[Code of Federal Regulations]
[Title 48, Volume 1]
[Revised as of October 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 48CFR50]

[Page 949]
 
            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM
 
                CHAPTER 1--FEDERAL ACQUISITION REGULATION
 
PART 50_EXTRAORDINARY CONTRACTUAL ACTIONS--Table of Contents
 
   Subpart 50.2_Delegation of and Limitations on Exercise of Authority
 
Sec.  50.203  Limitations on exercise of authority.

    (a) The Act is not authority for--
    (1) Using a cost-plus-a-percentage-of-cost system of contracting;
    (2) Making any contract that violates existing law limiting profit 
or fees;
    (3) Providing for other than full and open competition for award of 
contracts for supplies or services; or
    (4) Waiving any bid bond, payment bond, performance bond, or other 
bond required by law.
    (b) No contract, amendment, or modification shall be made under the 
Act's authority--
    (1) Unless the approving authority finds that the action will 
facilitate the national defense;
    (2) Unless other legal authority within the agency concerned is 
deemed to be lacking or inadequate;
    (3) Except within the limits of the amounts appropriated and the 
statutory contract authorization (however, indemnification agreements 
authorized by an agency head (50.403) are not limited to amounts 
appropriated or to contract authorization); and
    (4) That will obligate the Government for any amount over $25 
million, unless the Senate and the House Committees on Armed Services 
are notified in writing of the proposed obligation and 60 days of 
continuous session of Congress have passed since the transmittal of such 
notification. However, this paragraph (b)(4) does not apply to 
indemnification agreements authorized under 50.403.
    (c) No contract shall be amended or modified unless the contractor 
submits a request before all obligations (including final payment) under 
the contract have been discharged. No amendment or modification shall 
increase the contract price to an amount higher than the lowest rejected 
bid of any responsible bidder, if the contract was negotiated under 10 
U.S.C. 2304(a)(15) or 41 U.S.C. 252(c)(14), or FAR 14.404-1(f).
    (d) No informal commitment shall be formalized unless--
    (1) The contractor submits a written request for payment within 6 
months after furnishing, or arranging to furnish, supplies or services 
in reliance upon the commitment; and
    (2) The approving authority finds that, at the time the commitment 
was made, it was impracticable to use normal contracting procedures.
    (e) The exercise of authority by officials below the secretarial 
level is subject to the following additional limitations:
    (1) The action shall not--
    (i) Release a contractor from performance of an obligation over 
$50,000;
    (ii) Result in an increase in cost to the Government over $50,000;
    (iii) Deal with, or directly affect, any matter that has been 
submitted to the General Accounting Office; or
    (iv) Involve disposal of Government surplus property.
    (2) Mistakes shall not be corrected by an action obligating the 
Government for over $1,000, unless the contracting officer receives 
notice of the mistake before final payment.
    (3) The correction of a contract because of a mistake in its making 
shall not increase the original contract price to an amount higher than 
the next lowest responsive offer of a responsible offeror.

[48 FR 42471, Sept. 19, 1983, as amended at 50 FR 1746, Jan. 1, 1985; 50 
FR 52429, Dec. 23, 1985; 56 FR 67135, Dec. 27, 1991; 62 FR 51271, Sept. 
30, 1997]