D.C. Mun. Regs. r. 27-2303
The contracting officer may use a liquidated damages clause in a contract when the following factors apply:
When deciding whether to include a liquidated damages clause in a contract, the contracting officer shall consider the probable effect on pricing, competition, and the costs and difficulties of contract administration.
In order to avoid setting an unenforceable penalty, liquidated damages shall not be fixed without reference to probable actual damages. The contracting officer shall determine a reasonable rate of liquidated damages on a case by case basis.
The contracting officer shall set the rate of liquidated damages based on the recommendations and justifications provided by the agency initiating the procurement request and the contracting officer's assessment of all applicable factors.
A contract may include an overall maximum dollar amount or period of time during which liquidated damages may be assessed, or both, to prevent an unreasonable assessment of liquidated damages.
The contracting officer shall take all reasonable steps to mitigate liquidated damages.
If a liquidated damages clause is included in a contract and a basis for termination for default exists, the contracting officer shall take appropriate action expeditiously to obtain performance by the contractor or to terminate the contract.
If delivery or performance is desired after termination for default, efforts shall be made to obtain the delivery or performance from another source within a reasonable time.
If a contract provides for liquidated damages for delay, the contracting officer, shall be authorized to waive all or part of the damages if, in the discretion of the contracting officer, the waiver would be just and equitable.
D.C. Mun. Regs. r. 27-2303