[Code of Federal Regulations]

[Title 48, Volume 1]

[Revised as of October 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 48CFR50]



[Page 964-965]

 

            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

 

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



[[Page 965]]



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]