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Highlights

A firm requested that GAO authorize payment of a claim for compensation for services provided to the Minority Business Development Agency (MBDA). The claim is for information services provided to MBDA during 1981 as an extension of a previous grant, although there was neither a new grant nor a formal contract for the services provided during this period. The previous grant expired in December 1980 and, although the process for renewal of the grant was underway, in March 1981 an agency review board ruled that a contract, rather than a grant, should be used to fund this information operation. MBDA then began paperwork for the issuance of a contract; this process was not finalized until July 1981. During this time, the firm was requested by an MBDA official to continue providing its services and, in September 1981, it submitted its claim for payment for the services rendered. MBDA decided not to ratify the official's authorization for continuation of the services, formally denied the claim for payment, and referred the matter to GAO. GAO found that: (1) there was no reason to question that the procurement would have been permissible had proper procedures been followed; (2) the firm had acted in good faith in providing the services; and (3) MBDA has determined that a benefit was received and accepted by the Government as a result of the firm's services and that the amount claimed represents the reasonable value of the services rendered. Therefore, payment may be made to the firm on a quantum meruit basis, and the expenditure may properly be charged against the MBDA appropriation for fiscal year 1981.

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