December 5, 1941

case, the President would place an order with the Company for, and requisition, the total quantity and output of copper which is capable of being produced and/or delivered by it through the use of such waters from the San Francisco River, as may be necessary.

Such an order, in form and substance, would clearly be within the statutory authority granted to the President by the 1916 and the 1940 acts, to mention only these two.

It should be added here that the expropriation of the water rights in the San Carlos irrigation project which is here contemplated would consist rather in a continuous operation than in one single act. This is due to the character of the rights which relate not to a specific mass of water but rather to the continuous taking by each riparian owner of water flowing by his land. For this reason, it would appear that these water rights may be expropriated only as long as the additional quantities of copper for the processing of which the water is needed are, in fact, required and requisitioned by the Government. Approved:

HAROLD L. ICKES,

Secretary of the Interior.

PARK SADDLE HORSE COMPANY

Opinion, December 5, 1941

NATIONAL PARK SERVICE CONTRACTS-HIRE OF ANIMALS-RECOVERY FOR LOSS AVAILABILITY OF FUNDS.

Claims for the loss of animals rented to the National Park Service under contracts entered into pursuant to the provisions of the act of May 26, 1930 (46 Stat. 381), are reimbursable from any available funds in the appropriation to which the hire of such equipment would be properly chargeable.

GRAHAM, Assistant Solicitor:

My opinion has been requested as to whether payment may be made to the Park Saddle Horse Company, of Babb, Montana, for the loss of three saddle horses rented by it to the National Park Service under a contract approved by the Assistant Secretary on April 19, 1939, which provided that "Any horses not returned or horses crippled and rendered unfit for further service will be paid for by the Government at the rate of $50.00 per head."

It is my opinion that payment legally may be made to the Park Saddle Horse Company for the loss of the three horses under the act of May 26, 1930 (46 Stat. 381). Vouchers in payment, heretofore returned without certification by the General Accounting Office should, however, be returned to that office for further consideration in view of

the existence of the authorized contractual provision for the payment of such claims, which apparently was not made known to that office when the vouchers were submitted for preaudit.

In an opinion rendered by this office, approved August 26, 1940 (M. 30774), a claim filed by the Park Saddle Horse Company was considered under the act of December 28, 1922 (42 Stat. 1066), for the loss of one of the three horses in question, and was rejected because no showing had been made of negligence on the part of the Government employee, as required by that act. A memorandum, dated October 11, 1940, from the Chief Counsel to the Acting Associate Director, National Park Service, discloses the fact that the claim was erroneously submitted for consideration under the act of December 28, 1922, supra, and that payment thereof, as well as of a claim for the loss of the two other horses involved should be considered, in accordance with the terms of the contract for rental of the horses, under the act of May 26, 1930 (46 Stat. 381), which provides in part as follows:

SEO. 7. That hereafter the Secretary of the Interior in his administration of the National Park Service is authorized to reimburse employees and other owners of horses, vehicles, and other equipment lost, damaged, or destroyed while in the custody of such employee or the Department of the Interior, under authorization, contract, or loan, for necessary fire fighting, trail, or other official business, such reimbursement to be made from any available funds in the appropriation to which the hire of such equipment would be properly chargeable.

The record discloses that the General Accounting Office, by preaudit difference statement dated December 16, 1940, returned without certification a voucher (Bur. Vou. No. 14-992) in the amount of $50, covering the loss of the first-mentioned horse, stating that funds sought to be charged would appear not to be available for payment to the owner for loss of the horse "in the absence of showing of negligence or failure on the part of the Government employee of this service, which caused the death of the horse" (citing 16 Comp. Dec. 68 [1909], and a decision of the Comptroller General, A 67206, unpublished, dated March 18, 1936). By preaudit difference statement, dated March 3, 1941, the General Accounting Office returned without certification a voucher (Bur. Vou. No. 14-1360), in the amount of $100, for the loss of the two other horses, with a notation to the effect that the facts stated were not sufficient for a determination of whether or not the Government is liable for the loss of the horses, again citing 16 Comp. Dec. 68. The first-named voucher was designated as payable from funds appropriated under the Public Works Administration Appropriation Act of 1938 (52 Stat. 809), which made available certain funds for expenditure in bureaus of the Interior Department, and the second voucher was designated as payable from regularly appropriated funds available to the National Park Service under the Interior Department Appropriation Act for the fiscal year 1940 (53 Stat. 725). Neither

December 5, 1941

act contains language precluding payment of claims covered by authorized contractual provisions.

The opinion of the Comptroller of the Treasury, referred to, supra, disallowed payment for a horse lost while in the custody of a Department of the Interior employee because of the insufficiency of the record to establish the liability of the Government for its death, but held that, if upon investigation it was ascertained that the Government did not take ordinary care of the horse, and because of that fact the death of the horse resulted, then the Government would be liable for the reasonable value of the horse, to be agreed upon by the claimant and the Department. In that case there was a contract under which the horse was hired providing that the United States should "exercise ordinary care" of the horses hired thereunder. The opinion of the Comptroller General (unpublished), supra, disallowed payment for the loss of a horse while in the custody of a National Park Service employee, which was used in connection with the activities of a Civilian Conservation Corps camp, holding that such use may not be regarded as in the custody of an employee of such service "under authorization, control, or loan, for necessary fire fighting, trail, or other official business" within the purview of section 7 of the act of May 26, 1930, supra, and further stated:

The general rule is that in the absence of an authorized provision therefor the United States is not liable for injuries sustained, without fault or negligence on the part of any officer or employee of the Government, by horses when being used for the purposes for which hired. 16 Comp. Dec. 68; 1 Comp. Gen. 192; 3 id. 505; 4 id. 1028.

