Claim vs. Ratification

What did the contract say about the period of performance, and cut off services?  Why do you think you need to do either?

I agree it is not a ratification.  An essential element in a ratification is that there allegedly was an unauthorized commitment made by someone ("the Government representative").  No someone, no person, no Government representative who made an agreement?  No ratification.

If the contractor wants payment, it has to be under the terms of the expired contract, right?  That's a dispute.  Can the contractor make a case that it is entitled to payment under the terms of the expired contract?

I recommend you reject the invoice, if you don't see anything in the contract that binds the Government to continual payments.  Let the contractor file a claim, if it chooses to.

Please do not drink the koolaid that the Government must pay because it received a benefit.  Reject the invoice.

Does the Government not need the services anymore, or is there an ongoing requirement?

ji20874 said:

Please do not drink the koolaid that the Government must pay because it received a benefit.  Reject the invoice.

Why not assess whether the acceptance of benefits has created an implied-in-fact contract?

Don,

Because regardless, the invoice needs to be rejected.

If the agency wants to create a new contract and back-date it (or modify the contract to extend the period of performance to the present), it can do so with an appropriate sole-source justification -- and then it can process an invoice.  But today, reject the invoice.

And be cautious about encouraging implied-in-fact contracts -- we don't want to allow contractors to drain the Treasury by providing services that weren't ordered and then getting paid.

MMP514 said:

In situations where the contractor continues to provide services (ie, cell phone services) after the purchase order has expired and submits an invoice, would the contractor need to submit a claim in accordance with FAR 33.206 in order to be paid?

In order to submit a Contract Disputes Act claim under FAR Subpart 33.2, there must be a contract. If the PO had expired, then I don't think that the contractor can submit a claim.

Did government personnel use the cell phone service after the expiration of the PO?

If there was no contract and no one in the Government ordered services such that a ratification is appropriate, but the Government still received the benefit of the services, then the contractor may have a claim arising out of Quantum Meruit.

Such claims used to be settled by GAO, and if you check Comp Gen decision you will find old decisions laying out the basis for deciding a claim based on Quantum Meruit.  In 1995-96, Congress transferred authority to settle general claims to OMB.  OMB has since delegated much of that authority to the Executive Agencies.  If you are in DoD, that authority now rests with the Claims Division at the Defense Office of Hearings and Appeals.  You can find more information here: http://www.dod.mil/dodgc/doha/faq-cd.html

I recently dealt with a situation similar to the OP's, and dealing with this office is not a quick process.  It was a relatively straight-forward claim that the Agency agreed should be paid.  After all documentation was submitted, it took about a year for them to issue an opinion granting authority to pay based on Quantum Meruit.

Vern Edwards said:

In order to submit a Contract Disputes Act claim under FAR Subpart 33.2, there must be a contract. If the PO had expired, then I don't think that the contractor can submit a claim.

Vern,

Surely you are not asserting that the CDA Statute of Limitations for filing a claim is zero, are you? The contractor has six years from the date of claim accrual to file. The expiration of the PO is irrelevant.

Claims can "arise under" or be "related to" a contract, and those terms are interpreted broadly by the Boards and Courts. The ASBCA just went through the logic in the ABB Enterprise Software decision on the Government's motion to dismiss for lack of jurisdiction.

Help:

What are you talking about? The expiration of the PO is relevant if the service in question was performed after the PO period of performance had expired. If the PO stated that the contract ended on date X, and the service for which the invoice was sent was rendered after that date, how is the expiration of the PO irrelevant? How can a claim for service rendered after the expiration of a contract period of performance accrue against the expired contract? The additional service was out of scope and rendered voluntarily, unless there are facts of which we are unaware, like an authorized extension.

If I award a contract for the delivery of a dozen eggs each month beginning in July 2015 and ending in July 2016, and if the contractor delivers another dozen eggs in August 2016, how can the August 2016 delivery be the source of a claim arising under or relating to the contract that I awarded?

A claim for services rendered does not relate to a contract simply because the service  was of the same nature as the service called for by the contract. That's not what "relating to" means. Read the definition in FAR 33.213.

The facts in ABB Enterprise Software, Inc., F/K/A Ventyx, ASBCA 60314, June 29, 2016, are not similar to the facts presented in this thread. That case had to do with violation of a software license entered into in support of two commercial item contracts that weren't incorporated into the contracts. The board ruled that although not incorporated, the license was clearly signed as part of those deals:

Quote

The facts, plainly recognized by the Navy contracting officer and other officials, and which the Navy’s motion never confronts, demonstrate clearly that the execution of the license agreement was part and parcel with the performance of the contract.

Without persuasive case analysis from you, I don't see that decision as having any bearing on the matter at hand in this thread.

I would handle it differently than ji20874. First, I would notify the contractor that the PO expired and they should stop billing the Government. Then, I would determine whether the Government had any liability for the service provided after the expiration of the PO. Acceptance of benefits could give rise to such liability. From Formation of Government Contracts, Chapter 2, Section I:

Quote

Implied-in-fact contracts may also be created through the acceptance of benefits with the knowledge that the contractor expects to be compensated, Pacifi cMaritime Ass'n v. United States, 123 Ct. Cl. 667, 108 F. Supp. 603 (1952) (labor referral services by the contractor accepted with knowledge that compensation was expected); Buffalo & Fort Erie Pub. Bridge Auth. v. United States, 106 Ct. Cl. 731, 65 F. Supp. 476 (1946) (premises used with knowledge that contractor expected compensation); Equitable Life Assurance Soc'y, GSBCA 8909, 90-3 BCA ¶ 23,130 (directive to contractor/lessor to replace carpet in leased office space made with knowledge that contractor expected compensation); Robert J. DiDomenico, GSBCA 5539, 82-2 BCA ¶ 16,093 (building alterations not called for in the contract ordered with knowledge that contractor expected compensation).

Since implied-in-fact contracts require conduct of the parties manifesting assent, the mere conferring of a benefit on the government does not create a contractual relationship, Mega Constr. Co. v. United States, 29 Fed. Cl. 396 (1993). In private transactions, conferring a benefit may permit recovery under a restitutionary theory. In government contracts, however, sovereign immunity from suit has not been waived for restitutionary actions. Such claims have been called "quasi-contract" or "implied-in-law"contract claims, which are not actionable under the Tucker Act, 28 U.S.C. § 1491, or the Contract Disputes Act of 1978, 41 U.S.C. § 7101 et seq. These statutes waiving sovereign immunity for suits on express or implied contracts have been held to exclude suits on contracts implied in law. See Trauma Serv. Group v. United States, 104 F.3d 1321 (Fed. Cir. 1997); Dureiko v. United States, 62 Fed. Cl. 340 (2004). See Merritt v. United States, 267 U.S. 338 (1925), stating at 341:

The Tucker Act does not give a right of action against the United States in those cases where, if the transaction were between private parties, recovery could be had upon a contract implied in law.

