B-175325, DEC 21, 1972

B-175325, DEC 21, 1972

CONTRACT - RELIEF FROM PERFORMANCE - CANCELLATION - CLAIM FOR EXPENSES DENIAL OF REQUEST BY M & M PRECISION SYSTEMS, INC., FOR RECONSIDERATION OF DECISION B-175325, AUGUST 9, 1972, WHICH HELD THAT CANCELLATION WAS THE ONLY RELIEF AFFORDABLE UNDER A CONTRACT AWARDED BY THE NAVY AIR ENGINEERING CENTER, PHILADELPHIA, PA., FOR PARACHUTE DRYERS. A CLAIM FOR PAYMENT ON A QUANTUM MERUIT OR QUANTUM VALEBAT BASIS CAN BE RECOGNIZED ONLY IF THE GOVERNMENT HAS RECEIVED A BENEFIT UNDER THE CONTRACT. 46 COMP. GEN. 348 (1966). THEREFORE, THE CONTRACTOR'S CLAIM FOR WORK, MODIFICATION CHANGES, ENGINEERING AND MATERIAL COSTS IS AGAIN DISALLOWED SINCE NO PARACHUTE DRYERS WERE DELIVERED TO THE GOVERNMENT.

TO M & M PRECISION SYSTEMS, INC.:

REFERENCE IS MADE TO YOUR LETTER DATED SEPTEMBER 8, 1972, WITH ENCLOSURES, REQUESTING RECONSIDERATION OF DECISION B-175325, AUGUST 9, 1972, WHICH HELD THAT NO OTHER RELIEF THAN CANCELLATION OF CONTRACT NO. N00156-72-C-1115 FOR PARACHUTE DRYERS WAS AUTHORIZED IN THE CIRCUMSTANCES. WE FOUND THAT THE CONTRACTING OFFICER WAS ON NOTICE OF THE POSSIBILITY OF ERROR IN YOUR BID AT THE TIME OF AWARD. IN VIEW OF THAT KNOWLEDGE, HE COULD NOT BIND YOU TO PERFORM IN ACCORDANCE WITH THE ADVERTISED SPECIFICATIONS WHICH DIFFERED FROM YOUR INTENDED APPROACH. THE OTHER HAND, SINCE IN FORMAL ADVERTISING THE CONTRACT AWARDED MUST BE THE CONTRACT ADVERTISED, THE CONTRACTING OFFICER HAD NO AUTHORITY TO AWARD A CONTRACT WHICH VARIED FROM THE ADVERTISED SPECIFICATIONS. ACCORDINGLY, NO VALID AND BINDING CONTRACT CAME INTO BEING EITHER FOR PERFORMANCE UNDER YOUR INTENTION OR THE ADVERTISED SPECIFICATIONS.

YOU CONTEND THAT THE CONTRACT SHOULD HAVE BEEN TERMINATED IN OCTOBER 1971 AND THAT SINCE YOU INCURRED COSTS UNDER THE CONTRACT YOU SHOULD BE REIMBURSED.

WHEN A CONTRACT IS INVALID, PAYMENT MAY BE AUTHORIZED ON A QUANTUM MERUIT BASIS FOR THE REASONABLE VALUE OF WORK AND LABOR OR ON A QUANTUM VALEBAT BASIS FOR THE REASONABLE VALUE OF GOODS SOLD AND DELIVERED. 46 COMP. GEN. 348 (1966). HOWEVER, BEFORE A RIGHT TO PAYMENT UNDER EITHER BASIS MAY BE RECOGNIZED, IT MUST BE SHOWN THAT THE GOVERNMENT RETAINED THE BENEFIT OF THE LABOR OF ANOTHER WITHOUT RECOMPENSE. ALTHOUGH YOU CONTEND THAT YOU HAVE INCURRED SOME $24,000 IN WORK, MODIFICATION CHANGES, ENGINEERING AND MATERIALS COSTS, YOUR FIRM DID NOT DELIVER ANY PARACHUTE DRYERS AND THE GOVERNMENT THEREFORE HAS RECEIVED NO BENEFIT WHATSOEVER UNDER THE CONTRACT.

SINCE NO TANGIBLE BENEFITS WERE RECEIVED AND RETAINED BY THE GOVERNMENT, NO BASIS EXISTS FOR ALLOWING THE CLAIM.