Present: Carrico, C.J., Lacy, Keenan, Koontz, Kinser, and 

Lemons, JJ. 

THE DR. WILLIAM E.S. FLORY 

SMALL BUSINESS DEVELOPMENT 

CENTER, INC. 

v. Record No. 000961 OPINION BY JUSTICE ELIZABETH B. LACY 

 March 2, 2001 

COMMONWEALTH OF VIRGINIA, 

DEPARTMENT OF BUSINESS 

ASSISTANCE, ET AL. 

FROM THE CIRCUIT COURT OF PRINCE WILLIAM COUNTY 

Barnard F. Jennings, Judge 

 In this appeal, The Dr. William E.S. Flory Small Business 

Development Center, Inc. (the Center) seeks reversal of the 

trial court's judgment denying its claim against the Virginia 

Department of Business Assistance (VDBA) for services rendered 

by the Center. The issues we address are whether the Virginia 

Public Procurement Act, Code §§ 11-35 to -80 (the Procurement 

Act), applies to the Center's contractual claims, and, if so, 

whether the Center complied with the notice provisions of that 

Act. We also consider whether the Commonwealth can be held 

liable for claims based on quasi-contractual theories of 

recovery. 

The United States Small Business Administration (SBA) 

administers a federal grant program to provide assistance to 

small businesses throughout the country. The grant monies are 

distributed by the SBA to "lead agencies," which in turn 

allocate the federal funds to local small business development 
centers (SBDC) pursuant to written agreements between the SBDC 

and the lead agency. The SBA releases the funds after 

approving the budget of a SBDC as submitted by the lead 

agency. Federal funds provide fifty percent of the SBDC's 

budget and the SBDC must match the federal funding through 

local sponsors, private grants, donations, or other similar 

sources. Periodically throughout the year, the SBDC submits 

invoices to the lead agency detailing its expenditures, and 

the lead agency reimburses the SBDC with the federal funds 

based on the invoices received. 

 The lead agency for this program in Virginia is the VDBA. 

The Center is a non-stock corporation created by the Prince 

William Industrial Development Authority to operate as a SBDC 

in Prince William County. From 1991 to 1998, the Center 

provided various services to small businesses in Prince 

William County and the surrounding area under the SBA federal 

assistance program. The Center was reimbursed by the VDBA for 

these services pursuant to a series of Memoranda of Agreement 

executed annually by the Center and the VDBA. 

By letter dated December 18, 1998, the VDBA informed the 

Center that funding of approximately $33,000 had been 

authorized for the months of January and February 1999, but 

that "reimbursement for expenses shall not be disbursed until 

[the Center] has returned a signed copy of the Memorandum of 

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Agreement." A dispute arose between the Center and the VDBA 

regarding the management of the Center. The Center refused to 

sign the written Memorandum of Agreement for 1999 proffered by 

the VDBA until certain terms were negotiated but continued to 

provide the same services as it had in past years. 

In June 1999, the Center submitted invoices for 

reimbursement of approximately $89,000 for services rendered 

and expenses incurred from January through June 1999. The 

VDBA refused to pay the invoices because no memorandum of 

agreement had been signed. The Center filed suit against the 

VDBA, seeking reimbursement of its expenditures for 1999. 

In an amended motion for judgment joining the Comptroller 

as a defendant, the Center requested a total of approximately 

$210,000 plus interest, costs, and attorneys' fees. The 

Center sought recovery based on alternative theories of 

express oral promise, quantum meruit, account stated, and 

contract implied by acceptance of services. The VDBA filed a 

plea in bar, contending that the action was barred because the 

Center did not comply with the notice provisions of the 

Procurement Act. The trial court sustained the VDBA's plea in 

bar and dismissed the case. 

The Center appeals the trial court decision, arguing that 

the Procurement Act does not bar its claims because (1) the 

Procurement Act applies only to services acquired from 

3
nongovernmental sources, and the Center does not qualify as a 

nongovernmental source; (2) the Procurement Act does not apply 

to the Center's claims that are based on quasi-contract; and 

(3) even if the Procurement Act applies, the Center complied 

with the notice provisions of the Act.1 We will consider these 

assertions in order. 

I. 

 The Procurement Act sets out the "public policies 

pertaining to governmental procurement from nongovernmental 

sources," and requires that all "public contracts with 

nongovernmental contractors . . . for the purchase of services 

. . . shall be awarded" as provided in the Act, "unless 

otherwise authorized by law." Code §§ 11–35(B), -41(A). The 

term "nongovernmental source" is not defined in the 

Procurement Act. However, the Center asserts that because it 

was created by a political subdivision of the Commonwealth and 

engages in activities which are exclusively for " 'charitable 

and educational purposes including lessening the burdens of 

federal, state and local government' " by assisting small 

businesses, it performs governmental functions and, thus, is 

not a nongovernmental source. "In effect," the Center argues, 

 1

 The Center's claims are not based on any written 

contract. However, because the Center does not challenge the 

applicability of the Procurement Act to oral contracts, for 

purposes of this appeal we assume without deciding that the 

Procurement Act applies to oral contracts. 