In Russell Corp. v. United States, 210 Ct. Cl. 596, 537 F.2d 474 (1976), the court recognized this distinction and its inability to grant remedies on quasi-or implied-in-law contracts, stating at 609:

Implied-in-fact contracts differ from contracts implied in law (quasi-contracts), where a duty is imposed by operation of law without regard to the intent of the parties. Such arrangements are treated as contracts for the purposes of remedy only. This court, of course, has no jurisdiction to render judgment against the United States based upon a contract implied in law.

If the Government had liability due to an implied-in-fact contract, I would recommend payment. If not, I would reject the invoice.

Lionel,

The web site that you linked has the following Q&A:

Quote

What claims does the Claims Division at the Defense Office of Hearings and Appeals settle?

These include claims involving uniformed service members' pay, allowances, travel, transportation, payments for unused accrued leave, retired pay, and survivor benefits, both within and outside of DoD; requests by uniformed service members of all services and civilian employees of DoD that the government waive debts they owe to the government resulting from the erroneous overpayment of pay and allowances (including travel and relocation); and certain contractual and quasi-contractual claims by individuals and commercial entities which traditionally have not been under the jurisdiction of the Board of Contract Appeals. Most of the contractual claims involve disputes between a transportation carrier and a uniformed service concerning the carrier's liability for transit loss or damage when transportation services were acquired with a government bill of lading.

I believe that the claims being referred to in the answer are based on implied-in-law contracts.

Vern,

In my view you are conflating claim entitlement with claim accrual.

The contractor may or may not be entitled to its claimed amount (assuming it files a claim). However, that has nothing to do with whether or not the contractor may file a claim, have that claim adjudicated by a contracting officer, and appeal that COFD if it desires.

You said the expiration of the PO means the contractor cannot submit a claim that arises under or is related to that PO. That is wrong.

Extending a fixed-term contract

If you don’t see anything about extensions in the original contract, or if the information is unclear, ask the wireless provider to explain before you sign.

Extensions start automatically once your original contract expires. They will take place on a month-to-month basis. No new contract needs to be signed. The terms and conditions remain the same.

If you do not want the contract extended, or do not want further extensions to happen,  we recommend you cancel the original contract by giving written notice to the wireless provider 30 days before it expires.

Cancelling a fixed-term contract

You can cancel a fixed-term contract with a wireless provider when they do not clearly disclose information. If you do this within 1 year, you are entitled to a full refund.

But you must return any free or discounted items given to you under the contract if the wireless provider asks.

here_2_help said:

Vern,

In my view you are conflating claim entitlement with claim accrual.

The contractor may or may not be entitled to its claimed amount (assuming it files a claim). However, that has nothing to do with whether or not the contractor may file a claim, have that claim adjudicated by a contracting officer, and appeal that COFD if it desires.

You said the expiration of the PO means the contractor cannot submit a claim that arises under or is related to that PO. That is wrong.

I'm not conflating anything, and saying that I'm wrong does not make me wrong. If you think I'm wrong, make an argument that proves it. All you have done is assert. Your first assertion, based on ABB Enterprise Software, Inc., F/K/A Ventyx has failed. Try again.

A demand or assertion for payment is not a claim unless it satisfies the definition of claim in FAR 2.101 and the Disputes clause, FAR 52.233-1. I say that a demand or assertion for payment under a contract that does not arise from performance required by that contract or breach of that contract by the government does not constitute a claim as officially defined. Continued performance of work by a firm, not due to an act or omission by the government, but at its own initiative or due to its own neglect after a contract has expired and performance is no longer contractually required cannot be the basis for any demand for payment or assertion of a right to payment under that expired contract. That being the case, the contracting officer is not obligated to make a final decision on such a demand or assertion, because, since there was no contract for the continued performance there is no contractual obligation to make a final decision. 

Now, prove I'm wrong.

(In order to prove an implied-in fact contract, the contractor would have to show that the government employee who acted to create the contract had the authority to do so, which is very hard to do unless the employee is a CO.)

Vern Edwards said:

If I award a contract for the delivery of a dozen eggs each month beginning in July 2015 and ending in July 2016, and if the contractor delivers another dozen eggs in August 2016, how can the August 2016 delivery be the source of a claim arising under or relating to the contract that I awarded?

It would be prudent to reject the goods or services upon delivery and notify the Contractor of its error in a reasonable amount of time.  Instead, it seems like the agency made a soufflé, threw the eggs at each other, and cooked some on the sidewalk.  Not to be cocky, but after all that, the Contractor has an eggspectation of getting paid.

Vern Edwards said:

Continued performance of work by a firm, not due to an act or omission by the government, but at its own initiative or due to its own neglect after a contract has expired and performance is no longer contractually required cannot be the basis for any demand for payment or assertion of a right to payment under that expired contract.

Vern, you have assumed the contractor performed at its own initiative and not due to an act or omission by the government. Those assertions are for a trier of facts to decide. The trier of facts decides those things because the contractor files a claim and it gets heard.

Now, back to your post that I already quoted: "In order to submit a Contract Disputes Act claim under FAR Subpart 33.2, there must be a contract. If the PO had expired, then I don't think that the contractor can submit a claim." That's wrong.

My proof:

FAR 2.101 defines a contract and expressly includes a purchase order in the list of mutually binding agreements that fall under the definition. Thus: A purchase order between government and contractor is a contract. FAR 33.206(a) states that "Contractor claims shall be submitted, in writing, to the contracting officer for a decision within 6 years after accrual of a claim..." The six-year period is not lessened by the expiration of a contract's period of performance. Thus, the expiration of the P.O. is irrelevant for purposes of determining whether or not the contractor can file a claim. It may be quite relevant for purposes of determining whether or not the contractor is entitled to the relief it may be seeking. But that's a different thing entirely.

You have posted that an expiry of the PO eliminates the contractor's ability to file a claim. That's wrong. The contractor has six years from the date of claim accrual to file a claim.

You should admit you were wrong and we can be done with this nonsense.

here_2_help said:

You should admit you were wrong and we can be done with this nonsense.

Help:

I would admit that I am wrong if you could prove to me that I am wrong, but you haven't proven it. Your "proof" handily ignores the fact that the PO expired before the performance was rendered for which the contractor wants to be paid. Wouldn't that make any "claim" by the contractor frivolous?

Yes, the contractor has six years to assert a claim that accrued under a contract. But that assumes that the so-called claim did, in fact, accrue under that contract. See FAR 33.201:

Quote

“Accrual of a claim” means the date when all events, that fix the alleged liability of either the Government or the contractor and permit assertion of the claim, were known or should have been known. For liability to be fixed, some injury must have occurred. However, monetary damages need not have been incurred.

