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Hello, hope everyone is well!

A customer requested delivery of lumber directly to the vendor. Lumber was on the contract. After delivery the vendor advised customer they over delivered and need to receive the additional 543 pieces back. Customer didn't believe and did some fact finding. Customer found out that they already used the additional lumber pieces.

Customer was then trying to seek a modification for additional materials to include that lumber. The modification request was denied because the contract was over and no modifications to be made. This is was when the additional lumber delivered was discovered.

The customer used my Contracting Office to make the original purchase. The customer is not in the same command as my Contracting Office.

The additional lumber has been determined to be an unauthorized commitment by the customer.

My questions to group is should this ratification come through my contracting office or should it go through their contracting office.

Note: there was a contract with lumber on it. The qty received was more than the qty on the contract. My Contracting Office didn't know about the additional delivered lumber until the contract had expired. Also it was using FY14 funds.

Thanks for any and all help.

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To answer one of your specific questions - your agency FAR 1.602-3 supplement may help you determine which contracting office should process a ratification if that's what you decide to do. NOTE: It appears you have a contract issue to consider and resolve first and the ratification may be unnecessary.

Have you read FAR 11.7? Are any variation in quantity clauses in the contract the lumber was delivered against?

Funding aside - without knowing relative magnitude it's hard to tell what actions are prudent. 543 pieces may or may not be significant depending on the scope of the contract. Also, the standard shipment practices may be relevant. Is it common to have excess quantities delivered?

The dollar value of the excess could help sort out potential courses of action too.

I'm sure you'll get some guidance from some of the veterans.

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ladybug108:

In other words, the lumber was to be government-furnished property. Right? If so:

First question: Why did the contractor accept delivery of the excess quantity? Did the CO instruct them, in writing, about the quantity they were to receive?

Second question: If so, why is this a government problem?

Did the CO or some other government official authorize the lumber vendor to deliver an excess quantity?

Did the CO or some other government official authorize the contractor to accept an excess quantity?

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Thanks for the replies.

The Contracting Officer did not authorize the excess quantity. The customer, a military officer (customer) requested the delivery (the assumption was made that the quantity was in the contract).

No one authorized the contractor to accept any excess quantity.

There were no variations in quantity clause in the contract.

The amount of the delivered lumber is approx $5,800.

If the customer wanted additional quantities we usually would issue a modification to increase the quantity.

Thanks again.

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ladybug108:

In my opinion, this is an issue between the lumber vendor and the contractor. The government should deny any responsibility. No one told the lumber vendor to deliver an excess quantity. No one told the contractor to accept an excess quantity.

This was your question: "hould this ratification come through my contracting office or should it go through their contracting office[?]"

My answer is: Neither. There is nothing to ratify. There was no unauthorized commitment.

Tell the two companies in no uncertain terms to settle it between themselves.

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Vern, thanks, but it was the customer that accepted the excess quantity. It was the customer that requested the delivery. The customer being the entity I wrote the contract for. My apologies for not being clear.

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ladybug108

In your post #4 you wrote "No one authorized the contractor to accept any excess quantity" but you also wrote that the customer requrested the delivery. I assume the customer did not specifiy the quantity to be delivered because, as you wrote, "the assumption was made that the quantity was in the contract."

Are you now saying that the quantity of lumber to be delivered was NOT in the contract? If the quantity was not specified, how did you arrive at a contract price in the first place?

*Shakes head*

H2H

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A ratification is needed only when there is an agreement that is not binding solely because the Government representative who made it lacked the authority . . . . See FAR 1.602-3( a ).

As I read it, there is no agreement where a Government official ordered the excess quantity -- the military officer just asked for the delivery to occur directly to the site.

If so, I agree with an earlier poster that there is nothing to ratify. This is a matter between the two contractors.

But did the military officer do more than just ask for the delivery to occur directly to the site?

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ji -- In ladybug's post #8, it was stated that the military officer specified the point of delivery and "accepted the excess quantity." Given the issue description(s) in the various posts, I'm not willing to grant that "acceptance" as used by ladybug means "acceptance" in the contractual sense. But what if ladybug used the correct term?

What then?

