B-7064, NOVEMBER 29, 1939, 19 COMP. GEN. 534

B-7064, NOVEMBER 29, 1939, 19 COMP. GEN. 534

CONTRACTS - DAMAGES - LIQUIDATED - EXTENSIONS OF TIME WHERE A CONTRACT PROVIDES FOR PAYMENT TO THE GOVERNMENT OF LIQUIDATED DAMAGES FOR DELAY IN COMPLETION OF THE WORK BEYOND A STATED PERIOD "OR ANY EXTENSION THEREOF" AND, UNDER CERTAIN CONDITIONS, FOR EXTENSIONS OF TIME BY THE CONTRACTING OFFICER FOR CERTAIN SPECIFIED CAUSES, INCLUDING ACTS OF THE GOVERNMENT, AND THE CONTRACTING OFFICER ISSUED A " STOP ORDER" AND A " START ORDER" WHICH CLEARLY INDICATE THAT IN HIS JUDGMENT THE CONTRACTOR WAS BEING DELAYED BY ACTS OF THE GOVERNMENT, THE SAID ORDERS MAY BE REGARDED, FOR LIQUIDATED DAMAGE PURPOSES, AS AN EXTENSION OF TIME BY THE CONTRACTING OFFICER FOR THE PERIOD BETWEEN THEM, NOTWITHSTANDING THE CONTRACT CONTAINS NO PROVISIONS FOR THE ISSUANCE OF ORDERS FOR SUSPENSION OF WORK THEREUNDER.

COMPTROLLER GENERAL BROWN TO LT. COL. W. M. DIXON, UNITED STATES ARMY, NOVEMBER 29, 1939:

THERE HAS BEEN RECEIVED, BY REFERENCE FROM THE CHIEF OF FINANCE, YOUR LETTER OF NOVEMBER 3, 1939, REQUESTING DECISION AS TO WHETHER YOU ARE AUTHORIZED TO MAKE PAYMENT OF VOUCHER SUPPORTED BY AN INVOICE OF THE U.S. TILE AND MARBLE CO. IN THE AMOUNT OF $998.50 FOR WORK PERFORMED UNDER CONTRACT NO. W579-QM-792, DATED JUNE 19, 1939.

UNDER THE TERMS OF THE CITED CONTRACT, THE U.S. TILE AND MARBLE CO. AGREED TO FURNISH THE MATERIALS AND PERFORM THE WORK NECESSARY FOR COMPLETE INSTALLATION OF CERTAIN TILE WORK AT BUILDING NO. 1, FORT MYER, VA., IN STRICT ACCORDANCE WITH SPECIFICATIONS, SCHEDULES, AND DRAWINGS ATTACHED TO AND MADE A PART OF THE CONTRACT, FOR THE SUM OF $998.50. WAS FURTHER AGREED THAT THE CONTRACT WORK SHOULD BE COMPLETED WITHIN 35 CALENDAR DAYS AFTER RECEIPT OF NOTICE TO PROCEED, AND THAT LIQUIDATED DAMAGES WOULD BE PAID AT THE RATE OF $10 PER DAY FOR EACH CALENDAR DAY OF DELAY UNTIL COMPLETION OR ACCEPTANCE OF THE WORK.

WITH RESPECT TO LIQUIDATED DAMAGES, ARTICLE 9 OF THE CONTRACT IS AS FOLLOWS:

DELAYS--- DAMAGES.--- IF THE CONTRACTOR REFUSES OR FAILS TO PROSECUTE THE WORK, OR ANY SEPARABLE PART THEREOF, WITH SUCH DILIGENCE AS WILL INSURE ITS COMPLETION WITHIN THE TIME SPECIFIED IN ARTICLE 1, OR ANY EXTENSION THEREOF, OR FAILS TO COMPLETE SAID WORK WITHIN SUCH TIME, THE GOVERNMENT, MAY, BY WRITTEN NOTICE TO THE CONTRACTOR, TERMINATE HIS RIGHT TO PROCEED WITH THE WORK OR SUCH PART OF THE WORK AS TO WHICH THERE HAS BEEN DELAY. IN SUCH EVENT THE GOVERNMENT MAY TAKE OVER THE WORK AND PROSECUTE THE SAME TO COMPLETION, BY CONTRACT OR OTHERWISE, AND THE CONTRACTOR AND HIS SURETIES SHALL BE LIABLE TO THE GOVERNMENT FOR ANY EXCESS COST OCCASIONED THE GOVERNMENT THEREBY. IF THE CONTRACTOR'S RIGHT TO PROCEED IS SO TERMINATED, THE GOVERNMENT MAY TAKE POSSESSION OF AND UTILIZE IN COMPLETING THE WORK SUCH MATERIALS, APPLIANCES, AND PLANT AS MAY BE ON THE SITE OF THE WORK AND NECESSARY THEREFOR. IF THE GOVERNMENT DOES NOT TERMINATE THE RIGHT OF THE CONTRACTOR TO PROCEED, THE CONTRACTOR SHALL CONTINUE THE WORK, IN WHICH EVENT THE ACTUAL DAMAGES FOR THE DELAY WILL BE IMPOSSIBLE TO DETERMINE AND IN LIEU THEREOF THE CONTRACTOR SHALL PAY TO THE GOVERNMENT AS FIXED, AGREED, AND LIQUIDATED DAMAGES FOR EACH CALENDAR DAY OF DELAY UNTIL THE WORK IS COMPLETED OR ACCEPTED THE AMOUNT AS SET FORTH IN THE SPECIFICATIONS OR ACCOMPANYING PAPERS AND THE CONTRACTOR AND HIS SURETIES SHALL BE LIABLE FOR THE AMOUNT THEREOF; 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 ANY 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.

