B-201987(1), JUN 24, 1981

B-201987(1): Jun 24, 1981

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THE CORPS REPORTS THAT MARKWELL WAS THE LOW BIDDER UNDER A 1979 SOLICITATION FOR CONSTRUCTION OF A REINFORCED CONCRETE MASONRY FIVE-BAY PUMPING STATION IN LOUISIANA. THE ANTICIPATED AWARD TO MARKWELL UNDER THE 1979 SOLICITATION WAS DELAYED FOR SEVERAL MONTHS. THE WORK WAS DONE WITH THE KNOWLEDGE AND CONSENT OF CORPS PERSONNEL WHOSE PRIMARY WORK RESPONSIBILITY WOULD HAVE BEEN TO SUPERVISE SUCH WORK IF IT HAD BEEN UNDER CONTRACT. MARKWELL WAS INFORMED THAT IT WOULD NOT BE AWARDED A CONTRACT. THE 1979 SOLICITATION WAS CANCELED. THE PROCUREMENT WAS READVERTISED IN 1980. A FIRM OTHER THAN MARKWELL WAS THE LOW BIDDER AND RECEIVED AWARD UNDER THE 1980 SOLICITATION. WHILE SOME CONSTRUCTION SITE CLEARING AND GRUBBING WORK STILL REMAINED FOR THE FIRM THAT WAS AWARDED THE CONTRACT TO CONSTRUCT THE PUMPING STATION.

B-201987(1), JUN 24, 1981

DIGEST: WHERE DOUBT REMAINS AS TO EXTENT OF BENEFIT RECEIVED BY GOVERNMENT IN SITUATION WHERE NO FORMAL CONTRACT EXISTED BETWEEN AGENCY AND FIRM FOR CONSTRUCTION SERVICES RENDERED GOVERNMENT, PAYMENT MAY BE MADE ON QUANTUM MERUIT BASIS ONLY TO EXTENT REASONABLE VALUE OF SERVICES PERFORMED CAN BE ESTABLISHED AND APPROPRIATE CONTRACTING OFFICIAL RATIFIES ACTIONS WHICH LED FIRM TO PROVIDE SERVICES.

MARKWELL & HARTZ COMPANY:

THE DEPARTMENT OF THE ARMY'S CORPS OF ENGINEERS HAS REQUESTED OUR ADVANCE DECISION REGARDING THE GOVERNMENT'S LIABILITY FOR PAYMENT FOR WORK PERFORMED BY THE MARKWELL & HARTZ COMPANY (MARKWELL) WITHOUT A FORMALLY EXECUTED CONTRACT.

THE CORPS REPORTS THAT MARKWELL WAS THE LOW BIDDER UNDER A 1979 SOLICITATION FOR CONSTRUCTION OF A REINFORCED CONCRETE MASONRY FIVE-BAY PUMPING STATION IN LOUISIANA. FOR VARIOUS REASONS, THE ANTICIPATED AWARD TO MARKWELL UNDER THE 1979 SOLICITATION WAS DELAYED FOR SEVERAL MONTHS. DURING THIS PERIOD OF DELAY, FAVORABLE RIVER CONDITIONS EXISTED FOR CLEARING AND GRUBBING THE PUMPING STATION CONSTRUCTION SITE AND MARKWELL AND ITS SUBCONTRACTOR BEGAN TO CLEAR THE AREA. THE CORPS NOTES THAT ALTHOUGH NO CONTRACT EXISTED AT THE TIME, THE WORK WAS DONE WITH THE KNOWLEDGE AND CONSENT OF CORPS PERSONNEL WHOSE PRIMARY WORK RESPONSIBILITY WOULD HAVE BEEN TO SUPERVISE SUCH WORK IF IT HAD BEEN UNDER CONTRACT. SUBSEQUENTLY, THE CORPS DETERMINED THAT NO CONTRACT LAWFULLY COULD BE AWARDED UNDER THE 1979 SOLICITATION BECAUSE A DEPARTMENT OF LABOR WAGE DETERMINATION INCLUDED IN THE SOLICITATION HAD EXPIRED. CONSEQUENTLY, MARKWELL WAS INFORMED THAT IT WOULD NOT BE AWARDED A CONTRACT; THE 1979 SOLICITATION WAS CANCELED, AND THE PROCUREMENT WAS READVERTISED IN 1980. A FIRM OTHER THAN MARKWELL WAS THE LOW BIDDER AND RECEIVED AWARD UNDER THE 1980 SOLICITATION. THEREUPON, MARKWELL SUBMITTED A REQUEST TO THE CORPS FOR PAYMENT TOTALING $117,443 FOR THE CONSTRUCTION SITE CLEARING AND GRUBBING WORK IT HAD PERFORMED. ADDITIONALLY, MARKWELL REQUESTED THAT INTEREST BE PAID ON THE SUM DUE.