H2H

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Thanks for everyone's help on this issue.

There was lumber on the original contract that I bought for the customer (military officer). So, the customer called the vendor (lumber supplier) and asked to have a qty of lumber delivered (which customer assumed was the amount available on the contract). The vendor delivered. The vendor discovered he had over delivered per the qty on the contract by 543 pieces. The vendor called the customer to let them know, but by this time the customer had already used the excess qty.

Instead of the vendor nor the customer coming to me advising of this issue...the customer tried to get a modification processed to cover the over delivery. However, it was too late for the modification because my contract was over. We know how much the lumber is based on the price given on the contract already.

Which contracting office processes the unauthorized commitment - my office the one that did the original buy or the customer's contracting office?

Thanks again.

ladybug108

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ladybug108, see Post #2 above. The answer all depends on your agency. In the Air Force, for instance, the “commander of the organization in which the unauthorized commitment occurred” is charged with ensuring certain information is provided to the contracting officer. A reasonable inference under the Air Force’s procedures is that the contracting organization that typically supports the organization of the individual who made the unauthorized commitment would generally be responsible for determining whether or not to ratify. See AFFARS MP5301.602-3, at para 2. Other agencies may have other procedures. If not, consider raising the issue with your policy folks or up your contracting chain of command.

If your implementing regulations don’t speak to it and your functional chain is no help, I suspect where the contractor chooses to send its invoice (or which contracting activity it chooses to contact about the issue) will end up being dispositive. Your contracting office likely has the greatest understanding of the terms and conditions that would apply if there was in fact an unauthorized commitment. It doesn’t sound like the requiring activity objects to a ratification, so I doubt you’ll have much problem getting a funding document (e.g., a purchase request) if the decision is made to ratify the putative unauthorized commitment.

As your question isn’t (1) whether there is an unauthorized commitment or (2) if there was, whether the agency should ratify it, I express no opinion on either of these two issues.

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Thanks so much for your response Jacques. It makes so much sense. We initially told the customer to go up their chain, but they are trying to come to my office - just wanted some insight on which office should handle it.

ladybug108

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H2H,

The military officer's "acceptance" of the unordered quantity has no meaning -- if someone comes to my door and delivers a box, and I sign for it, that doesn't mean that I made the agreement to purchase what is in the box. If the box contained two items, but the original purchase order only called for one, well, that doesn't mean that I made an unauthorized commitment.

ladybug,

It sounds like you are determined to process a ratification, whether or not one is appropriate. That's your call, and you're very generous with your agency's money. However, what are you going to do about the contractor who received the excess quantity of lumber? Are you going to do a modification to that contract to reduce its price to reflect the additional quantity of lumber? If you don't, then that contractor got a present from the taxpayer that it hasn't earned and didn't bargain for.

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I completely agree with ji20874's remarks to ladybug. But I'm less bothered by her apparent eagerness to give away government money in this case than I am by the fact that her posts in this thread reflect the reality that contracting personnel are not being trained to know and properly use the language of their profession and to be able to frame an issue, recognize the relevant facts, and provide a coherent account of them. This is true of far too many persons who post questions here at Wifcon. In fact, it's epidemic.

Recently an esteemed author and practitioner in our field sent me an email about a class he taught and expressed shock at the lack of basic professional knowledge and of elementary communication skills on the part of students with bachelor's and advanced degrees. I have seen that myself on a number of occasions. I blame both the employers and the employed. Employers have to face the fact that most college graduates today need supplemental training in basic communication and need professional education in issue identification and analysis, relevant fact recognition, and coherent narrative reporting and explanation. The employed need to understand that they have to study long and hard to master their field, and they'd better get going on that task.

It is a very serious problem today, or so I'm told by many chiefs of government contracting offices. I presume that it's also a problem in the private sector.

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ji -- I'm not sure your analogy holds up, because in this case I would have both ordered the box from a vendor with whom I had a contract, and signed for it upon delivery, indicating I accepted what was being provided. The problem here was that I didn't have authority to order the box, even though I (apparently) had authority to accept delivery.

All that said, I agree that it was settled long ago that the authority to acquire is what matters, and sellers have a duty to understand the authority of those doing the ordering and accepting.

