B-164087, JUL. 1, 1968

B-164087: Jul 1, 1968

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IT WAS DETERMINED THAT THE NEGOTIATION AUTHORITY OF 41 U.S.C. 252 (C) (3) COULD NO LONGER BE UTILIZED. AN UNSUCCESSFUL ATTEMPT WAS MADE TO NEGOTIATE A REQUIREMENT-TYPE CONTRACT WITH THE YALE COMPUTER CENTER UNDER THE AUTHORITY OF 41 U.S.C. 252 (C) (10). NOTWITHSTANDING THE FACT THAT NEGOTIATIONS WERE BEING CONDUCTED. WE ARE INFORMALLY ADVISED THAT WHEN THE UNAUTHORIZED USAGE BECAME KNOWN IMMEDIATE ACTION WAS TAKEN TO PREVENT FURTHER USAGE OF THE CENTER'S SERVICES. YOU FURTHER ADVISE THAT THE SERVICES ORDERED WERE NECESSARY AND WERE RENDERED IN GOOD FAITH BY THE YALE COMPUTER CENTER. 496.33 AS THE REASONABLE VALUE OF THE SERVICES FURNISHED IS RECOMMENDED. THIS RECOMMENDATION IS CONCURRED IN BY THE CHIEF.

B-164087, JUL. 1, 1968

TO MR. PRENTICE:

WE REFER TO A LETTER, WITH ENCLOSURES, DATED APRIL 18, 1968, REQUESTING OUR DECISION AS TO WHETHER YOU MAY CERTIFY FOR PAYMENT EIGHT ENCLOSED VOUCHERS (INVOICES) IN A TOTAL AMOUNT OF $4,496.33 FROM THE YALE UNIVERSITY COMPUTER CENTER, NEW HAVEN, CONNECTICUT, FOR SERVICES PERFORMED FOR THE NEW HAVEN CENSUS USE STUDY OFFICE, BUREAU OF THE CENSUS, DURING JANUARY AND FEBRUARY OF 1968.

IT APPEARS THAT DURING CALENDAR YEAR 1967, THE CHIEF, PROCUREMENT AND SUPPLY MANAGEMENT BRANCH, ADMINISTRATIVE AND PUBLICATIONS SERVICES DIVISION, AT THE REQUEST OF THE PROJECT DIRECTOR, NEW HAVEN CENSUS USE STUDY OFFICE, ISSUED FOUR SEPARATE PURCHASE ORDERS TO THE YALE COMPUTER CENTER UNDER THE AUTHORITY OF 41 U.S.C. 252 (C) (3), PROVIDING FOR THE NEGOTIATION OF CONTRACTS NOT IN EXCESS OF $2,500. WHEN THE PROJECT DIRECTOR REQUESTED AUTHORIZATION TO PROCURE ADDITIONAL SERVICES, IT WAS DETERMINED THAT THE NEGOTIATION AUTHORITY OF 41 U.S.C. 252 (C) (3) COULD NO LONGER BE UTILIZED. ACCORDINGLY, DURING JANUARY AND FEBRUARY OF 1968, AN UNSUCCESSFUL ATTEMPT WAS MADE TO NEGOTIATE A REQUIREMENT-TYPE CONTRACT WITH THE YALE COMPUTER CENTER UNDER THE AUTHORITY OF 41 U.S.C. 252 (C) (10).

NOTWITHSTANDING THE FACT THAT NEGOTIATIONS WERE BEING CONDUCTED, THE PROJECT DIRECTOR WITHOUT AUTHORITY AND WITHOUT THE KNOWLEDGE OF THE AUTHORIZED CONTRACTING OFFICIALS OF THE BUREAU CONTINUED TO UTILIZE THE CENTER'S SERVICES DURING JANUARY AND FEBRUARY. IN THIS CONNECTION, WE ARE INFORMALLY ADVISED THAT WHEN THE UNAUTHORIZED USAGE BECAME KNOWN IMMEDIATE ACTION WAS TAKEN TO PREVENT FURTHER USAGE OF THE CENTER'S SERVICES.

A MEMORANDUM DATED APRIL 18, 1968, FROM THE CHIEF, PROCUREMENT AND SUPPLY MANAGEMENT BRANCH, ADMINISTRATIVE AND PUBLICATIONS SERVICES DIVISION, STATES THAT ACTION HAS BEEN TAKEN TO AVOID A RECURRENCE OF THE FOREGOING CIRCUMSTANCES. YOU FURTHER ADVISE THAT THE SERVICES ORDERED WERE NECESSARY AND WERE RENDERED IN GOOD FAITH BY THE YALE COMPUTER CENTER. THIS BASIS, PAYMENT OF $4,496.33 AS THE REASONABLE VALUE OF THE SERVICES FURNISHED IS RECOMMENDED. THIS RECOMMENDATION IS CONCURRED IN BY THE CHIEF, PROCUREMENT AND SUPPLY MANAGEMENT BRANCH.

AT THE OUTSET, WE STRESS THE ADVICE THAT THE PROJECT DIRECTOR WAS WITHOUT AUTHORITY TO ENTER INTO CONTRACTS ON BEHALF OF THE BUREAU. AGENTS OF THE GOVERNMENT MUST HAVE ACTUAL AUTHORITY IN ORDER TO BIND THE UNITED STATES AND INDIVIDUALS ENTERING INTO CONTRACTUAL ARRANGEMENTS WITH THE UNITED STATES ARE, AS A MATTER OF PUBLIC POLICY, CHARGED WITH THE RESPONSIBILITY OF ACCURATELY ASCERTAINING THE EXTENT OF THE AUTHORITY OF THE AGENT TO ACT FOR THE GOVERNMENT. FEDERAL CROP INSURANCE CORP. V MERRILL, 1332 U.S. U.S. 380, 384 (1947); NEWMAN V UNITED STATES, 135 F.SUPP. 953, 957 (CT. CL. 1955).

