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Deaner

Ratification or Claim

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I was reading Don's post "is this a claim?" and I know of claims and ratifications, but i found I couldn't distinguish the two. I asked a few people around my office, but I cant get two answers that are the same. I read a few articles, but I cant seem to grasp the difference, so my question is, can someone explain the difference between a ratification and a claim, and by explain I mean break it down barney style because its just not clicking in my head.

This is the arbitrary example that two different CO's gave to try and explain the difference to me, and depending on who I asked, it can be a claim or a ratification.

Contractor comes on the 1st of every month to perform preventative maintenance on a specialized piece of equipment. Contractor comes in on October 1st and performs the maintenance; however, the service contract expired on September 30th and a new contract was not established. Putting aside the contract expired, the service was still needed.

My question to the CO's in response to the arbitrary scenario, "would anything change if someone specifically called the contractor to come perform this service, or if the contractor just performed the service without anyone telling them to?"

Again, 2 different CO's, both gave me identical examples with different answers.

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Guest Vern Edwards

A claim is a demand by one party to a contract who wants something from the other party that they think the other party owes them. In Government contracting, you have to have a contract in order to submit a claim, and the demand you make has to meet the criteria in the FAR definition of claim.

A ratification is not a demand. It is a Government official's after-the-fact approval of an unauthorized purchase ("commitment") that was made by a Government employee who did not have the authority to make the purchase. The purchase is not binding on the Government, either because there was no proper contract or because an existing contract does not cover it, so the seller (don't call them a contractor) has no legal basis for payment. In order for the seller to get paid, an appropriate Government official must ratify the unauthorized commitment, making it binding after the fact. See FAR 1.602-3. A company that has done work in response to an unauthorized commitment cannot submit a claim, because you have to have a contract to submit a claim.

Now, as to your scenario:

Contractor comes on the 1st of every month to perform preventative maintenance on a specialized piece of equipment. Contractor comes in on October 1st and performs the maintenance; however, the service contract expired on September 30th and a new contract was not established. Putting aside the contract expired, the service was still needed.

My question to the CO's in response to the arbitrary scenario, "would anything change if someone specifically called the contractor to come perform this service, or if the contractor just performed the service without anyone telling them to?"

The answer is yes, something would change. If the person who called the firm to come to the work did not have the authority to obligate the Government to pay the firm, that person would have made an unauthorized commitment. The firm would have no contractual basis on which to get paid unless an appropriate official ratifies (consents to) the unauthorized commitment in accordance with the procedures in FAR 1.602-3.

If a contracting officer had called the firm to come do the work without first complying with the contracting laws, regulations, and policies, that, too, would have been an unauthorized commitment and would have to be ratified before the firm could be paid.

If the appropriate Government official refused to ratify the unauthorized commitment, the Government would not pay the firm and the person who made the unauthorized commitment might be personally liable to the firm.

If the firm had done the work without being asked to do so, there would be no unauthorized commitment and nothing to ratify.

Either way, unauthorized commitment or no unauthorized commitment, the firm could not submit a claim to the Government for payment, because it had done the work without the benefit of a contract.

I am not going to go into things like implied contract, quantum meruit, and quantum valebant.

It's distressing that the COs could not give you simple answers to your question.

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Thanks Vern, I believe i understand this now.

I am not going to go into things like implied contract, quantum meruit, and quantum valebant.

Amazingly I remember the latin terms from a business law class I took once.

It's distressing that the COs could not give you simple answers to your question.

Yup, I only have 2 years in this profession so I kind of have a lot of questions in areas i haven't dealt with yet, but I find that I will never get an "I dont know" for an answer. I think that is a fine answer instead of a wrong answer or an assumption.

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Guest Vern Edwards

Well, if you don't know you should say, "I don't know." On the other hand, there are some things that a CO ought to know.

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