Combination Industries, Inc.

B-271163 May 22, 1996 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights Was enacted. The facts concerning the effective date of the FAA's agreement to take over the cost of providing Unicom services at the Airport are disputed. An agreement was reached late in 1994 between the FAA and the Airport for the FAA to take over the cost of these services starting January 1. Denies that any of its officials were authorized to agree to assume the cost of Unicom services at the Airport any earlier than May 1. FAA notes in this regard that the contract between the Airport and Combination was not formally terminated until Combination received the June 27 letter from the Airport. The government is liable for the value of what it has received from a contractor even in the absence of a binding contract. View Decision Matter of: Combination Industries, Inc. File: B-271163 Date: May 22, 1996 A claim against the Federal Aviation Administration (FAA) for operating an advisory radio system at an airport during a 4-month period before the FAA entered into an agreement with the claimant to provide the service, may be paid on a quantum meruit/quantum valebant basis, since the FAA had a statutory duty to operate such a system at the airport, and the airport, which had been paying the claimant for providing the service previously, had terminated its agreement to do so. DECISION Robert Doyle on behalf of Combination Industries, Inc., requests payment of $6,044.40, from the Federal Aviation Administration (FAA) for operating the Unicom advisory radio system at the Marquette County Airport, Michigan, for the period January-April 1995. The claim may be paid. BACKGROUND Combination had two separate contracts for services at the Airport when the events leading to its claim arose, one with the FAA to provide auxiliary weather observation services at the Airport, and one with the Marquette County Airport to provide Unicom services. On February 12, 1994, Public Law 103-211, section 409, was enacted, which required FAA to establish and operate an Auxiliary Flight Service Station (AFSS) at the Marquette County Airport no later than September 1, 1994. FAA subsequently decided that it could meet its statutory obligation by including the Unicom services being provided by Combination under its contract with the Airport into its existing contract with that firm for auxiliary weather observation services. The facts concerning the effective date of the FAA's agreement to take over the cost of providing Unicom services at the Airport are disputed. According to the Airport, an agreement was reached late in 1994 between the FAA and the Airport for the FAA to take over the cost of these services starting January 1, 1995. However, for various reasons the FAA did not formally incorporate the change into its contract until May 1, 1995. Combination has submitted a letter dated June 27, 1995, received from the Marquette County Airport, responding to its request for payment for the first 4 months of 1995. The letter advises Combination, confirming for the first time in writing the content of previous telephone conversations, that it had terminated its obligation to pay for operating the Unicom system on January 1, 1995, and states that it did so because it understood that the FAA had assumed responsibility for payment as of that date. The FAA, for its part, denies that any of its officials were authorized to agree to assume the cost of Unicom services at the Airport any earlier than May 1, 1995. FAA notes in this regard that the contract between the Airport and Combination was not formally terminated until Combination received the June 27 letter from the Airport. OPINION Clearly, Combination had no contract to provide Unicom services to the FAA before May 1, 1995. Nonetheless, under the doctrines of quantum meruit and quantum valebant, the government is liable for the value of what it has received from a contractor even in the absence of a binding contract. Prestex Inc. v. United States, 320 F.2d 367, 373 (Ct. Cl. 1963); Mohawk Data Science Corporation, 69 Comp.Gen. 13 (1989). The criteria for payment under these doctrines consist of the following four elements. First, the goods or services for which payment is sought would have been a permissible procurement had the proper procedures been followed. Second, the government must have received and accepted a benefit. Third, the claimant must have acted in good faith. Fourth, the amount to be paid must not exceed the reasonable value of the benefit received. 69 Comp. Gen. at 14-15. The third and fourth elements of a quantum meruit and quantum valebant claim are clearly met here. There is no question but that Combination performed its services in good faith. The FAA does not suggest otherwise.