Claim Against the Federal Home Loan Bank Board

An advance decision was requested concerning a claim for compensation and expenses for services provided to an agency by a consultant without a formal contract. The agency asked whether GAO or itself had settlement authority in this case. Since settlement authority for all claims by and against the Government rests with GAO, the merits of the claim were considered. GAO found: (1) an appearance of a conflict of interest since the contractor had been a recent employer and law partner of the agency official; (2) the record indicated that the employing agency official had been advised by the agency of the need to enter into a formal contract; (3) neither the employing official nor the consultant informed the staff of the extent of the ongoing work or the estimated price in excess of $80,000 which they contemplated; and (4) it was impossible to determine which tasks were performed or what the actual costs were. The consultant's records and billings could not be used to establish the value of any benefit to the agency. Since there were serious questions concerning whether the Government received any measurable benefit from the consultant's services, the claim was disallowed as a doubtful claim.