a company enters into a contract with the government, it is required to comply
strictly with the terms and conditions of the contract. As with every rule, there is an exception called
an excusable delay. An excusable delay
is equivalent to an event of "Force Majeure” in commercial contracts. An authorized excusable delay serves to
shield the contractor from adverse actions such as liquidated damages, default,
and other damages.
contractor is not empowered to define an excusable delay. The reasons for an excusable delay are found
in the contract clauses. Such a delay
must be beyond the (foreseeable) control of the contractor, or could not be
prevented or overcome. In addition, it
must have occurred without the contractor’s fault or negligence. There are several enumerated causes of delay
in the contract clauses, and to some rare non-enumerated causes of delay shch
as impossibility of performance unknown to the contractor at the time of
contract formation, or financial distress caused by the government.
limitation or restraint on the use of excusable delay is intended to stress
that the contractor is required to perform the contract that resulted from
their proposal is strict compliance with those contract terms and conditions.
issue of excusable delay was discussed in the opinion from the United States
Civilian Board of Contrat Appeals (the "CBCA” or the "Board”) in the appeal of
Siver Spring Citrus, Inc. ("SSCI”) v. Department of Agriculture ("USDA”) CBCA
1659, August 4, 2010.
2008, SSCI received seven separate contracts for canned fruit juice. The contracts contained a clause for
liquidated damages generally for $.15 per hundred weight per calendar day not
to exceed 45 days of delay unless the delay was excusable under the excusable
delay clause in the contract.
SSCI experienced sporadic problems with various equipment requiring extensive
repairs and resulting in downtime. For
these reasons, SSCI claimed excusable delay for their inability to make timely
deliveries. The Contracting Officer
rejected the SSCI excuses and assessed liquidated damages.
Board had no sympathy for SSCI observing that "an excusable failure to deliver
timely occurs when the failure is caused by an occurrence beyond the reasonable
control of the contractor and without its fault or negligence.” The CBCA then stated that "SSCI’s delays were
ascribed to equipment and mechanical malfunctions. Neither an equipment malfunction nor a
mechanical malfunction is a valid excuse for a delay.” The Board went on to explain that "the inability
to make [timely deliveries] because of equipment and mechanical malfunction is
not extraneous to the contract, and it is therefore not an excusable delay.”
moral of the story is a contractor must strictly comply with the terms and
conditions of a contract.
a given situation, an excusable delay may be possible if and only if the delay
conforms to the acquisition regulation contract clauses. Contractor developed excuses will never be
accepted by the government.
Contracts Unlimited, Incorporated
The foregoing discussion is not
intended to be legal advice or a legal opinion.
Please see your attorney for legal support.