Ratification

[Fitz]

Not necessarily a beginner, but certainly not a pro either, felt it best to put this question here:

Currently in a situation where I've come into a new agency and found some issues, one of those issues I encountered was a contract from FY18/19 that is long since expired having 30+ invoices billed against it for services rendered after the expiry, (FY20/21). To clarify the POP of the original contract ended in Sept, 2019 and the payables technician continued to bill against it for services rendered well after the POP expiry while a follow-on contract to the same Vendor existed. Now ignoring the personnel/Vendor issue I'm now working on a D&F to submit to my legal folks to begin a ratification and I find myself wondering what my objective is.. I think the best course of action is initiate a ratification to have our unexpended FY20/21 money added to the expired contract to ensure the correct appropriations are billed against for the USG's records and issue a unilateral modification to the Vendor for their awareness. (The Vendor has been paid in full so the color of money does not matter to them)

 

Am I on the right track?

 

[formerfed]

Quote

To clarify the POP of the original contract ended in Sept, 2019 and the payables technician continued to bill against it for services rendered well after the POP expiry while a follow-on contract to the same Vendor existed.

Was a valid contract in place which the invoices should have been paid under rather than the expired one?

[ji20874]

3 hours ago, Fitz said:

...I find myself wondering what my objective is...

Yes, pray tell, what is your objective?

 

3 hours ago, Fitz said:

...The Vendor has been paid in full...

Then why disturb the vendor's peace with a contract modification?  A ratification gives you authority to pay, but you have already paid.

Instead of starting a ratification process, should you be starting an Anti-Deficiency Act process?  

[Don Mansfield]

Why is this a contracting office problem and not a payment office problem? 

[joel hoffman]

Why don’t you ask your legal department? I don’t understand why they wouldn’t be fully involved in this. If they say that a ratification is necessary and will resolve the situation,  then they should advise you how to prepare it. 

We don’t have all the facts. It looks like gross negligence on the part of those who processed, those who approved and those who paid the multiple, improper  invoices on the wrong (closed out?*) contract.

it’s a legal matter.  So Legal (and the Finance and Accounting Office)  ought to be involved in the solution, not us; especially without knowing all the specific facts.

*4.804 Closeout of contract files??

Edit: No answers to my rhetorical questions required here.

Edited May 16, 2023 by joel hoffman

[Fitz]

11 hours ago, formerfed said:

Was a valid contract in place which the invoices should have been paid under rather than the expired one?

It's tricky because there was a follow-on, but the POP's aren't linear. The original contract expired 09/30/2019 and the follow-on started 09/24/2020. Why it was done this way? Well.. I'm still scratching my head..

10 hours ago, ji20874 said:

Yes, pray tell, what is your objective?

 

Then why disturb the vendor's peace with a contract modification?  A ratification gives you authority to pay, but you have already paid.

Instead of starting a ratification process, should you be starting an Anti-Deficiency Act process?  

Well spotted, forgot to include that fact. The contract was not in jeopardy of being deficient, there were funds remaining but it was from the wrong FY so bonafide need was violated. Perhaps I'm using the word ratification improperly - this modification would be a correction unilaterally issued to the Vendor for their awareness. I can't correct the 'pots' of money without initiating a modification in our contract writing system.

7 hours ago, Don Mansfield said:

Why is this a contracting office problem and not a payment office problem? 

An excellent question, the Contracting Office submits the invoices for payment rather than the CORs or a Finance Office (working to change this). We're small and piggyback off a larger agency who actually renders payment for us. However, that agency has to be given direction on how to issue payment so I'm getting involved to make sure it's done correctly rather than leaving it to the payables technician or finance (who's not cut into the payment's process at all) to fix.

43 minutes ago, joel hoffman said:

Why don’t you ask your legal department? I don’t understand why they wouldn’t be fully involved in this. If they say that a ratification is necessary and will resolve the situation,  then they should advise you how to prepare it. 

We don’t have all the facts. It looks like gross negligence on the part of those who processed, those who approved and those who paid the multiple, improper  invoices on the wrong (closed out?*) contract.

it’s a legal matter.  So legal ought to be involved in the solution, not us; especially without knowing all the specific facts.

*4.804 Closeout of contract files??

So I'm drafting a D&F to send to Legal but before I sent it I wanted to consult WifCon. I want to ensure I give them all the facts and offer my prescribed way forward. We do not have attorneys who specialize in procurement or appropriations law.

[joel hoffman]

Aside from the fact that there are serious holes in your contracting, contract admin, legal and F&A organizations and procedures, it appears to me that F&A must be involved in the corrections/solution, if any will be made.

I’m guessing that there must be corrections to the payments accounting and assignments of the payments to the appropriate contract made. 

[Vern Edwards]

15 hours ago, Fitz said:

... a contract from FY18/19 that is long since expired having 30+ invoices billed against it for services rendered after the expiry, (FY20/21). To clarify the POP of the original contract ended in Sept, 2019 and the payables technician continued to bill against it for services rendered well after the POP expiry while a follow-on contract to the same Vendor existed.

15 hours ago, Fitz said:

Am I on the right track?

No.

What you have described is a billing and payment error. You have not described an unauthorized commitment. Based on what you have described there is no need for a ratification or a D&F, but someone should write a memo to file.

The supervisor(s) of whoever approved those invoices in the contracting office should be reprimanded. The accounting office needs to correct its records.

[joel hoffman]

16 minutes ago, Vern Edwards said:

No.

What you have described is a billing and payment error. You have not described an unauthorized commitment. Based on what you have described there is no need for a ratification or a D&F, but someone should write a memo to file.

The supervisor(s) of whoever approved those invoices in the contracting office should be reprimanded. The accounting office needs to correct its records.

And the 2  contracts’ files need to be corrected too. And close out the completed contract and files

[Fitz]

49 minutes ago, joel hoffman said:

Aside from the fact that there are serious holes in your contracting, contract admin, legal and F&A organizations and procedures, it appears to me that F&A must be involved in the corrections/solution, if any will be made.

I’m guessing that there must be corrections to the payments accounting and assignments of the payments to the appropriate contract made. 

F&A is apprised but unable to assist based on the limitations of our system.

23 minutes ago, Vern Edwards said:

No.

What you have described is a billing and payment error. You have not described an unauthorized commitment. Based on what you have described there is no need for a ratification or a D&F, but someone should write a memo to file.

The supervisor(s) of whoever approved those invoices in the contracting office should be reprimanded. The accounting office needs to correct its records.

Thank you Vern, I think it's more appropriate then to call what I've drafted a 'Memo to File' vice a 'Ratification' and steps have been taken to ensure this does not occur again.

7 minutes ago, joel hoffman said:

And the 2  contracts’ files need to be corrected too. And close out the completed contract and files

Yes, the second contract is being closed-out already and the unexpended funds de-obligated. Once I've fixed the first it will also be closed out.

 

 

[Vern Edwards]

One thing to check: Assuming that the billings should have been against the new contract, not the old, compare the contract prices and make sure that the correct prices were billed and paid.

[Fitz]

1 hour ago, Vern Edwards said:

One thing to check: Assuming that the billings should have been against the new contract, not the old, compare the contract prices and make sure that the correct prices were billed and paid.

Excellent point, thank you Vern!