B-199804.OM, FEB 24, 1981

B-199804.OM: Feb 24, 1981

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Z 2096415(19): GGC: WE ARE FORWARDING HERTZ CORPORATION'S CLAIM. THE HERTZ CORPORATION REQUESTS PAYMENT OF TWELVE INVOICES FOR CAR RENTAL CHARGES WHICH WERE GENERATED BY THREE INDIVIDUALS. MANY OF THE CHARGES WERE NOT INCURRED DURING THE COURSE OF OFFICIAL DUTY. WERE. INDIVIDUALS WERE REIMBURSED FOR CAR RENTAL CHARGES INCURRED DURING THE PERFORMANCE OF OFFICIAL DUTIES. THE REFUNDS WERE NEVER APPLIED TO THE APPROPRIATE RENTAL CREDIT CARD ACCOUNTS. THE MARINE CORPS CLAIMS THAT ANY DEBTS INCURRED THROUGH THE USE OF THE HERTZ CREDIT CARDS ARE THE PERSONAL OBLIGATIONS OF THE INDIVIDUALS INVOLVED. THE GOVERNMENT IS RESPONSIBLE FOR ALL DEBTS INCURRED. MAJOR MESSER OF THE MARINE CORPS HAS ADVISED US THAT A SUPPLY OFFICER DOES NOT HAVE THE AUTHORITY TO BIND THE GOVERNMENT TO A CONTRACT FOR THE OPEN-ENDED USE OF CREDIT CARDS.

B-199804.OM, FEB 24, 1981

SUBJECT: CLAIM OF HERTZ CORPORATION FOR PAYMENT OF CAR RENTAL CHARGES, Z 2096415(19):

GGC:

WE ARE FORWARDING HERTZ CORPORATION'S CLAIM. ON JULY 16, 1979, THE SUPPLY OFFICER OF THE U. S. MARINE BARRACKS AT GREAT LAKES, ILLINOIS REQUESTED FOUR CREDIT CARDS FROM THE HERTZ CORPORATION FOR USE BY "AUTHORIZED REPRESENTATIVES" OF THE U. S. MARINE CORPS. THE CARDS DISPLAYED THE NAMES OF BOTH THE MARINE BARRACKS AND OF THE AUTHORIZED REPRESENTATIVES.

THE HERTZ CORPORATION REQUESTS PAYMENT OF TWELVE INVOICES FOR CAR RENTAL CHARGES WHICH WERE GENERATED BY THREE INDIVIDUALS. MANY OF THE CHARGES WERE NOT INCURRED DURING THE COURSE OF OFFICIAL DUTY, BUT WERE, IN FACT, FOR PERSONAL USE. IN OTHER CASES, INDIVIDUALS WERE REIMBURSED FOR CAR RENTAL CHARGES INCURRED DURING THE PERFORMANCE OF OFFICIAL DUTIES, BUT THE REFUNDS WERE NEVER APPLIED TO THE APPROPRIATE RENTAL CREDIT CARD ACCOUNTS.

THE MARINE CORPS CLAIMS THAT ANY DEBTS INCURRED THROUGH THE USE OF THE HERTZ CREDIT CARDS ARE THE PERSONAL OBLIGATIONS OF THE INDIVIDUALS INVOLVED. HERTZ CLAIMS THAT, ACCORDING TO THE CHARGE APPLICATION AND AGREEMENT, THE GOVERNMENT IS RESPONSIBLE FOR ALL DEBTS INCURRED. CAPTAIN MEECE, SUPPLY OFFICER AT THE GREAT LAKES MARINE BARRACKS, DID SIGN THE AGREEMENT TO OBTAIN THE CREDIT CARDS. HOWEVER, MAJOR MESSER OF THE MARINE CORPS HAS ADVISED US THAT A SUPPLY OFFICER DOES NOT HAVE THE AUTHORITY TO BIND THE GOVERNMENT TO A CONTRACT FOR THE OPEN-ENDED USE OF CREDIT CARDS. ONLY WHEN A SUPPLY OFFICER IS DELEGATED SPECIFIC AUTHORITY CAN HE MAKE PURCHASES FOR THE GOVERNMENT, BUT ONLY FOR SPECIFIC ITEMS NOT EXCEEDING A TOTAL OF $2500.

SINCE THE SUPPLY OFFICER DID NOT HAVE THE AUTHORITY TO BIND THE GOVERNMENT TO A CONTRACT, 18 C.G. 568 MAY BE APPLIED. THAT DECISION HELD THAT WHERE A GOVERNMENT OFFICIAL DOES NOT HAVE CONTRACTING AUTHORITY, NO CONTRACT, IMPLIED OR OTHERWISE, CAN BE CREATED BY THE DELIVERY OF GOODS OR THE RENDITION OF SERVICES EVEN THOUGH IT APPEARS THAT THE GOVERNMENT MAY HAVE BENEFITED.

