B-51728.2 June 9, 1993
B-51728.2: Jun 9, 1993
We conclude that the AOUSC may ratify the commitment entered into by OIC Walsh provided that the requisite justifications and approvals are provided. Brosnahan felt strongly that a mock trial was necessary to prepare properly for the trial. IC Walsh advises that (1) PRA was the only one of the three firms surveyed that could meet the constraints posed by the January trial date. Our decisions have applied the concept of ratification to give effect to agreements made by Government personnel who lacked the requisite authority to contract. 58 Comp.Gen. 789 (1979). The Federal Acquisition Regulation expressly provides that an unauthorized commitment may be ratified when: (1) Supplies or services have been provided to and accepted by the Government or the Government otherwise has obtained or will obtain a benefit resulting from performance of the unauthorized commitment.
B-51728.2 June 9, 1993
Mr. Clarence A. Lee, Jr. Associate Director for Management and Operations Administrative Office of the United States Courts
Dear Mr. Lee:
This responds to your letter to David L. Clark, Jr., Director, Legislative Reviews and Audit Oversight Group, Accounting and Financial Management Division, GAO, dated December 30, 1992, asking whether the Administrative Office of the United States Courts (AOUSC) may process a request for payment for services from Public Response Associates, Inc. (PRA). PRA's request for payment covers services including a jury survey, mock jury trial, and juror analysis performed for the Office of Independent Counsel (OIC) Walsh in preparing for United States v. Weinberqer.
You note in your letter that the contractor, PRA, performed the services in question prior to the execution of the contract by an authorized AOUSC contracting officer. Therefore, you ask whether you may now authorize payment on one of the following bases: (1) ratification, (2) implied in-fact contract or (3) quantum meruit or quantum valebant. As explained below, we conclude that the AOUSC may ratify the commitment entered into by OIC Walsh provided that the requisite justifications and approvals are provided. Otherwise payment may be authorized on the basis of quantum meruit or quantum valebant.
Independent Counsel (IC) Walsh appointed James J. Brosnahan lead prosecutor in the Weinberqer case /1/ on October 5, 1992, following the filing by the defense of a motion to disqualify the former lead prosecutor /2/ Also, at the request of the defense the court rescheduled the case for trial from November 2, 1992, to January 5, 1993. The court, however, made clear its intention not to further delay the start of the trial beyond that date. Mr. Brosnahan felt strongly that a mock trial was necessary to prepare properly for the trial. Mr. Walsh stated that he approved Mr. Brosnahan's determination based on the need for Mr. Brosnahan's accelerated trial preparation, his prior use of mock trials to prepare for trial, and his views regarding the value of mock trials.
Apparently early in November 1992, OIC Walsh orally solicited quotations from three vendors to provide the necessary services and reports. IC Walsh advises that (1) PRA was the only one of the three firms surveyed that could meet the constraints posed by the January trial date, and (2) PRA offered the most competitive rate. PRA confirmed its price quotation in a November 13, 1992, letter to Mr. Brosnahan, and invited Mr. Brosnahan to agree with the terms offered by signing the letter. On November 15, 1992, Mr. Brosnahan signed the letter in the presence of Mr. Hugh Schwartz President, PRA, and instructed Mr. Schwartz to commence performance. /3/
By letter dated December 2, 1992, IC Walsh requested the AOUSC to award a contract to PRA reflecting the terms of the November 13, 1992 letter. /4/ The letter required a draft report by December 10, 1992 and a final report by December 20, 1992. The letter also required partial payment by December 10.
Shortly after receiving the December 2 letter, AOUSC orally advised the OIC Walsh that it would proceed with the requested procurement action. /5/ The AOUSC prepared the necessary contractual document and PRA executed the necessary "Award/Contract" (AO 366) form on December 17, 1992. The contracting officer subsequently executed the contract effective as of December 18, 1992. However, as indicated above, PRA began performance prior to the AOUSC contracting officer signing the contract form, and billed the government for services rendered. OIC Walsh has informally advised this Office that PRA has provided the required services and reports.
It has long been recognized that an authorized government official possessing knowledge of the facts may give effect to an unauthorized act of another government official by subsequently ratifying the action. United States v. Beebe, 180 U.S. 343 (1901). Our decisions have applied the concept of ratification to give effect to agreements made by Government personnel who lacked the requisite authority to contract. 58 Comp.Gen. 789 (1979). In this regard, the Federal Acquisition Regulation expressly provides that an unauthorized commitment may be ratified when:
(1) Supplies or services have been provided to and accepted by the Government or the Government otherwise has obtained or will obtain a benefit resulting from performance of the unauthorized commitment;
(2) The ratifying official could have granted authority to enter or could have entered into a contractual commitment at the time it was made and still has authority to do so;
(3) The resulting contract would otherwise have been proper if made by an appropriate contracting officer;
(4) The contracting officer reviewing the unauthorized commitment determines the price to be fair and reasonable;
(5) The contracting officer recommends payment and legal counsel concurs in the recommendation, unless agency procedures expressly do not require such concurrence;
(6) Funds are available and were available at the time the unauthorized commitment was made; and
(7) The ratification is in accordance with any other limitations prescribed under agency procedures. 48 C.F.R. Sec. 1.602-3(c).