It would appear from the foregoing that since there was an authorized contractual provision for payment by the Government of claims for any horses not returned, or horses crippled and rendered unfit for further service, and since there appears no specific prohibition in either of the appropriation acts, supra, barring their payment, the claims may be paid under the authority of the act of May 26, 1930, supra. It is suggested, however, inasmuch as no reference appears to have been made to the existence of a contract with the Park Saddle Horse Company at the time the vouchers were submitted to the General Accounting Office for preaudit, that the vouchers be resubmitted for further consideration by that office, calling specific attention to the fact that payment is sought, in accordance with an authorized contractual provision for the payment of such claims, under the authority of the act of May 26, 1930, supra.

LINE MATERIAL COMPANY

Decided December 10, 1941

CONTRACTS-DELAY-LIQUIDATED DAMAGES.

When there is a delay in furnishing materials beyond the date set by the contract for delivery and the materials could not sooner have been procured in the open market, it is proper to assess the liquidated damages prescribed in the contract, notwithstanding the fact that the total damages thus assessed exceed the purchase price of the materials furnished. Distinguishing 11 Comp. Gen. 384, and 16 Comp. Gen. 344.

BURLEW, First Assistant Secretary:

On November 10, 1939, Invitation for Bids No. 49065-A was issued for furnishing 10 solid ground rods, under item 7 of Schedule No. 3 for the Central Valley Project, California. The Line Material Company, being the lowest bidder, equalizing elements considered, it was awarded the contract. Under its bid the company agreed to make delivery f. o. b. cars at Oakley, California, and to make shipments from Glassport, Pennsylvania, within 21 calendar days after the date of receipt of notice of award of the contract. The award was made on November 28, 1939, and notice of the award was received by the contractor on November 30, 1939, thus establishing the shipping date as of December 21, 1939. Instead of shipping from Glassport, the shipment was made from Bridgeport, Connecticut, on January 5, 1940. This was 15 days later than the date of shipment stipulated in the contract. The contract provided for liquidated damages at a rate of $10 for each day's delay in shipment.

By a letter of January 28, 1940, the chief clerk of the Denver office of the Bureau of Reclamation notified the contractor that the delay of 15 days in shipment required the assessment of liquidated damages at the rate of $10 a day, or a total of $150. Findings of fact were made by the Government contracting officer on February 15, 1940, and a copy thereof was furnished the contractor. In his findings, the contracting officer ruled that the delay was due to acts of the contractor, and also that the contractor failed to give notice of the cause of the delay within the 10-day period specified in the contract. The contractor has appealed.

This is a case wherein a time limit was placed on a shipment of materials and liquidated damages were stipulated for the reason that a determination of the actual damages would be difficult. The contractor agreed to make the shipment within the time allowed but failed to do so. The failure is conceded by the contractor to have been its own fault, for in its letter of February 2, 1940, addressed to the Denver office of the Bureau of Reclamation, it stated:

December 10, 1941

The fact that the shipment was delayed is acknowledged. For your information, it was due to the confusion resulting from the removal of our general offices from South Milwaukee to Milwaukee. At the same time we were faced with a threatened strike which added to the confusion. As a result, your letter of December 2 in some manner was not properly connected with the file and was not acted upon promptly, resulting in the change in routing to the factory at Bridgeport being delayed. Just what happened to your letter during the existence of this confusion unfortunately cannot be reconstructed at this time. Notwithstanding its acknowledgment that the delay in shipment was its own fault, the contractor appeals from the payment of the liquidated damages on the ground that the payment of $150 damages in connection with a purchase of only $20.04 worth of material seems excessive. In support of its appeal, two decisions by the Comptroller General are cited.

The first decision cited (11 Comp. Gen. 384) dealt with the question of the collection of liquidated damages in cases of ordinary supplies that can be purchased in the open market, and in that case it was stated that provisions for liquidated damages should not appear in contracts for the purchase of such ordinary supplies, but if and when they do appear, there should not be a running of time indefinitely which would result in the liquidated damages exceeding the contract price of the supplies. It was then stated that, in such case, if procurement has not been made in the open market, "it is not ordinarily believed there can be a charging of liquidated damages beyond the value of the thing as it would result in taking the thing and demanding from the defaulting party a further sum.”

The second decision cited (16 Comp. Gen. 344) involved a contract for the purchase of test tubes for the use of the Veterans' Administration and in that case it was shown that the delivery on the delivery date of the entire number of test tubes covered by the contract was not necessary to the conduct of the work in which they were to be used, and that if one contractor had been the successful bidder on the entire schedule of supplies upon which bids were asked (it apparently included not only the test tubes but numerous other articles) his liquidated damages for failure to deliver the entire list of supplies would have been only $10 a day. From this it was argued that there was no relation between the amount of the liquidated damages and the actual damage that may have resulted, and that as such an attempt to assess liquidated damages was invalid (citing Wise v. United States, 249 U. S. 361), the form of stipulation in the contract had left the Government without any right to assess liquidated damages for the delay involved and without compensation for the intangible damages which such delay may have caused. Neither of the decisions cited is of benefit to the contractor in this case.