If a contract is terminated for default, or if a procedure is used in lieu of termination for default, the contracting officer must ascertain and demand any damages to which the Postal Service may be entitled. These damages are in addition to any excess repurchase cost.
When the contracting officer has accepted defective supplies, the Postal Service may recover, as damages for any nonconformity, the loss under usual circumstances resulting from the supplier’s breach. This may be determined in any reasonable manner. Damages for breach of warranty are the difference, at the time and place of acceptance, between the value of the supplies or services accepted and the value they would have had if they had been as warranted, unless special circumstances show there are proximate damages (damages resulting directly from the breach of warranty) of a different amount.
Normally, incidental and consequential damages may also be recovered. Incidental damages include:
Consequential damages include:
The contracting officer, on notifying the supplier, may deduct all or any part of the damages resulting from any breach of the contract, or from late delivery or delay not subject to liquidated damages, from any part of the price still due.
Damages for nondelivery or repudiation by the supplier when repurchase is not possible are the difference between the market price at the time when the contracting officer learned of the breach and the contract price, together with any incidental and consequential damages, but less expenses saved as a consequence of the supplier’s breach. Market price is determined at the place of acceptance or, in cases of rejection after arrival or revocation of acceptance, at the place of arrival.