What if the date of the event that supposedly fixed liability was after the date of contract expiration and the event was not prompted by government behavior? Here's the original scenario:

Quote

In situations where the contractor continues to provide services (ie, cell phone services) after the purchase order has expired and submits an invoice, would the contractor need to submit a claim in accordance with FAR 33.206 in order to be paid?  FAR 1.602-3 Ratification of unauthorized commitments would not apply (I don't think) because a government representative did not authorize (verbally or in writing) the continuation of services.

That sounds to me like the continued performance was inadvertent.

Now imagine this dialogue: I am a CO. I issued a PO that expired at the end of May and I thought that our business with XYZ Corp was finished. But XYZ Corp's president calls me:

XYZ Corp: Hi Vern. I just sent you an invoice for June. I hope you can expedite payment.

Vern: Invoice for June? Why?

XYZ: Because we provided services to you in June.

Vern: You did? Why?

XYZ: Because you didn't cancel the contract, so we continued to perform.

Vern: Why should I "cancel" the contract? The contract stated that the period of performance ended on May 31.

XYZ Corp: Yes, but you didn't tell us we were done.

Vern: Why should I tell you? We signed a contract. The contract said that the period of performance was 1 June 2015 through 31 May 2016. The contract contained no options and "no renewal" notice requirement, did it?

XYZ Corp: No,but a "no renewal" notice is standard practice in our industry.

Vern: I go by the contract, not by your industry's standard practice. It's not our fault that you didn't cut off the spigot.

XYZ Corp: Well, we provided a service and I guess we're going to have to submit a claim.

Vern: You can submit a request for payment and call it a "claim," but I'm not going to handle it as a claim.

XYZ Corp: Why not?

Vern: Because we had no contract for June, which is what you want to bill us for, and so there was no contract on which to assert a claim, and I have no contractual obligation to consider one for work you did without a contract. 

XYZ Corp: We're basing it on the old contract.

Vern: No, you're not. The old contract did not require performance in June. It expired at the end of May. So you have no basis upon which to submit an invoice against that contract or assert a claim on the basis of that contract. Heck, some people might consider that to be a false claim. 

XYZ Corp: Well, I'm going to submit a claim anyway.

Vern: I'll acknowledge receipt, tell you what I just told you, and do nothing else with it.

XYZ Corp: Well, I'll appeal to the board.

Vern: Appeal away. Nice talking to you.

*     *     *

Now, if the contractor provided facts that supported an assertion that the contract had not expired or that something in the contract had required him to perform after it expired, I suppose I'd have to reconsider, but that's not the scenario provided by the OP. The OP wanted to know if the contractor would have to submit a claim in order to get paid. I said that there has to be a contract in order for there to be a claim.

I'm sticking to my position. You haven't proven that I'm wrong on the basis of a valid argument or evidence from statute, regulation, or case law. If you want me to concede, you'll have to prove that I'm wrong. I'm not going to concede just because you demand it. I could support your argument, but it seems that you can't.

Don't be so eager for our discussion to end. What do you want to do here, just answer endless questions from the clueless about travel costs? Aren't you intrigued by the challenge of finding the truth of this matter and proving that it's the truth?

But if you don't want to engage, then don't.

Two of PepeTheFrog's favorite posters disagree, but it seems like they're two ships passing in the night.

Vern Edwards said:

That being the case, the contracting officer is not obligated to make a final decision on such a demand or assertion, because, since there was no contract for the continued performance there is no contractual obligation to make a final decision.

If the contracting officer fails to provide a final decision, there will be a "deemed denial" (just as if the contracting officer denied the claim) after the required response period elapses. The contractor will be free to appeal the ("denied") final decision to the Court of Federal Claims (CFC) or the Boards. See 41 USC 605(c); FAR 33.211(g).

Sure, the CFC/Boards may agree with Vern's analysis when it encounters the appeal of the final decision. Maybe it will dismiss, or deny, the claim. But what's to stop the contractor from alleging the facts (which Vern maintains did not happen) which can tie the claim to Government behavior or things that happened during the contract period of performance? (Before you say FAR 33.209 or false claims, remember, that's assuming those facts did not happen.)

Vern, it seems like you think the contracting officer has the ability to somehow "dismiss" a claim rather than deny it (or simply ignore it, and allow a "deemed denial" to take place). Is that what you're actually saying?

here_2_help said:

Vern, you have assumed the contractor performed at its own initiative and not due to an act or omission by the government. Those assertions are for a trier of facts to decide. The trier of facts decides those things because the contractor files a claim and it gets heard.

PepeTheFrog agrees with here_2_help's assertion above.

Vern Edwards said:

That sounds to me like the continued performance was inadvertent

Vern, if you were the contracting officer, you could make that analysis in your final decision. But another contracting officer writing that final decision could find that although

Vern Edwards said:

a government representative did not authorize (verbally or in writing) the continuation of services

a Government representative performed some act or omission that authorized or encouraged the continuation. The CFC/Boards could also make findings either way.

Vern Edwards said:

Vern: I'll acknowledge receipt, tell you what I just told you, and do nothing else with it.

XYZ Corp: Well, I'll appeal to the board.

Vern: Appeal away. Nice talking to you.

Vern, if you were the contracting officer, wouldn't it be more prudent to actually write a final decision that outlines the facts as you see them, to solidify, strengthen, and document your position before it's appealed? Why would you ignore this claim entirely and allow a "deemed denial"? Do you think the legal office or the head of contracting activity would be pleased with your decision to allow a "deemed denial" and not even write a final decision? It seems like a very ballsy, almost reckless wager that the CFC/Boards will totally agree with you, when the price of your insurance is simply cranking out a quick memo (final decision).

The interesting thing (to me) about the ABB Enterprise Software appeal is that the Navy essentially told the contractor just what Vern's hypothetical dialog did: "We're done talking. If you think you have a CDA claim, go ahead and file one." When the contractor did indeed file its claim, the CO denied it on the grounds that the CDA did not apply to the contractor's claim. Imagine how confused the contractor felt ... on one hand they have written correspondence telling them to file a CDA claim, but on the other hand they have a COFD saying they were not entitled to file a claim under the CDA.

Fortunately Judge Prouty at the ASBCA saw things differently than the CO did, and will let the contractor's claim be heard. The contractor may or may not win on the merits, but its claim will be heard.

I love Vern's imaginary conversation!  Right on!  Why do so many contracting officers agonize over the poor, pitiful contractor and do their very best to find some way to empty the Treasury into the contractor's pockets?

Reject the invoice.

Let the contractor make its case for entitlement to payment under the expired contract.

Folks - thanks for all the input on this.... I'm new to using this board and will certainly do so in the future.

Additional details:

1. The contract (for cell phone services) expired December 31st and the contract was explicit in this (ie, no options, nothing that would appear as express or implied authority).

2. The contractor did not stop services and the personnel with the phones continued using the cell phone services; as the customer, they were unaware of the contract expiration.

3. Government personnel realized mid-Feb that the contract had expired and immediately issued a new contract beginning March 1st - thus the contractor is awaiting payment for January and February (invoices have been rejected and the contractor has been contacted).

