Foundations of GOVCON: One Simple Trick to Avoid GovCon Problems…

The majority of problems we see post-award involve a failure to follow one govcon rule: only the contracting officer can change a contract.  Too many government contractors either don’t know this rule or forget it, leading to much unnecessary heartache.

In most government contracts, the contractor deals with a lot of people: a contracting officer, a contracting officer’s representative, customers, and in some cases, several different agencies.  All of these people make demands on the contractor.  Some of these demands are valid.  Some are questionable.  And some would require a change to the contract.  It is these last demands that cause most of the problems. (This is different than when you disagree with someone in the government on what is required by a contract.  That is a topic for another day).

The authority to bind the federal government by contract is very limited.  Contracting officers have this authority.  Once a contract is signed, only a contracting officer can change it.  Of course, practically speaking, others in the government have authority over how a contract is implemented:  a contracting officer representative may refuse to approve an invoice over a dispute, or a customer may complain to the contracting officer.  But as soon as someone other than a contracting officer asks a contractor to do more or less than a contract requires, real problems begin.

Government officials typically make these types of demands (or concessions) without realizing the implications.  Contractors, especially those relatively new to government contracting, agree to these demands in the interest of being a good partner, easy to work with, or because the changes are common sense.  Then, inevitably, a problem arises.

Say the contractor agreed to do a little more work than defined in the contract.  Then, the contractor looks for payment.  None will be available if the contracting officer hasn’t approved the additional work.  Or a government official says that part of the contract is no longer required, so it doesn’t make sense to do that work.  The contracting officer then holds the contractor accountable for failure to perform.  In both of these cases, the contractor bears the burden of following orders from a government official.  Sometimes, a government official will tell a contractor not to worry about some clause in the contract that is incidental to performance.  The contractor is still liable for not meeting the requirements of the clause, and reliance on the government official is no defense.

We’ve seen innumerable examples of this, but one common place this comes up is with labor qualifications, especially for task orders under a GSA Schedule.  A contractor will place a person in a role for which they are capable, but not qualified in accordance with the language of either the task order or the relevant GSA Schedule.  The government official they deal with on a day-to-day basis is happy with the posting.  However, a routine audit reveals that the person did not meet the LCAT requirements.  All of the liability for this mistake will end up with the contractor.  Even though the “customer” is perfectly happy with the work done, from the government’s perspective, the contractor is not fulfilling the terms of the contract.  This is even more confusing in the GSA Schedule context, because the ordering agency contracting officer may approve the posting, but if the GSA Schedule contracting officer has not, there is still an issue.

It can feel unwelcome and burdensome to tell customers no, especially when a company would happily accommodate a similar request from a commercial client.  But it is critical that contractors stand firm and follow the strict terms of the contract until a contracting officer makes a modification, because the party that bears all of the risk for deviating from a contract is the contractor itself.  No matter who made the error, the government will hold the contractor accountable.