A shipyard requested a GAO review of the Navy's denial of its claim for payment for performing ship repair services. The shipyard was awarded a contract for certain ship repairs but, because the ship sustained some damage between repair availability periods, the shipyard was asked by the contracting officer's technical representative to perform additional repairs. Although the urgent need for the additional repairs was discussed with the contracting officer, neither the shipyard nor the technical representative sought formal authorization for the additional work. Because the cost of the additional repairs exceeded $50,000, the Navy denied the shipyard's request for payment. GAO has recognized that, in appropriate circumstances, payment may be made on a quantum meruit basis. GAO found that there was no dispute that the Government received a benefit from the repair services, the contracting officer agreed that the shipyard should be paid, funds were available, and the Navy believed that the price for the work performed was fair and reasonable. Accordingly, GAO concluded that payment of the claim could be made on a quantum meruit basis.
Skip to Highlights