Contract Administration: What Do I Do?

*This is part of the series, What Do I Do?, which will address common scenarios with practical views on possible ways to handle situations. 

Consider the following scenario:

Your government Program Manager has asked you to make changes to deliverables that will increase your costs.  The COR has endorsed this request, but you haven’t heard from the Contracting Officer, who can’t be reached.  Time is of the essence.  What should you do?

Your Legal Counsel advises you not to do any extra work without a written direction from the Contracting Officer.  “Only the Contracting Officer has a warrant to bind the government.  Unless the CO directs the change, or ratifies it, you will be treated as a volunteer, and won’t be paid.”

Your Business Manager tells you to do the extra work in order to keep the customer happy.  “The most important thing is the relationship.  We want to meet our customer’s expectations.  The paperwork can be sorted out later.”

Who is right – your Legal Counsel or your Business Manager?

Actually, they both may be right.  Your Legal Counsel is correct: without the written direction or agreement by a warranted CO, who is the only member of the government’s team with authority to bind the government, you may not be paid for extra work.  But your Business Manager may have good reasons to work “at risk” – e.g., perhaps there is major tasking about to be awarded and if you “work to the rule” it will hurt your chances to win the tasking.  Perhaps the extra work is mission critical and can’t be delayed without severe harm to the mission or massive extra cost.  Perhaps there is a government shutdown, and the contracting officer is without authority to direct the change.

The important thing is to understand that there can be a tension between minimizing economic risk (the legal perspective) and maximizing opportunity (the business perspective).  In the given scenario, it would not necessarily be wrong to strictly follow the legal advice, and it would not necessarily be wrong to work at risk.  The only thing that would be wrong would be to make the decision blindly, without considering the competing factors and tradeoffs.

Want to learn more about this, and other contract administration dilemmas?  Come to the Basics in Contract Administration Seminar.

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