B-199697.OM, AUG 25, 1980

B-199697.OM: Aug 25, 1980

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THE MAXIMUM AMOUNT WHICH PEOCO COULD HAVE DELIVERED UNDER THE CONTRACT WAS 240. WHICH IS THE UNPAID BALANCE OF ADVANCE FUNDS RECEIVED BY PEOCO UNDER AN SBA CONTRACT. 265 GALLONS DELIVERED BY PEOCO WERE NOT COVERED BY THE CONTRACT. THE COURTS AND OUR OFFICE HAVE RECOGNIZED THAT IN APPROPRIATE CIRCUMSTANCES PAYMENT MAY BE MADE FOR SERVICES RENDERED ON A QUANTUM MERUIT BASIS (THE REASONABLE VALUE OF WORK OR LABOR) OR FOR GOODS FURNISHED ON A QUANTUM VALEBAT BASIS (THE REASONABLE VALUE OF GOODS SOLD AND DELIVERED). 40 COMP.GEN. 447. THE CONTRACTING OFFICER HAS DETERMINED THAT THE UNIT PRICE PER GALLON IS FAIR AND REASONABLE AND HAS RECOMMENDED PAYMENT.

B-199697.OM, AUG 25, 1980

PRECIS-UNAVAILABLE

ASSOCIATE DIRECTOR, FGMS DIVISION-CLAIMS GROUP:

RETURNED. IN OCTOBER 1977, EAST 51ST STREET PEOPLE'S FUEL, INC. (PEOCO), ENTERED INTO A CONTRACT WITH THE DEPARTMENT OF THE ARMY (ARMY) TO DELIVER AN ESTIMATED QUANTITY OF 190,000 GALLONS OF FUEL OIL. THE CONTRACT PROVIDED THAT THE ARMY COULD ORDER AND PEOCO COULD DELIVER, IN ADDITION TO THE ESTIMATED QUANTITY, AN AMOUNT OF FUEL OIL EQUAL TO THE LESSER OF DOUBLE THE ESTIMATED QUANTITY OR 50,000 GALLONS. HENCE, THE MAXIMUM AMOUNT WHICH PEOCO COULD HAVE DELIVERED UNDER THE CONTRACT WAS 240,000 GALLONS.

NOTWITHSTANDING THIS LIMITATION, ARMY'S RECORDS INDICATE THAT THE ARMY ACCEPTED DELIVERY OF 389,265 GALLONS AND PAID FOR 246,600.5 GALLONS. PEOCO HAS FILED A CLAIM IN THE AMOUNT OF $60,989.07 REQUESTING PAYMENT FOR THE 149,265 GALLONS NOT COVERED BY THE CONTRACT. THE SMALL BUSINESS ADMINISTRATION (SBA) HAS REQUESTED THAT ANY SUCH PAYMENT BE APPLIED AS A REDUCTION OF PEOCO'S OUTSTANDING OBLIGATION OF $284,473.79 TO SBA, WHICH IS THE UNPAID BALANCE OF ADVANCE FUNDS RECEIVED BY PEOCO UNDER AN SBA CONTRACT.

ALTHOUGH THE 149,265 GALLONS DELIVERED BY PEOCO WERE NOT COVERED BY THE CONTRACT, THE COURTS AND OUR OFFICE HAVE RECOGNIZED THAT IN APPROPRIATE CIRCUMSTANCES PAYMENT MAY BE MADE FOR SERVICES RENDERED ON A QUANTUM MERUIT BASIS (THE REASONABLE VALUE OF WORK OR LABOR) OR FOR GOODS FURNISHED ON A QUANTUM VALEBAT BASIS (THE REASONABLE VALUE OF GOODS SOLD AND DELIVERED). 40 COMP.GEN. 447, 451 (1961). A RIGHT TO PAYMENT ON THIS BASIS, HOWEVER, REQUIRES A SHOWING (1) THAT THE GOVERNMENT RECEIVED A BENEFIT AND (2) THAT THE UNAUTHORIZED ACTION HAS BEEN EXPRESSLY OR IMPLIEDLY RATIFIED BY AUTHORIZED CONTRACTING OFFICIALS OF THE GOVERNMENT. DEFENSE MAPPING AGENCY, B-183915, JUNE 25, 1975, 75-2 CPD 15; MATTHEWS FURNITURE COMPANY, B-195123, JULY 11, 1979, 79-2 CPD 131.

CLEARLY, THE DELIVERY OF 149,265 GALLONS CONSTITUTED A BENEFIT TO THE GOVERNMENT. THE CONTRACTING OFFICER HAS DETERMINED THAT THE UNIT PRICE PER GALLON IS FAIR AND REASONABLE AND HAS RECOMMENDED PAYMENT. AN IMPLIED RATIFICATION MAY BE INFERRED FROM ACCEPTANCE OF THE FUEL OIL AND SUCH FAVORABLE RECOMMENDATION. PLANNED COMMUNICATION SERVICES, INC., B-191476, MAY 31, 1978, 78-1 CPD 408.

ACCORDINGLY, PAYMENT ON A QUANTUM VALEBAT BASIS FOR THE AMOUNT CLAIMED, IF OTHERWISE CORRECT, WOULD BE PROPER. PAYMENT, HOWEVER, SHOULD BE APPLIED AS A REDUCTION OF PEOCO'S OUTSTANDING OBLIGATION TO SBA. UNITED STATES V. MUNSEY TRUST CO., 332 U. S. 234 (1947).