B-162132, SEP. 29, 1967

B-162132, SEP. 29, 1967

CONTRACTS - IMPLIED DECISION TO TED COOK ASSOCIATES CONCERNING PAYMENT FOR ADVERTISING SERVICES RENDERED ON BEHALF OF THE FEDERAL WATER POLLUTION CONTROL ADMINISTRATION. CONCERN WHICH EXPENDED CONSIDERABLE EFFORTS IN PREPARATION OF ADVERTISING COPY FOR GOVT. AGENCY AND AUTHORIZED PUBLICATION WITHOUT OBTAINING PRIOR APPROVAL OF THE AGENCY MAY NOT BE CONSIDERED TO HAVE AN IMPLIED IN FACT CONTRACT SINCE ANY BINDING AGREEMENT DOES NOT DEPEND ALONE ON WHAT MAY HAVE BEEN ASSUMED OR INTENDED BUT WHETHER THERE WAS MUTUAL ASSENT. INSTANT CASE AGENCY REPORT INDICATES THAT WORK WAS NOT ONLY NOT ORDERED BUT THAT CONCERN HAD BEEN WARNED AGAINST PERFORMING WORK OR INCURRING EXPENSE, AND, THEREFORE IN ABSENCE OF EVIDENCE TO OVERCOME THE PRESUMPTION OF CORRECTNESS OF THE ADMINISTRATIVE REPORT THE CLAIM FOR EXPENSES IS FOR DISALLOWANCE.

TO MR. EDWARD S. COOK:

REFERENCE IS MADE TO YOUR LETTER OF JULY 17, 1967, REQUESTING RECONSIDERATION OF GENERAL ACCOUNTING OFFICE SETTLEMENT DATED JULY 10, 1967, WHICH DISALLOWED YOUR CLAIM IN THE AMOUNT OF $5,913.96, IN CONNECTION WITH ADVERTISING SERVICES ALLEGEDLY RENDERED ON BEHALF OF THE DEPARTMENT OF THE INTERIOR, FEDERAL WATER POLLUTION CONTROL ADMINISTRATION (FWPCA), WASHINGTON, D.C.

THE EVENTS GIVING RISE TO YOUR CLAIM WERE DISCUSSED IN THE SETTLEMENT OF JULY 10, 1967. IN SUBSTANCE, THE RECORD INDICATES THAT MEETINGS WERE HELD BETWEEN CERTAIN FWPCA PERSONNEL AND YOURSELF IN THE NATURE OF PRESOLICITATION CONFERENCES DURING 1966 FOR THE PURPOSE OF DEVELOPING WAYS AND MEANS TO INITIATE AN ADVERTISING PROGRAM TO BE PLACED IN PROFESSIONAL PUBLICATIONS AND NEWSPAPERS OF VARIOUS COLLEGES AND UNIVERSITIES FOR THE PURPOSE OF RECRUITING SCIENTIFIC, TECHNICAL AND MANAGERIAL PERSONNEL TO BE EMPLOYED BY THE FWPCA IN CONNECTION WITH ITS WATER POLLUTION PROGRAM. YOU CONTEND, AND WE DO NOT DISPUTE, THAT YOU EXTENDED GREAT EFFORTS IN THE PREPARATION OF COPY, LAYOUTS AND PROGRAMS AND ENGAGED IN CORRESPONDENCE AND REPORTS WITH INTERESTED PARTIES REGARDING THE ADVERTISEMENTS AND PUBLISHING DATES. HOWEVER, AS POINTED OUT IN THE SETTLEMENT OF JULY 10, 1967, ON YOUR OWN INITIATIVE YOU AUTHORIZED CERTAIN PUBLICATIONS WITHOUT OBTAINING THE PRIOR APPROVAL OF THE FWPCA AND PRIOR TO THE EXECUTION OF ANY FORMAL CONTRACT OBLIGATING YOU TO DO SO. IT IS ON THIS BASIS THAT YOU CONTEND THAT YOU ARE ENTITLED TO $5,913.96.

