Liquidated damages actually applied to the prime contractor on one Commonwealth design-and-construct project, Mulwala NSW (ANAO audit)

What it is. AUD per project: liquidated damages applied for late Practical Completion ($1.3 million, May to December 2010) plus late Final Acceptance ($5.2 million, December 2014 to April 2015), on a fixed-price contract valued at $263 million (about 2.5% of that contract value).

Sample. Defence's design-and-construct contract with Lend Lease for the Mulwala propellant plant (signed 8 June 2007, fixed price, $263 million). Practical Completion was due in March 2010 (33 months, paragraphs 3.2 and 3.10; Box 2 prints the Deed 1 starting date as March 2009, which the report's own text contradicts) and was moved to February 2011 by the first deed; Final Acceptance, contracted for June 2011, was granted on 30 April 2015, nearly four years late (paragraph 3.3), and the last major defect is not expected to be rectified until August 2016, more than five years after the contracted date. Defence kept $1.3 million of $1.8 million accrued in the first period and deducted $5.2 million accrued in the second from a $9.4 million payment due at Final Acceptance.

What it is not. One Commonwealth defence-industrial project (New South Wales), selected by an audit because it failed, so it is the damages that were applied on a project whose Final Acceptance came nearly four years late (and whose last major defect fell more than five years after the contracted date), not a typical rate. It is a figure for what was applied and deducted, not for time owed and never claimed: the report records that the contractor sought extensions of time among its claims (paragraph 3.10) and that the deeds moved the completion dates, so the days charged were those left after that settlement. The two amounts are GST exclusive and are not adjusted for inflation (the $1.3 million is 2010 money and the $5.2 million 2015 money, added as published; price_year is the year of the larger amount), and the 2.5% is against the original $263 million contract value, which the deeds later changed. Table 3.1 of the same report shows liquidated damages paid as $7 million against $6.5 million here; the box note is used because it states each period. Not a figure for Australia-wide practice, so it is filed under NSW and does not fill the national cell.

Our arithmetic. 1.3 + 5.2 = 6.5 ($ million, the two amounts in Box 2 Note b). 6.5 / 263 = 0.0247, about 2.5% of the $263 million contract in paragraph 3.1. The share is given only here, in words, and is not filed as a ratio_of_contract: it is one project and the product would multiply it by every NSW job.

Where it came from

• Australian National Audit Office (2016), Defence's Management of the Mulwala Propellant Facility (Auditor-General Report No. 26 of 2015-16)
  Chapter 3, paragraphs 3.1 to 3.3 and 3.10; Box 2 Note b; Table 3.1 · source record

forfeited_entitlements/penalty_days_liquidated_damages_levied_mulwala_nsw · AU-NSW · F ·the record ·link to this figure ·dispute this figure(or email support@demiton.io)