MileHighAcq Posted January 19 Report Share Posted January 19 Is there such a thing as a verbal purchase order? Can a CO issue a verbal order, and later follow up with a written purchase order? Based on the FAR definition, a contract has to be in writing. Quote Contract means a mutually binding legal relationship obligating the seller to furnish the supplies or services (including construction) and the buyer to pay for them. It includes all types of commitments that obligate the Government to an expenditure of appropriated funds and that, except as otherwise authorized, are in writing. In addition to bilateral instruments, contracts include (but are not limited to) awards and notices of awards; job orders or task letters issued under basic ordering agreements; letter contracts; orders, such as purchase orders, under which the contract becomes effective by written acceptance or performance; and bilateral contract modifications. Contracts do not include grants and cooperative agreements covered by 31 U.S.C.6301, et seq. But suppose there's an emergency and a CO issues a verbal solicitation to a vendor, gets a verbal quote, and issues a verbal purchase order, and the vendor accepts it constructively by starting performance, do you have a valid contract in place? While the CO may have skipped several procedural steps, as long as they follow up with a written purchase order, it seems to me that they would have a valid contract in place. Or do you not have a valid contract until it's in writing? What if the CO never follows up with a written purchase order? Would it then be considered an unauthorized commitment? Yes, CO has the authority to enter into a binding agreement/contract within the limits of their authority, but does the CO have the authority to enter into a verbal agreement? Seems to me that no officer of the Government does. So is it to be treated as an unauthorized commitment that has to be ratified? I think the answer is yes, but curious as to what other think. It seems like there's some grace period between when a verbal purchase order is issued and when the CO follows up with a written purchase order (maybe same day?), but I can't find anything in writing that allows that grace period and based on a strict interpretation of the FAR, a verbal order/contract is not a real thing and it's therefore an unauthorized commitment that needs to be ratified. I'm not sure how useful this GAO decision is, since it dates to 1976, but it seems that at least at one point GAO considered verbal contracts to be valid: Quote https://www.gao.gov/assets/b-185177-098547.pdf In Escote Manufacturing Company v. United States, 169 F. Supp. 483 (Ct. Cl. 1959), it was held that, if all the elements of a contract were present, both the Government and private contractors could enforce an oral sales agreement made between them, even though the agreements were not subsequently reduced to writing. "Inasmuch as a contract was entered into between plaintiff and defendant, it would make no difference whether the signature of the contracting officer was on the acceptance form. Plaintiff points to no statute or regulation requiring contracts of this nature to be in writing, and we know of none. I guess that may have been the case in 1976, but clearly today there is regulation that requires a contract to be in writing. But even so, it other cases (e.g., https://www.gao.gov/assets/b-191029.pdf) GAO has recognized the concept of quantum meruit, which in essence recognizes the validity of a verbal contract, even if it arose from an unauthorized commitment. Perhaps the answer is both? A verbal purchase order constitutes a valid commitment for the purpose of paying a government obligation, but it has to be ratified because it is not a valid contract because no officer of the government, including the CO, has the authority to enter into a verbal contract. Quote Link to comment Share on other sites More sharing options...
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