Acquisition Letter AL #30

MAR 28 1986

ACQUISITION LETTER (AL) NO. 30

MEMORANDUM FOR:	Heads of Contracting Offices
FROM:	Hugh L. Brennan Director, Procurement and Administrative Services
SUBJECT:	Ratification of Unauthorized Procurement Actions

1. PURPOSE:

This Acquisition Letter (AL) establishes procedures for ratification when an unauthorized procurement action has taken place. Care must be exercised to prevent unauthorized individuals from making statements that may be interpreted by vendors as commitments to either commence work or to provide services or supplies. All program officials (and employees who are working in a position that requires them to deal with commercial and other non-federal organizations must be aware of these policies to prevent difficulties in the procurement process and embarrassment to the Department.

Commitments of an unauthorized nature must be avoided. The ratification of an unauthorized transaction is time-consuming, requires considerable documentation, and damages the Department's ability to conduct future business with the affected firm.

2. POLICY:

Subpart 1.6 of the Federal Acquisition Regulation (FAR) provides that only a contracting officer has the authority to enter into contracts on behalf of the Government. The FAR Subpart outlines qualifications required for contracting officers and discusses their duties and limitations.

The Department has further specified contracting officer qualification requirements in the "Contracting Officer Certification/Warrant Program" and the Commerce Acquisition Regulation (CAR), which implements the FAR coverage within the Department. The CAR states that the Department is not bound by any formal or informal type of agreement or contractual commitment which is made by persons who are not delegated contracting authority. No one other than a properly designated contracting officer (or purchasing agent) may request bids, proposals, or quotations, or make a contractual commitment on behalf of the Department.

3. DEFINITIONS:

a. Blanket Purchase Agreement. An agreement providing for the purchase of day-to-day requirements through agreements with vendors or dealers to furnish supplies or services on a "charge account" basis. These agreements authorize certain employees to make orders or "calls" up to a stated amount.

b. Ratification, as used in this A. L., means the act of approving an unauthorized procurement action, by an official who has the authority to do. so.

c. Responsible Officials:

(1) Ratification Officer. Head of the Contracting Activity (RCA) as defined in DAO 208-2, Section.2.d.

(2) Responsible Program Official. Regional Directors, Center Directors, Laboratory Directors, or equivalent.

(3) Head of the (Servicing) Contracting Office (HCO). As defined in DAO 208-2, Section 2.e.

d. Unauthorized Procurement Action. A representation of commitment on behalf of the Department by an unauthorized person concerning a procurement. Some examples of unauthorized procurement actions are:

(1) A request for a proposal from an educational institution, state agency, or other vendor, including those assumed to be "sole source", with an implied commitment for a contract. (Procurement statutes, regulations, and current procedures involving "sole source" procurements are very restrictive.);

(2) A commitment for construction, alteration, or renovation;

(3) A commitment for continuation of services or research, or delivery of supplies under an expired contract, purchase order, or delivery order;

(4) A commitment for performance of work or delivery of supplies prior to issuance of a contract, purchase order, or delivery order;

(5) A commitment which exceeds the call order limit on a Blanket Purchase Agreement'(BPA);

(6) A commitment under a BPA by a person who is not delegated authority;

(7) A commitment which continues contract services over and above the original scope and dollar amount; or

(8) A commitment made by an otherwise authorized contracting officer exceeding the level of authority delegated to the individual or position.

3. PROCEDURES:

a. When an unauthorized procurement action has occurred, the Responsible Program Official is required to submit to the Head of the (Servicing) Contracting Office a memorandum of all the facts concerning the unauthorized procurement action, including all pertinent records and documents. The memorandum shall include:

(1) A statement regarding the nature of the unauthorized procurement action and the individuals involved, including all managers who knew of the action and allowed it to take place;

(2) A discussion of the program requirements and an explanation of how the unauthorized procurement action occurred, and why it was considered valid and necessary to meet program requirements;

(3) An explanation of the selection of the proposed contractor, i.e., the "sole source justification", if any, of the initial selection, and names, addresses, phone numbers, and quotes received from any other sources that were considered;

(4) A statement of any approvals or clearances received for the unauthorized procurement action, including a listing of who told the contractor to proceed and on what date the contractor was so notified;

(5) A description of the work performed or products furnished, including the date work started;

(6) The estimated or agreed to purchase price and the estimated or agreed to completion date and the date when they were agreed to (include how price or cost reasonableness was evaluated and who agreed to it);

(7) A copy of the most current invoice;

(8) A description of what has been done to prevent recurrence, including any disciplinary action taken;

(9) A description of any attempts made to involve properly authorized procurement personnel before any commitment was made to the contractor (include any factors which prevented such involvement); and

(10) Any other pertinent information regarding the unauthorized procurement action or the ratification request.

b. The Head of the (Servicing) Contracting Office will review the request for ratification and recommend approval or rejection of the request. The recommendation will take into account the legality of the action and the number of prior ratifications requested by the individual and the program office.

c. The Head of the Contracting Activity shall either approve or reject the ratification request. Rejection of the ratification request may result in personal liability or adverse personnel action for persons found to be responsible for the unauthorized procurement action.

d. If the ratification request is approved, the (Servicing) Contracting Office will prepare the appropriate documentation; e.g., purchase order, contract, etc.

e. Heads of Contracting Offices should distribute this A.L. to program offices they service, and otherwise make their customers aware of ratification requirements before the need for ratification occurs.