prets 23 his actual authority or is, in good faith, unaware that a limitation exists.24 The Government, therefore, is never estopped to deny a contracting officer's lack of actual authority, even though the contractor has relied to his detriment upon unauthorized representations 25 or the Government has accepted the benefits of an unauthorized contract.26 The courts have reasoned that the risk of dealing with an unauthorized contracting officer should, as a matter of policy fall on the individual contractor rather than the general public.27

5. Exceptions. a. Legislative relief. The literal application of these rules imposes some hardship upon private contractors who deal with the Government. It is difficult to find and correctly interpret limitations contained in statutes and regulations, not to mention those which depend upon determinations of fact or unwritten agency custom. The difficulty is compounded where the contractor, in good faith, relies to his detriment upon a contracting officer's apparent authority or actually performs the contract. If no officer has actual authority to contract, neither an implied contract nor a ratification will result from the acceptance by the Government of the contractor's performance.28 Further, the Government has not consented to be sued where claims are based upon quasi-contract or unjust enrichment.29 Congress has recognized this hardship by providing legislative relief in section 117 of the Contract Settlement

23 In United States v. Zenith-Godley Co., 180 F. Supp. 611 (S.D.N.Y. 1960), a contract was invalidated where the contractor and the contracting officer had, in good faith, erroneously interpreted existing statutes and regulations to permit the contract. 24 Federal Crop Insurance Corp. v. Merrill, 332 U.S. 380 (1947).

For the basic proposition that no conduct of Government agents, even though relied upon by the contractor, estops the United States from subsequently asserting a lack of actual authority to act, see Pine River Logging Co. v. United States, 186 U.S. 279 (1902); Filor v. United States, 76 U.S. (9 Wall.) 45 (1869). See also, United States v. Zenith-Godley Co., 180 F. Supp. 611 (S.D.N.Y. 1960); Sanders v. Commissioner, 225 F. 2d 629 (10th Cir. 1955).

28 Sutton v. United States, 256 U.S. 574 (1921) (work performed in excess of appropriation); United States v. North American Co., 253 U.S. 330 (1920) and Filor v. United States, 76 U.S. (9 Wall.) 45 (1869) (use of land improperly requisitioned by agents); United States v. Willis, 164 F. 2d 453 (4th Cir. 1947) (expenses of manning a vessel); But see Whiteside v. United States, 93 U.S. 247, 256 (1876):

Services rendered under a contract executed by an unauthorized agent, and never approved or ratified by any competent authority, create no equity, unless it appears that the services performed resulted in some benefit to the party for whom they were rendered.

Whiteside v. United States, 93 U.S. 247 (1876); Lee v. Monroe, 11 U.S. (7 Cranch.) 366 (1813). Of. Federal Crop Insurance Co. v. Merrill, 332 U.S. 380, 385 (1947) (individuals dealing with Government must turn "square corners"). In Montana Power Co. v. Federal Power Comm., 185 F. 2d 491, 497 (D.C. Cir. 1950), cert. denied, 340 U.S. 947 (1950), the court reasoned that "(T) he Government is too vast, its operations too varied and intricate, to put it to the risk of losing that which it holds for the nation as a whole because of the oversight of subordinate officials." See supra note 26.

See discussion, infra Chapter 1, par. 7.

Act of 1944 30 and in Public Law 85-804.31 However, the former applies only to contracts awarded during World War II and the latter is limited to defense contracts awarded during a national emergency.

b. Implied authority of contracting officers. The courts have been reluctant to deny relief where the contract was not expressly prohibited by statute or regulation. In these cases, actual authority is usually predicated upon the contracting officer's implied power to do what is reasonably necessary to perform his duties.32 Thus, the Government will be bound by a contract within the contracting officer's general power even though an unwritten, factual determination has been made which limits that authority. Similarly, if the contracting officer is empowered to make representations on behalf of the Government, he does not exceed the scope of that authority by making false or mistaken representations. It should be noted that if the contracting officer is within the scope of his authority and the contractor relies to his detriment upon representations, the doctrine of estoppel may be applied against the Government.35

83

c. Ratification. A distinction must be drawn between cases where no officer had actual authority to bind the Government and those

80 41 U.S.C. § 117 (1958): (a) Where any person has arranged to furnish or furnished to a contracting agency or to a war contractor any materials, services, or facilities related to the prosecution of the war, without a formal contract, relying in good faith upon the apparent authority of an officer or agent of a contracting agency, written or oral instructions, or any other request to proceed from a contracting agency, the contracting agency shall pay such person fair compensation therefor.

