B-197641.OM, MAY 22, 1981

B-197641.OM, MAY 22, 1981

PRECIS-UNAVAILABLE

THE COMPTROLLER GENERAL:

WE ARE FORWARDING THE CLAIM OF NORTH AMERICAN CORPORATION (NAC) FOR $66,838.80. CLAIMANT SEEKS REIMBURSEMENT FOR RENTAL CHARGES ON WORD PROCESSING EQUIPMENT PROVIDED TO THE DEPARTMENT OF THE ARMY WITHOUT CONTRACTUAL COVERAGE DURING THE PERIOD OCTOBER 1, 1978 THROUGH MAY 31, 1979.

THE WORD PROCESSING EQUIPMENT WAS SUPPLIED TO FORT EUSTIS, VIRGINIA BY THE INFORMATION CONTROL SYSTEM COMPANY (ICS) UNDER CONTRACT NO. GS 005- 66078 FOR THE PERIOD OCTOBER 1, 1977 TO OCTOBER 1, 1978. AFTER THIS CONTRACT EXPIRED, THE DEPARTMENT OF THE ARMY CONTINUED TO USE THE EQUIPMENT UNTIL MARCH 5, 1979, AT WHICH TIME ICS WAS NOTIFIED TO PICK IT UP. THE EQUIPMENT WAS THEN STORED BY THE DEPARTMENT OF THE ARMY UNTIL IT WAS REMOVED ON MAY 4, 1979.

NAC IS CLAIMING PAYMENT OF THE RENTAL FEES DUE FOR USE OF THIS EQUIPMENT AS AN ASSIGNEE OF ANY AMOUNTS DUE ICS UNDER THE ORIGINAL RENTAL AGREEMENT. NAC CONTENDS THE GOVERNMENT IS LIABLE FOR USE OF THE EQUIPMENT THROUGH MAY 31, 1979 AS NO NOTICE TO CANCEL THE LEASE AND REMOVE THE EQUIPMENT WAS ISSUED BY THE GOVERNMENT AND THE ORIGINAL RENTAL AGREEMENT REQUIRED 30 DAYS ADVANCED NOTICE. ALTHOUGH THE DEPARTMENT OF THE ARMY STATES THAT USE OF THE EQUIPMENT BENEFITED THE GOVERNMENT, THEY STATE LIABILITY FOR SUCH USE SHOULD NOT EXCEED $37,273.78 BASED ON USE OF THE EQUIPMENT FOR THE PERIOD OCTOBER 10, 1978 - MARCH 5, 1979 AND THE MONTHLY COST IN EFFECT IN THE ORIGINAL DELIVERY ORDERS.

ALSO, ANOTHER CLAIM IN THE AMOUNT OF $57,105.65 FOR USE OF THIS EQUIPMENT AFTER THE RENTAL AGREEMENT HAD EXPIRED HAS BEEN SUBMITTED BY ASTROSERVE INC., THE COMPANY WHICH PURCHASED ICS.

AS DOUBT EXISTS AS TO WHOM PAYMENT SHOULD BE MADE, AND IN WHAT AMOUNT, AND ALSO BECAUSE THE CLAIM EXCEEDS $25,000.00, WE ARE FORWARDING IT FOR YOUR CONSIDERATION.

INDORSEMENT

ASSOCIATE DIRECTOR, AFMD - CLAIMS GROUP

RETURNED. NORTH AMERICAN CORPORATION (NAC), THE SUCCESSOR IN INTEREST OF INFORMATION CONTROL SYSTEMS (ICS), CLAIMS PAYMENT IN THE AMOUNT OF $66,838.80 FOR THE RENTAL OF WORD PROCESSING EQUIPMENT BY THE DEPARTMENT OF THE ARMY (ARMY) FOR USE AT FORT EUSTIS, VIRGINIA. THE CLAIM IS FOR THE PERIOD OCTOBER 1, 1978, THROUGH MAY 31, 1979, WHICH IS AFTER THE ARMY CONTRACTS WITH ICS FOR RENTAL OF THE EQUIPMENT EXPIRED ON SEPTEMBER 30, 1978.

THE ARMY HAS SUGGESTED THAT ASTROSERVE, INC., MAY ALSO BE CLAIMING PAYMENT FOR USE OF THE EQUIPMENT AFTER THE CONTRACT EXPIRATION DATE IN THAT ASTROSERVE REQUESTED THE ARMY TO ISSUE AN OPEN MARKET PURCHASE ORDER TO COVER THE RENTAL OF THE EQUIPMENT FROM OCTOBER 1, 1978. HOWEVER, THE INFORMATION TAKEN TOGETHER FROM THE RECORD IN THIS CASE AND ON PRIOR CLAIMS FROM NAC (B-197641-O.M., MAY 21, JULY 23, AND NOVEMBER 28, 1980) SUPPORTS NAC AS BEING THE SOLE CLAIMANT IN THAT NAC IS THE OWNER OF THE EQUIPMENT, ASTROSERVE IS NAC'S RECOGNIZED AUTHORIZED AGENT TO OBTAIN NEW ORDERS FOR NAC AND ASTROSERVE HAS ACKNOWLEDGED NAC'S ENTITLEMENT TO THE RENT.

