## Facts

- The Navy and Cath-dr/Balti Joint Venture entered a fixed-price contract (Sept. 29, 1998) to renovate the exterior of a historic dental research facility at the Great Lakes Naval Training Center in Illinois.
- The contract incorporated FAR 52.243-4 (Changes) and FAR 52.236-2 (Differing Site Conditions), which contemplate equitable adjustments and written contract modifications by the contracting officer (CO).
- The Navy designated a Resident Officer in Charge of Contracts (ROICC), who also acted as project manager, to administer the project and receive contract correspondence.
- The contract and related clauses stated that only the CO had authority to modify the contract or bind the government to changes; field personnel (including ROICC/COR-type representatives) lacked authority to make commitments affecting price, quantity, quality, or delivery.
- During performance, the ROICC and other field personnel gave directions and approvals that the contractor treated as changes increasing cost and/or time.
- The contractor submitted 37 claims to the Armed Services Board of Contract Appeals (ASBCA) seeking equitable adjustments; the ASBCA sustained 13 claims, relying largely on the ROICC’s role and directions as a basis for compensable changes.

## Issues

1. Whether the ROICC had actual (express or implied) authority to direct compensable contract changes despite clauses reserving modification authority to the CO.
2. Whether the ASBCA’s awards on the sustained claims could be upheld on another valid ground (e.g., differing site conditions or ratification by an authorized official).

## Decision

- The Federal Circuit held the ROICC lacked actual authority—express or implied—to order compensable changes because the contract and incorporated regulations reserved such authority to the CO.
- The court rejected reliance on apparent authority to bind the United States for unauthorized directives by field personnel.
- The court reversed the ASBCA’s awards on claims 2, 8, 13, 17, and 26/32 because they depended on unauthorized ROICC-directed changes and lacked an independent legal basis.
- The court affirmed the ASBCA’s award on claim 3 because it was independently supported as a differing site condition and the Navy did not challenge that ground on appeal.
- The court remanded claims 7, 33, and 37 for factual findings on whether an official with actual authority ratified the ROICC’s directives.

## Legal Principles

- The United States is bound only by government officials acting with actual authority; contractors bear the risk of relying on directions from personnel who lack such authority.
- When the contract and governing procurement clauses unambiguously reserve modification authority to the CO, another official cannot possess implied actual authority to do the same.
- Apparent authority does not bind the federal government in procurement; reasonable reliance on unauthorized field directives is insufficient by itself.
- FAR changes provisions require CO-issued written modifications for compensable changes affecting cost or time.
- Differing site conditions may support an equitable adjustment when qualifying conditions are shown and required notice is provided under the clause.
- Unauthorized commitments may be enforced only if an official with actual authority ratifies the commitment with knowledge of material facts and adoption/approval of the action or its benefits.

## Conclusion

The Federal Circuit enforced the rule that only officials with actual contracting authority can order compensable changes, reversing ASBCA awards that rested on ROICC directives alone, affirming a claim supported by differing site conditions, and remanding several claims to determine whether an authorized official ratified the unauthorized work.


Winter v. Cath-dr/Balti Joint Venture, 497 F.3d 1339 (Fed. Cir. 2007)