Thus, contracting authority is fragmented. The project officer is responsible for the success of the project, while the contract officer is the legal representative of the government and responsible for the legality and propriety of the contract. Only the contract officer can commit the government to anything, but he or she may choose to sub-delegate authority for certain purposes. This becomes confusing to the inexperienced contractor later in the contract administration process, where informal contract change orders are at issue…
Often there will be no competition whatsoever in a contract operation. This is the so-called ‘sole source’ or ‘single-selected source’ contract. The purpose of this variety of contract is two-fold. First, small items can be purchased in indefinite amounts from the same firm over long periods of time (for example light bulbs). Second, large complex projects can be contracted with selected firms which the government, for particular reasons, considers to be the only source capable of meeting the need at the appropriate cost…
One of the peculiarities of the government contract is that it is a contract of adhesion. The contracting officer writes the document and the contractor is left with a take-it-or-leave-it situation…
Contractors want to bid low in order to ensure success in contract awards, but they also wish to make a healthy profit.. If a contractor can include the overhead costs for other parts of the business within the costs section of the contract, then his profits increase.
Senator Proxmire’s investigations found the inclusion of general corporate overhead as a contract cost to be a common practice.’ Efforts have been made in recent years to prevent abuses of overhead expense payments. A related practice is what Fitzgerald, based upon his experience as a consulting engineer and in the Pentagon procurement community, has called ‘creative accounting’ which, though risky, allows for more return than could ordinarily be anticipated…
If it appears that original cost estimates were too low or that the performance targets cannot be achieved, change orders can be used either to increase allowable costs or decrease performance demands… As Gilbert Cuneo, et al., have noted, it can be extremely difficult to track down the source of what purports to be an official change order.
Phillip J. Cooper, Government Contracts in Public Administration: The Role and Environment of the Contracting Officer. Public Administration Review, Vol. 40, No. 5 (Sep. – Oct., 1980), pp. 459-468.
This is an important set of issues that we will be returning to shortly.
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