The act applies only to contracts "entered into by a contracting agency and connected with or related to the prosecution" of World War II, 41 U.S.C. 103(a) (1958). Claims under this section must have been filed within 180 days after 28 June 1954. 41 U.S.C. 117 (d) (1958).

72 Stat. 972, 50 U.S.C. § 1431 (1958) (Successor to Title II of the First War Powers Act). The President is authorized to empower any agency of the Government to "enter into contracts . . . without regard to other provisions of law relating to the making . . . of contracts, whenever he deems that such action would facilitate national defense." Informal commitments, however, may not be formalized unless it was impracticable, at the time, to use normal procurement procedures. 50 U.S.C. § 1432 (1958). See Executive Order No. 10789, 23 Fed. Reg. 8897 (1958). See also, ASPR 17-204.4 (informal commitments may be formalized where a contractor, relying in good faith upon the apparent authority of the officer issuing written or oral instructions, has arranged to furnish or has furnished property or services to a military department without formal contractual coverage provided it was impracticable to use normal procurement procedures).

32 See supra note 13.

83 Southern Pacific Co. v. United States, 192 F. 2d 438 (3d Cir. 1951). Of. United States v. Jones, 176 F. 2d 278 (9th Cir. 1949).

34 Hollerbach v. United States, 233 U.S. 165 (1914); Circle Clothing Co., ASBCA No. 4491 (1958), 58-1 BCA par. 1163; Restatement, Agency 162. Cf. Christie v. United States, 237 U.S. 234 (1915). But see Kelley v. United States, 91 F. Supp. 305 (Ct. Cl. 1950), cert. denied, 340 U.S. 850 (1950) (bid opening officer has no authority to represent what Government contract means).

25 United States v. Certain Parcels of Land, 131 F. Supp. 65 (S.D. Cal. 1955); Smale & Robinson Inc. v. United States, 123 F. Supp. 457 (S.D. Cal. 1954). The plaintiff must prove that the contracting officer acted within the scope of his actual authority or was employed in his capacity as a public agent to do the act or make the declaration involved. Whiteside v. United States, 93 U.S. 247 (1876); Shotwell v. United States, 163 F. Supp. 907 (E. D. Wash. 1958).

36

where power to contract existed but was exercised by an unauthorized person. In the latter situation, the unauthorized contract may be ratified by an officer who had authority to enter into that particular contract at the time of the original contract and the ratification. Ratification may be accomplished by a voluntary affirmance of the unauthorized contract.37 Ratification may also be implied from the Government's acceptance of benefits under the authorized contract, provided that someone with knowledge of the contract had authority to affirm.38

d. Requirement of basic fairness. The Court of Claims, in a unique decision,39 granted relief under the following circumstances. The contracting officer had authority to modify certain construction contracts by promising to reimburse contractors for extra costs should an executive order increasing weekly work hours become effective. This authority had been previously exercised in writing. The plaintiff requested the modification in the form of a letter from the contracting officer. The contracting officer, however, was not available when the request was made. Two lawyers in the office assured the plaintiff that a condition in the invitation for bids provided adequate protection and that a letter was not necessary. This representation was false and when the executive order became effective the plaintiff brought suit in the Court of Claims to recover the extra costs.

