Thursday, February 6, 2014

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.

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