It’s never a good idea to perform work without a written contract authorizing the work; handshake agreements between the Government and contractors aren’t reliable. This is particularly true when a dispute arises and the contractor wants compensation. Without a contract, the firm might be out of luck.Continue reading
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.
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.