"Verbal" approval

Just to be sure, do you mean oral approval to proceed before the contract has been awarded or funded?

Or, to follow-up on Vern's comment, are you meaning a “Contract action” as defined in FAR 4.601 as "any oral or written action that results in the purchase, rent, or lease of supplies or equipment, services, or construction using appropriated dollars over the micro-purchase threshold..."?

'Yes' to Vernon's question.

I believe that my scenario would meet the conditions of FAR 4.601 as its an order ($4M) issued against a MAC for non-commercial services. Does that apply if you're giving verbal/oral authorization on something just because it hasn't been awarded via a contract vehicle yet (but will be)? This just seems like putting the cart before the horse. Appreciate the advisement.

We have funding and all applicable documents in-house when these are processed, but the contract has not formally issued/awarded.

I know of no strict and express prohibition in FAR against giving a contractor an oral go-ahead as long as funds are available, but see FAR 32.704( c ). (There might be something in a FAR supplement or in local policy.) You should, of course, tell the contractor that it must proceed at its own risk.

If funds are not available you might violate (or be accused of violating) the Anti-deficiency Act or an agency regulation, which could be serious.

It is not a wise thing to do, however, as it can lead to complications and difficulties. The best thing to do is wait until the contract has been awarded or funded.

If you are dealing wiht a cost reimbursement contract, you need to make sure that there is a pre-contract cost clause in the contract/order so that costs incurred before the contract is awarded can be allowable.

See also FAR 31.205-32, Precontract costs.

Thanks all!

See also, FAR 31.109, Advance Agreements.

DW21

Sounds like my agency. We do verbals way too frequently. It is usually to keep services going while we process the funding modifications. Sometimes we are just getting final contract approvals and come up a couple of days short. Many times it is due to the customer having a real bureaucratic system for getting funds approved (one had 16 stops before coming to Acquisisitons. 16 chances for the approver to be out of office. My only huge concern giving verbals was having the funds especially when the program office seemed to be having difficulty providing them. I always get a written fund citation with dollar amount signed by the executive officer who is over the budget office of the supported organization. Then I call the company at 6PM on Friday night to give them the good news that they can keep on working and a funding document will be forthcoming in about a week.

A letter contract is what is needed if all the terms and conditions have not been resolved but urgent services are needed immediately.