The court held for the plaintiff on the theory of estoppel: the plaintiff had relied to his detriment on the representations of the two lawyers. Regarding the authority of these lawyers, the court said:

We are aware of the requirement that any representative must have authority in order to bind the Government and we are in full accord with the necessity of such a limitation. We have frequently invoked that rule of law. But here the man who had authority to modify the contract was in the area, the two men who were his immediate counsel for the occasion were present. These men not only knew of the letter from the contracting officer, they undoubtedly either drew or approved it. They gave the lay contractor a very plausible assurance as to the manner in which the provisions of similar contracts were being applied in the area. In these circumstances to permit Government legal representatives who had such positions and were acting in such circum

Be United States v. Beebe, 180 U.S. 343 (1901); Ford v. United States, 17 Ct. Cl. 60 (1881); 22 Comp. Gen. 1083 (1943).

See United States v. North American Co., 253 U.S. 330 (1920); National Electronics Laboratory v. United States, 180 F. Supp. 337 (Ct. Cl. 1960). Cf. Braden v. United States, 16 Ct. Cl. 389 (1880).

New York Mail & Newspaper Transport Co. v. United States, 154 F. Supp. 271 (Ct. Cl. 1957) (implied contract from acceptance by United States of benefits of contract improperly awarded by negotiation instead of formal advertising). Accord: 30 Comp. Gen. 490 (1951). Williams v. United States, 127 F. Supp. 617 (Ct. Cl. 1955), cert. denied, 349 U.S. 938 (1955) (although officer requesting work was not authorized, properly designated contracting officer was aware of situation and ratified by inaction). "George H. Whike Construction Co. v. United States, 140 F. Supp. 560 (Ct. Cl. 1956).

stances as to lead any normal person to regard them as having capacity to act in the matter, to escape responsibility completely would be like authorizing Government employees to set a trap to lure the unwary into signing a contract."

Whether this decision is treated as an exception to the limitation on unauthorized representations or as a case of ratification, it holds the Government to certain basic standards of fairness, particularly where some officer had authority to make the representation which the Government now tries to avoid.

III. Immunity of the United States From Suit

42

6. General. Without specific statutory consent, the United States is immune from suit." When given, this consent is a privilege which may be limited in scope to particular courts 2 or withdrawn at any time without repudiating the underlying legal obligation.13 The Supreme Court has stated: "

The reasons for this immunity are imbedded in our legal philosophy. They partake somewhat of dignity and decorum, somewhat of practical administration, somewhat of the political desirability of an impregnable legal citadel where government as distinct from its functionaries may operate undisturbed by the demands of litigants.

7. The Tucker Act. Congress, through the Tucker Act, has given the court of claims and the federal district courts jurisdiction to render judgments on "any claim against the United States founded upon any express or implied contract with the United States." 45 In theory, this jurisdiction is limited to obligations which the United States has voluntarily assumed by an express or implied promise to the contractor. The jurisdiction does not extend to quasi-contractual obligations which are imposed by law."6 In the law of quasi

40 140 F. Supp. at 563.

4 United States v. Shaw, 309 U.S. 495 (1940); Kansas v. United States, 204 U.S. 331 (1907).

42 Minnesota v. United States, 305 U.S. 382 (1939).

43 Lynch v. United States, 292 U.S. 571 (1934). "United States v. Shaw, 309 U.S. at 501.

45 28 U.S.C. § 1491 (1958) (Court of Claims); 28 U.S.C. § 1346 (a) (2) (1958) (district courts where claim does not exceed $10,000 in amount). In addition to contracts, express or implied, both statutes confer jurisdiction over claims against the United States "founded either upon the Constitution or any Act of Congress, or any regulation of an executive department . . . or for liquidated or unliquidated damages in cases not sounding in tort." If the contract contains a Disputes clause, the contractor must exhaust its administrative remedies before asserting the claim in a court of competent jurisdiction. See infra Chapter 18.

46 Goodyear Co. v. United States, 276 U.S. 287 (1927); United States v. Minnesota Investment Co., 271 U.S. 212 (1926); Merritt v. United States, 267 U.S. 338 (1925); Hickman v. United States, 135 F. Supp. 919 (W.D. La. 1955), DA Pam 715-50-1, p. 166, par. 17. See Comment, 42 Cornell L.Q. 278 (1956).

contracts it is the unjust enrichment rather than consent which requires a defendant to pay for or to return a benefit received.""

