Role of Cert~eing and Diiburaing Officere in Government Contracts

• Author: by MajorJames F. Nagle, Jr.
• Pages: 01

Stdies of federal government procurement qRen focus on the contracting oflxer and his or her duties and responszbilitas. Of considerable practical impodanee thongh ofin qnared are the offtcelals who oetually pay a contractor's invoiees. These qf/iiols are the eedzfying offieer, who confirms that money is tnf't owd by the goveniment, and the disbursing officer, who wsues the cheek. In the milttary sen-ices, the same persaa ofin perfoms the duties of both positions.

After providing historical background information, .!4r?jorNagle ex- platns the relationship of the disbwsing and eelthing oflicem Loith the contracting offtcer, prio. to contmt award, during contract pe?.fomance, and following completion of perforname. The problem ofliabilzty fo. em lie or^ payments LS dtscsssed, together with methods

foior the respansible offier to obtain rel~e.ffmm laab~lity.

Major Nugle obsoves that liability is cen~mrely imposed. He ar- gues that, mth the current immense volume of automated gmament transactions, It makes no practical Sense to subject disbursing officers

-The apinioni and conciuiions expressed in thia arfrele are those of the author and do not neeeeseanly represent the IIWS of The Judge Ad\aeare Genera3 Sehml, the Depanmenr of the Amy, or any other governmental agency Thls aide is bhied upon B thesis aubmtred by the avlhar in pmid ssri8facUm of the requiremenli for the LL Pdegree at Gwrpe Washmgron University, WaJhmgran. D C.. durinp academe sear

70th Judge havacate Off]& Basic Ciume, Deeemt;er 1913; the Conrraet Aftor-neys Course, 1978, and the Judge Advocate Offleer Advanced Correspondence Course November 1979 Xember af the Bars of the Sv~reme Court af Nsr Jer. sex, the United Stater Court of Military Appeals, the Umred Sfstes Supreme Court, aqd the United States Courf of Ciama.

Mnor Xarle is the author af Inronsafant Defenses tn Cnmtnai Cases. 92 Mi. L

to the nsk of linbilzty He mggesb fudie,. that the cert

1. INTRODL!CTIOiX Money doze sets the uorld in motm 1

   This quotation 1s as appropriate today as when it iias fuit written, oyer 2,000 years ago. It 1s especially applicable to government contracts. Eiions are constantly made to purchase goods and services at a reasonable price whsh also protides sufficient profit mentire to unleash the cantractois creative and technological energ?- Given such a maxim and its relevance to Government contracts. It might be assumed that those offids uho control the money of the various depanments and agencies wuld hare exceptional prommenee. axesome authority, and aven,-helming yesthe procurement process. Such E not exact1

   Theae mdimduals who control the purse sofficers and disbursing officers. Wlile more detailed definition.; will be developed and explained later, suffice it to sag that certfiyng officers are those officials nho validate the fact that a certainto a specific payee by the United States. Disbursing owho, based on this certification, issue the check or opaSment to the

   All agencies and departments hare cenliymagencies, however. do not do their own disonce the cenifying offmr certifies a voucher,Reglonal Disbursing Office of the Department of Treasury for pa~ment.~

   I llaxm 656 of Pub

   rernmeif 2-16 '197

   r Cseu.sr Ro. 6M 12d Rev Jan 9 19i4>

   14821 ACCOCSTABLE OFFICERS

   The Department of Defense, Postal Service, United States marshals, and certain other governmental entities do their own disbursing.B In these departments, the certifying and disburslng functm8 are oRen combined or vested in one person, usually called the disbursing affEer or fmance officer.' Such disbursing officers muat render detailed monthly amounts of those transactions LO the TreasuryDeparrment and must follow Treasuq regulations and uthze Tmasury forms to provide mame uniformity to Government-wide financial man-agement and arcountmg.8

   Some generai observations are appropriate at this pomt to introduce and explain the natm and function of these offmals. Despite their essential role in the pmcurement process, these officers haw labored mrelative obscurity.

   While much has been written about the procurement role of the contrartlng officers 02- the auditor,1° for example, precious little has been written regardmy certifying and disbursing officers.11 More attention has been paid recently to these officials because of technological ad-vances.12 Stated bluntly, the advent of the computer and the explosive gmwth of the federal bureaucracy smce World War I1 have over- ~-'See iioh 4, szpm Sei nlm Pub L No 66-31. Act ofYq, 26. 1959, 73 Stat. 60 [Gar-emment Prmling Offrel, Pub L No 1-340, .kt of Mareh 15, 1966, 12 Stat. 34 (Poar O f f d

   'See Mle 2, s v p lSec text between notrs Ziz and 243. inAa#See. s y , Chisman & Hams. T k Conlrwli, y Onmr XM Autho~Jy la del and Hia Ditty io Act fndepndpntly. i o Dick L Rev. 333 I19661

   LOSee. r g , Howell, Tk Role o f t k Go. 63 Ky L. J 141 (1W).

