GRANTED IN THE ORDER OF APRIL 10, SUPRA, WILL OPERATE TO RELIEVE THE CONTRACTOR OF THE DAMAGE ASSESSMENT REPRESENTED BY THE VOUCHER SUBMITTED WITH YOUR LETTER OF NOVEMBER 1, 1940.

THE CIRCUMSTANCES WHICH GAVE RISE TO THE ISSUANCE OF THE EXTENSION ORDER OF APRIL 10, 1940, ARE AS FOLLOWS: REALIZING THE RISK INCIDENT TO THE POURING OF CONCRETE IN COLD WEATHER AND THE IMPRACTICABILITY OF PROTECTING SUCH CONCRETE WORK WITH TEMPORARY HEAT, DUE TO THE LOCATION OF THE PROJECT WITHIN THE RESTRICTED AMMUNITION AREA, WHERE FIRES OF ALL DESCRIPTION ARE PROHIBITED, THE CONTRACTOR WAS FORCED TO ABANDON OPERATIONS DURING THE PERIOD DECEMBER 6, 1939, TO MARCH 28, 1940. BY LETTER DATED APRIL 1, 1940, APPLICATION WAS MADE TO THE CONSTRUCTING QUARTERMASTER, SAVANNA ORDNANCE DEPOT, FOR AN EXTENSION OF 30 DAYS, DUE TO THE ABOVE CONDITIONS, WHEREUPON THE MATTER WAS BROUGHT TO THE ATTENTION OF THE QUARTERMASTER GENERAL, WHO, IN HIS CAPACITY AS THE AUTHORIZED REPRESENTATIVE OF THE SECRETARY OF WAR, WITHIN THE CONTEMPLATION OF ARTICLE 9 OF THE CONTRACT, EXTENDED THE CONTRACT TIME FOR PERFORMANCE BY 30 DAYS, ADVISING THE CONTRACTOR IN THE EXTENSION ORDER OF APRIL 10, SUPRA, AS FOLLOWS:

* * * DUE TO SEVERE AND EXTREME WEATHER CONDITIONS AND THE FACT THAT YOU WERE NOT PERMITTED TO FURNISH TEMPORARY HEAT BECAUSE THE USE OF ANY TYPE OF FIRE IN THE AMMUNITION AREA IS RESTRICTED BY THE GOVERNMENT TO THE FULLEST EXTENT, YOU ARE ADVISED THAT AN INVESTIGATION BY THIS OFFICE HAS DISCLOSED THAT WORK ON THE PROJECT AS A WHOLE WAS DELAYED THIRTY (30) CALENDAR DAYS AS A RESULT THEREOF.

UNDER THE PROVISIONS OF ARTICLE 9 THE COMPLETION TIME OF CONTRACT NO. W 6579-QM-34 IS HEREBY EXTENDED THIRTY (30) CALENDAR DAYS BEYOND THE COMPLETION DATE STIPULATED THEREIN.

ARTICLE 9 OF THE INSTANT CONTRACT PROVIDES, IN PERTINENT PART, AS FOLLOWS:

* * * PROVIDED, THAT THE RIGHT OF THE CONTRACTOR TO PROCEED SHALL NOT BE TERMINATED OR THE CONTRACTOR CHARGED WITH LIQUIDATED DAMAGES BECAUSE OF ANY DELAYS IN THE COMPLETION OF THE WORK DUE TO UNFORESEEABLE CAUSES BEYOND THE CONTROL AND WITHOUT THE FAULT OR NEGLIGENCE OF THE CONTRACTOR, INCLUDING, BUT NOT RESTRICTED TO, ACTS OF GOD, OR OF THE PUBLIC ENEMY, ACTS OF THE GOVERNMENT, ACTS OF ANOTHER CONTRACTOR IN THE PERFORMANCE OF A CONTRACT WITH THE GOVERNMENT, FIRES, FLOODS, EPIDEMICS, QUARANTINE RESTRICTIONS, STRIKES, FREIGHT EMBARGOES, AND UNUSUALLY SEVERE WEATHER OR DELAYS OF SUBCONTRACTORS DUE TO SUCH CAUSES, IF THE CONTRACTOR SHALL WITHIN 10 DAYS FROM THE BEGINNING OF SUCH DELAY (UNLESS THE CONTRACTING OFFICER, WITH THE APPROVAL OF THE HEAD OF THE DEPARTMENT OR HIS DULY AUTHORIZED REPRESENTATIVE, SHALL GRANT A FURTHER PERIOD OF TIME PRIOR TO THE DATE OF FINAL SETTLEMENT OF THE CONTRACT) NOTIFY THE CONTRACTING OFFICER IN WRITING OF THE CAUSES OF DELAY, WHO SHALL ASCERTAIN THE FACTS AND THE EXTENT OF THE DELAY AND EXTEND THE TIME FOR COMPLETING THE WORK WHEN IN HIS JUDGMENT THE FINDINGS OF FACT JUSTIFY SUCH AN EXTENSION, AND HIS FINDINGS OF FACT THEREON SHALL BE FINAL AND CONCLUSIVE ON THE PARTIES HERETO SUBJECT ONLY TO APPEAL, WITHIN 30 DAYS, BY THE CONTRACTOR TO THE HEAD OF THE DEPARTMENT CONCERNED, OR HIS DULY AUTHORIZED REPRESENTATIVE, WHOSE DECISION ON SUCH APPEAL AS TO THE FACTS OF DELAY AND THE EXTENSION OF TIME FOR COMPLETING THE WORK SHALL BE FINAL AND CONCLUSIVE ON THE PARTIES HERETO.

