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For the reader’s reference, here is a link to the previous discussion in the contract administration topic area. 

 

On 11/2/2024 at 9:24 AM, C Culham said:

All in all in a contract that reserves a contract administration approval for the CO, or one he/she has delegated the authority to, cannot be approved by any other individual otherwise it is tantamount to an unauthorized commitment and must be ratified by an official with the express actual authority to do so.  Utilizing any other action that implies the approval was appropriate puts a contractor at risk that any adverse effect incurred as a result of the unauthorized approval would not be corrected causing the contractor to seek other avenues for correction.  Forcing a contractor to do so in the cases where the approval meets the conditions of ratification in is opposition to regulatory language of the FAR that that encourages ratification to avoid GAO and disputes processes  Likewise pursuing ratification supports the regulatory intent that efforts other than ratification should not be used where those efforts encourage unauthorized commitments.   

As clear as mud.

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In the specific (and only) examples described in the referenced thread, I find it rather silly to assume that a KO can’t simply approve those routine contract admin actions that he/she would have otherwise approved anyway*. There was no additional commitment of funds, risk, effort or change in the contract requirement. 

* per statement by the Original Poster that they would have approved the actions if they were sent to them.

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9 hours ago, C Culham said:

Perfect....do away with all CO approvals as by your assumption of facts the government will always approve or otherwise agree with a contractor.  I love the ideal...no more GAO and no more courts!

What you said makes no sense, Carl. I didn’t say do away with any KO* approval or that the government will always approve or agree with a contractor.

*Used here, the “KO” means the Contracting Officer or Contracting Officer’s Representative, acting within their authority.

Here, the KO can (should) now approve the two described examples, as he or she would have approved both routine contract admin actions anyway.

And what is the contractor going to claim here** (a rhetorical question only)??
** no change in requirement, no directed additional cost or time, no delay to the contractor.

We also described corrective actions for the KO to take to avoid these situations in the future.

If the OP’s office is “reviewing some internal processes for contract administration”, specifically with regard to authority, apparent authority, etc.  I suggest that they read applicable sections of any edition of the book Administration of Government Contracts by Nash, Et al.

 

In the original thread, we were not told if the KO knew of the "approvals" but did nothing to countermand them.  If such knowledge existed, constructive approval by the KO may have occurred.

On another point, there are three types of authority - actual authority, implied authority and apparent authority.  The first two apply to government employees, but the concept of apparent authority does not.  In the end, when all facts are examined, it may turn out that the folks who granted the approvals had implied authority so that the approvals are not unauthorized.  We simply don't know.

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SCENARIO

Background. A government office in Los Angeles has awarded a fully-funded cost-plus-fixed-fee R&D contract for the conduct of a project. The project was to be conducted in two phases under a single contract lime item.

The contractor had to commence performance of Phase I within 24 hours after contract award. Upon completion of Phase I the contractor had to notify the COR and present the Phase I results. The contract expressly states that the contractor may not commence performance of Phase II until expressly authorized to so by the CO in writing. The contract also expressly states that only the CO may authorize commencement of Phase II. Phase II is not a Government option. If Phase I is completed satisfactorily the CO must authorize the contractor to proceed or terminate the contract for convenience.

Upon being presented with the results of Phase I the COR will review them and notify the CO whether they merit proceeding with Phase II. If the results do not merit proceeding the CO may either (1) direct the contractor in writing to take specified actions and present new Phase I results to the COR within a specified period of time, or (2) terminate the contract for convenience. 

Facts. Upon the early completion of Phase I the contractor presented the results to the COR. The COR found them to merit proceeding and sent the CO a memo report to that effect. However, the CO was on official travel status and could not read the memo or send a written authorization to proceed with Phase II immediately.

The contractor was eager to commence Phase II. Delay could be costly. But the CO was incommunicado for official reasons. So the COR orally advised them that the CO would issue the written authorization to proceed upon her return and that it would be okay to proceed with Phase II immediately since the authorization was sure to be given. Based on the COR’s “go-ahead”, the contractor commenced Phase II work prior to receiving written authorization from the CO.

Upon her return from official travel status a week later the CO reviewed the COR’s finding about Phase I, agreed that the results of Phase I merited proceeding, and was writing the Phase II authorization to proceed when she learned that the contractor had started the Phase II work the week before based on the COR's okay.

QUESTIONS: 

1. Given the above facts, does FAR 1.602-3 prohibit the CO from authorizing the contractor to proceed with Phase II?

2. What would you do?

 

2 hours ago, Vern Edwards said:

QUESTIONS: 

1. Given the above facts, does FAR 1.602-3 prohibit the CO from authorizing the contractor to proceed with Phase II?

2. What would you do?

 

My answers:

1.  The CO can authorize it.  The contractor proceeded at risk and the COR overstepped their authority.  But the CO isn’t faultless.  The CO knew they would be out of touch doing this period and should have either made arrangements for another CO to approve, delegate one time authority to the COR, or found a way to stay in touch.  It’s a case where the contractor proceeded without waiting for CO approval.

