Release of Claims: Contractor Signatory Must Have Authority

What goes around, comes around.

The government sometimes refuses to pay a contractor for a modification when the government official requesting the modification lacks appropriate authority.  But contractual authority isn’t a one-way street benefiting only the government.  A recent decision by the Armed Services Board of Contract Appeals demonstrates that a contractor may not be bound by a final waiver and release of claims if the individual signing on the contractor’s behalf lacked authority.

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CORs Weren’t Authorized To Order Additional Work–So Contractor Goes Unpaid

A contractor’s performance of extra work outside the scope of the contract may go uncompensated if a contractor does not receive appropriate authorization in accordance with the contractual terms.

A Court of Federal Claims decision reinforced that a contractor should only perform work required under the terms of the federal contract or directed by an authorized government agent in accordance with the contractual terms. And importantly, a Contracting Officer’s Representative isn’t always authorized to order additional work–even if that person acts as though he or she has such authority.

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Government’s Engineers Couldn’t Modify Contract, Says ASBCA

A construction contractor was unable to recover the costs of performing changed work allegedly ordered by the government’s project engineers because the engineers did not have authority to modify the contract.

As demonstrated in a recent Armed Services Board of Contract Appeals decision, only a contracting officer or the contracting officer’s designated representatives may modify a contract, and a contractor bears the risk of non-payment by performing changed work directed by an unauthorized government employee.

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