Overview
This section defines the scope of a contracting officer’s power to resolve contract claims and specifies the legal boundaries and exceptions where that authority is restricted.
Key Rules
- General Authority: Contracting officers (COs) are authorized to decide or resolve all claims arising under or relating to a contract subject to the Disputes statute, provided they act within the specific dollar limitations of their warrants.
- ADR Usage: COs are encouraged and authorized to use Alternative Dispute Resolution (ADR) procedures to resolve claims, in accordance with agency policies and FAR 33.214.
- Penalties Exception: Authority does not extend to disputes regarding penalties or forfeitures prescribed by statute that another federal agency is specifically authorized to handle.
- Fraud Exclusion: COs have no authority to settle, compromise, pay, or adjust any claim that involves fraud.
Practical Implications
- If a claim involves allegations or evidence of fraud, the CO must stop the resolution process and refer the matter to legal counsel or the Department of Justice, as they no longer have the authority to settle the dispute.
- Contractors should verify that the CO they are negotiating with has a warrant capacity sufficient to cover the claim amount to ensure any reached agreement is legally binding.