THE RECORD INDICATES THE CONTRACTOR RECEIVED NOTICE TO PROCEED WITH THE WORK ON JUNE 19, 1939, THUS ESTABLISHING JULY 24, 1939, AS THE DATE FOR COMPLETION IN ACCORDANCE WITH THE CONTRACT TERMS. UNDER DATE OF JULY 7, 1939, BEFORE THE EXPIRATION OF THE CONTRACT PERIOD, A LETTER WAS ADDRESSED TO THE CONTRACTOR, AS FOLLOWS:

STOP ORDER NO. 1

CONFIRMING OUR CONVERSATION, YOU ARE HEREBY DIRECTED TO STOP WORK ON CONTRACT NO. W 579-QM-792, DATED JUNE 19, 1939, EFFECTIVE TODAY.

THIS STOP ORDER IS MADE NECESSARY THROUGH THE FACT THAT CERTAIN PRELIMINARY WORK MUST BE ACCOMPLISHED BY THIS OFFICE BEFORE YOU CAN BE GIVEN ACCESS TO THE WORK COVERED BY THE ABOVE-NAMED CONTRACT.

YOU WILL BE NOTIFIED WHEN WORK IS TO BE RESUMED.

BY LETTER DATED JULY 28, 1939, THE CONTRACTOR WAS INFORMED AS FOLLOWS:

START ORDER NO. 1

CONFIRMING OUR CONVERSATION, YOU ARE HEREBY DIRECTED TO RESUME WORK ON CONTRACT NO. W 579-QM-792, DATED JUNE 19, 1939, EFFECTIVE TODAY.

THE RECORD SHOWS THAT WORK UNDER THE CONTRACT WAS COMPLETED AUGUST 12, 1939, 19 DAYS AFTER THE EXPIRATION OF THE ORIGINAL CONTRACT PERIOD, BUT THERE WAS NO DELAY IN COMPLETION IF THE CONTRACT PERIOD MAY BE REGARDED AS HAVING BEEN INCREASED BY THE NUMBER OF DAYS INTERVENING BETWEEN THE ISSUANCE OF THE TWO ABOVE-QUOTED LETTERS TO THE CONTRACTOR. YOU EXPRESS DOUBT AS TO WHETHER YOU ARE AUTHORIZED TO MAKE PAYMENT TO THE CONTRACTOR WITHOUT DEDUCTION FOR LIQUIDATED DAMAGES, IN VIEW OF THE FACT THAT THE CONTRACT CONTAINS NO PROVISION FOR THE ISSUANCE OF ORDERS FOR SUSPENSION OF WORK THEREUNDER.

BOTH OF THE ABOVE-QUOTED LETTERS TO THE CONTRACTOR ARE SIGNED BY HOBART R. GAY, MAJOR, QUARTERMASTER CORPS, QUARTERMASTER, WHO APPEARS TO BE THE CONTRACTING OFFICER'S SUCCESSOR. SINCE THE DEFINITION OF THE TERM "CONTRACTING OFFICER," AS SET FORTH IN ARTICLE 21 (B) OF THE CONTRACT, INCLUDES "HIS DULY APPOINTED SUCCESSOR," IT APPEARS THAT MAJOR GAY WAS AUTHORIZED TO PERFORM THE DUTIES IMPOSED UPON THE CONTRACTING OFFICER BY ARTICLE 9 OF THE CONTRACT, QUOTED ABOVE. THAT IS, HE WAS AUTHORIZED TO "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 * * *.'

SINCE IT CLEARLY APPEARS FROM THE " STOP ORDER" ISSUED BY MAJOR GAY UNDER DATE OF JULY 7, 1939, THAT IN HIS JUDGMENT THE CONTRACTOR WAS BEING DELAYED BY ACTS OF THE GOVERNMENT (ONE OF THE EXCUSABLE CAUSES OF DELAY ENUMERATED IN THE CONTRACT), AND SINCE THE EXTENT OF THAT DELAY IS CLEARLY SHOWN BY THE " START ORDER" ISSUED UNDER DATE OF JULY 28, 1939, SUCH ORDERS MAY BE REGARDED AS AN EXTENSION OF TIME BY THE CONTRACTING OFFICER, WITHIN THE CONTEMPLATION OF ARTICLE 9 OF THE CONTRACT, FOR THE NUMBER OF DAYS INTERVENING BETWEEN THE EFFECTIVE DATES OF SUCH ORDERS.

THE DECISION REFERRED TO IN THE PAPERS ATTACHED TO YOUR SUBMISSION, 8 COMP. GEN. 80, INVOLVED THE CONSTRUCTION OF A CONTRACT WHICH CONTAINED NO AUTHORIZATION FOR EXTENDING THE CONTRACT TIME, AND IS TO BE DISTINGUISHED FROM CASES SUCH AS THIS, WHERE THE CONTRACTING OFFICER IS BY THE TERMS OF THE CONTRACT EMPOWERED TO GRANT SUCH EXTENSIONS. CF. 18 COMP. GEN. 870, WHERE THE ORDERS SUSPENDING THE CONTRACT WORK DID NOT SHOW THAT THE CONTRACTING OFFICER HAD DETERMINED THE DELAYS WERE CAUSED BY THE GOVERNMENT.

THE VOUCHER IS RETURNED HEREWITH AND, IF OTHERWISE CORRECT, THE CONTRACTOR'S INVOICE IN SUPPORT THEREOF MAY BE PAID WITHOUT DEDUCTION OF LIQUIDATED DAMAGES.