ALTHOUGH NO WRITTEN CONTRACT EXISTED BETWEEN THE CORPS AND MARKWELL, IN APPROPRIATE CIRCUMSTANCES PAYMENT MAY BE MADE FOR SERVICES RENDERED ON A QUANTUM MERUIT BASIS (THE REASONABLE VALUE OF WORK OR LABOR). COMP.GEN. 447, 451 (1961). RECOGNITION OF A RIGHT TO PAYMENT ON THAT BASIS, HOWEVER, REQUIRES (1) A SHOWING THAT THE GOVERNMENT RECEIVED A BENEFIT AND (2) RATIFICATION BY AN AUTHORIZED CONTRACTING OFFICIAL OF THE GOVERNMENT. DELOSS CONSTRUCTION COMPANY, B-196004, NOVEMBER 2, 1979, 80-1 CPD 201.

WHILE SOME CONSTRUCTION SITE CLEARING AND GRUBBING WORK STILL REMAINED FOR THE FIRM THAT WAS AWARDED THE CONTRACT TO CONSTRUCT THE PUMPING STATION, THE CORPS STATES THAT MARKWELL'S CONSTRUCTION SITE CLEARING WORK PROVIDED A DIRECT BENEFIT TO THE GOVERNMENT. HOWEVER, THE CORPS REPORTS THAT WHEN IT ISSUED THE SECOND SOLICITATION IT ERRED IN FAILING TO DELETE THE CONSTRUCTION SITE CLEARING AND GRUBBING WORK COMPLETED BY MARKWELL. THIS FACTOR RAISES THE POSSIBILITY OF DOUBLE PAYMENT SHOULD MARKWELL'S CLAIM BE HONONRED, SINCE CLEARING AND GRUBBING (THE REMOVAL OF TREE ROOTS AND STUMPS) ONCE PERFORMED WILL NOT BE REQUIRED TO BE REPEATED A FEW MONTHS LATER.

NONETHELESS, MARKWELL SHOULD NOT BE HELD RESPONSIBLE FOR THE CORPS ERROR IN THE AWARD OF THE SECOND CONTRACT SINCE SOME BENEFIT MAY HAVE ACCRUED TO THE GOVERNMENT AT THE TIME ITS WORK WAS PERFORMED. HOWEVER, THE CORPS HAS NOT ESTABLISHED A BASIS UPON WHICH THIS OFFICE COULD APPROVE A QUANTUM MERUIT PAYMENT, SINCE THERE IS NOTHING WHICH INDICATES WHAT AMOUNT IS CONSIDERED TO BE REASONABLE FOR THE WORK WHICH MARKWELL COMPLETED. CLEARLY, THE AMOUNT CLAIMED, EVEN IF SUPPORTED BY ACTUAL COST DATA, MAY NOT BE THE REASONABLE VALUE OF THE WORK PERFORMED.

THUS, IF THE CORPS CAN ESTABLISH THE REASONABLE VALUE OF MARKWELL'S WORK, MARKWELL MAY BE PAID ON A QUANTUM MERUIT BASIS, PROVIDED THE NECESSARY RATIFICATION IS MADE.

MARKWELL ALSO REQUESTS THAT INTEREST BE PAID ON THE SUM DUE. SUCH INTEREST IS NOT ALLOWABLE IN THE ABSENCE OF AN EXPRESS CONTRACT PROVISION FOR ITS PAYMENT. FOREST SERVICE RATIFICATION OF UNAUTHORIZED PURCHASES, B-197754, MAY 1, 1980, 80-1 CPD 312.