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    Since financial specialists manually enter obligations into an electronic system and obligations do not occur "real" time due to financial specialists not obligating when they get the notice from the Contracting Officer to do so, should contracts be signed and distributed to the awardee once the Contracting Officer knows the obligation has actually occurred or should the contract be signed before the obligation has occurred? The signing and obligating of contracts are not done concurrently. I'm just trying to determine if it is correct to sign the contract and obligate or obligate and sign the contract.


    There is always a lag time between the action of the Contracting Officer signing the contract document and the financial office receiving a copy to post into the financial system to document the obligation of funds.  The awarding of contracts and obligating the Government to pay contractors is a responsibility and authority reserved to Contracting Officers holding a warrant that authorizes them to act.  The Federal Acquisition Regulation (FAR) covers this under the FAR:

     1.602-1 -- Authority.

    (a) 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.
    The FAR further delineates Contracting Officers’ responsibilities:

    1.602-2 -- Responsibilities.

    Contracting officers are responsible for ensuring performance of all necessary actions for effective contracting, ensuring compliance with the terms of the contract, and safeguarding the interests of the United States in its contractual relationships. In order to perform these responsibilities, contracting officers should be allowed wide latitude to exercise business judgment. Contracting officers shall --
    (a) Ensure that the requirements of 1.602-1(b) have been met, and that sufficient funds are available for obligation; …
    Therefore, the contract (signed by the Contracting Officer) must come BEFORE the recording of the obligation of dollars can be entered into any financial management system.  Recording the obligation of funds before the signature of the contract by the Contracting Officer would be inappropriate.  Usually, a copy of the signed contract document is distributed simultaneously to the financial management office and the contractor – additional distribution to other interested parties can follow later.

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