IN YOUR LETTER OF JULY 17, 1967, REQUESTING RECONSIDERATION YOU ADMIT THAT THE PRESOLICITATION CONFERENCES TO DEVELOP A RECRUITMENT ADVERTISING PROGRAM FOR COLLEGE AND PROFESSIONAL JOURNALS RESULTED IN YOUR PERFORMING THE SERVICES INVOLVED ON A SEMI-SPECULATIVE BASIS WITH YOUR PRIOR KNOWLEDGE THAT THEY WERE TO BE DONE WITHOUT COMMITTING GOVERNMENT FUNDS. BASED ON PRIOR EXPERIENCE IN THIS FIELD WITH OTHER GOVERNMENT AGENCIES YOU SAY THAT THIS WAS FULLY UNDERSTOOD. HOWEVER, YOU HAVE TAKEN ISSUE WITH THE ADMINISTRATIVE VIEW THAT "ON YOUR OWN INITIATIVE YOU AUTHORIZED PUBLICATION WITHOUT OBTAINING THE PRIOR APPROVAL OF THE FWPCA.' YOU APPARENTLY FEEL THAT THE SERIES OF MEETINGS AND CORRESPONDENCE WITH THE FWPCA PERSONNEL GAVE RISE TO AN UNDERSTANDING, OR AT LEAST AN IMPLIED "CONTRACT," ENTITLING YOU TO REIMBURSEMENT UNDER THE INSTANT CLAIM. ALSO, WHILE CONCEDING YOUR KNOWLEDGE OF THE LACK OF THE AUTHORITY ON THE PART OF FWPCA PERSONNEL TO SUPPLY GOVERNMENT FUNDS IN THIS MATTER, YOU ELECTED TO PERFORM THE SERVICES IN QUESTION IN THE ABSENCE OF A FORMAL CONTRACT.

IN ITS REPORT TO OUR OFFICE ON THIS MATTER THE FWPCA HAS STATED IN PERTINENT PART AS FOLLOWS: ,IT IS OUR POSITION THAT MR. COOK TOOK A BUSINESS MAN'S RISK, IN ANTICIPATION OF THE AWARD OF A CONTRACT, AND LOST. WE DO NOT THINK THE FACTS SURROUNDING THIS SERIES OF TRANSACTIONS SUBSTANTIATE THE CLAIMANT'S ALLEGATIONS. WE WERE INTERESTED IN EXPLORING THE POTENTIAL FOR ADVERTISING FOR RECRUITMENT SERVICES. HOWEVER, WE EXPLAINED REPEATEDLY THAT MR. COOK SHOULD NOT PROCEED TO INCUR COSTS PRIOR TO FORMAL AUTHORIZATION FROM FWPCA. HONORING THIS CLAIM COULD OPEN THE DOOR FOR OTHERS TO VOLUNTARILY INCUR EXPENSES WITHOUT AUTHORIZATION ON THE PREMISE THAT THEY CAN COLLECT ON THE -BENEFIT TO THE GOVERNMENT- THEORY.

SINCE YOUR POSITION APPEARS PREDICATED UPON THE EXISTENCE OF AN "IMPLIED CONTRACT," WE BELIEVE IT PERTINENT TO FIRST POINT OUT THAT A DISTINCTION MUST BE DRAWN BETWEEN CONTRACTS "IMPLIED IN AW" AND CONTRACTS "IMPLIED IN FACT.' AS DISTINGUISHED FROM CONTRACTS IMPLIED IN LAW OR QUASI CONTRACTS, A CONTRACT IMPLIED IN FACT IS ESSENTIALLY BASED ON THE PARTIES' INTENTIONS AND ARISES WHERE THE SURROUNDING FACTS AND CIRCUMSTANCES DISCLOSE THAT THE PARTIES INTENDED TO MAKE A CONTRACT, BUT FOR THE SAME REASON FAILED TO ARTICULATE THEIR PROMISE. 17 C.J.S. CONTRACTS SECTION 4; AM. LAW INST. RESTATEMENT, CONTRACTS, VOLUME 1, SECTION 5; WILLISTON ON CONTRACTS, THIRD EDITION, SECTION 3. UNDER THE TUCKER ACT (28 U.S.C.A. 1346 (A) (2) (, ACTIONS AGAINST THE UNITED STATES ON IMPLIED CONTRACTS ARE LIMITED TO THOSE ACTIONS PREDICATED ON AN IMPLIED IN FACT CONTRACT. ALLIANCE ASSURANCE COMPANY V. UNITED STATES, 252 F.2D 529; ROXFORT HOLDING CO. V. UNITED STATES, 176 F.SUPP. 587.

