For all parties involved, the unauthorized undertaking has serious consequences. Unauthorized obligations may result in personal liability for the person who made the commitment. Contractors acting on the basis of unauthorised obligations do so at their own risk. You are not entitled to any consideration (money) unless the unauthorized commitment is confirmed. Payment is therefore significantly delayed or cannot be made at all if the measure is not approved or if costs are not recorded. In fiscal year 1979, the Department of Energy (DOE) stated that the commitments made it the largest civilian procurement agency in the federal government. The Federal Government Procurement Regulations, which govern most purchases by civilian agencies, give authorized contracts the exclusive authority to award contracts. However, doE program staff, who do not have public approval, have asked contractors to perform work. This circumvents established procurement regulations and eliminates the possibility of competition. The DOE has introduced special ratification procedures for the conclusion of contracts under unauthorized obligations. These procedures require a detailed description of the reasons for the engagement, examinations by the contract agent and the Advocate General, and the approval of the Head of Purchasing.
However, some offices have previous contracts or issued retroactive pre-contractual approvals instead of following DOE ratification procedures for unauthorized obligations. The process by which designated persons convert an unauthorized obligation into a legal contract is called ratification. Under the Department of State Acquisition Regulation (DOSAR), the Head of Contracting Has been given the authority to ratify unapproved commitments that do not exceed $1,000. The procurement authority must ratify any commitment over $1,000. Ratifications can only take place if all regulatory requirements or conditions are met. Customers are not allowed to simply issue an order or contract amendment if an unauthorized commitment has been established. Questions regarding unauthorized obligations can be directed to Susan Catington, Department of State Competition Attorney, (703) 516-1693. Recommendation: The Minister of Energy should take steps to develop procedures to identify unauthorized obligations within the department. Americom has received an order from the General Services Administration (“GSA”) to maintain the host country`s satellite licenses and bandwidth services for use by U.S.
forces in Korea. Americom charged GSA $579,793 and GSA approved and paid the full bill. Some time after payment, the GSA realized that licenses and bandwidth services were not covered by the work order or any other contract. The GSA “amortized” this amount by deducting the money from the payments to Americom on other valid invoices. It was not disputed that Americom had provided the satellite licenses and bandwidth services, but GSA noted that there was no valid contractual instrument signed by an authorized contract agent, and the Board agreed that there was no valid contract signed by a contract agent. The Council then considered the question of ratification. (4) Agencies should deal with unauthorized obligations using the ratification authority of this subsection instead of referring such actions to the Office of Government Accountability for resolution. (See 1.602-3 (d).) (5) Unauthorized obligations that would include claims that are resolved under U.S. Chapter 71§ 41.C, Contractual Disputes, shall be dealt with in accordance with subsection 33.2, Disputes and Appeals.
(2) If a contractor does not even realize that it is missing a signed contract, but is providing goods or services for the benefit of the government, the contractor should immediately take steps with the agency to resolve the problem when it first discovers the problem. If the government knew that it was receiving goods or services without a contract and that it was constantly receiving them, a contractor would have a strong case for ratification. An unauthorized obligation is defined in FAR 1.602-3(a) as an agreement that is not binding simply because the government official who entered into it was not authorized to enter into that agreement on behalf of the government. The only persons who can bind the government are justified contract agents and acquisition cardholders acting within their delegated authorities. Unauthorized obligations violate federal laws, federal regulations, government-wide standards of conduct for federal employees, and regulations of the State Department of Acquisitions. (1) The supplies or services have been made available to and accepted by the Government, or the Government has obtained or will receive a benefit from the performance of the unauthorized obligation; 5. The procuring entity shall recommend payment and the lawyer shall accept the recommendation, unless the Agency`s procedures expressly require such consent; (1) Agencies should take positive measures to exclude ratification measures as far as possible. Although this section provides procedures for cases where ratification of an unauthorized undertaking is required, these procedures should not be applied in a manner that encourages government personnel to undertake such obligations. Personnel responsible for unauthorized obligations are required to provide detailed written explanations of their actions and may be subject to disciplinary action, especially if the violations are flagrant and/or repetitive.
Ratification, as used in this subsection, means the act of approving an obligation not authorized by an official authorized to do so. (d) non-ratifiable commitments. Cases that cannot be ratified under this Subsection may be subject to a solution recommended by the Government Accountability Office as part of its Gao Policy and Procedures Manual for Guidance of Federal Agencies (Title 4, Chapter 2) or approved by Far Subpart 50.1. In these cases, legal advice should be sought. Before explaining why Americom won, it must be acknowledged that there is an internal government dynamic that has confused this payment problem – military interdepartmental purchase requests (“IMCI”). RMMs are funding documents, not contractual documents. In this acquisition, the U.S. force in Korea identified what it wanted for the GSA, provided financing through a MIPR, and the GSA signed the actual purchase agreement (for a four percent fee). Once awarded, the GSA simply became a payment channel and did not handle purchases. U.S.
forces in Korea filed a MIPR with the GSA to cover licenses and bandwidth services, but the GSA failed to put the money on a contract. This blog has often stated that the government can usually only be contractually bound to a person with actual authority, usually a written delegation of proxies known as an “arrest warrant”, hence the use of the term “justified contract agent” (e.B. Dept of State Acq. Reg. 48 CFR § 601.601-70, Department of Veterans Affairs Acq. Regulation 48 CFR § 801.690-5). Although the term “justified contract agent” is not used, the Federal Procurement Regulations (“FAR”) state that only “contract agents have the power to […] [and] may bind the Government only to the extent of the powers conferred upon it. FAR 1.602-1 The question for this blog is whether a contractor can be paid if he has done work or delivered a product without a properly signed contract? The answer is “YES” if there has been a “ratification” by the government of an unauthorized act. A recent case of the Civil Committee explains this somewhat rare situation. Americom Gov`t Serv., Inc.c. General Sevices Admin., CBCA 2294, March 31, 2016. Circumvention of the normal supply cycle will likely continue until the DOE successfully eliminates the causes of unauthorized obligations. There are three main reasons for unauthorized obligations: (1) the DOE program often does not plan for procurement needs sufficiently in advance to apply normal contracting procedures; (2) The Programme is faced with urgent needs of the Programme and does not believe that it has sufficient time to go through normal procurement procedures.
and (3) the program fails to review, approve and submit procurement requests to the Procurement Office in a timely manner. Whatever the cause, the anti-disability law is violated when DOE program officials make unauthorized commitments and accept voluntary goods or services from a contractor before the funds have been provided by Congress. In addition, the DOE Government Procurement Regulations do not contain the same restrictions as the Federal Government Procurement Regulations to ratify unreasonable obligations that would not be permitted under the Federal Government Procurement Regulations. While there may be instances where it is necessary to allow a contractor to begin work before entering into a contract, unauthorized obligations are never an appropriate means of obtaining goods or services. The DOE must establish a formal method for monitoring unauthorized obligations. .