2. I would authorize it.  But I would have all the parties present in a meeting to go over the mistakes made and especially let the contractor know how this made them financially vulnerable.  It’s especially important for the COR and contractor to fully understand so there’s no repeat. [Edit:  I would document the file explaining my rational and actions taken:]

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Thanks, formerfed. Let's see what any others have to say and what if any reasons they give.

1. I agree with formerfed’s analysis and conclusions, as far as he went.

The KO was negligent in her duties and responsibilities by being unreachable for an entire week without making arrangements to delegate her authority to another person or to be able to communicate orally or by electronic means, at least after hours if the only option. A KO can issue a Change order by electronic means per FAR 43.201 (c), then formally follow up with a Modification as soon as possible. So why can’t they issue the required NTP by email or text message, then follow up by other means if required. Or arrange for a temporary KO by email or text with notice to the contractor. Or, or , or, etc.

The Government has a fundamental responsibility of good faith and fair dealings to the contractor and to the public to have authorized officials reasonably available to perform its contractually required functions and actions.

The COR did what he or she had to do to protect both the Government’s and Contractor’s interests and to avoid delays and delay costs- but also assumed personal risk…

The contractor did assume risk by relying on the assurance of the COR that the missing KO would issue the NTP upon her return and that it would be okay to proceed with Phase II. 

2. I would be embarrassed. I’d issue the NTP and, if legally allowable,  CONFIRM the previous date of the NTP to authorize any costs prior to the date of my return to duty. Yes, the COR, contractor and I should sit down together and discuss as formerfed said.

I might also state that I should have either been available for communications or made arrangements for a temporary replacement for an extended absence and that I wouldn’t repeat it either.  

Thanks, Joel!

The issue raised by C Culham's now self-deleted posts was "unauthorized commitment" and the need for ratification.

Referring to my scenario, do you think the COR's communication with the contractor constituted a "commitment"?

Given the scenario, do you think it's in the same category of acts as someone𑁋 without contracting authority, without an existing contract, and without prior coordination with the contracting office𑁋calling a supplier and telling them to ship a quantity of goods to the government and that the paperwork will follow?

@formerfed If you're still reading, I put the same question to you.

I don’t have much sympathy for a KO who was unreachable for an entire week, without either finding some time during a 24 hour period to keep up or else arranging for a temporary substitute or delegation of duties to fulfill the Governments KO function.

When I retired in 2007, I was a member of the USACE Program Management Team (PMT)  for the $50Billion+  Army MILCON Transformation Program.

I was responsible to help develop uniform policies,  procedures,  Standardized design criteria,  standardized design-build acquisition methods, procedures, incorporating new means and methods, accelerated execution timelines, all at reduced cost.

Contract and Task Order Awards had to be made for full-scope, within the Budgeted Program Amounts. This had seldom been achieved prior to this Program.

This was necessary to meet  the Army’Transformation Program’s rigorous time, cost, uniformity and enhanced functional and quality requirements for new facilities to relocate and re-organize 1/3 of the Army Organizations in a compressed time.

If the Corps of Engineers couldn’t meet the new Army goals and objectives for full scope, accelerated time, high quality, vastly increased workload, all within the Programmed Amount budgets,the Army would seek Congressional Authority to hire the leading industry design- construction firms to manage and execute the Program.

The Army MILCON annual workload alone would increase by up the six times during the peak of the Program.

Before retirement, I was on the PMT’s for acquisition, contract execution and contract admin from 2005-2007.

We developed three Design-Build model RFP’s to be centrally maintained and electronically used  by all Districts for initial single award and Multiple Award Task Order Contracts and for Task Orders that would be used for about 47 different, standardized facility types.

We updated the model RFP’s on a monthly basis as the design criteria matured, for lessons learned, etc. We had daily contact, interaction, input and decision making actions with the various Districts and Facility Standardization Teams for the monthly updates. Much travel involved, too.

After my retirement date that June, I worked as a contractor member for several months, until I was brought on in late fall as a re-hired Annuitant for the next six years. I worked remotely from home. I worked flex-time, irregular hours and was paid only for the hours that I worked. 

Well, I deer hunted at a hunting camp in a nearby county for a few days a week over a 3 1/2 month season each year. But the workload and monthly update deadlines remained constant. I spent many hours in tree stands on different mountain sides where ever I could get Blackberry telephone reception, working on the MILCON Transformation Program.  

