Delay Damages Memorandum

The elements of proof, and the reasons for whether delay damages are recoverable differ under the procurement code and Rule 238.

The Procurement Code, 62 Pa. C.S.A. Section 3931 to 3939, contains express provisions for delay damages against governmental entities. The cases provided however that in order to recover for an alleged compensable delay, a contractor must prove: (1) the extent of the delay with a reasonable degree of accuracy; (2) the delay was caused solely by the government’s actions; and (3) the delay caused specific, quantifiable injury to the contractor. Servidone Constr. Corp. The burden of establishing these factors falls squarely upon the contractor. Avedon Corp. v. United States, 15 Cl. Ct. 648 (1988).

A contractor must show the government was the “sole proximate cause” of the delay and no concurrent cause would have equally delayed the contract, regardless of the government’s action or inaction. Avedon Corp.; Merritt-Chapman & Scott Corp. v. United States, 208 Ct. Cl. 639, 650, 528 F.2d 1392 (1976). “Only if the delay was caused solely by the government will the contractor be entitled to … recovery of excess costs associated with the delay.” Weaver-Bailey Contractors, Inc. v. United States, 19 Cl. Ct. 474, 476 (1990) (emphasis in original) (citations omitted). A “court [will] award delay damages only for the unreasonable portion of a government-caused delay.” Mega Constr. Co., Inc., 29 Fed

Additionally, Code also allows the Governmental entity to withhold payment for good faith claims. 62 Pa. C.S.A. Section 3934.

The “delay” at issue under the Procurement Code is a “delay’ in the work of the project which increases the cost of performance. Not a delay in payment.

Under Pa. R.C.P. 238, a party may be entitled to delay damages for late payment. Here again, the assessment of delay damages against governmental entities is permitted. Ehehalt v. Nyari O’Dette, Inc., 85 Pa. Commw. 94, 481 A.2d 365 (1984); Richardson v. LaBuz 81 Pa. Commw. 436, 474 A.2d 1181 (1984). However, Rule 238 only applies to actions involving bodily injury, death or property damage. The rule does expressly provide that delay damages under rule 238 may be awarded by an arbitrator. Rule 238 (d)(1).