An Unauthorized Commitment in federal acquisitions refers to an agreement or action by a government representative who lacks the authority to bind the government contractually. These actions are not legally binding on the government until properly reviewed and ratified.

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Definition of Unauthorized Commitment

According to FAR 1.602-3:

• An unauthorized commitment occurs when a government representative without proper authority obligates the government to pay for goods or services.
• Examples include:
  • A government employee directing a contractor to perform work without a signed contract.
  • Overstepping delegated authority limits.
  • Acquisitions made by personnel not designated as contracting officers.

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Consequences of Unauthorized Commitments

• The government may not be legally bound to honor the commitment.
• Could result in financial loss for the contractor and disciplinary action for the employee.
• Reflects poorly on the agency’s adherence to procurement regulations.

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Ratification of an Unauthorized Commitment

Ratification is the process by which an authorized official approves and legitimizes an unauthorized commitment, making it a valid government obligation.

Conditions for Ratification (FAR 1.602-3(c))

An unauthorized commitment can be ratified only if all the following conditions are met:

1. Government Benefit: The government received a benefit from the goods or services provided.
2. Contracting Officer Authority: The ratifying official has the authority to enter into a contractual agreement and to ratify the unauthorized act.
3. Funding Availability: Adequate funds were available at the time the unauthorized commitment was made and remain available.
4. Reasonable Action: The commitment would have been proper if made by an authorized contracting officer.
5. Documentation: The person who made the unauthorized commitment provides a complete written statement detailing the circumstances.
6. Fair Price: The price agreed upon must be determined fair and reasonable.

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Process for Ratification

1. Identify the Unauthorized Commitment:
   • Review the details of the commitment and assess whether ratification is appropriate.
2. Request for Ratification:
   • The individual who made the unauthorized commitment must submit a written request explaining the situation, including:
     • The nature of the goods or services.
     • Why the unauthorized action occurred.
     • Any correspondence or agreements with the contractor.
3. Review by Contracting Officer:
   • The contracting officer evaluates whether the conditions for ratification are met and determines if the price is fair and reasonable.
4. Approval by an Authorized Official:
   • Ratification requires approval from an official with appropriate authority, typically the head of the contracting activity (HCA) or a designated representative.
5. Completion:
   • Once approved, a formal contract or modification is issued to bind the government legally.

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Prevention

• Training: Ensure government personnel understand their roles and the limitations of their authority.
• Clear Communication: Emphasize the importance of involving contracting officers in all procurement-related decisions.
• Oversight: Implement checks to prevent unauthorized commitments.

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By adhering to these steps and guidelines, agencies ensure compliance with federal acquisition regulations and maintain accountability in procurement practices.