Kenneth E. Kincaid, Attorney at Law, for claimant.
Robert D. Pollitt, Assistant Attorney General, for respondent.


Claimant, Codex Corporation, a Massachusetts based manufacturer of
technical equipment,
supplied the West Virginia Network for Educational Telecomputing
(hereinafter referred to as
WVNET), a State agency under the auspices of the Board of Regents,
respondent herein, with
twenty-three modems, devices which permit the transmission of signals
between computers over
telephone lines. This transaction was made under a putative lease
agreement dated October 2,
1979 and executed by Gary Wenger, Assistant Director at that time of
WVNET. Under the
terms of the lease agreement, WVNET was supplied with modems for terms
of 36 months for
six of the modems and 48 months for 17. WVNET made monthly rental
payments on the
equipment through October 1981 when it returned the equipment to
claimant's office in
Mansfield, Massachusetts and indicated by letter that it was canceling
the agreement.

Claimant filed its Notice of Claim alleging breach of contract and
seeking $97,536.00, the
balance of payments due under the unexpired leases. Prior to the hearing
on the matter, claimant
and respondent stipulated most of the material facts.
The only issue remaining for resolution was the respondent's contention
that since the 1979
lease agreement was not executed pursuant to the laws and regulations
governing State purchase
orders and competitive bidding, it was void and of no effect.

This matter came on for hearing on November 13, 1985. The parties each
stipulated that "(n)o
purchase order was ever issued by the Department of Finance and
Administration for the State
of West Virginia approving the lease agreement." Moreover, Kathy Klein,
Assistant Director of
Purchasing of the Department of Finance and Administration, testified
that her department had
no record of a competitive bid or the issuance of a purchase order in
connection with the 1979
lease of the modems from claimant. John L. Hays, Business manager of
WVNET, testified that
WVNET also had no record of compliance with State purchasing
regulations. Finally, William
Phelps, claimant's manager of corporate credit and collections, stated
that his records did not
show that the 1979 lease agreement was the result of a competitive bid
or other procedure
authorized by law.

The West Virginia Code of 1931, as amended, 5A-3-1 et seq, prescribes
certain procedures
for the procurement of commodities by State agencies. Contracts for
commodities must be
evaluated and approved by the Director of Purchasing of the Department
of Finance and
Administration. Moreover, contracts which exceed $2,000.00 must be
awarded on the basis of
competitive bidding. WV Code of 1931, as amended, 5A-3-12. Finally,
contracts must be
signed by the commissioner, and, if they require more than six months to
fulfill, must be filed with
the State Auditor. WV Code of 1931, as amended 5A-3-15.

The lease agreement in the present case involved well over $2,000.00
and would require up to
four years for fulfillment. The testimony indicates that WVNET and
claimant did not comply
with the statutory procedures established for government procurement
contracts. It appears that
the modems were acquired on the open market and that the Department of
Finance and
Administration was bypassed altogether in a manner contrary to
applicable law.

The Code of WV of 1931, as amended, 5A-3-19, provides, in pertinent

"If a department purchases or contracts for commodities contrary to the
provisions of this
article..., such purchase or contract shall be void and of no effect."
(Emphasis supplied).

Since the 1979 lease agreement was void ab initio, the subsequent
cancellation thereof by the
State did not constitute a breach of contract. No contract had ever been
formed, and claimant
cannot recover damages for breach or otherwise enforce any rights
against the State under a
void contract.

The parties agree that the State returned the modems to claimant no
later than October 1981
and that the full rental price as set forth in the lease agreement has
been paid through that month.
Accordingly, the Court need not consider whether equity requires that
claimant be compensated
for the fair rental value of the equipment for the period of actual use.

Accordingly, inasmuch as the alleged contract upon which claimant
brings this action for
breach was void and unenforceable, the Court is of the opinion to and
does disallow the claim.

Claim disallowed.