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B-182437 1 (1976-07-27)

handle is hein.gao/gaobaddmb0001 and id is 1 raw text is: C THE COMPTROLLER GENERAL DECISIll d OF THE UNITED STATES WA SH IN'G TON, D.0. 2 0 5 4 8 FILE: B-182437 DATE: uy 27, 1976 Qi 7 'fo0 MATTER OF: Monitor Products Company, Inc. DIGEST: Where unauthorized Government official induced claimant to complete another's contract by stating that claimant's justifiable excess costs could be reimbursed, payment of claimant's justifiable cost increases may be allowed on quantum valebat basis since agency now has ratified con- tractual relationship. Claim is returned to agency for determination of whether value of items received exceeds any compensation received by claimant and for payment of any such amount. Monitor Products Company, Inc. has requested this Office to require the Navy to return certain oscillators for which a claim for payment was twice denied by this Office. See Monitor Products Company, Inc., B-182437, March 12, 1975, 75-1 CPD 151 and October 9, 1975, 75-2 CPD 215. In our prior decisions we concluded that Monitor was a subcontractor under a Government prime contract with Arvin Industries'. Arvin was contractually obligated to deliver 160 oscillators to the Navy at a stipulated price. During the course of the contract, the Navy considered increasing the contract quantity from 160 to 200 units.- Monitor, which was actually producing the items, indicated to the Navy's project engineer that a substantial price increase would be necessary for the additional 40 units as well as reim- bursement for cost overruns which it was. incurring in producing the initial 160 units; otherwise it would have to cease production. The project engineer contacted a Navy supply officer who telephoned the cognizant contracting officer requesting that a novation agree- ment be entered into recognizing Monitor as the prime contractor. The cognizant contracting officer then contacted Arvin in an attempt to obtain a novation agreement and Arvin reported that it had re- quested information from Monitor that was necessary to accomplish the agreement. Arvin also stated that Monitor was acting as its subcontractor.

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