Panama City officials told residents at a town-hall meeting that the city includes liquidated-damages language in construction contracts but has rarely executed those penalties, opting instead to work alongside contractors in the field to resolve delays.

City Manager Jonathan (City Manager) said the clauses are “in the contract” but acknowledged the city “for the better part of 1 or 2 decades, we've never actually executed liquidated damages.” He said the city’s project-management and construction engineering inspection (CEI) teams are “literally in the field … working hand in hand with the contractors each and every day” to address issues as they arise.

Why it matters: Liquidated-damages provisions are designed to create a financial incentive for on-time completion. When they are not enforced, the city must rely on other accountability mechanisms or face extended schedules that can raise overall program costs across a multi‑year capital program.

City Attorney Nevan Zimmerman explained legal limits on selection and post-award action: for consultants and engineers, state law uses the Competitive Consultants Negotiation Act so that qualifications are selected before price; for construction contracts the city is constrained when using federal or state funding and must generally accept the lowest responsive bidder if it meets specifications. Zimmerman said that, to bar a contractor from bidding, “you really need to make that determination on the front end and decide this particular contractor we've had the following 10 problems. We are going to make a finding. The city commission says you cannot bid for a year, 2 years.”

Officials and residents discussed the Harrison Avenue streetscape as an example where schedule extensions occurred. Jonathan said that a combination of a premature start, 60-plus days of plan revisions, un-ordered structures and an “abnormally heavy rainy season” contributed to a lengthy schedule. He emphasized that certain delays — such as discovering undocumented underground utilities or soil conditions — can legally justify extensions and change orders.

Multiple commissioners and residents raised alternatives to penalties, including incentive pay for early completion and stronger post-project evaluations. Jonathan and other staff described ongoing discussions inside the city about formalizing a more robust closeout or evaluation process for contractors. “If we're not documenting the review or post a a some sort of post mortem,” Jonathan said, “then the information that happened on the job leaves with the staff.”

Officials also explained why night crews or 24-hour work is uncommon: “it makes it that much more expensive” because contractors would need separate crews and overtime pay, Jonathan said. Several commissioners urged the city to consider performance scoring and other upfront remedies so poor performance can be excluded from future bidding.

Ending: City staff said they are discussing a stronger evaluation and closeout practice to improve accountability and preserve institutional memory; state procurement rules and federal funding requirements will continue to limit some post-award options.