THE ARMY RECOMMENDS PAYMENT IN THE AMOUNT OF $37,273.78, SINCE THE ARMY RECEIVED A BENEFIT FROM THE USE OF THE EQUIPMENT AFTER THE CONTRACT EXPIRATION DATE. THE ARMY BASES ITS RECOMMENDATION AS TO THE AMOUNT ON THE BASIS THAT IT USED THE EQUIPMENT FROM OCTOBER 10, 1978, TO MARCH 5, 1979. ALSO, THE ARMY STATES THAT NOTIFICATION TO PICK UP THE EQUIPMENT WAS GIVEN THE WEEK OF MARCH 5, 1979, AND THAT THE PICKUP WAS MADE BY COMMON CARRIER ON MAY 14, 1979. APPARENTLY, THE COMMON CARRIER DELIVERED THE EQUIPMENT ABOUT MAY 31, 1979. HOWEVER, THE COMMENCEMENT DATE AND THE RECOMMENDED AMOUNT FOR PAYMENT APPEAR TO BE MISSTATEMENTS SINCE ARMY'S SUPPORTING DOCUMENTS INDICATE THAT THE EQUIPMENT REMAINED IN USE FROM OCTOBER 1, 1978 (NOT OCTOBER 10, 1978), TO MARCH 5, 1979, AND THAT THE LIABILITY ON THE BASIS OF THE MONTHLY CHARGE IN THE EXPIRED CONTRACTS WAS $43,111.88 FOR THAT PERIOD.

NAC HAS CONTENDED THAT IT SHOULD BE PAID THROUGH MAY 31, 1979, BECAUSE THE EQUIPMENT WAS USED DURING THE PERIOD ENDING ON THAT DATE AND NO ADVANCE NOTICE TO CANCEL THE LEASES AND REMOVE THE EQUIPMENT WAS ISSUED BY THE GOVERNMENT. THE EXPIRED LEASES HAD PROVIDED FOR 30 DAYS' ADVANCE NOTICE OF TERMINATION. HOWEVER, THE LEASES EXPIRED BY THEIR OWN TERMS ON SEPTEMBER 30, 1978, SEE RONALD K. BRADLEY D/B/A-ALASKA HOSPITALITY, 53 COMP.GEN. 902, 903 (1974), 74-1 CPD 297, AND, ONCE THE LEASES LAPSED, THE NOTICE PROVISIONS OF THE CONTRACTS WERE NO LONGER OF ANY EFFECT. MOREOVER, WHILE THE EQUIPMENT WAS IN THE ARMY'S POSSESSION UNTIL MAY 14, 1979, IT WAS NOT USED AFTER MARCH 5, 1979. THEREFORE, RECOVERY IS LIMITED TO THE TERM THAT THE GOVERNMENT ACTUALLY USED THE EQUIPMENT.

UNDER THE CIRCUMSTANCES, PAYMENT OF $43,111.88 SHOULD BE MADE ON A QUANTUM MERUIT/QUANTUM VALEBAT BASIS, SINCE THE GOVERNMENT RECEIVED A BENEFIT AND THE UNAUTHORIZED ACTION IN CONTINUING TO USE THE EQUIPMENT AFTER THE LEASE EXPIRED HAS BEEN IMPLIEDLY RATIFIED BY THE RECOMMENDATION FOR PAYMENT. DAVE JARRETT CONSTRUCTION, B-197568, FEBRUARY 12, 1980, 80-1 CPD 127.

DIGEST

1. CLAIM FOR CONTINUED USE BY GOVERNMENT OF WORD PROCESSING EQUIPMENT AFTER EXPIRATION OF RENTAL CONTRACT MAY BE PAID ON QUANTUM VALEBAT/QUANTUM MERUIT BASIS WHERE GOVERNMENT RECEIVED BENEFIT AND UNAUTHORIZED ACTION HAS BEEN IMPLICITLY RATIFIED.

2. ADVANCE NOTICE FROM GOVERNMENT OF TERMINATION OF USE OF EQUIPMENT IS NOT REQUIRED AFTER LAPSE OF LEASE SO RECOVERY ON QUANTUM VALEBAT/QUANTUM MERUIT BASIS FOR USE AFTER EXPIRATION DATE OF LEASE IS LIMITED TO TERM THAT GOVERNMENT ACTUALLY USED EQUIPMENT.