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    Will the CO holding that warrant, with said limitation of contract actions of less than $100,000, be in violation of that limitation if he/she signs a modification deobligating the contract by $130,000. There were no funds obligated; the entire mod is for the deobligation. If they are in violation, even though the amount is not to obligate funds, would this need to be ratified, and if so, why, since no money was obligated?


    Answer

    The following response is based solely on the question and background information provided.  As we do not have all the facts particular to your contract, program and situation, we highly recommend you consult with your Contracting Officer and Legal Office for guidance. 
     
    FAR 1.602-1(a) states "Contracting Officers have authority to enter into, administer, or terminate contracts and make related determinations and findings. Contracting officers may bind the Government only to the extent of
    the authority delegated to them. Contracting officers shall receive from the appointing authority (see 1.603-1) clear instructions in writing regarding the limits of their authority. Information on the limits of the contracting officers' authority shall be readily available to the public and agency personnel.
    (b) No contract shall be entered into unless the contracting officer ensures that all requirements of law, executive orders, regulations, and all other applicable procedures, including clearances and approvals, have been met. Further the SF 1402, Certificate of Appointment states "The undersigned and in conformance with Subpart 1.6 of the Federal Acquisition Regulation NAME_is appointed Contracting Officer for the United States of America Subject to the limitations contained in the Federal Acquisition Regulation and to the following: DOLLAR AMOUNT. If the warrant was for contract actions less than $100,000, then any actions above $100,000 would be in violation of the limitations stated on the SF1402, Certificate of Appointment. Concerning the ratification question, see FAR 1.602-3(c) Limitations below which states "The authority in subparagraph (b)(2) of this subsection may be exercised only when --
    (1) Supplies or services have been provided to and accepted by the Government, or the Government otherwise has obtained or will obtain a benefit resulting from performance of the unauthorized commitment;
    (2) The ratifying official has the authority to enter into a contractual commitment;
    (3) The resulting contract would otherwise have been proper if made by an appropriate contracting officer;
    (4) The contracting officer reviewing the unauthorized commitment determines the price to be fair and reasonable;
    (5) The contracting officer recommends payment and legal counsel concurs in the recommendation, unless agency procedures expressly do not require such concurrence;
    (6) Funds are available and were available at the time the unauthorized commitment was made; and
    (7) The ratification is in accordance with any other limitations prescribed under agency procedures.
     
    Per paragraph (c)(1), will the Government receive a benefit and be able to reuse those funds on future procurements by the deobligation action? My recommendation is to talk with your legal office to see what course of action they recommend.  It appears that a violation has occurred and some form of documentation is required. 
      
     
    1.602-3 -- Ratification of Unauthorized Commitments.
    (a) Definitions.
    "Ratification," as used in this subsection, means the act of approving an unauthorized commitment by an official who has the authority to do so. "Unauthorized commitment," as used in this subsection, means an agreement that is not binding solely because the Government representative who made it lacked the authority to enter into that agreement on behalf of the Government.
    (b) Policy.
    (1) Agencies should take positive action to preclude, to the maximum extent possible, the need for ratification actions. Although procedures are provided in this section for use in those cases where the ratification of an unauthorized commitment is necessary, these procedures may not be used in a manner that encourages such commitments being made by Government personnel.
    (2) Subject to the limitations in paragraph (c) of this subsection, the head of the contracting activity, unless a higher level official is designated by the agency, may ratify an unauthorized commitment.
    (3) The ratification authority in subparagraph (b)(2) of this subsection may be delegated in accordance with agency procedures, but in no case shall the authority be delegated below the level of chief of the contracting office.
    (4) Agencies should process unauthorized commitments using the ratification authority of this subsection instead of referring such actions to the Government Accountability Office for resolution. (See 1.602-3(d).)
    (5) Unauthorized commitments that would involve claims subject to resolution under the Contract Disputes Act of 1978 should be processed in accordance with Subpart 33.2, Disputes and Appeals.
    (c) Limitations. The authority in subparagraph (b)(2) of this subsection may be exercised only when --
    (1) Supplies or services have been provided to and accepted by the Government, or the Government otherwise has obtained or will obtain a benefit resulting from performance of the unauthorized commitment;
    (2) The ratifying official has the authority to enter into a contractual commitment;
    (3) The resulting contract would otherwise have been proper if made by an appropriate contracting officer;
    (4) The contracting officer reviewing the unauthorized commitment determines the price to be fair and reasonable;
    (5) The contracting officer recommends payment and legal counsel concurs in the recommendation, unless agency procedures expressly do not require such concurrence;
    (6) Funds are available and were available at the time the unauthorized commitment was made; and
    (7) The ratification is in accordance with any other limitations prescribed under agency procedures.
     
     

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