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  • Question

    Can a CO allow a contractor who is performing work on a task order for construction to move furniture (service type work) in the area in lieu of paying a portion of their LDs?


    Answer

    There are several issues potentially related to the basic question of whether the existing contract can be modified to require or allow the prime contractor to move furniture in consideration for reduced liquidated damages charges.
     
    Modification of the contract to include moving furniture must be determined within the general scope of the contract IAW FAR 52.243-4, Changes and the definition of a contract action IAW FAR 5.001. Scope is generally interpreted to mean the "original intent of the parties at the moment of contract award". An opinion cannot be provided as to scope without reading the entire contract.
     
    Should the contracting officer determine the proposed action of moving furniture is within the general scope of the contract, then a decision must be made concerning "fair and reasonable" consideration. Is the potential value of the "liquidated damages" adequate for the cost of moving the furniture. Again, not enough information is provided in the request to provide an opinion.
     
    There are other considerations that may have a bearing on the overall decision such as "are the liquidated damages even appropriate?" FAR 11.501(c) states, "The contracting must take all reasonable steps to mitigate liquidated damages." What actions has the contracting officer taken to mitigate LDs? Is any mitigation action documented in the contract file? In addition, did the Government interfere with or delay the contractor's progress by not moving the furniture? If the contract states the Government will move the furniture and the furniture has not been moved, assessment of liquidated damages may not be appropriate. IAW DFARS 211.503(b), the liquidated damages clause at FAR 52.211-5 should be included in the solicitation and contract if the contractor can control the pace of the work. The furniture relocation may interfere with the contractor's ability to control the pace of work and complete the effort within the contractual schedule.
     
    Was the contractor's performance satisfactory other than the lack of ability to meet the contract completion date?  Was a cure notice issue? IAW FAR 52.249-10(b)(1), The delay in completing the work arises from unforeseeable causes beyond the control and without the fault or negligence of the contractor. If all or a portion of the delay was "causes beyond the control and without the fault of negligence" of the contractor, then again liquidated damages may not be appropriate. Therefore, there may be no tradeoff!
     
    These areas and potentially other factors should be researched and analyzed prior to making a decision concerning the tradeoff of liquidated damages and cost of moving furniture.

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