How to fix unauthorized approvals?

[C Culham]

2 hours ago, Vern Edwards said:

@C CulhamRatification is not one of the guiding principles in FAR 1.102. It is a rule.

Do you understand the difference?

And do you understand the reason for the ratification rule in 1.602-3? Do you know why the rule exists?

What have you read about ratification other than FAR 1.602-3? (Have you read the AGAR coverage?)

What does FAR 1.602-3(c) suggest to you about the OP's problem in light of the OP's scenario?

A repetitive yes, but I think you know that especially since you know me well enough to imply I am at worst a  jackass or at best simply lack professional judgement.

Think I am wrong minded in my full view?  Let me help you with this reminder.  

Now carry on Vern with nuances Vern,  I have heard it all before.

Thanks!

[Vern Edwards]

@C Culham I'm not going to read all of that. Can you help me understand what it has to do with the OP's inquiry in this thread and your position? Are you suggesting that I'm arguing just for the heck of it? If so, you might be right. Or not. I said this, and I still think it:

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A contracting person is only as good as the thoughts that he or she develops and the arguments that he or she can make. Any contracting person who thinks that every regulation always has a single, definite meaning that is cast in stone is intellectually ineffective. And as for conflicting arguments, need I quote Emerson about foolish consistency, hobgoblins, and little minds?

I'm tempted to make an argument in support of your position, just to show you how it's done. But, the thing is, I think it's best not to communicate with you anymore. It's pointless. I just wish you knew--but I know you don't--that there is rarely a single product of a regulatory analysis and interpretation that is written in stone. If you think for one minute that there is a single, definitely correct interpretation of all of this stuff, then you're just being silly.

You know why I've said all this? It wasn't for you. I don't write for fossils. I write for the young people who read here who still have a chance to fix our broken system, which they can't fix it by being narrow minded and inflexible, greeting every new thought with the Everlasting Nay. They've got to be inventive.

 

[C Culham]

1 hour ago, Vern Edwards said:

 I'm not going to read all of that.

🤣 Well at least you read part of it.   

And I still think this.....

"PS - Vern, as I know it will come up as it has in the past I want to be explicit in relaying that my comments in this post are not of a bleeding heart, sobbing or even lack of an ability of taking a bruising.  I can and have stood in the corner and continue to do so with anyone anytime and debate in fairness and sincerity any matter of reasoning.  You see this is me and always will be...http://cowboyethics.org/cowboy-ethics/."

[Vern Edwards]

Let cowboy-ethics provide the last words. "Page Not Found." 😀

 

[Don Mansfield]

Why do people think that granting an approval is an unauthorized commitment? If you look at FAR 1.602-3(c), you can reasonably infer that if the commitment were authorized it would result in a contract. When a CO grants an approval, it does not necessarily result in a contract as defined at FAR 2.101. If there's no obligation of appropriated funds, there's no contract.

[Vern Edwards]

13 hours ago, Don Mansfield said:

When a CO grants an approval, it does not necessarily result in a contract as defined at FAR 2.101. If there's no obligation of appropriated funds, there's no contract.

I would edit Don's sentence to insert the word new between "in a" and "contract". I would also add that an unauthorized commitment does not obligate funds unless ratified.

Everyone has heard of "terms and conditions." According to Black's Law Dictionary, 12th:

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condition n. [Middle English condicion, fr. Old French condicion, fr. Latin condiciŌnem, accusative of condiciŌ (also spelled conditiŌ) “a compact, stipulation, agreement,” fr. Latin vb. condĪcere “to agree upon,” fr. con- “together, with” + dĪcere “to declare, tell, say.”] (14c) 1. A future and uncertain event on which the existence or extent of an obligation or liability depends; an uncertain act or event that triggers or negates a duty to render a promised performance. • For example, if Jones promises to pay Smith $500 for repairing a car, Smith's failure to repair the car (an implied or constructive condition) relieves Jones of the promise to pay.

See also Restatement of the Law - Contracts § 250.

(The phrase "terms and conditions" is redundant, since, as a lawyer explained to me many years ago, conditions are terms of a contract.)

Many contracts include conditions that one of the parties must meet before the other party is required to keep its promises. See, for example, GSAR 552.236-72, Submittals, which is included in construction contracts and which states, in part:

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The Contractor shall not proceed with construction work or procure products or materials described or shown in submittals until the submittal is reviewed. Any work or activity undertaken prior to review shall be at the Contractor's risk. Should the Contracting Officer subsequently determine that the work or activity does not comply with the contract, the Contractor shall be responsible for all cost and time required to comply with the Contracting Officer's determination. The Contracting Officer shall have the right to order the Contractor to cease execution of work for which submittals have not been reviewed. The Government shall not be liable for any cost or delay incurred by the Contractor attributable to the proper exercise of this right.

In contract law, that kind of condition is known as a "condition precedent". See Black's Law Dictionary, 12th:

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- condition precedent (prə-seed-ənt also pres-ə-dənt) (1818) An act or event, other than a lapse of time, that must exist or occur before a duty to perform something promised arises. • If the condition does not occur and is not excused, the promised performance need not be rendered. The most common condition contemplated by this phrase is the immediate or unconditional duty of performance by a promisor.

In the case of material submittals as per GSAR 552.236-72, the parties agree at the time of contract award that submittal is a condition that the contractor must meet before the it may proceed with the work and before the Government is obligated to pay for any work done into which the material is to be incorporated. Review of the submittal allows the government to confirm that material to be incorporated into the work complies with contract requirements. It is a condition precedent to the Government's obligation to allow the work to continue and to pay for the work. 