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it is a " 'public body' as that term is defined in § 11-37" of 

the Procurement Act. 

 We disagree with the Center. The Procurement Act defines 

"Public body" as an entity "created by law to exercise some 

sovereign power or to perform some governmental duty, and 

empowered by law to undertake the activities described" in the 

Procurement Act. Code § 11-37. The Center is not an entity 

"created by law" to "perform [a] governmental duty." As the 

Center recites, it was formed by the Prince William Industrial 

Development Authority, the directors of the Authority 

comprised the initial board of directors of the Center, and, 

in the event of the dissolution of the Center, all remaining 

assets are to be distributed to the Authority or to political 

subdivisions that contributed funds to the Center during the 

year of dissolution. Although that Authority was created by 

ordinance pursuant to Code § 15.2-4903(A), the role of the 

Authority in incorporating the Center does not qualify the 

Center as an entity "created by law" to "perform [a] 

governmental duty" within the Procurement Act's definition of 

"Public body." 

The Center further argues that it qualifies as an entity 

"created by law" for purposes of the Procurement Act because, 

as a corporation, it is a "creature of statute." Adopting 

this argument would transform virtually every corporation into 

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a public body if the corporation engages in any activity 

touching on a governmental duty. Such a construction of the 

definition of "Public body" is not consistent with the purpose 

of the Procurement Act and we reject it. 

II. 

 The Center next asserts that the Procurement Act does not 

apply to its claims for relief based on theories of quasicontract — quantum meruit and contract implied in law, Counts 

2 and 4 respectively of the amended motion for judgment.2 

Under these theories, even though there is no contract, the 

law imposes a promise to pay for services rendered to avoid 

unjust enrichment. Kern v. Freed Co., 224 Va. 678, 680-81, 

299 S.E.2d 363, 364-65 (1983). To obtain relief based on 

these theories, the Center asserts that compliance with Code 

§ 2.1-223.1, not the Procurement Act, was required and that it 

complied with the requirements of that section. 

 Code § 2.1-223.1 provides that a person "having any 

pecuniary claim against the Commonwealth upon any legal 

ground" must present the claim to the head of the agency 

responsible for the alleged claim. If the head of the agency 

disallows the claim, Code § 8.01-192 provides that a right of 

action accrues and "the person presenting such claim may 

 2

 The Center's claims of express oral promise and account 

stated are contract claims, not claims based on theories of 

quasi-contract. 

6
petition an appropriate circuit court for redress." Though we 

have not considered these statutes in the context of a claim 

based on the quasi-contractual theories pled in this case, the 

Court in Commonwealth v. Pierce, 25 Va. (4 Rand.) 432 (1826), 

addressed a similar issue. 

In Pierce, a claim was presented to the state auditor for 

payment of certain bridge tolls incurred by the militia. When 

the auditor denied part of the claim, the claimant filed for 

relief pursuant to an 1814 general law which allowed a 

claimant to appeal the auditor's denial of a claim to the law 

or equity court in the City of Richmond and allowed "a like 

petition . . . in all other cases to any other person, who is 

entitled to demand against the Commonwealth any right in law 

or equity." Id. at 435 (discussing Rev. Code 1814, ch. 85 

§§ 2, 6). Finding that no statute authorized the payment of 

the claimed bridge tolls, the Court determined that the 

auditor had no authority to audit the claim or issue a warrant 

for payment and that neither the auditor nor the courts could 

provide for the payment of these expenses "upon the principles 

of a quantum meruit or quantum valeba[n]t." Id. at 437. The 

Court further determined that the filing of an original 

petition under the statute by one "who is entitled to demand 

against the Commonwealth any right in law or equity" required 

that such demand 

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be founded upon some existing law. No such demand 

can exist against the public upon the principles 

of implied assumpsits, unless it be founded upon 

some contract authorized by law, made by a public 

agent, or upon the payment to the Commonwealth, of 

money which she was not entitled to claim. 

Id.

 This conclusion was based on principles of sovereign 

immunity, not on the construction of specific language in the 

1814 statute. Under the common law, sovereign immunity did 

not shield the sovereign from liability for its valid 

contracts. Wiecking v. Allied Med. Supply Corp., 239 Va. 548, 

551-52, 391 S.E.2d 258, 260 (1990). However, quasicontractual doctrines are premised on the absence of a valid 

contract. The Commonwealth's common law liability for its 

contracts does not encompass quasi-contractual claims, and any 

relief based on such claims must be authorized through a 

statute abrogating the Commonwealth's sovereign immunity. 

The statute considered by the Court in Pierce was a 

predecessor to current Code §§ 2.1-223.1 and 8.01-192. Like 

the earlier legislation, the current statutes contain 

procedural requirements setting out the manner in which a 

claim is presented. Neither section establishes the 

claimant's right to lodge a claim against the sovereign or the 

sovereign's liability for such claim. Code § 2.1-223.1, in 

referring to the presentation of a claim "upon any legal 

ground," like its predecessor, implies that the right to make 

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the claim is not established by that statute, but must be 

found elsewhere. 