IN HIS SECOND INDORSEMENT TO THE CHIEF OF FINANCE DATED MAY 10, 1940, THE QUARTERMASTER GENERAL INVITED ATTENTION TO THE LANGUAGE OF ARTICLE 9, SUPRA, WHICH QUALIFIES THE 10-DAY NOTICE REQUIREMENT BY ALLOWING THE CONTRACTING OFFICER, WITH THE APPROVAL OF THE HEAD OF THE DEPARTMENT, OR OF HIS DULY AUTHORIZED REPRESENTATIVE, TO GRANT A FURTHER PERIOD OF TIME "PRIOR TO THE DATE OF FINAL SETTLEMENT OF THE CONTRACT.' IT IS ALSO POINTED OUT THEREIN THAT SINCE THE EXTENSION ORDER OF APRIL 10 WAS EXECUTED BY THE QUARTERMASTER GENERAL, WHO WAS THE DULY AUTHORIZED REPRESENTATIVE OF THE HEAD OF THE DEPARTMENT, WITHIN THE MEANING OF ARTICLE 9, AND SINCE THE ISSUANCE OF THE ORDER WAS BASED UPON THE SPECIFIC FINDINGS AND RECOMMENDATION OF THE CONTRACTING OFFICER, THE FAILURE OF THE CONTRACTOR TO SERVE NOTICE WITHIN 10 DAYS FROM THE BEGINNING OF THE DELAY DID NOT CONSTITUTE A BAR TO THE GRANTING OF THE EXTENSION IN THIS INSTANCE. IN CONNECTION THEREWITH, WHILE THE AVAILABLE RECORD DOES NOT CONTAIN THE FINDINGS AND RECOMMENDATIONS OF THE CONTRACTING OFFICER UPON WHICH THE QUARTERMASTER GENERAL PRESUMABLY BASED HIS ACTION IN GRANTING THE 30-DAY EXTENSION, THERE CAN BE LITTLE DOUBT BUT THAT SUCH FINDING WAS ACTUALLY PREPARED AND SUBMITTED TO THE QUARTERMASTER GENERAL FOR SIGNATURE, PARTICULARLY IN VIEW OF THE DISCLOSURES MADE IN THE SECOND AND THIRD PARAGRAPHS OF THE CONTRACTING OFFICER'S FOURTH ENDORSEMENT OF JUNE 6, 1940, WHEREIN THE CHIEF OF FINANCE WAS ADVISED AS FOLLOWS:

2. IN SIMILAR CASES THIS OFFICE HAS DEEMED IT INADVISABLE TO MAKE FINAL DECISIONS UPON REQUEST FOR EXTENSION OF TIME DUE TO UNUSUALLY SEVERE WEATHER AS PROVIDED FOR IN ARTICLE 9 OF THE CONTRACT, UNTIL THE WORK AUTHORIZED BY THE CONTRACT HAD BEEN SUBSTANTIALLY COMPLETED. THIS METHOD OF HANDLING SUCH REQUESTS SEEMS TO BE REQUIRED BECAUSE IN MANY INSTANCES THE DELAYS CAUSED THE CONTRACTOR BECAUSE OF UNUSUALLY SEVERE WEATHER ENCOUNTERED NEAR THE BEGINNING OF THE CONTRACT PERIOD HAVE BEEN WHOLLY OR PARTIALLY OFFSET BY FAVORABLE WEATHER CONDITIONS AS PERFORMANCE OF THE CONTRACT PROGRESSED. DUE TO THESE FACTORS, THIS OFFICE HAS NOT INSISTED UPON STRICT COMPLIANCE WITH THE 10-DAY PROVISION IN ARTICLE 9 OF THE CONTRACT TO THE EFFECT THAT WRITTEN NOTICE OF THE DELAYS TO BE GIVEN TO THE CONTRACTING OFFICER AT THE VERY OUTSET OF UNUSUALLY SEVERE WEATHER.