Also, wouldn't the contract price be INCREASED to reflect an additional quantity of lumber (in excess of that contracted for) was provided and accepted?

H2H

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Thanks everyone. I am so at a lost about the contractor that received the excess quantity. I have re read my posts several times and never mentioned a contractor receiving an excess quantity only the customer.

I thought my original post was "plain jane" enough to get the point across. Contrary to popular belief I am versed at the language of contracting and misunderstanding my posts or my question is not my fault. Assumptions were made about my posts that were never stated in the beginning.

H2H, My contract no longer is active. If it was still active yes the price of the contract would increase.

I had 800 pieces of lumber on this contract. The customer did not realize that all 800 pieces had already been delivered. So they thought they still had 543 pieces that needed to be delivered. When the error was discovered it was too late they had already used the lumber and could not return to the vendor. They didn't notify me of this error so that I could fix it then. The error was not brought to my attention until after my contract ended. Too late to do a modification. So how does the vendor get paid for the 543 pieces of lumber they delivered?

ji, acceptance of the excess qty did happen by my customer (the military officer) because he used it - all of it as stated before. Not to mention it is not my agency's money. As mentioned before the military officer is my customer and not in my chain nor in my same agency.

There are only three parties - my contracting office, my customer (military officer) and the vendor(lumber contractor).

Again thanks.

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Ladybug:

In an earlier post you apologized for not being clear. When you're not clear it's your fault.

Do you understand the difference between "acceptance" (see FAR 46.101 and 46.501) and receipt?

In modern contracting terms, first, there is delivery and receipt (see the definition of "receiving report" in FAR 2.101), and then there is acceptance or rejection. Look at DD Form 250, Material Inspection and Receiving Report (AUG 2000), and compare blocks 21 and 22. See the distinction made between receipt and acceptance? See also DHS Form 700-21 (12/03), block 8.

Now, you have said that your "customer" "accepted" the lumber. Did he "accept" it or merely receive it? The CO is responsible for acceptance, not the customer. See FAR 46.502. It is acceptance, not receipt, that entitles the contractor to payment. See, e.g., FAR 52.212-4(i) and 52.232-1. Did you delegate acceptance to the customer? In writing? Did the customer accept in writing? Are you saying that the customer "constructively" accepted the lumber?

An unauthorized commitment is a nonbinding agreement made by someone without authority. So what happened? Did someone without authority agree to buy the extra 543, or was it just a screwup? Did the customer just receive and use the extra 543 without realizing, like the vendor, that it was over and above? If they didn't realize it was over and above, did they agree to buy the extra?

If it was just a screwup, maybe no ratification is necessary and you should pay the "vendor" on a quantum meruit basis. See Mr. Claytor, GAO B-163644 (March 14, 1968).

Where beef in excess of contract maximum weight limitation has been accepted and consumed contractor is entitled to payment on quantum meruit basis. However, appropriate instructions should be issued to commissary or other receiving officers to preclude reocurrence of situation.

Google <GAO B-163644>.

Maybe what you've got is essentially a claim relating to the contract. See FAR 33.213. You have authority to settle that under the Disputes statute and clause. See FAR 33.205(a) and 33.210. Maybe you should just skip the whole ratification hassle, get funds from your customer, write a decision explaining the screwup and your decision to pay, modify the contract to provide for payment on a quantum meruit basis, tell your customer not to come around any more, and go on about your business. It should take all of a week or two.

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Vern,

Thanks. I wish I could go do that. I believe it was a mistake but he wasn't forthcoming with the mistake which meant the contract ended.

I was looking into your suggestion about how to resolve without ratification and was told to stand fast. So I'm not sure exactly how it will be resolved.

Well in my organization the customer does all three.

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ladybug,

I suppose I misunderstood in thinking that the ordered lumber was GFP to another contractor -- your original posting talked about delivery of lumber to the vendor -- in hindsight, I suppose I would have understood better if I had read your second paragraph in a manner such as--

A customer requested delivery of lumber (543 pieces) directly to from the vendor. Lumber (800 pieces) was on the contract, and all 800 pieces had already been delivered. After delivery of the additional 543 pieces, the vendor advised customer they over delivered and need to receive the additional 543 pieces back. Customer didn't believe and did some fact finding. Customer found out that they already used the additional lumber pieces.