4. A ratification was initiated and the details revealed that government personnel had not directed the contract to continue - thus ratification through FAR process is not an option.

5.  Legal council has advised that we pay the contractor under quantum meruit principles but this seems to be a new concept for all in our organization so I'm having to piece this together. He has provided me a sample D&F for the Payment for Services Received Pursuant to Equitable Quantum Meruit Principles which I am working with the Contracting Officer on finalizing.

The question from management is: under what authority do we utilize the quantum meriut principles and does it tie back to the FAR or other authority? What is/or is there a defined process - if not, is there a process we can borrow?

What I've found so far....

• Regulatory Authority for paying under quantum meruit principles:

• 1.102 Statement of guiding principles for the Federal

  • (d) “…In exercising initiative, Government members of the Acquisition Team may assume if a specific strategy, practice, policy or procedure is in the best interests of the Government and is not addressed in the FAR, nor prohibited by law (statute or case law), Executive order or other regulation, that the strategy, practice, policy or procedure is a permissible exercise of authority.”

• 1.102-3 Acquisition Team.

  • (e) “…If a policy or procedure, or a particular strategy or practice, is in the best interest of the Government and is not specifically addressed in the FAR, nor prohibited by law (statute or case law), Executive order or other regulation, Government members of the Team should not assume it is prohibited. Rather, absence of direction should be interpreted as permitting the Team to innovate and use sound business judgment that is otherwise consistent with law and within the limits of their authority. Contracting officers should take the lead in encouraging business process innovations and ensuring that business decisions are sound.”

    • FAR 1.206(d) Nonratifiable commitments. Cases that are not ratifiable under this subsection may be subject to resolution as recommended by the Government Accountability Office under its claim procedure (GAO Policy and Procedures Manual for Guidance of Federal Agencies, Title 4, Chapter 2), or as authorized by FAR Subpart 50.1. Legal advice should be obtained in these cases.

      • Title 4--Claims  “…This title contains regulatory material relating to (1)  doubtful claims by and against the United States, including loss-and-damage claims, (2) claims which may be paid administratively under regulations issued by the General Accounting Office pursuant to statute, (3) claims which, because of statutory provisions, I may be paid only after settlement by the General Accounting Office, (4) administratively uncollectible debt claims, including loss-and-damage claims; and (5) waiver of claims for erroneous payments of pay and certain a1lowances.”

• B-195123, July 11, 1979 -  “RECOGNITION OF A RIGHT TO PAYMENT ON THIS BASIS, HOWEVER, REQUIRES A SHOWING (1) THAT THE GOVERNMENT RECEIVED A BENEFIT AND (2) THAT THE UNAUTHORIZED ACTION HAS BEEN EXPRESSLY OR IMPLIEDLY RATIFIED BY AUTHORIZED CONTRACTING OFFICIALS OF THE GOVERNMENT. DEFENSE MAPPING AGENCY, B-183915, JUNE 25, 1975, 75-2 CPD 15; THE SINGER COMPANY, B-183878, JUNE 20, 1975, 75-1 CPD 406.“

• GAO B-209173, Jan 17, 1983 Payment on Quantum Meruit Basis in Absence of Formal Contract - The Navy requested an advance decision as to the legality of certification for payment to a private firm for services rendered for the maintenance of data processing systems for a 3-month period. The Navy also requested a decision as to which fiscal year appropriation should be charged with the payment. Although the Navy and the firm did not enter into a formally executed contract covering the services for the period in question, the Navy requested that the firm provide the services since the firm had provided them under a recently expired Government contract. Due to technical irregularities and confusion in the Navy procurement process, no express contract arose for the performance of work during this period. GAO held that, although no formal contract existed, the Government received a benefit, and contracting for the services was not prohibited by statute or regulation. Accordingly, payment may be made on a quantum meruit basis. The proper appropriation account to be charged with payment would be the fiscal year appropriation current when the liability for the payment arose.

• GAO B-213489, MAR 13, 1984 – “IN APPROPRIATE CIRCUMSTANCES, INCLUDING WHEN A CONTRACTING OFFICER DECLINES TO RATIFY AN INFORMAL OR UNAUTHORIZED COMMITMENT, PAYMENT MAY BE MADE FOR SERVICES RENDERED ON A QUANTUM MERUIT BASIS (THE REASONABLE VALUE OF WORK OR LABOR) OR FOR GOODS FURNISHED ON A QUANTUM VALEBANT BASIS (THE REASONABLE VALUE OF GOODS SOLD OR DELIVERED). DELOSS CONSTRUCTION COMPANY, B-196004, NOVEMBER 2, 1979, 80-1 CPD 201.”

• B-218957 August 1, 1985 - “The record does not disclose that any officer or employee of the Government requested, or was even aware that the telephone company had undertaken the actions in question. In other words, the telephone company was acting as a volunteer….. Where a valid written contract for a procurement was never executed and the agency is unable to establish even an implied agreement to pay for the goods or services provided, the agency may not ratify the procurement retroactively. However, under this Office's claims settlement authority (31 U.S.C. S 3702), the Comptroller General may authorize reimbursement to the contractor on a quantum meruit or quantum valebant basis when certain conditions are met.”  http://www.gao.gov/assets/470/465601.pdf

• Common Law?????

  • A legal treatise is a scholarly legal publication containing all the law relating to a particular area, such as criminal law or trusts and estates.

  • The Restatement (Second) of the Law of Contracts is a legal treatise from the second series of the Restatements of the Law, and seeks to inform judges and lawyers about general principles of contract common law.

 I'm working on a product for my agency on this topic (once I get it sorted out).... if anyone's interested, let me know and I'll send you the brief.

Thanks again!

I don't think the contracting officer, all by him- or herself, can issue a brand new contract on a quantum meruit basis.  The contracting officer needs to follow the FAR.  Quantum meruit is a judicial doctrine, meaning that judges get to order its use in settling disputes after the contractor has made its argment.  If the contracting officer wants to write a brand new contract, he or she relies on the FAR.  If the contractor wants a contract based on quantum meruit, it needs to get itself in front of a judge (or other competent authority).

Here, the contractor hasn't even made a case yet, and everyone in the agency is trying to find a way to give money to the contractor.  It's July -- Christmas is a long way away -- but even then, it's Uncle Sam, not Uncle Sugar, and Uncle Sam's contracting officers shouldn't give gifts through the contracting process.

There are two avenues, as I see it -- (1) a claim, with an actual or deemed denial followed by an appeal to the proper board or court; or (2) the process in FAR 1.602-3 for nonratifiable commitments.  Either avenue could result in a quantum meruit outcome, or not, depending on the lawyers.  It sounds like the contractor will win, because the agency lawyers have already folded.

The agency has drunk the koolaid that it must pay because it received a benefit.  Maybe I'll cut my office's grass this weekend and send in an invoice for payment.  Other than FAR Subpart 3.6, what's the difference?