TO SUPPORT THE CONCLUSION THAT THERE WAS AN IMPLIED IN FACT CONTRACT, IT MUST BE FOUND THAT BOTH PARTIES INTENDED SUCH AN AGREEMENT. IN THIS CONNECTION, ANY BINDING AGREEMENT DOES NOT DEPEND ALONE ON WHAT YOU MAY HAVE ASSUMED OR INTENDED, BUT WHETHER THERE WAS MUTUAL ASSENT. SOCIETE COTONNIERE DU TONKIN V. UNITED STATES, 171 F.SUPP. 951. IT IS REPORTED BY THE FWPCA THAT YOU WERE NOT GIVEN EITHER ORAL OR WRITTEN AUTHORITY TO ORDER THE ADVERTISING SERVICES IN QUESTION AND THAT YOU WERE ADVISED THAT EXPENDITURE OF $2,500 OR MORE WOULD ENTAIL A NEED FOR FORMAL ADVERTISING. YOU WERE SPECIFICALLY WARNED NOT TO PERFORM ANY WORK OR INCUR ANY COSTS IN CONTEMPLATION OF A CONTRACT. NOTWITHSTANDING THE ABSENCE OF CONTRACT AUTHORIZATION OR DIRECTION FROM AN AUTHORIZED CONTRACTING OFFICER TO PROCEED, YOU CHOSE TO PERFORM SERVICES WHICH WERE NOT ORDERED BY THE GOVERNMENT. IN THIS CIRCUMSTANCE, NO LEGAL OBLIGATION AROSE TO COMPENSATE YOU FOR YOUR SERVICES. SEE BYRNE ORGANIZATION, INC. V. UNITED STATES, 287 F.2D 582, 586, WHEREIN THE COURT STATED:

"PLAINTIFFS NEXT CONTEND THEY ARE ENTITLED TO RECOVER AN EQUAL SUM OF MONEY, MEASURED NOT ON THE TERMS OF THE DEFINITIVE NON-EXECUTED CONTRACT, BUT MEASURED AS THE REASONABLE VALUE OF THEIR SERVICES RENDERED BY RELYING ON LETTERS OF INTENT ISSUED BY THE EXECUTIVE VICE CHAIRMAN OF THE COMMISSION. PLAINTIFFS CLAIM, AND THE COURT AGREES, THAT IT IS CLEAR FROM AN EXAMINATION OF THE LEGISLATION CREATING THE COMMISSION THAT CONGRESS AUTHORIZED THE COMMISSION TO ENTER INTO CONTRACTS ON BEHALF OF THE UNITED STATES. BUT IT DOES NOT FOLLOW THAT AN AGREEMENT SIGNED BY AN AGENT OR OFFICER OF THE COMMISSION IS BINDING ON THE COMMISSION OR THE GOVERNMENT. ACTUALLY THE CONVERSE IS TRUE. NO OFFICER OF THE GOVERNMENT HAS THE POWER TO BIND THE UNITED STATES, IN THE ABSENCE OF CONGRESSIONAL AUTHORITY. GEORGE H. WHIKE CONSTRUCTION COMPANY V. UNITED STATES, 1956, 140 F.SUPP. 560, 135 CT.CL. 126, 131. TO HOLD A CONTRARY RESULT COULD CONCEIVABLY CREATE A SITUATION WHERE TWO COLLUSIVE PEOPLE COULD EFFECT A DRAIN OF THE PUBLIC TREASURY. SINCE THE EARLY HISTORY OF THIS COURT, IT HAS BEEN CONSISTENTLY HELD THAT THE GOVERNMENT IS NOT BOUND BY THE ACTS AND DECLARATIONS OF ITS AGENT, UNLESS IT APPEARS THAT HE ACTED WITHIN THE SCOPE OF HIS AUTHORITY. WHITESIDE V. UNITED STATES, 1876, 93 U.S. 247, 257, 23 L.ED. 882. THESE CASES CONFORM WITH THE BASIC PRINCIPLES OF AGENCY THAT ONE DEALING WITH AN AGENT MUST LOOK TO HIS AUTHORITY. PERSONS DEALING WITH THE GOVERNMENT MUST TAKE NOTICE OF THE EXTENT OF THE AUTHORITY WHICH THE GOVERNMENT HAS GIVEN ITS AGENTS. HAWKINS V. UNITED STATES, 1877, 96 U.S. 689, 24 L.ED. 607; RIETHMILLER V. UNITED STATES, 1944, 101 CT.CL. 495.'

WHILE YOU DISPUTE THE ADMINISTRATIVE VERSION OF THE FACTS REPORTED TO US, AS A MATTER OF PRACTICAL NECESSITY, WE HAVE ADOPTED A RULE OF LONG STANDING THAT, IN THE ABSENCE OF SUFFICIENT EVIDENCE TO OVERCOME THE PRESUMPTION OF THE CORRECTION OF THE FACTS AS ADMINISTRATIVELY REPORTED, THOSE FACTS WILL BE ACCEPTED AS CORRECT WHERE THEY CONFLICT WITH THE STATEMENT OF FACTS SUBMITTED BY THE CLAIMANT.

BASED ON THE FOREGOING, WE CANNOT FIND THAT A BINDING CONTRACT EVER CAME INTO EXISTENCE. ACCORDINGLY, THE SETTLEMENT OF JULY 10, 1967, IS SUSTAINED.