301 FW 5
Unauthorized Commitments

Supersedes 301 FW 5, 07/06/11

Date:  April 6, 2017

Series: Contracting

Part 301: Acquisition Policies and Procedures

Originating Office: Division of Contracting and Facilities Management

 

 

PDF Version

 

TABLE OF CONTENTS

Topics

Sections

Overview

5.1 What is the purpose of this chapter?

5.2 What is the scope of this chapter?

5.3 What are the authorities for this chapter?

Unauthorized Commitments Defined

5.4 What is an unauthorized commitment?

5.5 In general, how are unauthorized commitments handled?

Responsibilities

5.6 Who is responsible for resolving unauthorized commitments?

Requesting Ratification and Consequences

5.7 What is the process for requesting ratification?

5.8 What happens if the official refuses to ratify an unauthorized commitment?

5.9 What are the potential consequences for making an unauthorized commitment?

 

OVERVIEW

 

5.1 What is the purpose of this chapter? This chapter:

 

A. Provides procedures for resolving unauthorized commitments in the U.S. Fish and Wildlife Service (Service), and

 

B. Describes the officials responsible for ratifying unauthorized commitments.

 

5.2 What is the scope of this chapter? This chapter applies to all Service employees.

 

5.3 What are the authorities for this chapter? See 301 FW 1 for the authorities for all the chapters in Part 301. The following authorities are specific to unauthorized commitments:

 

A. Federal Acquisition Regulation (FAR) Subpart 1.6: Career Development, Contracting Authority, and Responsibilities.

 

B. Department of the Interior Acquisition Regulation (DIAR) Subpart 1401.602-3, Ratification of Unauthorized Commitments.

 

UNAUTHORIZED COMMITMENTS DEFINED

5.4 What is an unauthorized commitment? An unauthorized commitment occurs when a Federal employee buys items without the authority to make the transaction or enters into an agreement for services without the authority to make the commitment. Two examples of unauthorized commitments are provided below.

 

A. Example: A Federal employee with purchase card authority of up to the current micro-purchase threshold (see the FAR 2.101) enters into a contract with a hotel for meeting space that costs $4,300. This is an unauthorized commitment because the total cost of the meeting space exceeds the micro-purchase limit ($3,500 on the publication date of this policy).

 

B. Example: A Federal employee authorizes the repair of Government property before obtaining an approved purchase order.

 

5.5 In general, how are unauthorized commitments handled?

 

A. There are three categories of employees who are allowed to make acquisition commitments for the Service—employees who hold an active Contracting Officer’s appointment, employees authorized to use a purchase card, and appointed Ordering Officials (see Department of the Interior Federal Acquisition Certification and Appointment Programs.) All other employees must not make acquisition commitments.

 

B. The resolution of an unauthorized commitment is ratification. Ratification occurs when an authorized official approves the unauthorized commitment, allowing the Service to pay for the supplies received or services rendered. If an employee makes an unauthorized commitment, he/she must request a ratification of the action through his/her supervisor. If ratification does not occur, the employee may be financially liable for the purchase. You can find more guidance in the Contracting Officer’s Handbook.

 

RESPONSIBILITIES

5.6 Who is responsible for resolving unauthorized commitments? See Table 5-1.

 

Table 5-1: Responsibilities for Resolving Unauthorized Commitments

These employees….

Are responsible for…

A. The Assistant Director – Business Management and Operations (AD-BMO), as Head of the Contracting Activity

Ratifying unauthorized commitments above the simplified acquisition threshold (and only after the Office of the Solicitor concurs). (The current threshold is $150,000 and is listed at FAR 2.101.) He/she is the only Service official who has the authority to do so.

 

B. The Chief, Division of Contracting and General Services (CGS) in Headquarters, as Bureau Procurement Chief

 

(1) Commitments above the simplified acquisition threshold:

 

(a) Obtaining concurrence from the Office of the Solicitor on the ratification request, and

 

            (b) Recommending to the AD-BMO whether he/she should ratify the commitment.

 

(2) Commitments from the Regions above the micro-purchase level and at or below the simplified acquisition threshold:

 

            (a) Reviewing requests for ratification to determine if he/she concurs, and

 

            (b) Ensuring the Office of the Solicitor has been consulted and concurs.

C. Regional Chiefs of Contracting Offices (CCO)

DIAR Subpart 1402.101 defines the CCO as “the senior GS–1102 within a contracting office.” Within the Service, CCOs are the Chiefs of the Regional Contracting Offices. (The Acquisitions Branch Chief is the CCO for the Headquarters office.) 

 

(1) Commitments above the simplified acquisition procedures:

 

(a) Reviewing requests for ratification before sending them to the Bureau Procurement Chief and the AD-BMO, and

 

(b) Recommending to the AD-BMO whether he/she should ratify an unauthorized commitment.

