Can a contractor be held liable for an Unauthorized Commitment by the KO or government.
The prime contractor is responsible for the delivery of goods and services to the Government, and for managing subcontractors in the deliverance of goods and services to the Government. The Government does not have privy of contract with the subcontractor. The question states that the subcontractor (to the prime contractor), without authorization from the prime contractor nor the Government, provided software patches to a Government system. The software patches were not part of the contract between the Government and the prime contractor. The Government has a separate contract with a different prime contractor who provides software maintenance. The question is who is liable for the cost of the software patches provided by the subcontractor. The prime contractor, who has privy of contract with the Government, is responsible for the management of its subcontractors. As such, the prime contractor bears the risk for the cost of the software patches. If the Government believes that a benefit has been received for these software patches, the Government may negotiated, with the prime contractor, an equitable adjustment to the contract. However, the Government would then have two (2) contractors responsible for software maintenance of the Government system. The prime contractor for the software patches and a different prime contractor who is responsible for software maintenance on the Government system. The prime contractor can also have the subcontractor remove the software patches that were provided to the Government system. The removal is the prime contractor’s liability. The Government can also have the prime contractor remove the software patches at the prime contractor’s liability. Obviously all of the above scenarios should be discussed with the Chief Information Officer (CIO) or appropriate information technology personnel.
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