Case Study #1

Provide a detailed response to the case study provided below. Your response should be less than two pages, double-spaced, not including a References page. It is critical that you support your statements with sources provided in the course.

Line of Contracting Authority

It is important for every contracting professional to know the authority of the individuals you deal with under a contract. Uncertainty over the authority of those you are dealing with can create problems related to (a) the authority to bind the agency or contractor or (b) the nature and extent of contract's requirements and scope.

Government personnel possess express actual authority to contractually bind the contract only when clearly granted such authority by the Constitution, a regulation, or statute. While the contracting officer is the only person authorized to enter into, obligate (bind the government), and administer an agency contract, other individuals, such as inspectors and contracting officer technical representatives (COTRs) may have delegated authority under a contract. Knowing the limits of those with delegated authority can reduce the possibility of disputes related to changes in a contract's requirements. Particularly in cases where performance issues arise, it is important to obtain proper authorization for altering any aspect of the contract. In some cases, the government may be bound by those acting with implied authority. A contract may contain clauses that specifically limit the ability of those with delegated authority from binding the government through their acts.

Therefore,it is important to distinguish between actual, implied and apparent authority. A government official with apparent authority, such as an assistant secretary, does not have the power to contractually bind the government where such activity is not a part of that person's regular duties. Numerous court and board decisions exist holding that contractual acts of senior agency officials, including agency secretaries, as well as others without contractual authority were insufficient to bind the government because the individual possessed only apparent authority. For example, in one case FBI special agents could not contractually bind the government because such actions were not integral to their assigned duties. Roy v. United States, 38 Fed.Cl. 184 (1997).

However, under some circumstances, the acts of a person with implied authority, such as an inspector or contracting officer'srepresentative, may be sufficient to bind the government - particularly where the actions are subsequently ratified by the contracting officer. In these cases, there must be some amount of express actualauthority.

Case #2

Under a firm-fixed price contract involving engineering services, a contractor is tasked with evaluating information related to certain aspects of bridge construction related to stream scour (wearing away) and preparing a manual identifying related problems and discussing solutions. The contract identified the Contracting Officer's Technical Representative (COTR) as the person responsible for technical administration of the contract. The contract further stated that:

"The COTR IS NOT authorized to change the scope of work or specifications as stated in the contract, to make any commitments or otherwise obligate the government or authorize any changes which affect the contract price, delivery schedule, period of performance or other terms and conditions.The contracting officer is the only individual who can legally commit or obligate the government for the expenditure of public funds. The technical administration of this contract shall not be construed to authorize the revision of the terms and conditions of this contract. Any such revision shall be authorized in writing by the contracting officer."

The contract also included the Changes clause, FAR 52.243-1, which provides that the contracting officer may, at any time, make changes to the specifications. The clause also provides that if such changes increase the cost of performance, the contracting officer shall make an equitable adjustment to the contract price. The contractor must assert its right to such adjustment within 30 days from the date it receives the change order, although the contracting officer, at his/her discretion may consider requests for adjustment prior to final payment.

During contract performance, a bridge on a state highway collapsed, causing fatalities, after a period of heavy water flow undermined the bridge. The event caused a change in the agency's overall efforts related to bridge stability, as it was now pressured to disseminate information on how to protect bridges from undermining by high water flow (stream stability).

At a subsequent meeting between three contractor employees and the COTR, the COTR directed the contractor to furnish a manual that discusses not only stream scour, but also stream stability. The contractor employees attending the meeting were not authorized to agree to changes in the contract's terms; however, they agreed with the COTR to revise the manual to add a discussion of stream stability and high water flow to the analysis of stream scour. The COTR followed up the meeting with written direction to make the changes.

The contractor began reworking the manual per the discussions with the COTR. Fifteen days after the meeting in which the contract changes were agreed to, the contractor, in a monthly progress report to the contracting officer, stated that it was assessing the amount of work and time that would be required to make the revisions to the manual requested at the meeting. The contracting officer did not respond to the contractor's notice concerning the changes to the contract.

In the following weeks, the contractor submitted a revised manual outline, revised chapters, and finally, a revised manual per the COTR's direction.

After submission of the final revised manual, the contractor filed a request for additional compensation with the contracting officer.

Required Response

Based on the law principles discussed in the first two weeks of the course, put forth your argument as to (2a) whether the COTR's direction to the contractor concerning the manual was a change to the contract and (2b), whether the contractor is entitled to recover its additional costs of revising the manual. In preparing your response, deal only with the stated facts.