   I'Tk mail amount of shalarly attention form of deetmns m anicle~ dealmgiriththe Wash L Rev 349

   of the Mllilvy Disbwrmg Offer (196s) hlr. Itnyre ias a rfudenf at the George laah- mgton University &ha1 of Lar akn he iubmicfed this papr.

   Llveh more ~mpomnt

   1s B study released by the Joint Financial Managemem Improvement Program I" June 1980, entitled Assuring Accurate and Legal Payrnenrs-the Raler of Csnifymg Offieeri m the Federal Gorernment [heremaft-er~icedarJFMIP Study1 The stud? graupra~comprised of officials from variou~ led the role af eenifying officers m financial mand IO confrsetsl from B managerial and aeeavnting Isr reporti uili be discussed m more detail beloa MS.

   Comp Gen B-101021. lien Methods Needed for ompmem 17 60%

   197:) [hereinafter cited as Ner

   Methods1

   whelmed the traditional concepts of rhe roles rheae officials must play. These traditional concepts and the Ikeiy changes in the roles the) represent will be discussed belaiu.

   Despite their relative obscurity in the general literature, the certifymg and disbursing officers have awesome authority. They are not of the contracting officer On the contrary, they ndependent of him in order to form a system of to aroid improper or illegal payments They have the authanry to decide unilaterall) that a paynent 1s improper, and to refuse to certify or disburse payment. Enless they can be persuaded by agency officials to alter their decisions, the contractor is forced to litigate in order to receiie his papent."

   Of special rnpxtanm in this regard IS the fm that certibmg and disbursmg officers have a statutory nght to call upn the Comptroller General for an advance decision on such questionable payments I6 Such

   a procedure has had a tremendous rnpaet on Government contracrmg. It has served as a conduit by irhlch the Comptroller General has been able to exer~iseextraordinary influence quite earl? UI the procurement process.1B Thus, eerti@mg and diabwamg officers plas pivotal roles mthe contraetmg process not only because of their oiin inherent authority but because they serve as the vehicle for Comptroller General input (for better or worse1 into an agency's procurement decisions.

   Coupled wth this broad authorit) is an equall) extensive responsibility. These officials are held to an extremelj- high 3tandm.d of care" and may be held pecuniarily liable for their imperfect perfomance It is this Siamese-tam concept of near perfection and personal liabilitg whsh has been called mto quemon recently.1a The advent of the com-

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   I

   puter and the spectacular gronth of the federal government, both m dollars and geapaphical inputs, hare mandated changes in the traditional manner of eraluatmg the conduct, and usmg the services of certifying and disbursing officers. The future status of these officials is an impartant aspect of this article.

   One last generalization is necessary regarding these officials. It ie sald that one should "pity the man who must serve two masted' Cer-tieing and disbursing officers have the hapless distmction af serving three masters. First, they are employees of a particular agency or department. They are, therefore, subject to all the administrative pres-sures such an agency can bring to bear. Such pressures may be nega-tire (disciplinary action, lover performance ratings) or positive (promotion, awards) and can be stern reminders not to disregard the agency's xishes and orders. Second, they are intmately involved with the Treasuv Department. They utiiize Treasq farms, follow Treas-ury regulations, and comply with Treasury directives.'8 Third, their actions and accounts will be reviewed by the General Accounting Of-fice (GAO), which has the authority to disapprove and disallow their actions and render them pecuniarily liable. It 1s not unusual, therefore, for such officials to be put m the unfortunate predicament of following agency directives to pay a contractor and then be held personally liable because the Comptroller General later ruled the payment illegal.20

   With these general comments serving as B preface, attention will now be focused on the over 14,OW certi$ing and 050 disbursing offi-cera who are reapnsible each year for federal payments amounting to abaut one trillion dollars.B1

   The duties and responsibilities of each cert@ing or disbursing offi-cer will r a q aorneivhat depending on the internal plicies of the agency for which he or she ivorks. Nor ali agencies can be analyzed without praducmg an interminably long tame. and consequently only a f w rep-resentative agencies \, ill be studied.

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   j8Scr Treaiun Fibeal Reqvmmenrr lilanial for Guidance of Depanmenrr and Ammer. To1 1. $ 4-2000 [heremafter cired a8 TFRX See text ~f notes 243.29.

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   Far agencies which do their own disbursmg, only the Departments of the Army and the Xa~ywill be studied. Thus unless othemme noted, the tern "disbursing officer" will refer to officials of those depanments and not to the disbursing officers of the Twasuq. Department.

   Because of the recent Joint Financial Management Impmvement Program study,22 a broad picture...