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Scope Changes Must Be Authorized

Know the titles of acquisitions officials. There are many acquisition officials who might be involved during the negotiation, administration and settlement of a government contract. But there is one fact you should know. Contracting Officers are the individuals who have been granted explicit authority to enter into, administer and terminate contracts. They are the only individuals with this authority.

Contracting Officers have the responsibility for ensuring performance and compliance with contract terms and conditions, as well as protecting U.S. government interests. In this regard, they are given wide latitude to exercise business judgment. Agencies are required to maintain procurement career management programs and a system for selecting, appointing and terminating Contracting Officers.

It is important to be aware that there are some contractual functions that cannot be delegated and can only be performed by Contracting Officers. Only they can:

  • Award, agree to, or execute a contract.
  • Award, agree to, or execute a contract modification, including a scope change.
  • Obligate the government payment of money.
  • Make a final decision under the disputes clause.
  • Direct the contractor to incur costs not specifically covered by the contract.
  • Terminate a government contract for convenience or default.

FAR 43.104: “When a contractor considers that the government has effected or may effect a change in the contract that has not been identified as such in writing and signed by the contracting officer, it is necessary that the contractor notify the government in writing as soon as possible.”

Contracting Officers are classified into different functional categories, although any one individual can be responsible for performing in multiple categories for a given contract.

Procuring Contracting Officers, known as PCOs, are the individuals who are responsible for the contract negotiation and award and will sign the initial contract document. In many instances, following award, the PCO may delegate authority to perform some, many or all contract administration functions to a contract administration office.

The contract will then be overseen by an Administrative Contracting Officer, known as an ACO. United States government contractors operating in multiple geographic locations at separate business units or divisions often have corporate-wide policies, procedures and activities requiring government oversight. In these instances, a Corporate Administrative Contracting Officer, known as the CACO, will be assigned to deal with management and perform contract administration functions on a corporate-wide basis.

When contractors do business with multiple government agencies, one of them is deemed to be cognizant. This means they have responsibility for several oversight areas with potential financial impact on all of a contractor’s government contracts. The cognizant federal agency is normally the agency with the largest dollar amount of negotiated contracts. Contracting Officers at these locations may be referred to as Divisional Administrative Contracting Officers, also known as DACOs. They may also be called Principal Administrative Contracting Officers, also known as PACOs.

While these Administrative Contracting Officers have authority to exercise unilateral change orders that have zero dollar impact, only the Procuring Contracting Officer has authority to “obligate government funds”, and thus, authority to make bilateral changes that amend the contract amount.

Also, when the government terminates a contract for convenience or default, the Contracting Officer who is assigned to administer the terminated action is the Termination Contracting Officer, or TCO. A TCO also has authority to obligate the government’s funds.

Contracting Officers are not necessarily physically present during the performance of a contract. In addition, they usually do not have the time or technical expertise to monitor contractor activities. Program personnel are normally assigned to keep the Contracting Officer fully informed of any technical or contractual difficulties that arise during performance. A Contracting Officer’s representative, also known as the COR, assists in the technical monitoring or administration of a contract. This individual may also be called a Contracting Officer’s technical representative, or COTR.

The Contracting Officer will typically designate a properly trained COR or COTR before the contract begins. Their typical responsibilities are to assure the contractor is performing the technical requirements, inform the contractor of failures to comply and advise the Contracting Officer of any potential problem areas under the contract.

CORs and COTRs do not have the authority to award, agree to, or sign any contract, delivery order or task order. They do not have the authority to:

  • Make any commitments or otherwise obligate the government.
  • Make any changes to the contract.
  • Grant deviations or waive any contract terms and conditions.
  • Impose or place a demand upon the contractor to perform any task or permit any substitution that is not specifically provided for in the contract.

Tip: Always verify changes are authorized by the designated Contracting Officer. In addition:

  1. Avoid verbal change orders.
  • Obtain scope changes and associated dollar changes in writing (a good practice).
  • Obtain scope changes and associated dollar changes in the form of a contract amendment (a best practice).
  1. Establish an internal change process.
  • Limit internal authority to execute contract changes.
  • Make sure authorized internal personnel know their COs.
  • Make sure project employees know to work through an authorized internal contract executor.

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