Don't Rely on Just Any Old Government Employee for Direction

Contracting officers have the authority to enter into, administer, or terminate contracts and make related determinations and findings. Contracting officers may bind the Government only to the extent of the authority delegated to them. Contracting officers shall receive from the appointing authority clear instructions in writing regarding the limits of their authority. Information on the limits of the contracting officers' authority shall be readily available to the public and agency personnel (FAR 1.602-1).

Contracting officers are responsible for ensuring performance on all necessary actions for effective contracting, ensuring compliance with the terms of the contract, and safeguarding the interests of the United States in its contractual relationship. In order to perform these responsibilities, contracting officers are allowed wide latitude to exercise business judgment. Among those responsibilities are

• Ensure sufficient funds are available for obligation
• Ensure that contractors receive impartial, fair, and equitable treatment
• Request and consider the advice of specialist in audit, law, engineering, information security, transportation, etc.

Contracting officers may also delegate some of their contract administration functions and responsibilities to an Administrative Contracting Officer (AC). In DoD, ACO's are part of the Defense Contract Management Agency (DCMA).

The top level responsibility rests with the Contracting Officer. Anything delegated must be delegated in writing.

Here's where problems arise. Sometimes there are Government employees running around acting like they have a lot of authority. These could be Contracting Officer Representatives, Contracting Officer Technical Representatives, inspectors, quality control people, and sometimes even auditors. Be very careful when you follow their advice or take some kind of contractual action based on their requests, demands, directions, or assurances. 

Beware when you comply with such direction. The person making the request/demand may not have the authority to do what he/she just did. It could be a construction project where an inspector tells you to place the door here instead of there. If he didn't have the authority to make that change, you will not prevail in an equitable adjustment for increased costs. This happens a lot in depot level maintenance contracts where someone on the Government's side has to decide whether particular work is included in the basic contract or represents "over and above" work that should be compensated. If a contractor relies upon direction from an individual that does not have the authority to bind the Government, the chances of prevailing in a dispute are diminished.

In the old days, courts (including the Board of Contract Appeals) were inconsistent in deciding whether the contractor acted in good faith in relying on a Government representative's actions. However, in a 2007 Federal Circuit Court decision (Winter v. Cath-dr/Balti Joint Venture), that former "flexibility" was sharply limited.

For more information on this, follow this link.

What Does the ACO (Administrative Contracting Officer) Do?

People that are new to Government contracting (and we were there once) are often perplexed by similar sounding, yet very different roles and responsibilities among Government contracting professionals; contracting officer (CO), procurement contracting officer (PCO), administrative contracting officer (ACO), termination contracting officer (TCO), contracting officer's representative (COR), contracting officer technical representative (COTR), for example.

The contracting officer is the main person with authority to enter into, administer, and/or terminate contracts and make related determinations and findings. That person then, may or may not delegate some of their authority to authorized representatives to assist in certain matters. Usually, but not always, the contracting officer will delegate contract administration functions to an ACO (Administrative Contracting Officer). The ACO function within DoD is the Defense Contract Management Agency (DCMA).

The administrative functions that are normally delegated to an ACO are listed in FAR 42.302. There are 81 of them so we're not going to list them all. You can refer to the complete listing here. Of the 81 administrative tasks, 78 are optional in that the CO may delegate the functions or, in a rare case, choose to retain the functions in-house. The three administrative functions that are reserved for the ACO specifically are:

1. Negotiating forward pricing rate agreements
2. Establishing final indirect cost rates and billing rates
3. Anything dealing with Cost Accounting Standards (CAS)

The ACO's organization (sometimes referred to as CAO, Contract Administration Office) are the ones responsible for CIPRs (Contractor Insurance/Pension Reviews), CPSR (Contractor Purchasing System Reviews), and EVMS (Earned-Value Management Systems) oversight.

The ACO is the person contractors usually start with when there are any billing issues (though DCAA plays a role in that process as well). The ACO can negotiate advance agreements applicable to the treatment of costs, issue notices of intent to disallow costs, and levy penalties for unallowable costs.

For contractors, the ACO is arguably your most important contact, once your contract has been negotiated. Get to know him or her.

Don't know who your ACO is? Just click here and enter a Contract Number (or your CAGE Code)