Delegation of authority
Delegation of authority for extraordinary contract actions is tightly controlled, with high-value and high-risk decisions reserved for senior agency officials to ensure accountability and uniformity.
Overview
FAR 50.102-1 outlines the rules for delegating authority under Public Law 85-804 and Executive Order 10789, which allow agencies to enter into, amend, or modify contracts to facilitate national defense. The section specifies who within an agency can be given this authority and sets strict limits on how far down the chain of command this authority can be delegated, especially for high-value or high-risk contract actions.
Key Rules
- Written Delegation Required
- Agency heads may delegate authority, but only in writing and with clear limitations.
- Uniformity of Action
- Delegated authority must be at a sufficiently high level to ensure consistent application across the agency.
- Dollar Threshold for Delegation
- Authority to approve obligations over $90,000 cannot be delegated below the secretarial level.
- Amendments Without Consideration
- Authority to approve amendments that increase contract or unit price without consideration cannot be delegated below the secretarial level, except in extraordinary, justified cases.
- Indemnification Authority
- Authority to indemnify against unusually hazardous or nuclear risks is strictly limited to the agency Secretary, Administrator, Public Printer, or TVA Chairman.
Responsibilities
- Contracting Officers: Must ensure actions are approved by the appropriate authority level and not act outside delegated powers.
- Contractors: Should verify that contract modifications or indemnifications are properly authorized.
- Agencies: Must document delegations in writing and maintain oversight to ensure compliance with delegation limits.
Practical Implications
This section ensures that significant or high-risk contract actions are reviewed and approved at the highest appropriate levels, reducing risk and ensuring accountability. Contractors and contracting officers must be vigilant about proper authorization, especially for large obligations or indemnification clauses, to avoid unauthorized commitments or legal challenges.