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  • Question

    Under what circumstances can a CO authorize a contractor in a non-combat environment to work at risk (prior to fund obligation onto the contract)?


    Answer

    The contracting officer does not have the authority to authorize a contractor to work at risk.  FAR 1.602-1(b) states, “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.”  The creation of an obligation in advance of an appropriation would be a violation of the Anti-Deficiency Act.  A violation occurs when an obligation is created (e.g. by directing the contractor to perform work) without having the funds in hand, regardless of whether or not the obligation is put into writing (such as a signed contract or PCO letter).  In addition, FAR 32.704(c) states, “Government personnel encouraging a contractor to continue work in the absence of funds will incur a violation of Revised Statutes section 3679 (31 U.S.C. 1341) that may subject the violator to civil or criminal penalties.” 

    Knowingly allowing services to be performed without a contract might also be construed as accepting voluntary services, potentially in violation of 31 U.S.C. 1342.  In the event of a Continuing Resolution, the Contracting Officer can exercise an option year without funding if
    FAR 52.232-19 -- Availability of Funds clause is included in the contract, which essentially informs the contractor of the government’s intent and willingness to exercise the option and that the contractor can perform if and when funds become available.  However, the clause does not give the Contracting Officer authority to direct or encourage the contractor to perform work without the necessary funds being available. 

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