Claim for Expenses Incurred Under Implied Construction Contract

A Saudi Arabian contracting firm claimed construction costs for work performed under instructions from officials of the U.S. Military Training Mission to Saudia Arabia. Training Mission personnel were in critical need of housing. The Saudi Arabian Government agreed to pay for and to administer the first phase of a three-phase construction program for housing. Since it could not wait for the Saudis to go through their procurement procedures, the Training Mission would be responsible for negotiating a final price and selecting a contractor. After the contractor was selected, the Training Mission's recommendation would be submitted to the Saudi Arabian Defense Ministry for award of the contract. U.S. funds were neither appropriated nor intended to be used on the project. The claimant made the lowest bid, and the Training Mission officials authorized the claimant to work on the project even though no written commitment was made. Subsequently, the firm was told that it would be awarded the contract if it obtained a bank security as a Saudi Arabian Government contractor. The claimant was informed that contract requirements would increase, and a revised offer was requested from the claimant. After receiving the revised offer, another firm was asked to tender an offer. The contract was awarded to the other firm. With the knowledge of the Training Mission, the claimant continued to work on the project. A claim for the work was submitted to the Training Mision. Periodically, the claimant has followed up its initial claim with additional correspondence. Moreover, to avoid possible statute of limitation problems, the claim was presented to GAO by letter. GAO held that a claim for expenses incurred under an implied construction contract between the United States and the contractor was not a valid claim since the Saudi Arabian Government was to pay for the housing project and the U. S. Military Training Mission personnel acted as agents for the Saudi Arabian Government. Accordingly, the protest was denied.