What is the standard for dollar amounts and calendar days claimed under the liquidated damages (LD) clause?
There is no “standard” for LDs. LDs are tailored to the acquisition and must represent the real (or anticipated) damages the NAFI will suffer for late performance. LDs are not punitive or negative performance incentives. The contract file must be documented with the rationale for determining the LD amount. (See AR 215-4, paragraph 2-20) Question: How effective is a contractor warranty as a remedy for ensuring effective contractor performance. Answer: Not very good, in our experience. Just requiring a contractor to provide his “most favorable commercial warranty,” as required by Clause BI-111 often doesn’t offer the NAFI much protection. For example, how do you know that the warranty offered is the contractor’s “most favorable commercial warranty?” Have you checked to what warranties he offers in the commercial marketplace? To their credit, some contracting officers do. Many, though, don’t focus at all on this important contract remedy, and fail to address the topic in their negotiation