The regulations also provide that the head of the contracting activity, unless a higher level official is designated by the agency, may ratify an unauthorized commitment. 48 C.F.R. Sec. 1-602-3(b)(2). A contracting activity is defined as an element of an agency designated by the agency head and delegated broad authority regarding acquisition functions. 48 C.F.R. Sec. 2.101.
The Director of the AOUSC is the administrative officer of the courts of the United States (except the Supreme Court). 28 U.S.C. Sec.(s) 604, 610. Under the supervision and direction of the Judicial Conference of the United States, the Director acquires goods and services for the courts and their clerical administrative personnel. You have advised that the Director's contracting authority, but not ratification authority, has been delegated to the Contract and Services Branch. /6/
Since 1984 the AOUSC has provided support service, including contracting, to the OICs pursuant to interagency agreements with the Department of Justice. This apparently is in furtherance of the authority set forth in 28 U.S.C. Sec. 594(d) concerning the Department of Justice rendering assistance in response to a request from an independent counsel and paying costs relating to operation of any office of independent counsel. The interagency agreement effectively delegated the Department's procurement authority on behalf of OICs (to the extent that it exists under the law) to the AOUSC.
Thus, the AOUSC performs a contracting function vis a vis the OICs just as it performs this function for the courts of the United States. In our opinion, the AOUSC possesses the requisite authority to ratify unauthorized commitments involving supplies or services provided to OICs. /7/
From the information provided, the OIC Walsh clearly received the benefit of the reports and associated services requested. You are concerned whether the contract would otherwise have been proper if made by an appropriate contracting official. 48 C.F.R. Sec. 1.602-3(c)(3).
Section 303(a)(1) of the Federal Property and Administrative Services Act of 1949, as amended (41 U.S.C. Sec. 251(a)(1) (1988)), requires that, except as otherwise provided, executive agencies procure property or services through competitive procedures. Procedures other than competitive procedures are authorized when the agency's need for the property or services is of such an unusual and compelling urgency that the Government would be seriously injured unless the agency is permitted to limit the number of sources from which it solicits bids or proposals. 41 U.S.C. Sec. 253(c)(2).
Contracts may not be awarded using other than competitive procedures unless justified and approved in advance as set forth in 41 U.S.C. Sec. 253(f)(1), except that contracts awarded under 41 U.S.C. Sec. 253(c)(2) may be justified and approved after the contract is awarded. 41 U.S.C. Sec. 53(f)(2). An agency may not contract for property or services under 41 U.S.C. Sec. 253(c)(2) on the basis of lack of advance planning. 41 U.S.C. Sec. 253(f)(5)(A). An agency procuring property or services under 41 U.S.C. Sec. 253(c)(2) is required to request offers from as many potential sources as is practicable under the circumstances. 41 U.S.C. Sec. 253(e).
We have approved the use of noncompetitive procedures when the agency's decision concerning the urgent and compelling circumstances has a reasonable basis. 66 Comp.Gen. 228, 230 (1987) /8/ In our opinion, the procurement in question was of compelling urgency and not the result of lack of advance planning. Further, the Government would have been seriously injured had the lead counsel not been permitted to properly prepare for the litigation. Obtaining an additional postponement to permit lead counsel Brosnahan to prepare seemed unlikely. Additionally, nothing in the record currently before us indicates that the three quotes obtained by OIC Walsh were not the result of "maximum practicable" competition under the circumstances.
Finally, the fact that the litigation was subsequently terminated as a result of Mr. Weinberger's pardon does not prevent the ratification of the commitment. Nor does it undermine the fact that at the time of performance the government received the benefit that it sought, i.e., the preparation of the lead counsel litigating the case. Thus it appears that ratification would be appropriate under these circumstances, provided that the other criteria set forth in 48 C.F.R. Sec. 1.602-3(c) are met and the required justification and approval are provided.