3. THE ADMINISTRATION OF THE PRESENT CONTRACT SEEMED TO REQUIRE THE ACTION OUTLINED IN THE PRECEDING PARAGRAPH. THEREFORE, WHEN THE REQUEST FOR AN EXTENSION OF THIRTY (30) CALENDAR DAYS BY THE MANHATTAN CONSTRUCTION COMPANY OF APRIL 1, 1940, WAS SUBMITTED BY THE CONSTRUCTING QUARTERMASTER, ALL OF THE FACTS WERE DULY CONSIDERED AND AN EXTENSION ORDER WAS PREPARED FOR EXECUTION BY THE DULY AUTHORIZED REPRESENTATIVE OF THE HEAD OF THE DEPARTMENT WHICH EMBODIED THE CONCLUSIONS OF FACT BY THE CONTRACTING OFFICER.

UNDER A STRICT INTERPRETATION OF THE TERMS OF ARTICLE 9, SUPRA, AND IN THE PARTICULAR CIRCUMSTANCES RELATED HEREIN, IT IS APPARENT THAT ANY ATTEMPT ON THE PART OF THE CONTRACTING OFFICER TO GRANT AN EXTENSION IN THE TIME FOR PERFORMANCE WITHOUT FIRST HAVING SECURED THE APPROVAL OF THE SECRETARY OF WAR, OR HIS DULY AUTHORIZED REPRESENTATIVE, WOULD HAVE BEEN INEFFECTUAL AND, THEREFORE, IN ORDER TO AVOID ANY POSSIBLE COMPLICATIONS WHICH MIGHT HAVE ARISEN THROUGH THE EXERCISE OF HIS INDEPENDENT DISCRETION IN THE MATTER, THE CONTRACTING OFFICER PROPERLY SUBMITTED HIS FINDINGS OF FACT AND RECOMMENDATIONS TO THE HEAD OF THE DEPARTMENT FOR APPROPRIATE ACTION THEREON. SUCH ACTION, HAVING BEEN TAKEN IN THE SPIRIT AND LANGUAGE OF THE CONTRACT, AND HAVING AS ITS BASIS THE SPECIFIC FINDINGS AND CONCLUSIONS OF THE CONTRACTING OFFICER SHOULD BE GIVEN EFFECT STRICTLY ACCORDING TO THE EXPRESS TERMS OF THE ORDER. SEE, GENERALLY, PENN BRIDGE COMPANY V. UNITED STATES, 59 CT.1CLS. 892, 897; UNITED STATES V. GLEASON, 175 U.S. 588, 602, 607; POPE V. UNITED STATES, 75 CT.1CLS. 436, 447. THE ACTION OF THE CONTRACTING OFFICER AND OF THE QUARTERMASTER GENERAL HAVING BEEN TAKEN DURING THE LIFE OF THE CONTRACT INVOLVED, AND IN APPARENT GOOD FAITH, IT IS CONCLUDED THAT THE 10-DAY NOTICE REQUIREMENT SPECIFIED IN ARTICLE 9, SUPRA, WAS AUTOMATICALLY WAIVED BY THE CONSIDERATION OF THE CONTRACTOR'S REQUEST AND THE GRANTING OF THE EXTENSION ORDER, IN VIEW OF WHICH THERE APPEARS NO PROPER BASIS FOR NOW QUESTIONING THE VALIDITY OF THE ACTION TAKEN IN THE PREMISES. SEE MARYLAND STEEL COMPANY V. UNITED STATES, 235 U.S. 451; POPE V. UNITED STATES, SUPRA.

ACCORDINGLY, THE VOUCHER IS RETURNED HEREWITH, WITH THE ADVICE THAT PAYMENT MAY BE MADE THEREON, IF OTHERWISE CORRECT.