Unauthorized Commitments - Avoid Costly Out-of-Pocket Costs
The Social Security Administration (SSA) requires all vendors to have an approved procurement instrument (e.g. contract, order, or agreement) in place, authorized by an SSA contracting officer (CO) or SSA micro-purchaser (also known as a purchase cardholder), before providing us supplies or services.
If you are a vendor and have been asked to provide supplies or services:
- by someone lacking authority to do so;
- beyond a CO’s or micro-purchaser’s authority or where no funds are available; or
- that are prohibited or otherwise restricted,
If a vendor acts on the implied or apparent authority instead of a CO’s or a micro-purchaser’s verbal or written authority within his or her delegated acquisition authority, an unauthorized commitment is created.
The Federal Acquisition Regulation (FAR) defines an “unauthorized commitment,” as an unbinding agreement “because the Government representative who made it lacked the authority to enter into that agreement on behalf of the Government.” Unauthorized commitments are a violation of Federal law.
Only a CO or micro-purchaser is authorized to legally bind the government. SSA is not bound by agreements with, or contractual commitments made to vendors by individuals lacking delegated acquisition authority. You could be acting entirely at your own risk by providing the supply or service because it is possible you may not be paid or may not be paid in full. Also, the individual making the unauthorized commitment may be personally liable to pay you out-of-pocket for some or all of the expense incurred. In this case, it would be up to you to collect the amount from the individual.
SSA micro-purchasers’ delegated acquisition authority limits are: $2,000 for construction $2,500 for services and $3,500 for supplies. A CO’s authority varies.
Unauthorized commitments take many forms. Here are some common situations:
- The program office orders supplies or services from the vendor before an approved acquisition action, authorized by a CO or micro-purchaser within his or her delegated authority, is in place;
- The program office directs the vendor to deviate from contract, order, or agreement issued by the CO or micro-purchaser;
- The CO or micro-purchaser exceeds his or her delegated authority, including splitting a requirement to keep it under the thresholds mentioned above. In this case two or more orders may be placed on the same day or within several days;
- The supplies or services are prohibited or otherwise restricted;
- Funds were not available, or the price exceeded the available amount.
If you suspect you are operating under an unauthorized commitment, do not deliver supplies or perform the services, and challenge the questionable action.
Subject to the limitations in FAR Subpart 1.602-3(c), an SSA authorized official within the Office of Acquisition and Grants may ratify an unauthorized commitment, and create a proper contract, order, or agreement. The ratification process can take several weeks or months. However, SSA does not routinely ratify an unauthorized commitment.