B-142969, JUN. 3, 1960

B-142969: Jun 3, 1960

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TO THE SECRETARY OF THE NAVY: REFERENCE IS MADE TO A LETTER DATED MAY 20. THE EDUCATIONAL SERVICES IN QUESTION WERE FURNISHED BY THE UNIVERSITY WITHOUT THE BENEFIT OF A FORMAL CONTRACT. IT IS REPORTED THAT THE EMPLOYEES NOW ATTENDING THE UNIVERSITY IN THEIR JUNIOR YEAR OF THE ENGINEERING CURRICULUM ARE STUDENT-TRAINEES. THAT THESE STUDENT-TRAINEES STARTED IN THE PROGRAM IN JANUARY 1957 AND HAVE BEEN ATTENDING THE UNIVERSITY DURING THEIR FRESHMAN AND SOPHOMORE YEARS ON A CONTRACTUAL BASIS. THE CENTER'S STUDENT-ENGINEERING WORK PROGRAM WAS APPROVED AT THE SECRETARIAL LEVEL AND AUTHORITY WAS DELEGATED ON SEPTEMBER 25. AUTHORIZATION FOR THE SERVICES WAS GIVEN ORALLY TO THE UNIVERSITY BY MR. BENEDETTI HAS CERTIFIED THAT HE ORALLY REQUESTED THE UNIVERSITY TO FURNISH THE SERVICES "BECAUSE IT WAS APPARENT THAT THE NECESSARY DELEGATION OF AUTHORITY FROM THE BUREAU OF AERONAUTICS.

B-142969, JUN. 3, 1960

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO A LETTER DATED MAY 20, 1960, WITH ENCLOSURES, FROM THE ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, REQUESTING OUR DECISION AS TO THE PROPRIETY OF THE PAYMENT OF THE SUM OF $15,634.09 TO PENNSYLVANIA STATE UNIVERSITY, REPRESENTING THE COST OF EDUCATIONAL SERVICES FURNISHED DURING THE CURRENT ACADEMIC YEAR TO CERTAIN EMPLOYEES OF THE NAVAL AIR MATERIAL CENTER, PHILADELPHIA, PENNSYLVANIA.

THE EDUCATIONAL SERVICES IN QUESTION WERE FURNISHED BY THE UNIVERSITY WITHOUT THE BENEFIT OF A FORMAL CONTRACT. IT IS REPORTED THAT THE EMPLOYEES NOW ATTENDING THE UNIVERSITY IN THEIR JUNIOR YEAR OF THE ENGINEERING CURRICULUM ARE STUDENT-TRAINEES, GS-4, IN THE CENTER'S WORK- STUDY PROGRAM FOR THE DEVELOPMENT OF ENGINEERING PERSONNEL CRITICALLY NEEDED TO ASSIST THE ACTIVITY IN ITS MISSION OF PERFORMING VITAL RESEARCH AND DEVELOPMENT FUNCTIONS, AND THAT THESE STUDENT-TRAINEES STARTED IN THE PROGRAM IN JANUARY 1957 AND HAVE BEEN ATTENDING THE UNIVERSITY DURING THEIR FRESHMAN AND SOPHOMORE YEARS ON A CONTRACTUAL BASIS.

THE CENTER'S STUDENT-ENGINEERING WORK PROGRAM WAS APPROVED AT THE SECRETARIAL LEVEL AND AUTHORITY WAS DELEGATED ON SEPTEMBER 25, 1959, BY THE BUREAU OF AERONAUTICS TO THE COMMANDING OFFICER OF THE CENTER TO APPROVE TRAINING REQUESTS IN THE AMOUNT OF $25,380 FOR 67 TRAINEES DURING THE 1960 FISCAL YEAR. AUTHORIZATION FOR THE SERVICES WAS GIVEN ORALLY TO THE UNIVERSITY BY MR. F. BENEDETTI, TRAINING SUPERINTENDENT OF THE CENTER, ON OR ABOUT SEPTEMBER 14, 1959. MR. BENEDETTI HAS CERTIFIED THAT HE ORALLY REQUESTED THE UNIVERSITY TO FURNISH THE SERVICES "BECAUSE IT WAS APPARENT THAT THE NECESSARY DELEGATION OF AUTHORITY FROM THE BUREAU OF AERONAUTICS, * * * AND THE SUBSEQUENT APPROVAL BY THE COMMANDING OFFICER, * * * WOULD NOT BE RECEIVED IN TIME TO PROCESS THE CONTRACT PRIOR TO THE DATE THE EDUCATIONAL SERVICES COMMENCED; I.E., 21 SEPTEMBER 1959.' THE CERTIFICATION FURTHER STATED THAT FAILURE TO ENROLL THE STUDENT-TRAINEES AT THE BEGINNING OF THE CURRENT ACADEMIC YEAR WOULD HAVE RESULTED IN A BREAKDOWN OF THE PROGRAM AND THE LOSS OF VITALLY NEEDED POTENTIAL ENGINEERS TO THE NAVY. THE CONTRACTING OFFICER HAS CONCURRED IN MR. BENEDETTI'S CERTIFICATION AND RECOMMENDS THAT THE PAYMENT BE MADE.