MMP514,

If contract expiration was explicitly marked, ask your legal team why it is not unjust enrichment? 

These service providers leave the switch on because they know government CO's ( like yourself) will have a dilemma, typically resulting in their favor.

My opinion, It broke ethics and breached contract if payment is made for these services.

ji20874 said:

I don't think the contracting officer, all by him- or herself, can issue a brand new contract on a quantum meruit basis.  The contracting officer needs to follow the FAR.

What basis are you saying an Agency couldn’t execute a new contract based on its own determination, i.e., without a Court Order?  What Part(s) of the FAR would be violated?

ji20874 said:

There are two avenues, as I see it -- or (2) the process in FAR 1.602-3 for nonratifiable commitments.

1.602-3, nonratifiable commitments, implies there was a commitment.

I may be wrong, but the simple answer seems to be for the program office to submit a PR with funds for services rendered.  The KO makes the award.  Note to file as to why it’s not a UC and doesn’t require ratification.  Contractor gets paid.

Unless you’re trying to punish the program office or contractor for some reason, why make it any more difficult than that?

jwomack said:

What basis are you saying an Agency couldn’t execute a new contract based on its own determination, i.e., without a Court Order?  What Part(s) of the FAR would be violated?

jwomack,

Every part having to do with contract formation.  Which J&A authority in FAR Subpart 6.3 would be cited?

Quantum meruit is a judicial doctrine, not a FAR principle.  What Part(s) of the FAR allow for contracting officers to make after-the-fact sole-source contracts to favored contractors using the quantum meruit principle?

If I voluntarily decided to cut my office's grass this weekend, would you approve my invoice for payment?

jwomack said:

I may be wrong, but the simple answer seems to be for the program office to submit a PR with funds for services rendered.  The KO makes the award.  Note to file as to why it’s not a UC and doesn’t require ratification.  Contractor gets paid.

I recommended an approach in my 6:03pm comment on Monday.  It didn't get any traction.

PepeTheFrog said:

Vern, it seems like you think the contracting officer has the ability to somehow "dismiss" a claim rather than deny it (or simply ignore it, and allow a "deemed denial" to take place). Is that what you're actually saying?

I don't think that. In my opinion I would not be dismissing a claim, because as far as I'm concerned I haven't received a claim. I've received a request for payment for which there is contract.

If the contractor wants to appeal on a deemed denial basis, that's his business. If the board wants to accept the appeal and find that there was a claim, that's within their power. They can overrule me. The government's attorneys will get to handle the appeal, and that's their job. If they don't want to fight, or don't fight well, that's their business.

If, in addition to accepting the appeal, the board finds that there was a contract, and that the contractor is entitled to payment under that contract, then more power to the contractor. It won't upset me. I will have been wrong in the board's eyes.

But I'll be damned if I'm going to let a contractor force me to issue a final decision on a request for payment for which, based on the facts we have, there is no basis in contract, and which I do not consider a claim for reasons I am perfectly able to state in no uncertain terms. The CO's duty to issue a final decision is contractual, arising from the Disputes clause. If the services were not provided under  contract, then there is no Disputes clause, and if there is no Disputes clause, there is no contractual obligation on my part to issue a final decision.

PepeTheFrog said:

Vern, if you were the contracting officer, wouldn't it be more prudent to actually write a final decision that outlines the facts as you see them, to solidify, strengthen, and document your position before it's appealed?

No. The government's lawyers will make the government's case on appeal, unless they decide that the Government should pay. In my opinion it would not be prudent to issue a  final decision, because it might be considered acknowledgement that there was a contract for the services.

PepeTheFrog said:

Do you think the legal office or the head of contracting activity would be pleased with your decision to allow a "deemed denial" and not even write a final decision?

I would tell them what I'm doing. The chief of the contracting office can overrule me. Legal offices have no authority over me. They advise me and advise my boss. I will consider their advice, but make my own decision.

I am amendable to persuasion when I get a good argument. I just haven't gotten one yet, even though one could be made by a researcher and thinker. I'm just wondering why my esteemed colleagues can't seem to put one together. Of course, if they do, there might be another argument. I love to argue. I can argue all day and all night. I want to be right, but I'd rather argue and be wrong than not argue. I would rather argue with a good interlocutor than answer elementary questions from people who ought to have done their homework. That's how I learned contracting--from senior people who loved to argue, and didn't think much of you if you wouldn't argue back. No way you could just go to those guys looking for an answer. You had to earn that answer. I learned something from every argument I made, even the ones that ended inconclusively.

The best way to learn how to fight is to fight. It's that, or leave the << bleeping >> neighborhood.

Vern Edwards said:

I am amendable to persuasion when I get a good argument. I just haven't gotten one yet, even though one could be made by a researcher and thinker. I'm just wondering why my esteemed colleagues can't seem to put one together. Of course, if they do, there might be another argument.

PepeTheFrog will jump. How about: An express contract is not necessary to incur and file a claim under the Contract Disputes Act (and make Vern Edwards respond to your claim with a written final decision).

The Contract Disputes Act and claims thereof apply to any express contract or implied contract. See 41 USC 7102(a).

The contractor could allege an implied-in-fact contract in the absence of (or after the expiration of) an express contract and thereby incur and file a claim under the Contract Disputes Act.

Vern, will you respond to such a claim with a written final decision? Say the contractor properly certifies the claim and even cites the Contract Disputes Act's applicability to implied contracts.

Quote

The contractor could allege an implied-in-fact contract in the absence of (or after the expiration of) an express contract and thereby incur and file a claim under the Contract Disputes Act.

Vern, will you respond to such a claim with a written final decision? Say the contractor properly certifies the claim and even cites the Contract Disputes Act's applicability to implied contracts.

Pepe:

Neither the Contract Disputes Act nor FAR Subpart 33.2 contains its own definition of contract, so when interpreting FAR Subpart 33.2 the definition in FAR 2.101 applies. That definition says that contracts are in writing. That would exclude implied contracts, as I understand them to be. However, CDA § 7102(a) says that the act applies to express and implied contracts, and FAR 33.210 says;

Quote

Except as provided in this section, contracting officers are authorized, within any specific limitations of their warrants, to decide or resolve all claims arising under or relating to a contract subject to the Disputes statute.

Thus, that presumably includes implied contracts, but FAR Subpart 33.2 gives COs no instructions about what to do if they receive a demand based on an implied contract. Neither FAR nor the statute defines implied contract, and the case law on implied contracts is very complex. I do not know much about implied-in-fact contracts, but I know that It is difficult for contractors to establish the existence of an implied contract, for a number of reasons.

If I received a demand explicitly based on an implied contract, I would refuse to issue a final decision. According to FAR 33.210(g):

Quote

(g) Any failure of the contracting officer to issue a decision within the required time periods will be deemed a decision by the contracting officer denying the claim and will authorize the contractor to file an appeal or suit on the claim.

