Government Contracts Monitor

Contractors Beware: Make Sure the Person Issuing Orders Has Authority to Bind the Government

January 30, 2013

In another cautionary tale for contractors, the Armed Services Board of Contract Appeals (ASBCA) denied a contractor’s claims for performance costs that resulted from constructive changes to the contract.  The Board found that the government personnel allegedly directing the changes lacked proper authority to alter the contract.  See ECC International, ASBCA No. 55781 (Dec. 28, 2012).  The contractor’s constructive claims included “allegations that the government … interfered with its means and methods of performance by directing actions that were not required, constructively accelerated performance….”  The contractor alleged that the Government’s construction representative and contracting officer representatives (CORs) applied an incorrect standard of care for contract performance, improperly interpreted the task order, erroneously required a full time onsite safety manager, and directed numerous other alleged changes.

The board dismissed all of these claims stating, “Assuming these events occurred as ECCI describes them, and that they could otherwise constitute constructive changes to the contract, ECCI is barred from recovering an equitable adjustment for them because neither [the government’s construction representative] nor the CORs were authorized to modify the contract.”  The board similarly rejected the contractor’s claims that these acts were ratified by an official that had knowledge of the material facts and the authority to bind the Government.  According to the board, only the contracting officer (CO) had authority to modify the contract and the contractor never alleged that the CO ratified the alleged acts.

This decision should serve as a stark warning to contractors to avoid taking direction from anyone in the Government that lacks authority to modify the contract.

 

Jeffry Cook is the attorney responsible for the content of this article.