2 U.S.C. § 1816: Construction contracts

Summary

Contracts worth more than $50,000 must include a clause that makes the contractor pay money for delays the contractor causes. The penalty equals the daily damage rate times the number of days the project is late. The daily rate is $140 for contracts over $50,000 but under $100,000; $200 for contracts $100,000 through $500,000; and $200 plus $50 for each $100,000 (or part of $100,000) over $500,000. The contracting officer may change the rate in writing if the standard rate does not match expected harm. The rule applies to contracts begun in fiscal year 2002 or later.

Title 2, §1816

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(a)Liquidated damages

The Architect of the Capitol may not enter into or administer any construction contract with a value greater than $50,000 unless the contract includes a provision requiring the payment of liquidated damages in the amount determined under subsection (b) in the event that completion of the project is delayed because of the contractor.

(b)Amount of payment

The amount of payment required under a liquidated damages provision described in subsection (a) shall be equal to the product of— (1)

(2)the number of days by which the completion of the project is delayed.

(c)Daily liquidated damage payment rate

(1)In general

In subsection (b), the “daily liquidated damage payment rate” means—

(A)$140, in the case of a contract with a value greater than $50,000 and less than $100,000;

(B)$200, in the case of a contract with a value equal to or greater than $100,000 and equal to or less than $500,000; and

(C)the sum of $200 plus $50 for each $100,000 increment by which the value of the contract exceeds $500,000, in the case of a contract with a value greater than $500,000.

(2)Adjustment in rate permitted

Notwithstanding paragraph (1), the daily liquidated damage payment rate may be adjusted by the contracting officer involved to a rate greater or lesser than the rate described in such paragraph if the contracting officer makes a written determination that the rate described does not accurately reflect the anticipated damages which will be suffered by the United States as a result of the delay in the completion of the contract.

(d)Effective date

This section shall apply with respect to contracts entered into during fiscal year 2002 or any succeeding fiscal year.

Editorial Notes

Codification Section was classified to section 166j of former Title 40, prior to the enactment of Title 40, Public Buildings, Property, and Works, by Pub. L. 107–217, § 1, Aug. 21, 2002, 116 Stat. 1062.

§1816 Construction Contracts

Summary

Title 2, §1816

Notes & Related Subsidiaries

Editorial Notes

Citations & Metadata