who is responsible for the debt? if the government is responsible should the contractor submit a claim or should contracting deal with this as a unauthorized commitment? (no government official agreed to continued performance but neglect may have been on the government side due to no follow-up after contract closeout.) also could it be considered abandoned property? What FAR, DFARS, AFFARS, or GAO decision reference may speak to government neglect may be construed as acceptance?
1. The FAR references quoted below in pertinent part are applicable to this response.
FAR 1.602-3 -- Ratification of Unauthorized Commitments
“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.
FAR 2.101 -- Definitions
“Excess personal property” means any personal property under the control of a Federal agency that the agency head determines is not required
for its needs or for the discharge of its responsibilities.
“Personal property” means property of any kind
or interest in it except
real property, records of the Federal Government, and naval vessels of the following categories: (1) Battleships; (2) Cruisers; (3) Aircraft carriers; (4) Destroyers; and (5) Submarines.
FAR 4.804-4 -- Physically Completed Contracts
(b) Rental, use, and storage agreements are considered to be physically completed when --
(2) The contract period has expired.
FAR subpart 33.2 -- Disputes and Appeals
FAR 33.201 -- Definitions
As used in this subpart--
“Issue in controversy” means a material disagreement between the Government and the contractor that--
(1) May result in a claim or
(2) Is all or part of an existing claim.
2. The following reference is also applicable to this response: Appeal of Golden Wings, Inc. under Contract No. W91GY0-07-C-0629, ASBCA No. 57136 dated 17 March 2011
3. Per FAR 1.602-3(a)
, an unauthorized commitment results from an express agreement by a Government representative who lacked the authority to enter into that agreement on behalf of the Government. Because this inquiry states that “no government official agreed to the continued performance”, the disposition of this situation would not be handled as an unauthorized commitment. The equipment in question is not “excess personal property” as defined above because the Government subsequently purchased this equipment for additional use. Therefore, this equipment does not qualify as “abandoned property” under the policy and procedures described in FAR 45.603, Abandonment or Destruction of Personal Property
4. Pursuant to FAR 4.804-4(b)(2)
, the lease agreement was physically complete when the contract period expired
and the contract closed out. The Armed Services Board of Contracts Appeals (ASBCA) case referenced above describes a lease situation for vehicles where the contractor incurred post contractual
(i.e., the lease agreement had expired) storage and depreciation costs as part of a damages claim. The ASBCA ruled that the contractor’s actions that resulted in such costs were voluntary and did not form a basis for a claim against the Government and hence denied the claim. Based on the facts stipulated in this inquiry, it would appear that the contractor’s actions in continuing the lease without authorization by the contracting officer and sending invoices to the other contractor for payment were similarly voluntary and not directed by the Government.
5. Based on the above, we believe that the Government is not liable for the additional $10K-$25K of leasing costs that resulted from the contractor’s voluntary actions. If this situation becomes an “issue in controversy”, then the contractor can file a formal claim with the contracting officer for reimbursement of these costs which then would be dispositioned in accordance with the procedures described in FAR subpart 33.2.