THERE APPEARS TO BE NO QUESTION AS TO THE NECESSITY FOR THE EDUCATIONAL SERVICES FURNISHED BY THE UNIVERSITY AND ALSO IT IS EVIDENT THAT THE UNIVERSITY FURNISHED THE SERVICES SOLELY IN ANTICIPATION OF PAYMENT THEREFOR ON THE BASIS OF 80 PERCENT OF ITS REGULAR FEE. THE SERVICES FOR WHICH PAYMENT IS CLAIMED HAVE BEEN, OR SHORTLY WILL BE, FULLY PERFORMED BY THE UNIVERSITY. FROM THE FACTS AND CIRCUMSTANCES INVOLVED, THE CLAIM OF THE UNIVERSITY APPEARS TO BE FOR PAYMENT ON THE BASIS OF AN IMPLIED CONTRACT. IN THE CASE OF WOODRUFF V. NEW STATE ICE COMPANY, 197 F.2D 36, 38, IT WAS HELD:

"* * * IT IS TRUE THAT WHERE SERVICES PERFORMED BY ONE PERSON ARE KNOWINGLY AND VOLUNTARILY ACCEPTED BY ANOTHER, THE LAW WILL PRESUME THAT SUCH SERVICES WERE GIVEN AND RECEIVED IN THE EXPECTATION OF BEING PAID THEREFOR, AND WILL IMPLY A PROMISE TO PAY FOR THEIR REASONABLE WORTH.'

SINCE THE IMPLIED OR PAROL CONTRACT HERE INVOLVED IS, FOR ALL INTENTS AND PURPOSES, FULLY EXECUTED, THERE IS FOR APPLICATION ALSO THE RULE LAID DOWN IN TIDEWATER COAL EXCHANGE, INC. V. UNITED STATES, 37 C.CLS. 590, 600, THAT:

"* * * WHAT IS HERE INVOLVED IS NOT AN EXECUTORY BUT AN EXECUTED CONTRACT, I.E., THE DEFENDANT HAS RECEIVED THE FULL BENEFIT OF ALL THE ADVANTAGES AND SAVINGS ACCESS TO THE EXCHANGE AFFORDS, AND REFUSED TO PAY IN FULL FOR WHAT SAID SERVICES ARE REASONABLY WORTH. IT IS NEITHER ASSERTED NOR CONTENDED THAT THE DEFENDANT ACCEPTED THE SERVICE AS GRATUITOUS, OR UNDER CIRCUMSTANCES JUSTIFYING SUCH AN INFERENCE, FOR PAYMENT WAS MADE WITHOUT QUESTION OVER A LONG PERIOD OF TIME. STARTING WITH THE CASE OF CLARK V. UNITED STATES, 95 U.S. 539, * * * AND CONSISTENTLY FOLLOWED SINCE, THIS COURT AND THE SUPREME COURT HAVE ADHERED TO THE RULE THAT A PAROLE CONTRACT FULLY EXECUTED BY THE CONTRACTOR UPON HIS PART, WHEREIN THE UNITED STATES RECEIVES ALL THE BENEFITS OF THE UNDERTAKING, IMPOSES A LIABILITY UPON THE LATTER AS UPON AN IMPLIED CONTRACT. ST. LOUIS HAY AND GRAIN CO. V. UNITED STATES, 191 U.S. 159; * * * UNITED STATES V. BETHLEHEM STEEL CO., 258 U.S. 321; * * * ANDREWS CASE, 41 CT.CL. 48; MORAN BROS. V. UNITED STATES, 39 CT.CL. 486.'

SEE, ALSO, PACIFIC MARITIME ASSOCIATION V. UNITED STATES, 108 F.SUPP. 603.

ACCORDINGLY AND SINCE THE AMOUNT CLAIMED APPEARS FAIR AND REASONABLE, WE WOULD NOT BE REQUIRED TO INTERPOSE ANY OBJECTION TO THE PAYMENT OF $15,634.09 TO THE UNIVERSITY, IF OTHERWISE PROPER.