Unauthorized Commitments

TABLE OF CONTENTS

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

UNAUTHORIZED COMMITMENTS DEFINED

5.4 What is an unauthorized commitment? An “unauthorized commitment” is defined in FAR 1.602-3(a) as an agreement that is not binding solely because the Government representative who made it lacked the authority to enter into that agreement on behalf of the Government. Employees who are allowed to make acquisition commitments for the Service include employees who are warranted Contracting Officers (CO), purchase cardholders, and other appointed Ordering Officials acting within the limits of their delegated authority (see Departmental Federal Acquisition Certification and Appointment Programs Policy). All other employees must not make acquisition commitments. Examples of unauthorized commitments are provided below. 

A. Example: A Federal employee requests a quote for new signage for their refuge. After the quote comes in, the employee tells the vendor to go ahead and start working on the new signage. The vendor delivers and installs the new signage. The next week, the employee receives an invoice from the vendor. This is an unauthorized commitment because Federal employees must be delegated authority to make purchases.

B. Example: A Federal employee is told that they need to get all the potholes in their parking lot fixed. The employee reaches out to a local paving contractor and tells them to fill the potholes, and the contractor completes the work on the employee’s verbal authorization. This is an unauthorized commitment because Federal employees must be delegated authority to make purchases.

C. Example: A Federal manager decides that their team needs collaboration training. The manager reaches out directly to a vendor that they’ve heard gives excellent training on this topic and arranges for the vendor to give training the next week. The vendor provides the training and serves their invoice to the manager. This is an unauthorized commitment because Federal employees, including managers with their own budgets, must be delegated authority to make purchases.

D. 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 $10,300. This is an unauthorized commitment because the total cost of the meeting space exceeds the micro-purchase limit ($10,000 on the publication date of this policy).

E. Example: A Federal employee with CO authority up to $250,000 signs a modification authorizing a contractor to perform $50,000 of additional work under an existing contract.  The additional work brings the new total of the existing contract to $275,000. This is an unauthorized commitment because the total amount of the modified contract exceeded the CO’s delegated authority.

5.5 In general, how are unauthorized commitments handled? 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, they must request a ratification of the action through their 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 (COH).

RESPONSIBILITIES

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

Table 5-1: Responsibilities for Resolving Unauthorized Commitments

REQUESTING RATIFICATION AND CONSEQUENCES

5.7 What is the process for requesting a ratification for unauthorized commitments made using anything other than the Government purchase card? 

A. The request memorandum. The immediate supervisor of the employee who made the unauthorized commitment must send a memorandum requesting ratification to the CO. 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. Ratification process.

(1) The CO must review the unauthorized commitment details provided by the employee’s supervisor and prepare a memorandum for review. The memorandum must address all the factors in FAR 1.602-3(c), and include a fair and reasonable price determination.

(2) The Section Chief:

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

     (b) Investigates the unauthorized commitment as necessary;

     (c) Ensures concurrence is received from the Office of the Solicitor; and 

     (d) Routes the memorandum, with reason for recommending the ratification, to the CCO.

(3) The CCO:

     (a) Approves or disapproves the ratification,

     (b) Returns the ratification to the CO for appropriate action based on approval or disapproval, and  

     (c) Maintains a summary of all ratification actions processed.

5.8 What is the process for requesting a ratification for unauthorized commitments made using the Government purchase card? 

A. The request memorandum. The immediate supervisor of the employee who made the unauthorized commitment must send a memorandum to the Branch Chief, APT, requesting ratification. 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 authorization before making the unauthorized commitment,

(3) Verification that the funds are and were available at the time the unauthorized commitment was made,

(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. Ratification process.

(1) The Branch Chief, APT:

     (a) Reviews the memorandum to ensure that the factors in FAR 1.602-3(c) are met and that the price paid was fair and reasonable;

     (b) Investigates the unauthorized commitment as necessary; 

     (c) Ensures concurrence is received from the Office of the Solicitor; and

     (d) Routes a memorandum, with reason for recommending the ratification, to the HCA.

(2) The HCA:

     (a) Approves or disapproves the ratification, and

     (b) Maintains a summary of all ratification actions processed.

5.9 What happens if the ratifying official disapproves the ratification of an unauthorized commitment?

A. The ratifying official may disapprove ratifying 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 (see section 5.10 below). This situation may also be resolved by the claim procedure at the Government Accountability Office.

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

5.10 What are the potential consequences for making an unauthorized commitment? Unauthorized commitments violate Federal law, Federal regulations, and the Standards of Ethical Conduct for Employees of the Executive Branch. 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 the employee is a warranted CO, suspension or rescission of that appointment.

B. Supervisors should work with their Employee Management Relations (EMR) office to determine appropriate disciplinary actions.