 

(2) Commitments above the micro-purchase level and at or below the simplified acquisition threshold:

 

            (a) Obtaining concurrence on the request from:

 

                        (i) The Office of the Solicitor, and

                        (ii) The Chief, CGS, in Headquarters; and

 

            (b) Ratifying the request if he/she chooses to do so.

 

(3) Commitments below the micro-purchase level: ratifying the request if it is in the best interest of the Government.

 

D. Supervisors

Preparing a memorandum to the CCO requesting ratification of any unauthorized commitment made by an employee.

 

 

Requesting Ratification and Consequences

 

5.7 What is the process for requesting ratification?

 

A. The request memorandum. The immediate supervisor of the employee who made the unauthorized commitment must send a memorandum requesting ratification to the CCO. The memorandum must include:

 

(1) Description of the circumstances of the acquisition and how the unauthorized commitment occurred,

 

(2) Description of efforts made by the employee to obtain appropriate authority from the Contracting Officer before making the unauthorized commitment,

 

(3) Purchase request with appropriate accounting data,

 

(4) Certification of receipt of goods or services,

 

(5) Invoice,

 

(6) Description of corrective measures taken by the supervisor or office to prevent future violations, and

 

(7) Recommendation to ratify the unauthorized commitment.

 

B. Actions at or below the simplified acquisition threshold. For actions at or below the simplified acquisition threshold, the ratifying official must:

 

(1) Review the memorandum to ensure that all the factors in FAR 1.602-3(c) are met and that the Contracting Officer has provided a written determination of a fair and reasonable price;

 

(2) Seek concurrence from the Office of the Solicitor through a memorandum if the action exceeds the micro-purchase level (current threshold listed at FAR 2.101). The memorandum to the Office of the Solicitor must include:

 

(a) Description of the circumstances of the acquisition and how the commitment occurred,

 

(b) Determination that the price paid is fair and reasonable,

 

(c) Statements addressing each of the limiting factors in FAR 1.602-3(c),

 

(d) Description of the corrective measure(s) taken to prevent future violations, and

 

(e) Signature of the CCO recommending ratification.

 

(3) Maintain files and a summary of all ratification actions processed.

 

C. Actions greater than the simplified acquisition threshold: For actions greater than the simplified acquisition threshold:

 

(1) The CCO must prepare a memorandum to the AD-BMO through the appropriate Directorate member and the Chief, CGS. The memorandum must describe the reason for recommending the ratification and address all the factors in FAR 1.602-3(c).

 

(2) The Chief, CGS:

 

(a) Reviews the memorandum to ensure that the factors in FAR 1.602-3(c) are met and that the Contracting Officer has provided a written determination that the price paid was fair and reasonable,

 

(b) Investigates the unauthorized commitment as necessary,

 

(c) Seeks concurrence from the Office of the Solicitor about ratification approval, and

 

(d) Sends a memorandum to the AD-BMO recommending ratification or rejection of ratification of the unauthorized commitment.

 

(3) The AD-BMO:

 

(a) Approves or disapproves the ratification, and

 

(b) Sends approved ratification and payment instructions to the appropriate personnel for payment.

 

5.8 What happens if the official refuses to ratify an unauthorized commitment?

 

A. The ratifying official may refuse to ratify an unauthorized commitment partially or completely when:

 

(1) The circumstances of FAR 1.602-3(c) are not clearly demonstrated, and

 

(2) The items or services are:

 

(a) Of marginal benefit to the Government,

 

(b) Unreasonably priced, or

 

(c) Not formally accepted or used by any Federal employees other than the purchaser.

 

B. The ratifying official must obtain legal advice from the Office of the Solicitor (DIAR 1401.602-3(c)) when refusing to ratify an unauthorized commitment. The purchaser may be required to personally pay unpaid amounts or reimburse the Government for the amount the Service paid the vendor. This situation may also be resolved by the claim procedure at the Government Accountability Office.

 

C. The ratifying official must refer situations involving fraud, misappropriation of Government funds or property, or ethical violations to the Office of the Inspector General for investigation.

 

5.9 What are the potential consequences for making an unauthorized commitment? Penalties for unauthorized commitments are listed in the Department’s Handbook on Charges and Penalty Selection for Disciplinary and Adverse Actions.

 

A. An employee responsible for making an unauthorized commitment may be subject to one or more of the following disciplinary actions (not all-inclusive):

 

(1) Reprimand,

 

(2) Personal responsibility for paying the costs of the commitment, and

 

(3) If he/she is a Contracting Officer, suspension or rescission of that appointment.

 

B. Supervisors should work with their servicing Human Resources office to determine appropriate disciplinary actions.

 

For more information about this policy, contact the Division of Contracting and General Services. For more information about this Web site, contact Krista Bibb in the Division of Policy, Performance, and Management Programs.

 

 

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