B-176079, MAR 21, 1973

B-176079, MAR 21, 1973

UNAUTHORIZED CONTRACT - REIMBURSEMENT FOR COSTS CONCERNING THE CLAIM OF THE UNIVERSITY OF ARIZONA, INSTITUTE OF ATMOSPHERIC PHYSICS, FOR REIMBURSEMENT OF EXPENSES INCURRED IN CONNECTION WITH THE ESTABLISHMENT OF A PILOT GREENHOUSE ON THE PAPAGO INDIAN RESERVATION. EVEN THOUGH CONSTRUCTION OF THIS GREENHOUSE WAS DIRECTED BY GOVERNMENT OFFICIALS WITH NO CONTRACTING AUTHORITY SO THAT NO VALID CONTRACT BETWEEN THE UNIVERSITY AND THE GOVERNMENT EVER CAME INTO BEING, UNDER THE CIRCUMSTANCES OF THIS CASE, THE BUREAU OF INDIAN AFFAIRS (BIA) AND THE UNIVERSITY MAY EXECUTE A CONTRACT WHEREIN THE UNIVERSITY WOULD BE PAID ITS DIRECT COSTS AND OVERHEAD IN CONSTRUCTING THE GREENHOUSE IN CONSIDERATION FOR CONVEYING TITLE IN THE PROJECT TO BIA.

TO MR. SECRETARY:

REFERENCE IS MADE TO A LETTER DATED FEBRUARY 23, 1972, FROM THE COMMISSIONER, BUREAU OF INDIAN AFFAIRS, SUBMITTING FOR OUR CONSIDERATION THE CLAIM OF THE UNIVERSITY OF ARIZONA, INSTITUTE OF ATMOSPHERIC PHYSICS, FOR REIMBURSEMENT OF EXPENSES INCURRED BY THE CLAIMANT IN CONNECTION WITH THE ESTABLISHMENT OF A PILOT GREENHOUSE ON THE PAPAGO INDIAN RESERVATION.

THE PROJECT WAS TO BE FUNDED BY A GRANT FROM THE BUREAU OF INDIAN AFFAIRS (BIA), AND ITS PURPOSE WAS TO DEVELOP A PAPAGO-OWNED AND OPERATED VEGETABLE INDUSTRY IN THE ARIZONA DESERT.

FOLLOWING SEVERAL MONTHS OF DISCUSSION AND NEGOTIATIONS BETWEEN REPRESENTATIVES OF THE CLAIMANT AND THE BIA, ON FEBRUARY 8, 1971, THE ACTING ASSOCIATE COMMISSIONER OF THE BIA SENT A TELEGRAM TO THE DIRECTOR OF THE INSTITUTE, WHICH STATED:

I HAVE REVIEWED YOUR PROPOSAL TO CONTRACT WITH THE UNIVERSITY OF ARIZONA TO ESTABLISH A PILOT GREENHOUSE PROJECT ON THE PAPAGO RESERVATION. THIS IS TO INFORM YOU THAT WE APPROVE THE PROJECT AND WILL FUND IT. LETTER FOLLOWS.

THE TELEGRAM WAS FOLLOWED BY A LETTER DATED APRIL 20, 1971, FROM THE ACTING DIRECTOR, ECONOMIC DEVELOPMENT OF THE BIA, WHICH STATED IN PART AS FOLLOWS:

IN SHORT, THE ALTERNATIVE PROPOSAL AS OUTLINED IN YOUR LETTER (MARCH 24, 1971) APPEARS TO COINCIDE WITH OUR ORIGINAL UNDERSTANDING AND THEREFORE I AM RECOMMENDING APPROVAL OF YOUR APPLICATION.

NEITHER OF THE REFERENCED OFFICIALS OF THE BIA HAD CONTRACTING AUTHORITY, AND IN FACT NO VALID CONTRACT BETWEEN THE PARTIES EVER CAME INTO BEING. THE RECORD INDICATES FEDERAL PARTICIPATION IN THE AMOUNT OF APPROXIMATELY $82,000 WAS CONTEMPLATED, AND THAT THE UNIVERSITY, NOT BEING AWARE OF THE PROPER CONTRACTING PROCESS, ACTED IN RELIANCE UPON THE OFFICIAL COMMUNICATIONS QUOTED ABOVE AND PROCEEDED WITH CERTAIN ASPECTS OF THE PROJECT WITHOUT WAITING FOR A FORMAL CONTRACT TO BE EXECUTED.

AT THE TIME OF THE SUBMISSION OF THE CLAIM TO OUR OFFICE THE BIA FELT THAT NOTHING OF ANY PURPOSE USEFUL TO THE BUREAU HAD BEEN DEVELOPED BY THE UNIVERSITY, BUT IT FELT A MORAL OBLIGATION WAS CREATED, AND THAT FUNDS WERE AVAILABLE FOR PAYING THE CLAIM IF APPROVED BY OUR OFFICE. HOWEVER, AS A RESULT OF OUR FURTHER INVESTIGATION AND A RECENT AUDIT BY THE DEPARTMENT OF THE INTERIOR IT NOW APPEARS THAT THE BUILDING (GREENHOUSE) HAS BEEN BUILT BY THE UNIVERSITY AND IS OPERATIONAL. THE RECORD ALSO SHOWS AN EXPENDITURE BY THE UNIVERSITY OF $32,710.62 IN DIRECT COSTS AND OVERHEAD PRIOR TO SUBMISSION OF ITS CLAIM TO THIS OFFICE, AND THE UNIVERSITY HAS INDICATED ITS WILLINGNESS TO ACCEPT THIS AMOUNT IN FINAL SETTLEMENT OF ITS CLAIM, AND TO TRANSFER TITLE TO THE PROJECT TO THE GOVERNMENT.

AS A CONSEQUENCE OF THESE DEVELOPMENTS, THE DEPUTY ASSISTANT SECRETARY OF THE INTERIOR IN HIS LETTER OF JANUARY 10, 1973, TO OUR OFFICE STATED:

WITH THE ABOVE FACT, IT WOULD APPEAR PRUDENT TO PAY FOR THE COMPLETED BUILDING AND, AS A CONDITION TO REIMBURSE THE UNIVERSITY FOR ITS COSTS, TO REQUIRE TITLE OF THE BUILDING AND OTHER APPURTENANCES A PART THEREOF TO BE TRANSFERRED TO THE GOVERNMENT.

IN THE CIRCUMSTANCES, WE WOULD INTERPOSE NO OBJECTION TO THE BIA AND THE UNIVERSITY OF ARIZONA EXECUTING A CONTRACT WHEREIN THE UNIVERSITY WOULD BE PAID THE SUM OF $32,710.62 IN CONSIDERATION FOR CONVEYING TITLE TO SAID PROJECT TO THE BIA.