401.12 - Ratification of Unauthorized Commitments
8/5/94
OPR: Admin/Procurement and Contracts
1. Purpose. This chapter sets forth the policy and procedures for requesting and approving the ratification of unauthorized procurement commitments and implements Federal Acquisition Regulation (FAR) 1.602-3 and Department of the Interior Acquisition Regulation (DIAR) 1401.602-3.
2. Policy.
A. Commitments by unauthorized employees violate federal regulations and may result in violations of law, including various acquisition statutes and the Anti-Deficiency Act. The procedures of this chapter may not be used in a manner that encourages such commitments being made by USGS employees. Each Division within the USGS should take positive action to preclude, to the maximum extent possible, the need for ratification actions.
B. Employees must take care in communications with outside parties to ensure that no unauthorized commitments or purchases are made. An employee who makes a commitment without authority to act on behalf of the Government is legally deemed to have acted on his or her own behalf. A vendor might pursue legal action to obtain compensation for damages directly from the employee when compensation cannot be obtained from the Government.
C. The ratification process applies when an employee has made an agreement which would have formed a binding contract except for the employee's lack of authority. If any of the basic elements of contract (e.g., mutual consent, clear and certain terms, legality of purpose, or receipt of a benefit) is not present, there may have been no liability created and no ratifiable commitment.
D. Ratification actions may be approved only when the approving official has authority to contract for the item/service involved. Actions requiring delegation of authority (such as information processing (FIP) resource or GSA real property authority) may be ratified only when and if the required authority delegation is granted. The action must also be a proper use of appropriated funds (not prohibited, such as a "personal use" expense).
E. Procedures of this chapter do not apply to requests to reimburse employees for unauthorized purchases made or expenses incurred. (See also SM 335.4.2.)
3. Responsibilities.
A. Employee Responsible for Unauthorized Action - The employee whose action or inaction gave rise to the unauthorized liability is responsible for initiating the procurement request, providing supporting details and documentation, and for taking corrective action to avoid a recurrence of the problem.
B. Contracting Officer -
(1) Reviews the procurement request package to determine if ratification is necessary and appropriate, based on the conditions for ratification in FAR 1.602-3(c);
(2) Analyzes the action in the context of any existing contract or order to determine whether the matter can be resolved under the Contract Disputes Act;
(3) Obtains and analyzes background information and any relevant documentation as necessary to make determinations as to quantum and entitlement, including the extent to which the contractor's own actions contributed to the unauthorized action, and any other mitigating factors which may limit or void the Government's liability;
(4) Prepares the payment recommendation and obtains any required higher level approval, prepares and awards the ratifying contractual document.
Only Contracting Officers in the Office of Procurement and Contracts or regional Procurement and Contracts Branches may award ratification actions.
4. Procedures.
A. Ratification Request. As soon as it is discovered that an unauthorized commitment has occurred, the USGS employee responsible for the action should first see that any further performance or deliveries are stopped, or in the case of essential services, that contractual coverage is established as soon as possible. If practical, unintended deliveries of goods should be returned to the vendor. The responsible employee will coordinate with an official authorized to approve requisitions in preparing a DI-1 to cover the action to be ratified and attach the following information:
(1) Background information and description of circumstances, including vendor name; description of the item(s) or service(s) obtained; the dollar value of the item(s) or service(s) obtained; and a narrative of what happened, how it happened, and who was involved;
(2) Statement from an authorized funds certifying official that funds were available at the time the unauthorized commitment occurred and that funds are still available for use in the ratification;
(3) Vendor invoice or claim letter (if any) supporting the amount of the unauthorized commitment, and copies of any other relevant correspondence or documents.
The requisition approving official forwards the complete requisition package to the supporting procurement unit that would execute any resultant contract or order.
B. Contracting Officer review. The assigned Contracting Officer (CO) reviews relevant documents and information, determines whether the action is ratifiable under FAR 1.602-3, and recommends payment to the vendor. This recommendation requires concurrence of the Office of the Solicitor for actions exceeding $1,000 (DIAR 1401.602-3(b)) and approval by the ratifying official in c. below. For actions requiring ratification at the level of the Chief, Office of Procurement and Contracts or higher, the CO forwards the ratification payment recommendation through his/her Branch Chief to the Chief, Office of Procurement and Contracts. An information copy of each signed approval will be forwarded by the approving official to the Procurement Policy Branch, which will be responsible for maintaining a log of ratifications.
C. Approval. The following officials may approve ratifications and authorize the issuance of a ratifying contractual document for actions in the designated amounts.
(1) Over $100,000.00 - Assistant Director for Administration
(2) $25,000.01 to $100,000 - Chief, Office of Procurement & Contracts
(3) $25,000 or less - Chief of the Contracting Office as defined in DIAR 1402.1.
The approved ratification recommendation will be returned to the Contracting Officer, who will complete the procurement, including determining a fair and reasonable price and executing the contractual document.
D. Nonratifiable actions. If the Contracting Officer believes that the action does not meet the criteria for ratification in FAR 1.603(c), the matter will be referred to the Solicitor as required by FAR 1.602-3(d) and DIAR 1401.602-3(c). The Contracting Officer responsible for the payment recommendation will advise the contractor in writing when an action will not be ratified, and is responsible for issuing a Contracting Officer's decision if appropriate.