The Center provides no statutory or case authority, and 

we can find none, for the proposition that the Commonwealth 

has waived its immunity from liability under theories of 

quasi-contract.3 Therefore, we conclude that, regardless of 

the requirements of the Procurement Act, the Center cannot 

recover against the Commonwealth on the quasi-contractual 

theories pled in Counts 2 and 4 of its amended motion for 

judgment. 

III. 

The Center next argues that even if the Procurement Act 

applies, the trial court erred in granting the VDBA's plea in 

bar because the Center complied with the requirement of Code 

§ 11-69(A) that written notice of the intent to file a claim 

be given "at the time of the occurrence or beginning of the 

 3

 Recovery on the basis of quantum meruit has been allowed 

against a municipality exercising a proprietary function. 

Leonard v. Town of Waynesboro, 169 Va. 376, 193 S.E. 503 

(1937); Mount Jackson v. Nelson, 151 Va. 396, 145 S.E. 355 

(1928). However, that analysis is not applicable to the 

powers and protections of the state. See Hoggard v. City of 

Richmond, 172 Va. 145, 147-48, 200 S.E. 610, 611 (1939). 

Although Trinkle v. Commonwealth, 170 Va. 429, 438, 196 

S.E. 652, 656 (1938), did state that, in the absence of a 

definite contract due to no meeting of the minds, a contractor 

should nevertheless be entitled to compensation on the basis 

of quantum meruit for work accepted by the Commonwealth's 

Highway Department, recovery in that case was not allowed on 

the basis of quantum meruit. 

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work upon which the claim is based." In its response to the 

VDBA's request for admissions, the Center admitted that it did 

not "specifically submit" such a notice. The Center argues 

here, however, that it substantially complied with this notice 

requirement when it submitted its invoices. We conclude, 

however, that, in this case, the submission of invoices did 

not qualify as compliance with the requirement in Code § 11-

69(A) that a notice of intention be filed with the 

Commonwealth. 

 The General Assembly has imposed certain procedures and 

limitations on the processing and enforcement of contract 

claims which are subject to the Procurement Act. These are 

mandatory, procedural requirements which must be met in order 

for a court to reach the merits of a case.4 Welding, Inc. v. 

Bland County Serv. Auth., 261 Va. ___, ___ S.E.2d ___ (2001), 

decided today. However, the statute does not specifically 

 4

 We recognize that in Sabre Construction Corp. v. County 

of Fairfax, 256 Va. 68, 72, 501 S.E.2d 144, 147 (1998), we 

held that a similar filing requirement of the Procurement Act, 

Code § 11-66, was a condition precedent to maintaining the 

action, and the failure to comply with the requirement barred 

the action. However, in that case the claimant was an 

unsuccessful bidder who was challenging the county's award of 

a bid to another party. Because there was no right at common 

law to bring such an action, the Procurement Act in that 

instance created "the substantive right to file an action 

against a county," and, under those circumstances, any special 

limitation on the exercise of that right became a part of the 

substantive cause of action and thus a condition precedent. 

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require that the notice of intent be separate and distinct 

from the claim itself in time or in form. By identifying more 

than one event that triggers the filing of an intent to file a 

claim, the statute acknowledges that not all claims will arise 

under the same circumstances. For example, a dispute over 

payment under the contract may not arise until the work is 

completed, preventing a contractor from giving notice of an 

intent to file a claim for such payment at the "beginning of 

the work upon which the claim is based." Thus, the timing and 

form of an alleged notice of intent pursuant to Code § 11-

69(A) requires an examination of the circumstances of each 

case. 

Here, the VDBA informed the Center by letter dated 

December 18, 1998 that the VDBA would not reimburse the Center 

for services rendered in 1999 "until [the Center] ha[d] 

returned a signed copy of the Memorandum of Agreement." The 

Center nevertheless continued to provide its services without 

a signed memorandum of agreement for 1999. The Center was 

aware of the condition for payment of its expenses for more 

than six months before it submitted its invoices. At no time 

before submission of its invoices in June 1999 did the Center 

inform the VDBA that it intended to claim reimbursement for 

those services in the absence of a memorandum of agreement. 

Under these circumstances, the invoices filed in June 1999 

11
were insufficient to comply with the provision of Code § 11-

69(A) requiring a notice of intent to file a claim at the 

"time of the occurrence or beginning of the work upon which 

the claim is based." 

The Center also argues that its claim was valid because 

it complied with the notice requirements of Code §§ 2.1-223.1 

and 8.01-192. However, as noted by the VDBA, the Procurement 

Act is a specific statute relating to the acquisition of 

services by public bodies and thus prevails over the more 

general statutes relating to the presentation of pecuniary 

claims against the Commonwealth. See Commonwealth v. Brown, 

259 Va. 697, 706, 529 S.E.2d 96, 101 (2000). 

In conclusion, for the reasons stated, we hold that the 

trial court did not err in dismissing the Center's motion for 

judgment with prejudice, and we will affirm the judgment of 

the trial court. 

Affirmed.

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