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Policy on the Recovery by Government Contractors on the Basis of Quantum Meruit I.
COMMI CO MMISSI SSION ON ON A!I" A!I" R#SO$ R#SO$"I "ION ON NO. NO. %&'(% %&'(% Novemb November er )(* )+%& )+%& Adjudicaton of claims arising from void governmen conracs: wheher or no recovery agains he governmen under such conracs may be allowed on he basis of he quanum merui principle. COA hereby resolves ha where he only defec or irregulariy in he claim claim under under a gove governm rnmen en conr conrac ac is he he delaye delayed d execu executo ton n of he certc certca ae e as o avail availab abili iliy y of funds funds !CA"#$ !CA"#$ a reco recove very ry again agains s he governm governmen en under under he equiable equiable principle of quanum quanum merui merui based based upon he reasonable value of he services performed and he mar%e value value of he mae maeria rials ls and goods goods delive delivered red bu bu no no excee exceedin ding g he con conra rac c pric price e may may be allo allowe wed d in audi audi$ $ subj subjec ec o he he follo followi wing ng conditons: &. 'ha 'ha funds have have already been been appropria appropriaed ed and allo(ed allo(ed o he implementng agency as of he executon of he conrac) *. 'ha 'ha all oher oher sau sauory ory and regula regulao ory ry require requiremen mens s for he executon of governmen conracs have been complied wih as veried by he audior concerned) +. 'ha 'ha he delay delay in he executo executon n of he CA" is no a(ribu a(ribuable able o any faul ul on he par par of he con onracor or is hr hrough ugh inadverence) ,. 'ha 'ha he dela delay y in he exec execut uton on of he he CA CA" " is reaso reasona nabl ble e as deermined by his Commission upon a circumspec evaluaton of he facs and circums circumsances ances of he case. case. Any unreasonable unreasonable delay canno be counenanced) -. 'ha 'ha her here e is no evide evidenc nce e of bad bad faih aih on he he par par of he conracor in he performance of he conrac . 'ha 'ha he conrac conracor or is willing$ and so undera% undera%es$ es$ o abide and be bound by he evaluaton by he implementng agency of he clai claim$ m$ he he basi basiss of whic which h is o be revi review ewed ed by he he audi audio orr concerned as o is reasonableness) reasonableness) /. 'ha a repor repor on such audiorial review review$$ ogeher ogeher wih a veried CA"$ is led wih he records of he claim) 0. 'ha all claims claims are elevaed elevaed by by he 1ni Audior Audior o he Chairman Chairman of his Commission who is enrused wih he implemenaton implemenaton of his his 2olic olicy y for for he he dee deerm rmin ina aton ton of comp complia lianc nce e wih wih he he conditons above se forh and for nal approval approval of he paymen of he claims.
COA considers considers i vial o adhere o a policy of disallowing recovery on he basis of quanum merui where: i. he he con conrac rac is bey beyond ond he he pow powers ers and and obje object ctv ves of he he implementng agency concerned$
ii. where here is paen violaton of he mandaory legal provisions relatng o compettve public bidding as well as he exisence of he corresponding appropriaton covering he conrac cos and hose prohibitng public o3cials from having a nancial ineres in he conrac execued by hem)
II.
Relevant ,uris-ruence /i0ilar v. A1uino 4 5econdly$ in ordering he paymen of he obligaton due responden on a quantum meruit basis , he Cour of Appeals correcly relied on Royal Trust Corporaon v. COA, Eslao v. COA, Melchor v. COA$ EPG Construcon Company v. Viilar, and !epartment o" #ealth v. C.V. Canchela $ Associates, Architects. All hese cases involved governmen projecs undera%en in violaton of he relevan laws$ rules and regulatons covering public bidding$ budge appropriatons$ and release of funds for he projecs. Consisenly in hese cases$ his Cour has held ha he conracs were void for failing o mee he requiremens mandaed by law) public ineres and equiy$ however$ dicae ha he conracor should be compensaed for services rendered and wor% done.
#slao v. Melchor 4 6ha clearly demonsraes he good faih of pettoner is ha when he learned of he irregulariy in securing he approval of he conracs by he O3ce of he 2residen$ he promply suspended wor% on he projec untl furher advise.
'he Cour nds and so holds ha pettoner enered ino he wo conracs in good faih for he good and ineres of he universiy and he governmen. As i is$ he wo projecs are now 7-8 complee. 'he buildings are now being used by he universiy. On he basis of quantum meruit he conracor should be allowed o recover for he wor% accomplished. 9xx n he presen case$ he Cour nds ha he conracor should be duly compensaed for services rendered$ which were for he bene of he general public. 'o deny he paymen o he conracor of he wo buildings which are almos fully compleed and presenly occupied by he universiy would be o allow he governmen o unjusly enrich iself a he expense of anoher. ;ustce and equiy demand compensaton on he basis of quantum meruit .