Quantum Meruit, Quantum Valebant
Where a valid written contract for a procurement is never executed and the agency is unable to establish even an unauthorized commitment by the government representative to pay for the goods or services provided, the agency may not ratify the procurement retroactively. 65 Comp.Gen. 692, 695 (1986). However, we have recognized that where a performance by one party has benefited another, even in the absence of an enforceable contract between them, equity requires that the party receiving the benefit should not gain a windfall at the expense of the performing party. The law implies a promise by the receiving party to pay what the services are reasonably worth. Thus, even though a contract may not be entered into even by way of ratification, payment may be made for the reasonable value of services or goods (quantum meruit, quantum valebant) provided to the government.
Before this Office will authorize a quantum meruit or quantum valebant payment, we determine whether that (1) the goods or services would have been a permissible procurement had the formal procedures been followed, (2) the Government received and accepted the benefit, (3) the contractor acted in good faith, and (4) the amount claimed represents the reasonable value of the benefit received. 70 Comp.Gen. 664 (1991) and 65 Comp.Gen. 692 (1986).
We find no general prohibition on the use of appropriated funds by government agencies to contract for jury surveys or for jury trial simulations. Also, OIC Walsh has received and accepted the benefit from PRA, and nothing in the record currently before us indicates that PRA did not act in good faith.
The only issue that remains should PRA submit a Quantum meruit or quantum valebant claim is determining the reasonable value of the benefit received by OIC Walsh. In this regard, you have determined that the prices reflected in the agreement with Mr. Broanahan and the contract executed by PRA are fair and reasonable and recommend payment of these amounts to PRA. PRA's quotes were the lowest of the three quotes received. /9/ Therefore, in the absence of any information demonstrating that the recommended amount is not the fair and reasonable value of the services and reports provided by PRA to OIC Walsh, payment may be made to PRA in this amount should the contract not be ratified.
Thus if the unauthorized commitment is not ratified, the AOUSC would be authorized to pay PRA the reasonable value of the services and reports at the time that they were provided by PRA to OIC Walsh.
Gary L. Kepplinger Associate General Counsel
1. The case involved prosecution of former Secretary of Defense Weinberger for his alleged conduct related to the Iran-Contra affair. Former President Bush issued Proclamation 6518, on December 24, 1992, granting Mr. Weinberger and others a pardon for all offenses charged or prosecuted by OIC Walsh. 57 Fed. Reg. 62145 (December 30, 1992).
2. We have been advised by OIC Walsh that it was determined that none of the other counsels assisting the former lead counsel possessed the requisite experience to litigate a case of this complexity and visibility. Thus, Mr. Brosnahan was hired to handle the litigation.
3. Mr. Brosnahan was not acting in the capacity of an authorized contracting officer when agreeing that PRA should provide the reports and associated services.
4. The November 13 letter called for PRA (1) to perform a community survey of 800 jury eligible individuals and (2) to conduct a mock jury trial before three sets of jurors (36 individuals) reflecting the characteristics of possible juries. The community survey and mock jury trial were used to prepare a juror scoring guide to be used to score the void dire questionnaires that would be filled out by members of the juror panel.
5. Formal notice that AOUSC would enter into the contract was provided by letter dated December 18, 1992. The letter also indicated that the price of the initial or final report could include the reasonable costs of any service already performed.
6. You have advised that ratification authority in AOUSC is exercised by the Director or Deputy Director.
7. If the AOUSC is deemed not to be an authorized contracting activity for ratification purposes, then IC Walsh may ratify the commitment since he is, for all practical purposes, the head of the agency on whose behalf the procurement was made. Any doubts on this matter could be resolved by having both the AOUSC official authorized to ratify unauthorized commitments and IC Walsh ratify the unauthorized commitment.
8. In 66 Comp.Gen. 228 (1982), we held that a decision by the U.S. Marshals Service to limit a solicitation for procurement for metal detector's to two firms that it knew met its stringent requirements was justifiable under 41 U.S.C. Sec. 253(c)(2) since the Marshals Service had an urgent need to provide security to the courts.
9. 0bviously it is difficult to assess the reasonable value of the benefit received by OIC Walsh as a result of PRA's performance in this situation. In the past, the recommendation of the agency receiving the goods and services as to their reasonable value has been accorded respect by this Office when considering such claims. 65 Comp.Gen. 692 (1986); 64 Comp. Gen. 727 (1985); and, B-237825, April 27, 1990. With regard to determinations of reasonable value for quantum meruit, quantum valebant purposes, courts have stated that there is ample support for the principle that the contract price may provide probative value of service rendered, but does not impose a limit on quantum meruit recovery. United States v. Western States Mechanical Contractors, 834 F.2d 1533, 1552 (10th Cir. 1987) and cases cited therein. In Wunderlich Contracting Company v. United States, 240 F.2d 201, 205 (10th Cir. 1957) cert. den. 353 U.S. 950, the court stated that reasonable value of services and materials is generally considered to be the amount for which they could be obtained under like circumstances.