You should not think that you cannot modify a contract simply because it is "over." You can. I suppose both 800 pieces of lumber, 543 pieces of lumber, and the sum of 1,343 pieces of lumber are all under the simplified acquisition threshold. If the customer organization has some money, I would find this very easy to resolve and it would not involve a ratification. Vern gave you good advice. See also FAR 1.602-3( b )( 5 ). However, you said you have been instructed to stand fast for the ratification, so I suppose that is what you have to do. Even so, I hope this exchange has been good for learning.

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Vern,

Well in my organization the customer does all three.

I think that the customer receives, inspects, and accepts in many organizations.

My thinking at this point is that it doesn't matter whether the customer accepted or not. The contractor was not entitled to deliver the additional items and the customer did not have the authority to accept it. The problem is that the customer used it and cannot return it in its original condition. The question is how to settle the issue between the government and its contractor. I think a quantum meruit adjustment and payment is the way to go. Like ji20874 said, you can mod the contract after its physically complete in order to settle this matter. You can mod it even after it's been closed out. That's what you'd have to do if a ratification is approved, unless you intend to issue a new purchase order.

The ratification thing sounds to me like revenge against the customer. Somebody wants to inconvenience him for what he did. He's not going to get fired, and I doubt that the government will take the money out of his pay. In any case, it strikes me as a borderline case for ratification, at best.

Unless you believe that he did not receive/accept the stuff by mistake, but did it intentionally, I say settle the thing by modifying the contract, paying the money (which is a pittance), and moving on.

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Ladybug, you should not be too defensive. It wasn't until I read the latest several posts that I could understand what the heck you were trying to describe ! You were NOT clear. You said that the lumber was directly delivered TO the vendor. I had no idea whT the vendor was using the lumber for. You didn't initially say that the "contract" to buy lumber was with the "vendor". I didn't know that the military customer was actually directly using the lumber for something (?). You said "they" had already used the excess quantity of lumber. I thought you were speaking about "the vendor", who was supposedly doing "something" with the lumber then sending "something" back to the military. You said "the contract is over". I didn't know if you were talking about the lumber contract or "the vendor's contract" who was making something with the lumber.

i agree with Vern and JI about the simplest course of action. But if your boss is insistent on punishing or educating the customer and the lumber dealer then make up your mind and tell the customer to pay the dealer.

By the way, I buy lumber and building supplies from several yards and I'm pretty sure that if a customer orders lumber to put against an account, the clerk at the lumber yard doesn't go read the contract each time the customer calls. They just put it on the account and it gets billed later.

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Ji thank you for the information. It has been a great learning experience and I will take heed to the information that has been shared. Again thank you.

Modifying after the fact, let me see if my chain would ever let me do that (insert sarcasm here) lol. That is something to think about and if I approach it nicely they may let me do.

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ladybug:

It might be an easier discussion if you explain your action in terms that make them feel comfortable.

It's likely that they've routinely had exposure to modifying contracts after performance is complete. They should be familiar with deobligating funds during contact closeout efforts, warranty calls and extensions after a contact completion date has elapsed, etc.

Leverage their comfort zone to get what you want accomplished. Don't make it appear to be foreign, to a risk averse population, and explain how it's common. Most likely they don't care if it's proper (it is) they just want to be secure in knowing that it's a common practice and won't raise questions.

Sad but hey - you just want to get off the X.

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Vern,

I just saw your post. I like the idea of what you and Ji said but I'm not sure it will go down that way. I can only hope for the best. I can use this as a tool to educate the customer and my command.

Joel,

You have no idea how it felt to be slammed. I was defensive. It made perfect sense to me because I've told the story so many times and trying to restate it so that anonymity is respected it came across as unclear to everyone. I can accept that and learn from it and move on. I'm a big girl and can adjust. I'm always open to learning from my mistakes. Please believe if I should ever brave the posting course again I will remember the lessons learned here.

Jamaal,

You might be on to something. I'm not sure if this will be the one to try but I'm sure there will be other chances.

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