If the contractor installs the material before the Government is able to review a submittal, the Government may be off the hook for paying for that work unless there is some other way to prove that the material conformed to contract requirements. Failure to satisfy the condition is breach of contract. If failure to comply damages the Government in any way, such as by delaying completion, the contractor must compensate the Government. 

Pre-installation review and approval or disapproval of material pursuant to the terms of the contract under the GSAR clause is a unilateral right of the government. Since unilateral, it is not a matter of agreement or commitment. 

I don't know what the OP's contract says. But if it says that the contractor must obtain the CO's approval prior to proceeding with the work, then the COR's unauthorized communication of approval is not in this case an unauthorized agreement/commitment, and ratification is not appropriate or required. However, the COR should be criticized and instructed not to do such a thing again, and the CO should document the file. To say that ratification pursuant to FAR 1.602-3 is not appropriate does not mean that the culprit should get off scot-free.

The purposes of the FAR "unauthorized commitment"/ratification rule are to:

1. prevent violations of the Antideficiency Act,
2. prevent the creation of government contracts that do not comply with statutory requirements for such contracts, such as TINA, EEO requirements, and Buy American limitations,
3. ensure that agencies comply with CICA in the award of contracts, and
4. to provide for compensation to a party when it has provided something of value to the Government.  

[Jamaal Valentine]

4 hours ago, Vern Edwards said:

(The phrase "terms and conditions" is redundant, since, as a lawyer explained to me many years ago, conditions are terms of a contract.)

We recently covered doublets, triplets, and synonym-strings in class. The basic takeaway was (1) drafters would be better off using a single word instead of a synonym string; and (2) drafters use synonym strings to try and cover the possibilities of interpretations of unclear writing. Using a single word is definitely clearer when a drafter only includes the synonym out of tradition or an emphasis out of an abundance of caution.

How much time and money has the phrase ‘terms and conditions’ cost the taxpayer?

[Vern Edwards]

4 hours ago, Jamaal Valentine said:

We recently covered doublets, triplets, and synonym-strings in class.

What class?

[REA'n Maker]

12 hours ago, Jamaal Valentine said:

How much time and money has the phrase ‘terms and conditions’ cost the taxpayer?

I'd guess about as much time and money as the term 'PIN number' has cost the banking industry. 🙃

[C Culham]

17 hours ago, Vern Edwards said:

In contract law

Thanks Vern.  The post has made me think.  I am still not quite ready to jump on the wagon that the approvals could be considered other than an unauthorized commitment.  I understand the point Don's post is trying to make yet to me the definition in the FAR is clear of what an unauthorized commitment is.  Is this one of the cases where Federal contracting is unique and definitions apply to what happens in Federal sector as opposed to applying what I will term common law?  Afterall by my read the definition an approval is either a unauthorized commitment or it is not.  

17 hours ago, Vern Edwards said:

I don't know what the OP's contract says.

This comment seems key in that condition precedent as a doctrine revolves around the actual facts of the contract.  What spins in my head is that discussion was with regard to  CPFF (term or completion) contracts.   Flawed thinking, I am not sure, as I wondered how many "simple approvals" would add up approvals that exceeded the monies obligated on the contract and in our exchanges I kept wondering whether draconian measures such as ratifying an unauthorized commitment was appropriate to fix the "unauthorized approvals" or in other words what seems to painted as something that is more that a one off.

 

[Vern Edwards]

Think of it this way:

Ratification is not a disciplinary measure. It is a curative measure.

An agency ratifies an unauthorized commitment because it wants to enter into a valid contract with the party to whom the commitment was made, so the transaction can be completed and the party can be paid. Prior to ratification the agency has no way to make payment. Ratification (1) creates a valid contract and (2) permits payment after the fact of the commitment. 

When the government doers not want to pay it simply refuses to do so and does not seek ratification. The party to whom the commitment was made cannot file a claim under the Contract Disputes Act because it has no contract. The Government employee who made the commitment might be liable.

In the OP's case, in which a contract already exists and the CO wants to grant the approval under its terms, all the CO need do is grant it pursuant to those terms. No ratification is necessary, because a contract already exists. If the CO wants to deny the approval, they simply notify the contractor and instruct it to take corrective action. If the contractor disagrees with the denial it can submit a contract claim.

Either way, the CO sends the COR a memo telling them not to do it again and documents the file.

My advice to the OP was sound. No ratification.

[Jamaal Valentine]

13 hours ago, Vern Edwards said:

What class?

LAW 522, Contract Drafting (McGeorge School of Law)

[Jamaal Valentine]

6 hours ago, REA'n Maker said:

I'd guess about as much time and money as the term 'PIN number' has cost the banking industry. 🙃

CAC card

*while fun, I doubt either have the same levels of costly disputes

[Vern Edwards]

40 minutes ago, Jamaal Valentine said:

LAW 522, Contract Drafting (McGeorge School of Law)

Is there a text?

[formerfed]

4 hours ago, Vern Edwards said:

Think of it this way:

Ratification is not a disciplinary measure. It is a curative measure.

An agency ratifies an unauthorized commitment because it wants to enter into a valid contract with the party to whom the commitment was made, so the transaction can be completed and the party can be paid. Prior to ratification the agency has no way to make payment. Ratification (1) creates a valid contract and (2) permits payment after the fact of the commitment. 

Thank you Vern for this logical and straightforward explanation.  Makes perfect sense.

[Jamaal Valentine]

11 hours ago, Vern Edwards said:

Is there a text?

Yes, two actually.

A Manual of Style for Contract Drafting, 5th Edition by Kenneth A. Adams (2023) ISBN: 9781639052516 (“MSCD”)

Contract Redlining Etiquette: How to leverage the power of redlines for faster and smarter contract negotiations by Nada Alnajafi (2022) ISBN: 057830273X (“CRE”)