(Editor’s Note.  The following demonstrates the common problem of having project management and technical representatives apparently approve changes which are not formally approved by contracting officers.)

During a pre-performance conference under a construction contract, the Navy stated the project manager – the resident officer in charge of contracts (ROICC) – would administer the contract and that all correspondences should be sent to him. Presentation slides stated work should not be performed beyond contract requirements without the ROICC’s written notification. After performance began, the Navy notified Cath that day-to-day administration of the contract would be the responsibility of the engineer in charge of construction (EIC) and the EIC received Cath’s numerous requests for information (RFI) for contract clarification and the ROICC signed responses to the RFIs. When the Navy rejected Cath’s claims for price adjustments after performance asserting the EIC, acting as project manager, had no authority to approve changes to the contract, the appeals board sided with Cath and held the EIC had express authority to resolve minor contract problems based on the Navy’s RFI responses which indicated the EIC was authorized to provide “technical and administrative direction.”

The appeals court reversed the board decision noting the federal government has given authority to enter into and modify contracts to a very limited class of government employees - contracting officers.  A CO may delegate some of their authority, which seemed to occur here, because the contract included a clause stating the CO could designate a representative to perform certain technical and administrative functions, but delegations were limited and did not extend to authority for the EIC to make contract modifications. The court cited a DOD regulation (48 C.F.R. 201.6022), which was incorporated into the contract, that states a CO’s representative “may not be delegated authority to make commitments regarding price, quality, quantify or delivery changes.” The court conceded the pre-performance conference confused the issue and contradicted the clear language of the contract but nonetheless, the contract language governs (Sec. of Navy v Cath-Dr/Balti Joint Venture, Fed. Cir. No 2006-1359).

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