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B-242274 1 (1991-08-27)

handle is hein.gao/gaobadnyd0001 and id is 1 raw text is: I Comptroller General of the United States Wauhuttan,0, 20848 143 Decision Matter of: Department of Interior--Disposition of Liquidated Damages Collected for Delayed Performance File: B-242274 Date: August 27, 1991 DIGEST The Minerals Management Service, Department of the Interior, may not use liquidaLed damages recovered under a computer conversion contract to pay for increased costs it incurred under other computer contracts in a subsequent fiscal year, DECISION An c.fficial of the Minerals Management Service, Department of the Interior, requests our opinion concerning the proper use of funds received as liquidated damages, In fiscal year 1986, the Service collected $979,498.80 in liquidated damages as the result of a contractor's delayed performance under a fiscal year 1985 contract, Because of the contractor's delay, the Service incurred increased costs under two fiscal year 1987 contracts, The official asks whether the Service may use the funds collected as liquidated damages to cover the increased cost.s incurred under the two fiscal year 1987 contracts. For the following reasons, we conclude that the Service may not use the funds to pay for such costs. BACKGROUND In fiscal year 1985, the Service awarded a contract to Martin Marietta Data Systems to convert three of the Service's accounting systems from VAX computers to an IBM mainframe computer, Martin Marietta failed to convert the accounting systems to the IBM computer by the required completion date. Therefore, as provided in the contract, the Service assessed liquidated damages against Martin Marietta for each day of delay up to the maximum 180 days. The Service collected damages totaling $979,498.80 in fiscal year 1986 and credited the amount to its fiscal year 1985 appropriation. In fiscal year 1987, as a result of the delay, the Service was required to extend performance under an existing contract to continue the operation and maintenance of the accounting system3 using the VAX computers. The delay also resulted in additional data entry and associated work under a second fiscal year 1987 contract.

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