[Decision Concerning USCG Payment of Contractor]

The United States Coast Guard requested a decision concerning the propriety of using appropriated funds to pay for work completed under a contract that it awarded at an overstated price. GAO held that the Coast Guard could properly pay the contractor, since: (1) there was no evidence of fraud; (2) the resulting contract was not palpably illegal; and (3) the Coast Guard determined that termination of the contract was not in the government's best interest. Accordingly, the payment was allowed.