Section 27-2303. LIQUIDATED DAMAGES

 

2303.1In addition to the requirement for a liquidated damages clause in certain construction contracts under §507(a) of the Procurement Practices Act of 1985 (the "Act"), D.C. Code §1-1185.7, and Chapter 26 of this title, a liquidated damages clause approved by the Director may be used in a contract when the following factors apply:

 

(a)The time of delivery or performance is such an important factor in the award of the contract that the District may reasonably expect to suffer damages if the delivery or performance is delinquent; or

 

(b)The extent or amount of damages would be difficult or impossible to ascertain or prove.

 

2303.2When deciding whether to include a liquidated damages clause in a contract, the contracting officer shall consider the probable effect on pricing, competition, the costs and difficulties of contract administration, and similar matters.

 

2303.3In order to avoid setting an unenforceable penalty, liquidated damages shall not be fixed without reference to probable actual damages. The contracting officer shall determine a reasonable rate of liquidated damages on a case by case basis.

 

2303.4The contracting officer shall set the rate of liquidated damages based on the recommendations and justifications provided by the agency initiating the procurement request and the contracting officer's assessment of all applicable factors.

 

2303.5The contracting officer shall document the justification of the rate of liquidated damages in the contract file.

 

2303.6A contract may include an overall maximum dollar amount or period of time during which liquidated damages may be assessed, or both, to prevent an unreasonable assessment of liquidated damages.

 

2303.7The contracting officer shall take all reasonable steps to mitigate liquidated damages.

 

2303.8If a liquidated damages clause is included in a contract and a basis for termination for default exists, the contracting officer shall take appropriate action expeditiously to obtain performance by the contractor or to terminate the contract.

 

2303.9If delivery or performance is desired after termination for default, efforts shall be made to obtain the delivery or performance from another source within a reasonable time.

 

2303.10If a contract provides for liquidated damages for delay, the Director, on the recommendation of the contracting officer, shall be authorized to remit all or part of the damages if, in the discretion of the Director, remission would be just and equitable.

 

source

Final Rulemaking published at 35 DCR 1549 (February 26, 1988).