What is an unauthorized commitment and who ratifies unauthorized commitments exceeding $100,000?

What is an unauthorized commitment and who ratifies unauthorized commitments exceeding $100,000?

• A. A binding agreement entered into by a government official with authority.
• B. An agreement not binding solely because the Government representative lacked authority; HCA ratifies unauthorized commitments in excess of $100,000.
• C. An illegal agreement that must be approved by the President.
• D. An agreement with no consideration.

Answer: (B)

An unauthorized commitment is an obligation entered into by someone who does not have the authority to bind the government. It isn’t binding on the government by itself, because proper authority wasn’t exercised. However, it can become binding if the appropriate official ratifies it, validating the action after the fact. When the commitment is large, specifically exceeding a certain dollar threshold, the Head of the Contracting Activity is the official empowered to ratify it. In this context, that threshold is $100,000, so ratification for unauthorized commitments above that amount is vested in the HCA. This explains why the correct idea is that an unauthorized commitment isn’t binding due to lack of authority, but can be ratified by the Head of the Contracting Activity for those above $100,000. The other statements introduce elements that don’t fit procurement practice—such as requiring Presidential approval or involving no consideration—so they don’t describe unauthorized commitments accurately.

An unauthorized commitment is an obligation entered into by someone who does not have the authority to bind the government. It isn’t binding on the government by itself, because proper authority wasn’t exercised. However, it can become binding if the appropriate official ratifies it, validating the action after the fact. When the commitment is large, specifically exceeding a certain dollar threshold, the Head of the Contracting Activity is the official empowered to ratify it. In this context, that threshold is $100,000, so ratification for unauthorized commitments above that amount is vested in the HCA.

This explains why the correct idea is that an unauthorized commitment isn’t binding due to lack of authority, but can be ratified by the Head of the Contracting Activity for those above $100,000. The other statements introduce elements that don’t fit procurement practice—such as requiring Presidential approval or involving no consideration—so they don’t describe unauthorized commitments accurately.