PURPOSE
Master Specifications, General Conditions Article 0408 states the following, “Time is of the essence in completing the work required by the contract. If the Contractor fails or refuses to complete the work or any part thereof within the time fixed by the terms of the contract, or any approved extension thereof, the actual damage to the City due to the delay will be difficult or impossible to determine. In lieu thereof, the Contractor shall pay to the City, as fixed and agreed, liquidated damages for each day of delay in completion, the sum or sums as set forth in the contract documents. The Contractor shall be liable for the amount thereof. The City reserves the right, however, to terminate the Contractor’s completion of the work, charging against the Contractor and its sureties any excess cost occasioned the City thereby, together with liquidated damages accruing until such time as the City may reasonably complete the work.”
The purpose of this procedure is to establish guidelines and responsibilities for assessing liquidated damages.
REFERENCES
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RESPONSIBILITIES
Project Manager (PM): The PM is responsible for defining the requirements for establishing substantial completion of all project milestones in the Liquidated Damages Section of the General Requirements Section 01112 – “Description of Work” and listing the liquidated damages amount(s) in the Proposal for the project. The PM should also establish the amount of liquidated damages associated with each milestone and verify that the liquidated damages amounts are in line with Attachment 18.5-1 or those calculations of the liquidated damages are included in the project design files.
Construction Manager (CM): The CM is responsible for determining whether or not the Contractor is entitled to any contract time extensions. The CM shall then process any legitimate time extension change orders. The CM shall concur with the Lead Inspector on the dates the clock will be stopped for any project milestones, which have associated liquidated damages. The last change order issued for the project, which is sometimes called the “Final Closeout Change Order”, should address the substantial completion dates versus the actual completion dates for all project milestones and establish the maximum amount of liquidated damages. Only the Board of Public Works has the authority to assess or waive liquidated damages. If the Contractor is running later than can be justified by change orders, the CM must make sure that adequate funds are withheld from the Contractor to cover the potential liquidated damages. This is accomplished by requesting that the Bureau of Contract Administration (BCA) withhold contingency money from the progress payment.
PROCEDURE
All Public Works construction contracts contain a liquidated damages provision for late completion, which is a specified and unique amount for each contract. Some contracts may contain liquidated damages for interim milestone dates (included in General Requirements Section 01112 and the Proposal, late or incomplete construction schedule submittals and the Proposal (included in General Requirements Section 01321), and failure to meet the training schedule submittal requirements and the Proposal (included in General Requirements Section 01820). The CM should make every effort to warn the Contractor in writing of any impending liquidated damage dates/events.
If the Contractor fails or refuses to complete the work or any part thereof within the time fixed by the terms of the contract, the CM should notify the Contractor, in writing, of the amount to be withheld from progress payments. The CM shall also instruct the Lead Inspector, in writing, regarding the amounts withheld.
Upon completion of the project and resolution of all change orders, BCA will prepare the Draft Acceptance Board Report and forward it to the Bureau of Engineering (BOE) for review and comments. The Acceptance Board Report will then be finalized and circulated for signatures. The Acceptance Board Report shall specify the recommended liquidated damages assessment.
RELATED PROCEDURES
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Comments