Liquidated damages are a pre-set amount that one party agrees to pay another in the event of a breach of some element of a contract. Easy. Sort of.
In GovCon, liquidated damages can be a form of expectation management. However, these expectations have a bite (the pre-set amount). Despite this bite, liquidated damages can be an effective mechanism to drive communication between government and contractors – and that is a very good thing.
In this episode, Kevin and Paul dig into what, how and why liquidated damages matter, and to whom. They also, of course, integrate what the FAR has to say about them.