Edit: after posting I just saw Vern’s post above. I will respond ASAP but have to take my dog to the park, go vote and grocery shop for tonight. 🤠

 

 

Edited November 5, 20241 yr by joel hoffman

1 hour ago, Vern Edwards said:

Referring to my scenario, do you think the COR's communication with the contractor constituted a "commitment"?

Given the scenario, do you think it's in the same category of acts as someone𑁋 without contracting authority, without an existing contract, and without prior coordination with the contracting office𑁋calling a supplier and telling them to ship a quantity of goods to the government and that the paperwork will follow?

Quickly, I don’t think that there was any new commitment of funds, scope, schedule or change in contractor requirements by the government. It was a fulfillment of the government’s obligation to the contractor under the contract- with the mutual intent to avoid additional costs or delays…

It’s not the same category as the second situation you described. Not in spirit or reality.

Off to the park- my dog is begging and panting for relief. 🐕 . 
 

 

Thanks, Joel!

In fairness to my poor fictional CO, I set her up in order to create the issue. She's not to blame. A director of R&D contracting I should have made sure she had a backup.

My bad.

I agree with Joel.  It’s more like an administrative delay rather than a commitment because the contracting officer wasn’t available.  The COR approved Phase 1 and sent a memo accepting the initial phase.  CO direction, while needed, wasn’t available to ensure timely performance.   It didn’t modify the contract, require additional funding, or change anything else.  

BTW, the Milcon Transformation Pprogram emphasized performance based design criteria, commercial industry standard  materials, means and methods, allowing flexibility, in how to meet those requirements. 

14 minutes ago, Vern Edwards said:

Thanks, Joel!

In fairness to my poor fictional CO, I set her up in order to create the issue. She's not to blame. A director of R&D contracting I should have made sure she had a backup.

My bad.

You are forgiven, Vern. I hope you let the poor COR off with a slap on the wrist or better yet a congratulations and handshake . Sorry I rambled on but I wanted to make a point about doing whatever it takes to get a critical job done even when you are out of the office. .🤠

22 hours ago, Vern Edwards said:

QUESTIONS: 

1. Given the above facts, does FAR 1.602-3 prohibit the CO from authorizing the contractor to proceed with Phase II?

2. What would you do?

1.  Yes because the COR's action was a unauthorized commitment as it was an agreement that is not binding solely because the COR who made it lacked the authoirty to enter into the agreement on behalf of the Government and the action by the COR did effect delivery and other terms of the contract.  It was an action that directed the contractor to a act in conflict with the contract terms that required express written direction from the CO as the only one to provide the direction.  

2. Require the COR to follow the cure administrative procedure to ratify the commitment.  As the CO I would recommend to the Chief of Contracting Activity, or that individual otherwise delegated,  that the action be ratified.  A CO that handles the matter otherwise is shirking their responsilibilty to ensure performance of all actions for effective contracting and compliance with the terms of the contract which in doing so does not  safeguard the interests of the the United States in the contractural relationship because it did not follow the regulations and the contract and puts the Government at risk. 

Here I note that following the ratification process is not admonisment, a penalty, and/or adverse personnel action it is as noted, a cure, allowed for in the regulations. A CO that would process the matter as a ratification is not acting unwisely they are following their delegated authority pursuant to FAR 1.6 and wisely so.    

 

 

Thanks, Carl.

On 11/4/2024 at 7:59 AM, Vern Edwards said:

1. Given the above facts, does FAR 1.602-3 prohibit the CO from authorizing the contractor to proceed with Phase II?

2. What would you do?

My answers:

1. No. FAR 1.602.3(b)(5) states:

Quote

(5) Unauthorized commitments that would involve claims subject to resolution under 41 U.S.C. chapter 71, Contract Disputes, should be processed in accordance with subpart  33.2, Disputes and Appeals.

2. The contract is CPFF. Pending ratification I would have to reject any invoice for costs incurred for the performance of Phase II as unallowable. Moreover, what would happen if if the ratification were to be denied? The contract might have to be terminated. Either of those actions would be the basis for a contractor claim.

FAR 33.204, Policy, states, in pertinent part:

Quote

The Government’s policy is to try to resolve all contractual issues in controversy by mutual agreement at the contracting officer’s level. Reasonable efforts should be made to resolve controversies prior to the submission of a claim....

Emphasis added.

In light of the circumstances, FAR 1.602-3(b)(5) and FAR 33.204, and in response to the contractor's agreement not to act and incur costs based on unauthorized guidance again, I would issue the authorization to proceed with Phase II, and we would put the matter behind us and get on with the work within 24 hours of my return from official travel. I would buy the COR a beer.

Contracting officers are expected to solve problems, not be a problem.