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caramel92

Liability in the event of a failure to ratify an unauthorized commitment

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In the event of an unauthorized commitment where the COR directed the contractor to perform the work not called for/funded by the contract (CR), where the CO doesn't feel that the commitment meets the requirements for ratification set forth in FAR 1.602©(3) and refuses to ratify, what are the options for the government and contractor?

Specifically, the contractor can submit a claim or sue the government, but can the contractor take action against the COR specifically? Can the government take action against the COR, holding them liable for the amount of the unauthorized commitment? Are there any cases or examples where this has occurred?

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The contractor can do nothing and swallow the cost.

The contractor can approach the chief of the contracting office and ask for a re-visiting of the ratification denial.

The contractor can use the GAO's claim procedure.

The contractor can seek an extraordinary contractual action under FAR SUbpart 50.1.

The contractor can file a claim under the Disputes clause -- see FAR 1.602-3( b )( 5 ) -- this is probably the best answer.

Or, the contractor can do nothing and swallow the cost. Sometimes, that's a good business decision.

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Right...but there is no way for either the contractor (if the gov't doesn't pay) or the gov't to hold the COR financially accountable for his actions? (or, since we are talking about the government, accountable at all)?

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Caramel, did the "contractor" ** know that the COR had no authority to "[direct] the contractor to perform the work not called for/funded by the contract(CR)" ? If not, SHOULD the contractor have known that the COR had no such authority?

Did the contractor know the limits of the funded scope of work, i.e., that the work was not called for/funded by the contract? If not why not?

The contractor's representative apparently accepted direction from an unauthorized individual to perform additional work. If the person SHOULD have known that the work was not called for or funded by the contract, where is that accountability?

**By the word "contractor" here, I'm referring to the person/representative that the COR "directed" to perform the work outside the funded contract scope.

Just another perspective, depending upon what "the rest of the story" is.

Thanks.

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Yes, the contractor probably should have known, or at least asked. But because it's a CR contract for R&D, the 'funded scope' is rather broadly defined. So while I normally would lay this at the contractor's feet on a 'should have known' basis, in this instance I think it is questionable at best. Additionally, the COR is notorious for doing this, despite having been told repeatedly not to, so it would be nice to have something that gave the limitations on the COR's authority teeth-otherwise why bother? (unfortunately removing the COR is a non-starter, we've tried).

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If there is no ratification (or no claim (see FAR 1.602-3( b )( 5 )), then there is no cost to the Government, and there is no reason for "the gov't to hold the COR financially accountable for his actions."

The COR's supervisor could consider the COR's action as a disciplinary or performance matter, if the facts justify such an approach.

It's a cost-reimbusement contract, you say... If there is a claim (see FAR 1.602-3( b )( 5 )), you need to ask the following two questions: (1) Did the contractor comply with para. ( c ) of the contract clause at FAR 52.243-2 Changes--Cost-Reimbursement? (2) If the contract includes the clause at FAR 52.243-7 Notification of Changes, did the contractor comply with the terms of the clause, particularly para. ( b )? If the answer to either question is NO, then the contractor may have forfeited its right to an equitable adjustment. Maybe that's why it's seeking a ratification?

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Caramel92,

Just out of curiosity, how was this situation discovered, i.e. how did it come to light that there was some allegedly out-of-scope work performed? Were some costs disallowed on an invoice? In a CR contract for R&D,with an approved accounting system, and with the scope broadly defined, how were the out-of-scope costs identified? Is there an argument to be made that the work was in-scope?

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Just tossing in my opinion from a financial perspective. Yes, the COR should have known he/she couldn't speak for the CO. And the contractor's representative should have known that the COR didn't speak for the CO. But, I'm afraid that in the past I've put the absolute fear of God into the COR by telling them that they could cut a personal check for the amount. Usually the CO/Agency and the contractor work something out that is reasonable especially if the Government received good/services and the benefit from them. But that COR NEVER did the same thing again. I have a list of the people in my agency who have been delegated the authority to obligate government funds. When we do training, I tell them that if your name/position are not on this list you may not speak for the Commanding Officer.

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