Since that is right out of the CDA, hat applies to both express and implied contracts.

The rule is that all a contractor need do to appeal is to make a non-frivolous allegation of the existence of a contract. It does not have to first prove that there was such a contract in order for the board or court to have jurisdiction. See Engage Learning Inc. v. Salazar, 660 F.3d 1346 (Fed. Cir. 2011) and Black Tiger Co., ASBCA 59819, June 29, 2016. Thus the contractor could go to one of the boards or to the Court of Federal Claims on the basis of my deemed denial. Thus, if I refused to issue a decision, the contractor could appeal and, as Help indicated, the board or COFC would have to decide whether there was a contract and, if so, whether their claim had any merit.

In Tech Products, LLC, ASBCA 58789, 15-1 BCA ¶ 35940, the contractor submitted a "claim" based a demand for payment under an implied contract with the Army. The parties had not signed any contract. The CO, apparently feeling guilty about a deal that fell through after the contractor had spent some money in preparation, audited the claim and determined that the contractor was entitled to part of it. Here is a quote from the decision:

Quote

Following multiple difficulties in auditing the claim, as well as an initial decision in 2009, and a reconsideration request in 2011, the contracting officer rendered his final decision by date of 22 March 2013. The contracting officer determined that Tech Projects was entitled to reimbursement for a portion of its initial claim and denied a supplemental claim in its entirety. (R4, tab 50 at 10) In his decision, the contracting officer also asserted that “[t]he government is in agreement with Tech Projects that there is an implied contract when SBA acceptance occurs” (_id.at 3). The contracting officer further stated that “i_t is understood that there was never a formal written contract but the SBA Acceptance Letter and actions by the government could be reasonably perceived by Tech Projects (or any other 8 (a) contractor) to constitute an implied contract” _(_id. at 4).

But when the contractor appealed, the Army moved for dismissal on grounds that the contractor had not proven the existence of an implied contract!!!!! So much for JAG review. Now get this:

Quote

We reject the Army's argument that the appeal must be dismissed because Tech Projects “does not allege adequate facts to show that an implied-in-fact contract was ever formed” (gov't mot. at 5). To the contrary, Tech Projects has advanced more than a “non-frivolous allegation,” Engage, 660 F.3d at 1353. The record contains the contracting officer's decision, in which he stated that “[t]he government is in agreement with Tech Projects that there is an implied contract when SBA acceptance occurs” and then declared that “the SBA Acceptance Letter and actions by the government could be reasonably perceived by Tech Projects (or any other 8 (a) contractor) to constitute an implied contract” (statement 7). Relying upon the contracting officer's decision, Tech Projects has alleged that he “properly recognized that there was a contract in fact” regarding the Target Control System requirement,” and Tech Projects prayer for a determination “that there were two contracts and that[,] in each case, the Contracting Officer's actions amounted to a termination for the convenience of the Government” (statement 8), cannot be dismissed as frivolous. Given their grounding, they must be regarded as non-frivolous and sufficient to defeat the jurisdictional challenge posed by the present motion.

Emphasis added. Now, why let the CO make a final decision saying that there is an implied contract and then argue for dismissal on grounds that there isn't one? The Army comes across as confused.

Reading the CDA and FAR Subpart 33.2 together, I think that if there is no apparent contractual (written document) basis for a "claim," a CO should not issue a final decision upon receiving a demand, because he has no basis on which to consider the demand a claim, as defined by FAR, and has no apparent contractual obligation to issue a decision for payment. Let the company appeal on the basis of deemed denial if they know enough to do so and have enough evidence to make a non-frivolous assertion. If the board takes jurisdiction, then the government's lawyers can argue the case.  I don't think FAR requires COs to issue final decisions on claims based on implied (unwritten) contracts, and I don't think COs should feel compelled to issue a final decision based on the possibility that the contractor will appeal a deemed denial and the board will take jurisdiction. If an appeal is made and the board takes jurisdiction, the agency lawyers can handle it.

H2H was right to call me out for a carelessly worded comment:

Quote

In order to submit a Contract Disputes Act claim under FAR Subpart 33.2, there must be a contract. If the PO had expired, then I don't think that the contractor can submit a claim.

What I should have said was that I don't think the contractor can successfully base its claim for payment for continued performance on a PO that had expired before the performance was rendered, and that there cannot be a claim without a contract.

Vern,

I appreciate your responses. Let me offer one of my own.

1. There was a contract. There was a written agreement executed by both parties that meets the definition of contract at 2.101. It was called a "purchase order" and, based on the purchase order, the contractor provided services and (presumably) received payment. The contract had terms, including a period of performance.

2. The contractor continued to provide services after the period of performance.

3. The contractor wishes to be paid for the services it provided, and for which the government received benefit.

4. The government acknowledges benefit received but believes the contractor is not entitled to payment because it should have stopped providing services at the end of the contractually specified period of performance. To be clear: performance WAS rendered but the issue is that performance continued after the contract's specified PoP had ended.

5. The contractor's argument will be that it was willing to end performance but the government failed to cancel the service, which was of a nature that it would be continually provided until cancelled. If the government didn't want the service to continue, it should have switched to another provider. That it failed to do so indicated it wanted performance to continue even past the contractual PoP. The government's argument is that the contractor had a duty to cease providing the service upon completion of the contractual PoP. Who's right? To be decided.

My only point in all this is that the contractor has a valid claim that must be heard. The claim is not based on an implied contract, but on the actual contract that the parties executed. The contractor is arguing that the contract continued beyond the agreed-to PoP because of the government's inaction. Essentially it would be saying that the government waived the PoP by continuing to accept and use the services. Reasonable people can and will disagree with that argument. If the CO denies the claim, that's fine and the contractor can appeal the denial.

I do agree that a valid claim must be related to one of the parties' discharge of its obligations under the contract. However, the term "related to" is to be read broadly (Todd Construction L.P., Federal Circuit, 2010 [s. p. 10]). In this case, the contractor would be arguing that its claim is related to the P.O. -- and I think that argument would be sufficient to get it a hearing on the merits.

ji20874 said:

Which J&A authority in FAR Subpart 6.3 would be cited?

If it’s within SAP a Part 6 citation wouldn’t be necessary.  Part 13 Procedures could be followed.

ji20874 said:

What Part(s) of the FAR allow for contracting officers to make after-the-fact sole-source contracts to favored contractors using the quantum meruit principle?

FAR 1.102(d).  “In exercising initiative, Government members of the Acquisition Team may assume if a specific strategy, practice, policy or procedure is in the best interests of the Government and is not addressed in the FAR, nor prohibited by law (statute or case law), Executive order or other regulation, that the strategy, practice, policy or procedure is a permissible exercise of authority.”

ji20874 said:

If I voluntarily decided to cut my office's grass this weekend, would you approve my invoice for payment?

