52.211-12 Liquidated Damages-Construction
Source: FAR 52.211-12 on acquisition.gov
FAR 52.211-12 requires contractors to pay a specified daily penalty for each day a construction project is delayed beyond the contract deadline, providing a clear financial incentive for timely completion.
Overview
FAR 52.211-12, Liquidated Damages-Construction, is a contract clause used in construction contracts to establish a predetermined amount of damages the contractor must pay if they fail to complete the work within the specified contract time. The clause allows the Contracting Officer to specify a daily rate for liquidated damages, which accrues for each calendar day the project is delayed beyond the agreed completion date. If the Government terminates the contractor's right to proceed, liquidated damages continue to accrue until the work is finished, and these damages are in addition to any excess costs incurred by the Government to complete the project. This clause provides a clear, enforceable remedy for project delays, helping ensure timely completion of construction contracts.
Key Rules
- Liquidated Damages for Delay
- Contractors must pay a specified daily amount for each day the project is delayed beyond the contract completion date.
- Damages Continue After Termination
- If the contract is terminated for default, liquidated damages continue to accrue until the work is completed by another party.
- Damages Are in Addition to Repurchase Costs
- Liquidated damages are separate from and in addition to any excess costs the Government incurs to complete the work after termination.
Responsibilities
- Contracting Officers: Must insert the clause in applicable solicitations and contracts and specify the daily liquidated damages amount.
- Contractors: Must complete work on time or pay the specified liquidated damages for each day of delay.
- Agencies: Must monitor contract performance and enforce the clause if delays occur.
Practical Implications
- This clause incentivizes timely completion of construction projects and provides the Government with a straightforward remedy for delays.
- Contractors should carefully assess project schedules and risks, as delays can result in significant financial penalties.
- Common pitfalls include underestimating the impact of delays or failing to negotiate a reasonable liquidated damages amount during contract formation.
As prescribed in 11.503(b), insert the following clause in solicitations and contracts:
Liquidated Damages-Construction (Sept 2000)
(a) If the Contractor fails to complete the work within the time specified in the contract, the Contractor shall pay liquidated damages to the Government in the amount of ____________ [Contracting Officer insert amount] for each calendar day of delay until the work is completed or accepted.
(b) If the Government terminates the Contractor’s right to proceed, liquidated damages will continue to accrue until the work is completed. These liquidated damages are in addition to excess costs of repurchase under the Termination clause.
(End of clause)