REGARDLESS OF THE ABOVE, IF PAYMENT WERE TO BE MADE ON A QUANTUM MERUIT BASIS, A QUESTION EXISTS CONCERNING THE EXTENT OF GOVERNMENT BENEFIT FROM THE RENTAL VEHICLES. MANY OF THE CHARGES WERE FOR PERSONAL TRAVEL, AND THERE IS NO EVIDENCE WHICH WOULD ALLOW US TO SEPARATE THE OFFICIAL TRAVEL FROM THE PERSONAL.

WE ARE UNABLE TO DETERMINE WHETHER THE GOVERNMENT IS LIABLE FOR ALL AUTHORIZED AND UNAUTHORIZED USE OF THE CREDIT CARDS, OR IF THE UNAUTHORIZED REQUISITION OF THOSE CARDS PRECLUDES PAYMENT ON BOTH A CONTRACTUAL AND QUANTUM MERUIT BASIS. WE THEREFORE REQUEST YOUR ADVICE AS TO THE PROPRIETY OF PAYMENT.

INDORSEMENT

CHIEF, PAYMENT BRANCH, AFMD/CLAIMS GROUP

RETURNED. THE HERTZ SYSTEM, INC., CLAIMS PAYMENT OF 12 INVOICES FOR CAR RENTAL CHARGES INCURRED BY THREE INDIVIDUALS WITH THE U. S. MARINE CORPS CROSS COUNTRY PRISONER ESCORT SECTION (CCPES), MARINE BARRACKS, NAVAL TRAINING CENTER, GREAT LAKES, ILLINOIS.

AT VARIOUS TIMES BETWEEN JUNE 22 AND NOVEMBER 23, 1974, AND ON JUNE 15, 1975, THE THREE MEMBERS OF CCPES CHARGED CAR RENTALS FROM HERTZ ON CREDIT CARDS ISSUED TO THEM IN THEIR OWN NAMES BEARING CARD HOLDER NUMBERS 0006, 0014 AND 0024. SOME OF THE RENTALS CHARGED WERE FOR OFFICIAL TRAVEL WHILE OTHER RENTALS ADMITTEDLY WERE FOR PERSONAL TRAVEL. SUBSEQUENTLY, THE MEMBERS PRESENTED CLAIMS FOR THE COSTS OF THE OFFICIAL TRAVEL AND WERE REIMBURSED BY THE MARINE CORPS. HERTZ ALSO BILLED THE CCPES, MARINE CORPS, FOR ALL OF THE RENTAL CHARGES, BOTH PERSONAL AND OFFICIAL, TOTALING $915.31.

THE MARINE CORPS ADVISED THE HERTZ SYSTEM THAT THE CHARGES WERE THE PERSONAL OBLIGATIONS OF THE INDIVIDUAL MEMBERS WHO MADE THE CHARGES AND NOT OBLIGATIONS OF THE MARINE CORPS OR OF THE UNITED STATES GOVERNMENT, THAT THE INDIVIDUALS HAD BEEN PAID BY THE MARINE CORPS FOR THE COSTS OF OFFICIAL TRAVEL, AND THAT SUCH MEMBERS ARE OBLIGATED TO PAY HERTZ WHICH MUST LOOK TO THE MEMBERS FOR ITS CHARGES.

HOWEVER, HERTZ TAKES THE POSITION THAT HERTZ RENTED TO THE INDIVIDUALS AS AGENTS OF THE GOVERNMENT. HERTZ ALSO STATES THAT THE CREDIT CARDS USED FOR THE RENTALS WERE ISSUED THROUGH THE APPLICATION ENCLOSED WITH ITS REQUEST. MAJOR MESSER OF THE MARINE CORPS HAS ADVISED OUR OFFICE THAT CAPTAIN MEECE WHO SIGNED THE APPLICATION DID NOT HAVE AUTHORITY TO ENTER INTO A CONTRACT FOR CREDIT CARDS.

THE CREDIT CARD APPLICATION SIGNED BY CAPTAIN MEECE WAS EXECUTED FOR CREDIT CARDS TO BE MADE OUT TO THE "COMMANDING OFFICER," NOT FOR CARDS IN THE NAMES OF INDIVIDUAL MEMBERS, AND PROVIDED FOR CARD HOLDER NUMBERS 0001 THROUGH 0004. THE CARDS USED FOR THE CHARGES CLAIMED HAVE CARD HOLDER NUMBERS 0006, 0014 AND 0024. THEREFORE, THE RENTAL CHARGES CLAIMED WERE NOT MADE ON THE CREDIT CARDS SECURED ON THE APPLICATION BY CAPTAIN MEECE, AND THE AUTHORITY OF CAPTAIN MEECE IS IRRELEVANT.