Probably not, but I may and I wouldn’t be prohibited by FAR from doing so assuming it provided benefit to the Government, etc.

Won't know until ( or if ) the attorney do research into the service providers history of leaving the switch on, or cutting the switch off.

My bet is the service provider cuts the switch off on individual accounts, ( ordinary people and small business )

When that can be proven, the question will be why did the service provider allow the services to continue if they have a track record of cutting them off for other than US Government customers. 

The other question I have ( not sure if discussed ) is how much money are we talking about and how many end users of these phones?  I thought I read invoices ran almost 2 months before someone noticed, but are we talking a couple dozen phones, couple hundred phones, or couple thousand phones?  relevant question ( if not answered already ) about if this is much to do about nothing and settling this.  The size and scope (in my mind) also matters in how easy it would be for end users to walk into Verizon or AT&T - keep their same phone number - and switch over to another carrier.  The government would be demonstrating its distaste for the current provider and doing what they would have done if alerted their service would be cut off.

Its also my strong sense, the providers T&C's were incorporated or signed up by the USG.  Which means provider could legally leave the switch on if not notified ahead of time to cancel.  Automatic renewals, I hate them.

Quote

ji20874  - “If the agency wants to create a new contract and back-date it (or modify the contract to extend the period of performance to the present), it can do so with an appropriate sole-source justification -- and then it can process an invoice.”

Seriously considering proposing a modification to the expired contract - considering that the invoices could be considered a claim (FAR 33.2 - unless I’m missing something in FAR or law) the Contracting Officer has broad discretion in making the determination. Taking this approach, we would need to support an implied contract (FAR 33.203 Applicability) and I believe we could do this.

Thoughts???

While I agree that some contractors may take advantage of the government by continuing work, I also feel that utilizing program, legal and contractor personnel to fight with the contractor is a waste of everyone’s time and money – especially when the government received a benefit and would likely pay in the long run. If there is an authority within the FAR or law to quickly and with as little resources/money used, that's the approach we want to take. Our organization will take this as a lesson-learned…..

Vern Edwards said:

Reading the CDA and FAR Subpart 33.2 together, I think that if there is no apparent contractual (written document) basis for a "claim," a CO should not issue a final decision upon receiving a demand, because he has no basis on which to consider the demand a claim, as defined by FAR, and has no apparent contractual obligation to issue a decision for payment. Let the company appeal on the basis of deemed denial if they know enough to do so and have enough evidence to make a non-frivolous assertion. If the board takes jurisdiction, then the government's lawyers can argue the case.  I don't think FAR requires COs to issue final decisions on claims based on implied (unwritten) contracts, and I don't think COs should feel compelled to issue a final decision based on the possibility that the contractor will appeal a deemed denial and the board will take jurisdiction. If an appeal is made and the board takes jurisdiction, the agency lawyers can handle it.

Vern, thank you for your entire response-- I have learned something. PepeTheFrog knew you had something up your sleeve!

Help:

I think what you're arguing is that the CO should accept the demand for payment as a claim and write a final decision.

A point-by-point response, in the manner of the CO responding to the demand for payment.

1. Agreed, but irrelevant. The PO was for a specific time period. The services for which the firm (not "contractor") wants to be paid were rendered after the PO had expired by its express terms. The parties did not extend the PO. Yes, there once was a PO. So what?

2. Disagree. I have a problem with "continued," because I think it's a loaded word in the context of the situation. (I acknowledge that I have used the word "continued" in this thread, but I did so carelessly.) The services provided under the PO were severable and the final period of performance was expressly stated. The firm provided service during a period for which there was no contract for the service. They did not do so upon demand, and they did it without giving notice.

3. Agreed in part. The firm does want to be paid. But it is a question whether the Government received a benefit. What's the benefit? Just because Government employees used their phones doesn't mean that they used them for Government purposes.

4. Disagree. First, if you're relying on the comments of the OP to assert that the Government acknowledges that it received a benefit, it has not been established that the OP has the authority to represent the Government in that regard. Second, the Government does not assert that the firm is not entitled to payment because it should have stopped performing, but because the Government had no contract with that firm to perform during the period in question.

5. Disagree. The firm's asserted willingness and motive to perform are irrelevant, even if true, unless it asserts that the Government demanded the service under contract. It's entirely possible that the firm's performance was the result of its own neglect. What is relevant is what if any express or implied agreement existed between the parties. The Government does not say that the firm had a duty to the Government to cease the service. If it had any such duty, it was to itself. The Government says simply that there was no contract for the service during the period in question and thus no obligation on the part of the Government to pay for it. The parties apparently did not communicate about the period in question. They did not bargain for service during the period in question. They did not agree to a price for the period in question. The firm did not notify the CO that it was going to provide service during the period, it simply did so, voluntarily, and not upon demand. Whether or not the Government engaged another provider was of no concern to the firm. The Government had no duty to communicate with the firm in that regard.

here_2_help said:

My only point in all this is that the contractor has a valid claim that must be heard.

What do you mean by "valid," what do you mean by "heard," and why do you think it "must" be heard?

here_2_help said:

The claim is not based on an implied contract, but on the actual contract that the parties executed.

The "actual" contract? Do you mean the expired PO? What's the nexus?

here_2_help said:

The contractor is arguing that the contract continued beyond the agreed-to PoP because of the government's inaction.

 What's your reasoning--post hoc, ergo propter hoc?

here_2_help said:

The contractor is arguing that the contract continued beyond the agreed-to PoP because of the government's inaction.

Has the contractor identified the PO term that called for government action with regard to future performance? According to the OP, there was no such term.

here_2_help said:

Essentially it would be saying that the government waived the PoP by continuing to accept and use the services.

"Waived"? To the best of my knowledge, there is no waiver doctrine to the effect that the government can waive the stipulated end of the contractor's obligation to perform. To the best of my knowledge, the waiver doctrine is a contractor defense against T for D. Educate me.

here_2_help said:

However, the term "related to" is to be read broadly (Todd Construction L.P., Federal Circuit, 2010 [s. p. 10]).

I assume you meant Todd Construction LP v. US, 653 F.3d 1306 (Fed. Cir. 2011). If so, okay, "related to" is to be read broadly.

Bottom line: I think you are saying that the contractor is making a claim as defined by FAR 2.101 and the Disputes clause, because it is demanding payment on the basis that the Government had a duty under the PO to terminate the contract upon the expiration of the period of performance. It wants me to agree with its interpretation and pay the bill. If that's what the contractor is claiming, then I'll write a final decision and deny the claim if, in fact, the Government had no such duty under the contract.

Having said that, here is what I'd do in real life:

Two things are clear to me: both parties were managed by incompetents. Sensible people would have communicated prior to the end of the period of performance. But cell service providers are not customer oriented and it is hard to find anyone to talk to, and the Government is, well, the Government. The Government's CO should have reminded the requiring activity of the impending expiration of the contract. The requiring activity should have notified the cell phone holders to stop using the phones after December 31 and that if they didn't they would be personally liable for any charges incurred after that date. The CO should have sought confirmation that that had been done. Those actions would have been prudent behavior.  I don't know much about Government cell phone service, but maybe the requiring activity should have confiscated those phones.

