Overview
This section outlines the extraordinary authority granted by Public Law 85-804 and Executive Order 10789, which allows specific agencies to modify contracts outside of standard procurement laws to facilitate national defense. It establishes that this power is a remedy of last resort, intended for use only when other legal authorities are insufficient and when the action is in the interest of national security.
Key Rules
- Source of Authority: Pub. L. 85-804 empowers the President to authorize agencies involved in national defense to enter into or modify contracts without regard to other laws, provided the action facilitates national defense.
- Authorized Agencies: Authority is specifically granted via E.O. 10789 to agencies including the DoD (Army, Navy, Air Force), NASA, DHS, GSA, DOE, and several others.
- Limitations on Use:
- Cannot be used if other adequate legal authority exists within the agency (e.g., Contract Disputes Act).
- Must not be used in a way that encourages contractor carelessness or laxity.
- Preference must be given to FAR Part 33 (Protests, Disputes, and Appeals) for relief such as rescission or reformation due to mutual mistake.
- Expediency and Judgment: Actions must be processed as quickly as possible but must be balanced with restraint and sound judgment.
- Record-Keeping: Agencies must maintain exhaustive records for every request, including the contractor's initial request, all supporting documentation, the formal Memorandum of Decision, and the resulting contractual implementation.
Practical Implications
- Last Resort Status: Contracting Officers (COs) cannot use this authority for routine adjustments; they must first exhaust standard procedures under FAR Part 33 and seek legal counsel if there is doubt regarding which authority applies.
- High Accountability: Because these actions bypass standard statutory restrictions, the documentation requirements are stringent, requiring a clear "paper trail" from the contractor's request to the final agency decision to justify the use of extraordinary power.