EFFECTIVE ON AND AFTER JUNE 1, 1973, U. S. NAVY COMPTROLLER NOTICE, NAVCOMPNOTE, 4650, PARAGRAPH 4, NAVY AND MARINE CORPS ACTIVITIES WERE DIRECTED TO DISCONTINUE THE USE OF GOVERNMENT CREDIT CARDS FOR THE PROCUREMENT OF COMMERCIAL RENTAL CAR SERVICE TO SATISFY OFFICIAL TRAVEL REQUIREMENTS. ALL TEMPORARY DUTY TRAVELERS AUTHORIZED BY THEIR ORDERS TO USE RENTAL CARS WERE DIRECTED TO PROCURE ANY RENTAL CAR BY CASH OR BY PERSONAL CHECK PAYMENT OR BY PERSONAL CREDIT CARD WITH SUBSEQUENT REIMBURSEMENT TO BE MADE ON THE TRAVEL VOUCHER. PARAGRAPH 6 OF MARINE CORPS ORDER 4600.31B, SEPTEMBER 4, 1974, APPLICABLE TO ALL MARINE CORPS FUNDED TRAVEL ON OFFICIAL DUTY, INDICATES THAT ALL RENTALS ARE TO BE PAID BY PERSONAL CREDIT CARD OR CASH AND ALSO THAT THE RENTAL AGREEMENT WILL BE IN THE NAME OF THE INDIVIDUAL.

SUBSEQUENT TO THE EFFECTIVE DATE OF NAVCOMPNOTE 4650, AN APPLICATION, DATED JUNE 6, 1974, AND APPARENTLY SIGNED BY T. W. BATTAGLIA, OFFICER IN CHARGE, WAS MADE FOR CHARGE CARDS IN INDIVIDUAL NAMES. ONE OF THE INDIVIDUALS NAMED ON THIS APPLICATION WAS C. W. JONES, ONE OF THE THREE MEMBERS OF CCPES WHOSE CAR RENTAL CHARGES ARE NOW CLAIMED BY HERTZ. HOWEVER, THE NAVY NOTICE AND MARINE CORPS ORDER PROHIBITED THE RENTAL OF CARS ON BEHALF OF THE GOVERNMENT. CONSEQUENTLY, THERE WAS NO AUTHORITY TO CONTRACT FOR GOVERNMENT LIABILITY ON THE APPLICATION FOR THE CAR RENTAL CARDS. THERE IS NO EVIDENCE TO SHOW THAT THE OTHER TWO CREDIT CARDS WERE APPLIED FOR PRIOR TO THE NAVY NOTICE OR MARINE CORPS ORDER OR THAT THE OFFICER APPLYING FOR THE CARDS HAD AUTHORITY TO DO SO.

SIMILARLY, ALL OF THE CAR RENTALS, FOR WHICH HERTZ NOW CLAIMS, WERE CONTRACTED FOR SUBSEQUENT TO THE EFFECTIVE DATE OF THE NOTICE ENDING AUTHORITY TO RENT CARS ON BEHALF OF THE GOVERNMENT. THUS, THE TRAVELERS LACKED AUTHORITY TO RENT THE CARS AS GOVERNMENT AGENTS.

AS INDICATED IN YOUR SUBMISSION, NO CONTRACT FOR GOODS OR SERVICES CAN BE CREATED IN THE ABSENCE OF AUTHORITY IN A GOVERNMENT AGENT TO MAKE THE CONTRACT. NEITHER IS THE CLAIMANT ENTITLED TO PAYMENT ON THE BASIS OF QUANTUM MERUIT. RECOGNITION OF A RIGHT TO PAYMENT ON THIS BASIS REQUIRES A SHOWING, INTER ALIA, THAT THE UNAUTHORIZED ACTION HAS BEEN EXPRESSLY OR IMPLIEDLY RATIFIED BY AUTHORIZED GOVERNMENT OFFICIALS. PLANNED COMMUNICATIONS SERVICES, INC., B-191476, MAY 31, 1978, 78-1 CPD 408. THE UNAUTHORIZED CAR RENTAL CONTRACTS HAVE BEEN NEITHER EXPRESSLY NOR IMPLIEDLY RATIFIED BY THE MARINE CORPS, WHICH HAS REPEATEDLY DENIED ANY LIABILITY OF THE GOVERNMENT.

ACCORDINGLY, THE CLAIMS OF HERTZ SHOULD BE DISALLOWED.

DIGEST

CLAIMANT MAY NOT BE PAID FOR CAR RENTALS INCURRED BY CREDIT CARD ISSUED TO GOVERNMENT SUBSEQUENT TO NAVY DIRECTIONS PROHIBITING RENTAL OF CARS ON BEHALF OF GOVERNMENT SINCE RENTALS WERE UNAUTHORIZED AND PAYMENT ON BASIS OF QUANTUM MERUIT IS NOT APPLICABLE SINCE UNAUTHORIZED RENTALS WERE NEITHER EXPRESSLY NOR IMPLIEDLY RATIFIED BY GOVERNMENT AGENCY.