ALTHOUGH THE PROJECT DIRECTOR'S INFORMAL REQUESTS FOR SERVICES CANNOT BE CONSIDERED AUTHORIZED, IT IS RECOGNIZED THAT IN APPROPRIATE CIRCUMSTANCES SUCH UNAUTHORIZED ACTION MAY BE EXPRESSLY OR IMPLIEDLY RATIFIED. IN THIS REGARD, THERE IS INITIALLY FOR CONSIDERATION FEDERAL PROCUREMENT REGULATIONS (FPR) 1-1.405, WHICH PROVIDES AS FOLLOWS:

"SEC. 1-1.405 RATIFICATION OF UNAUTHORIZED CONTRACT AWARDS.

"EXECUTION OF OTHERWISE PROPER CONTRACTS MADE BY INDIVIDUALS WITHOUT CONTRACTING AUTHORITY, OR BY CONTRACTING OFFICERS IN EXCESS OF THE LIMITS OF THEIR DELEGATED AUTHORITY, MAY BE LATER RATIFIED. TO BE EFFECTIVE, SUCH RATIFICATION MUST BE IN THE FORM OF A WRITTEN DOCUMENT CLEARLY STATING THAT RATIFICATION OF A PREVIOUSLY UNAUTHORIZED ACT IS INTENDED AND MUST BE SIGNED BY A PERSON AUTHORIZED TO RATIFY SUCH ACTS. GENERALLY SUCH RATIFICATION MAY BE MADE ONLY BY AN OFFICIAL ON WHOSE BEHALF THE CONTRACT WAS MADE AND THEN ONLY (1) IF HE COULD HAVE GIVEN AUTHORITY TO ENTER INTO THE CONTRACT BEFORE IT WAS AWARDED AND (2) IF HE STILL HAS POWER TO DO SO AT THE TIME OF RATIFICATION.'

WE ARE INFORMALLY ADVISED BY THE FPR STAFF THAT THE FOREGOING PROVISION WAS INTENDED TO PROVIDE A REGULATORY FOUNDATION FOR THE VOLUNTARY RATIFICATION OF UNAUTHORIZED CONTRACTUAL ARRANGEMENTS BY AGENCIES SUBJECT TO THE FPR. IN THIS RESPECT, WE NOTE THAT THE RATIFICATION PROCEDURE AUTHORIZED FOLLOWS GENERALLY THE CRITERIA SET FORTH IN 22 COMP. GEN. 1083, 1086-1087.

OF RELEVANCE TO OUR CONSIDERATION HERE, WE HAVE BEEN INFORMALLY ADVISED BY THE CHIEF, PROCUREMENT AND SUPPLY MANAGEMENT BRANCH, THAT THE OFFICIAL IN THE BUREAU OF CENSUS AUTHORIZED TO RATIFY SUCH ACTS IN ACCORDANCE WITH FPR 1-1.405 HAS DECLINED TO DO SO. SUCH REFUSAL IS NOT, IN OUR OPINION, NECESSARILY DETERMINATIVE OF THE GOVERNMENT'S LIABILITY SINCE IT IS ALSO RECOGNIZED THAT THE ACCEPTANCE OF BENEFITS BY AUTHORIZED REPRESENTATIVES OF THE GOVERNMENT WITH KNOWLEDGE OF THE CIRCUMSTANCES MAY, IN THE PROPER CASE, RESULT IN A RATIFICATION OF THE UNAUTHORIZED ACT BY IMPLICATION. SEE WILLIAMS V UNITED STATES, 127 F.SUPP. 617 (CT. CL. 1955), CERTIORARI DENIED 349 U.S. 938 (1955); NIAGARA FALLS BRIDGE COMMISSION V UNITED STATES, 76 F.SUPP. 1018 (CT. CL. 1948); PACIFIC MARITIME ASSOCIATION V UNITED STATES, 108 F.SUPP. 603 (CT. CL. 1952). HOWEVER, THE FACTS OF RECORD INDICATE THAT THE AUTHORIZED CONTRACTING OFFICIALS OF THE BUREAU WERE NOT AWARE OF THE PROJECT DIRECTOR'S ACTION, AND THAT IMMEDIATE ACTION WAS TAKEN TO CURTAIL SUCH ACTIVITY WHEN IT BECAME KNOWN. IN VIEW THEREOF, NO BASIS IS PRESENTED FOR FINDING A CONTRACT IMPLIED IN FACT WHICH WOULD OBLIGATE THE GOVERNMENT TO PROVIDE COMPENSATION ON A QUANTUM MERUIT BASIS FOR THE SERVICES FURNISHED BY THE YALE COMPUTER CENTER. BYRNE ORGANIZATION, INC. V UNITED STATES, 287 F.2D 582 (CT. CL. 1961).

THEREFORE, SINCE THE CLAIM IS ESSENTIALLY QUASI-CONTRACTUAL IN NATURE IN THE ABSENCE OF A RATIFICATION IN ACCORDANCE WITH FPR 1.1-405, PAYMENT MAY NOT BE AUTHORIZED. ALLIANCE ASSURANCE COMPANY V UNITED STATES, 252 F.2D 529, 532 (1958), AND CASES CITED THEREIN.