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  • Question

    If a CLIN total has been exceeded, but there is still funding available on the contract and the period of performance is active, would this be an unauthorized commitment? If there is funding available on other CLINS, is there any restriction on moving funds from one CLIN to another to prevent a UAC?


    Answer

    1. The FAR references quoted below in pertinent part are applicable to this response.

    FAR 1.602-3 -- Ratification of Unauthorized Commitments
    (a) Definitions. “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.
      (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.

    (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.

    2. As indicated in FAR 1.602-3(a), an unauthorized commitment (UAC) in this case would mean that the some Government representative who lacked the requisite authority expressly directed the contractor to provide more services than the amount contracted for under the nursing services CLIN. If this was actually the case, then this UAC must still be ratified in accordance with the procedures set forth in FAR 1.602-3(b)(2) & (c), notwithstanding the fact that funds are available on the contract to cover the UAC. Once the UAC is formally ratified, then funds can be transferred from other CLINS to the nursing services CLIN for the UAC.


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