This is not a matter for ratification or quantum meruit or implied-in-fact contracts_._  Be prudent, practical, and efficient. If I were the CO, and assuming that funds are available for the period in question, I would not tell the contractor to submit a claim. I would call them, negotiate a discounted settlement, and modify the PO after the fact (yes, after the fact) to extend the service for two months at the settlement amount. I would not pay the full amount of the invoice, because the contractor was partly to blame.  I assume that we're talking about a small sum, below the SAT. If that were not the case, then I might do something else. Of course, I'd document the file and tell the whole sad story. (I'd mail copies to all my friends and to certain higher-ups. I'd make people laugh and shake their heads.)

I think that would be perfectly legal. Yes, the cell service provider should have stopped providing, but it didn't, and Government people should not have used the phones, but they did, because they had not been told not to.

Sorry, ji20874, but that's what I'd do, if for no other reason but to make a point with the requiring activity. I see no point in reinforcing incompetence with stupidity by making a bureaucratic hassle out of a small matter, and I wouldn't put all the blame on the contractor.

Fun argument, H2H, but my wife is going to kill me if I don't get off the computer and go bird watching with her. We're in the Wallowa Mountains in northeastern Oregon, Chief Joseph country. We're in a cabin on Wallowa Lake, and it's gorgeous out. We came to see the raptors on the Zumwalt Prairie and we weren't disappointed. Gave up counting all the various kinds of hawks. Went for a walk across part of the prairie, and my wife almost fainted from heat exhaustion, but we made it. Bad judgement. It was hotter than it seemed at first. Yesterday we drove north though Joseph Canyon to Clarkston and Lewiston in Idaho (named for Lewis and Clark). Beautiful drive until we drove down into that canyon and back up, which was a little nerve wracking. I think my wife had her eyes closed the whole way. Headed for Hell's Canyon on the Snake River today (deepest river canyon in the U.S., 7,993 feet--deeper than the Grand, but much smaller overall). The geology of this part of the U.S. is astonishing. Spectacular scenery. The people who live back East have no idea.

Vern Edwards said:

Thus, that presumably includes implied contracts, but FAR Subpart 33.2 gives COs no instructions about what to do if they receive a demand based on an implied contract. Neither FAR nor the statute defines implied contract, and the case law on implied contracts is very complex. I do not know much about implied-in-fact contracts, but I know that It is difficult for contractors to establish the existence of an implied contract, for a number of reasons.

Wouldn't COs follow the same procedures for an implied contract as they would for an express contract?

Quote

33.203 Applicability.

(a) Except as specified in paragraph (b) of this section, this part applies to any express or implied contract covered by the Federal Acquisition Regulation.

MMP514 said:

While I agree that some contractors may take advantage of the government by continuing work, I also feel that utilizing program, legal and contractor personnel to fight with the contractor is a waste of everyone’s time and money – especially when the government received a benefit and would likely pay in the long run. If there is an authority within the FAR or law to quickly and with as little resources/money used, that's the approach we want to take. Our organization will take this as a lesson-learned…..

Yes, but some can't forego an opportunity to be a prick to a contractor.

Don Mansfield said:

Wouldn't COs follow the same procedures for an implied contract as they would for an express contract?

Maybe. I suppose they could. But think about what that says. FAR 33.2 applies to an implied contract. So, if you follow the same procedure, are you acknowledging that there is an implied contract? It doesn't say alleged implied contract.

And what is an implied contract? The Army apparently couldn't figure it out in the case cited above.

Anyway, what's wrong with the deemed denial route? Some guy you never heard of before calls you up and says the Government owes him money for this or that he did and the CO has to write a final decision? Does he have to make an explicit assertion of an implied contract? I'll be honest, in the past when that happened to me I told the guy to get lost and never heard from them again. How many COs do you think know anything about implied contracts. I know very little.

To Vern's point, here is a situation I faced some years ago.  Some of our employees were occupying office space in a GSA leased building where the water was unsafe to drink.  (Nothing's too good for the Feds and that's what they will get.)  Rather than go through the process of acquiring drinking water using appropriated funds, they merely chipped in and got a subscription to bottled water, (water cooler) provided by a commercial company.  As fate would have it, a dispute arose regarding payment and the company tried to file a claim against the government for the water it had provided to the government employees.  Obviously, we did not pay, although we spent many times more in resolving the issue without paying than what it would have cost to pay the company off and have them go away.

Vern Edwards said:

Anyway, what's wrong with the deemed denial route? Some guy you never heard of before calls you up and says the Government owes him money for this or that he did and the CO has to write a final decision? Does he have to make an explicit assertion of an implied contract? I'll be honest, in the past when that happened to me I told the guy to get lost and never heard from them again. How many COs do you think know anything about implied contracts. I know very little.

Nothing's wrong with it if the CO didn't think the Govt. was liable.

On Monday, July 25, 2016 at 6:03 PM, ji20874 said:

If the agency wants to create a new contract and back-date it (or modify the contract to extend the period of performance to the present), it can do so with an appropriate sole-source justification -- and then it can process an invoice.  But today, reject the invoice.

Vern,

I agree with your practical approach.  I tried to offer such an approach earlier in the thread.

I never advocated for advising the contractor to file a claim -- I'm opposed to giving legal advice to contractors -- all I said was to reject the invoice and then to let the contractor file a claim if it chooses to -- if the agency rejects the invoice and the contractor never files a claim, then the matter dies -- that would be my expectation in this case.  But all the agency effort into justifying a quantum meruit answer is regrettable.  Like you, I wholly disagree with the quantum meruit approach that the agency is trying to use.

MMP514 said:

Seriously considering proposing a modification to the expired contract - considering that the invoices could be considered a claim (FAR 33.2 - unless I’m missing something in FAR or law) the Contracting Officer has broad discretion in making the determination. Taking this approach, we would need to support an implied contract (FAR 33.203 Applicability) and I believe we could do this.

Thoughts???

While I agree that some contractors may take advantage of the government by continuing work, I also feel that utilizing program, legal and contractor personnel to fight with the contractor is a waste of everyone’s time and money – especially when the government received a benefit and would likely pay in the long run. If there is an authority within the FAR or law to quickly and with as little resources/money used, that's the approach we want to take. Our organization will take this as a lesson-learned…..

If you want to pay the contractor for the two months by modifying the existing purchase order, look at my Monday 6:03pm comment and Vern's 4-hour-ago posting.  Read FAR 1.602-3( b )( 5 ), the definition of "issue in controversy" in FAR 33.201, and the first sentence of FAR 33.204.  I wouldn't use an implied contract argument.  Just do it, provided, as Vern rightly points out, that funds were available at the time.