1.602-3
Ratification of unauthorized commitments
Unauthorized commitments can only be ratified under strict conditions, and contractors should ensure government representatives have proper authority before accepting agreements.
Overview
FAR 1.602-3 addresses the ratification of unauthorized commitments—agreements made by government personnel who lacked the authority to bind the government. This section defines key terms, outlines agency policy to discourage unauthorized commitments, and establishes the process and limitations for ratifying such actions when they occur. It also clarifies the roles of contracting officers and agency officials in reviewing and approving ratifications, and provides guidance for handling nonratifiable commitments.
Key Rules
- Definitions
- "Ratification" is the approval of an unauthorized commitment by an authorized official. "Unauthorized commitment" is an agreement not binding on the government because the representative lacked authority.
- Policy
- Agencies must minimize unauthorized commitments and use ratification procedures only when necessary. Ratification authority generally rests with the head of contracting activity or higher, and may not be delegated below the chief of the contracting office.
- Limitations
- Ratification is only allowed if the government received a benefit, the ratifying official has proper authority, the contract would have been proper if made by a contracting officer, the price is fair and reasonable, payment is recommended by the contracting officer and legal counsel, funds were available at the time, and agency procedures are followed.
- Nonratifiable Commitments
- If a commitment cannot be ratified, it may be resolved through the GAO claims process or under FAR subpart 50.1, with legal advice required.
Responsibilities
- Contracting Officers: Review unauthorized commitments, determine price reasonableness, recommend payment, and ensure compliance with agency procedures.
- Contractors: Ensure they only accept commitments from authorized government representatives to avoid payment risks.
- Agencies: Establish procedures, designate ratification authority, and discourage unauthorized commitments.
Practical Implications
- This section exists to protect the government from unauthorized obligations and to provide a controlled process for resolving such situations. Contractors risk nonpayment if they act on unauthorized commitments. Agencies must ensure robust training and oversight to prevent unauthorized actions and follow strict procedures when ratification is necessary.