8. Quasi-contract relief under guise of implied contract. In practice, however, the courts, under the guise of an implied contract, have taken jurisdiction of some quasi-contractual claims against the United States. If an officer enters into an express contract which is procedurally defective or which exceeds his authority 8 and that contract is subsequently ratified, the United States would be obligated to pay for any benefits received. Under a literal reading of the Tucker Act, the enforceability of that obligation would seem to depend upon the type of ratification involved. Clearly, if the United States freely consented to the act of its officer and accepted the benefits conferred, an express or implied contract would arise.50 But the theory of ratification also covers cases where the principal retains the benefits conferred and either denies the agent's authority or remains silent. While these claims arguably rest in quasi-contract, the lower courts have taken jurisdiction despite the Tucker Act limitations.52 These decisions seem to reflect a policy that the United States should be required to pay for benefits received under an unauthorized contract if some officer had authority to ratify.

471 Corbin, Contracts § 19 (1952). See American La France F. E. Co. v. Borough of Shenandoah, 115 F. 2d 866, 867 (3d Cir. 1940):

A quasi contract arises where the law imposes a duty upon a person, not because of any express or implied promise on his part to perform it, but even in spite of any intention he might have to the contrary. A quasi contract, which is a fictional contract, is not to be confused with a contract implied in fact, which is an actual contract, and which arises where the parties agree upon the obligations to be incurred, but their intention, instead of being expressed in words, is inferred from their acts in the light of the surrounding circumstances.

48 The officer may have no authority to enter the particular contract in question. See United States v. North American Co., 253 U.S. 330 (1920); Williams v. United States, 127 F. Supp. 617 (Ct. Cl. 1955), cert. denied, 349 U.S. 938 (1955); Reeside v. United States, 2 Ct. Cl. 1 (1886). On the other hand, the officer may have authority to contract but exceed it by ignoring statutory and regulatory requirements. See North American Iron & Steel Co. v. United States, 130 F. Supp. 723 (E.D.N.Y. 1955) (contract not in writing); New York Mail & Newspaper Transport Co. v. United States, 154 F. Supp. 271 (Ct. Cl. 1957) (award of contract by negotiation when formal advertising required); 33 Comp. Gen. 533 (1954) (prohibited cost-plus-a-percentage-of cost contract). These cases should be carefully distinguished from those where no officer had authority to contract. See supra note 26.

49 See supra notes 36 & 37.

50 See Moylan v. United States, 247 F. 2d 623 (9th Cir. 1957); New York Mail & Newspaper Transport Co. v. United States, 154 F. Supp. 271 (Ct. Cl. 1957); United States v. Georgia Marble Co., 106 F. 2d 955 (5th Cir. 1939). Cf. Allied Assurance Co. v. United States, 252 F. 2d 529 (2d Cir. 1958). See also, Seavey, RatificationPurporting to Act as Agent, 21 U. Chi. L. Rev. 248 (1953).

51 See Mechem, The Rationale of Ratification, 100 U. Pa. L. Rev. 649, 661 (1952). 52 Williams v. United States, 127 F. Supp. 617 (Ct. Cl. 1955); Pacific Maritime Ass'n. v. United States, 123 Ct. Cl. 667 (1952). In Halvorsen v. United States, 126 F. Supp. 898, 901 (E. D. Wash. 1954), the court took jurisdiction under the Tucker Act to grant relief on a claim arising out of an inspector's apparently authorized oral request for extra work, regardless of whether the claim was called an implied in fact contract, a quasi-contract or something else. See also, Royal Indemnity Co. v. Bd. of Education & United States, 137 F. Supp. 890 (E. D. La. 1956); Kerkendall v. United States, 90 Ct. Cl. 660 (1940) (United States has implied obligation to make restitution of money illegally received from plaintiff).