APPROPRIATIONS/FINANCIAL MANAGEMENT - Claims Against Government - Unauthorized contracts - Quantum meruit/valebant doctrine PROCUREMENT - Payment/Discharge - Unauthorized contracts - Quantum meruit/valebant doctrine DIGEST The Bureau of Indian Affairs may pay a contractor on a quantum meruit basis for services provided to the government under an improper contract extension since the government could properly have acquired the services. An extension of a requirements contract beyond the period of performance creates additional requirements that are outside the scope of the original contract. There is a significant difference between those situations where a contractor is given additional time to perform a contractual obligation.
B-237148, Mar 15, 1991
APPROPRIATIONS/FINANCIAL MANAGEMENT - Claims Against Government - Unauthorized contracts - Quantum meruit/valebant doctrine PROCUREMENT - Payment/Discharge - Unauthorized contracts - Quantum meruit/valebant doctrine
Bureau of Indian Affairs -- Request for Advance Decision:
An authorized certifying officer of the Bureau of Indian Affairs (BIA) requests an advance decision regarding the propriety of certifying a voucher in the amount of $30,632.94 for payment of computer system maintenance services. For the following reasons, we conclude BIA may pay for the services on a quantum meruit basis.
On November 20, 1981, BIA entered into a contract (K01C14200888) with the Burroughs Corporation (now named Unisys) to lease computer equipment. BIA later exercised an option to purchase the equipment but continued to obtain program analysis and maintenance services under the original contract.
The contract limited the period of performance, including any extensions, to five years. As such, the contract period expired November 20, 1986. Nevertheless, the contracting officer modified the contract to extend performance through September 30, 1989 -- well past the original period of performance. The certifying officer questions whether the government may pay $30,632.94 for services provided after the original period of performance.
Generally, an extension of a requirements contract beyond the period of performance creates additional requirements that are outside the scope of the original contract. B-211464, June 7, 1984. As we noted in the cited decision, there is a significant difference between those situations where a contractor is given additional time to perform a contractual obligation, and those where time is used in a contract to define the extent of an obligation. The latter type of contract extension is on its face a new procurement. B-211464, June 7, 1984.
Here, Unisys and BIA entered into a requirements contract. As such, the original period of performance defined the extent of the obligation. Extension of the contract beyond that period was thus outside the scope of the original contract and on its face a new procurement. Id.
Such a new procurement must be made in accordance with the Competition in Contracting Act of 1984 (CICA). 41 U.S.C. Sec.253 (1988). Under CICA, agencies must "obtain full and open competition through the use of competitive procedures" to procure goods or services. 41 U.S.C. Sec. 253(a)(1). Therefore, an agency may only enter into a contract extension, which on its face is a new procurement, if the agency either procures the services competitively or separately justifies it as a noncompetitive procurement. See 65 Comp.Gen. 25 (1985). BIA did neither. As such, the contracting officer was without authority under CICA to contract with Unisys to extend the contract and no binding contract extension came into effect. See B-224702, Aug. 5, 1987.
If a contracting officer executes a contract in contravention of a statutory prohibition or in the absence of statutory authority, the government is not legally obligated to make payments to contractors or others who have provided goods or services under such invalid contracts. B-212430, June 11, 1984; see also, Federal Crop Insurance Corp. v. Merrill, Sec. 332 U.S. 380 (1947). However, our Office may authorize payment on a quantum meruit basis for work performed for the government without a valid written contract. 64 Comp.Gen. 727 (1985). To authorize payment under quantum meruit we must determine that: (1) the government could properly have acquired the services had the appropriate procedures been followed; (2) the government received and accepted the benefit of the services; (3) the claimant acted in good faith; and (4) the amount claimed represents the reasonable value of the benefit obtained. See B-234321, Mar. 20, 1989.
Here, BIA could have properly procured these services had it followed the appropriate procedures, the government received and accepted the benefits of the services and the contractor appears to have acted in good faith. Therefore, BIA may make payment in the amount of the voucher since that amount appears to represent the reasonable value of the benefit to the government.