Government Oral Assurances

In a recent episode of the epic legal soap opera, Suits, an Assistant DA and the show’s protagonist reached an oral agreement that the Assistant DA later reneged on. This reminded me of the general proposition in the world of government contracts that, to coin a phrase, oral agreements are worth the paper they’re written on. A few years back, my opposition in a bid protest ran into this truism.

In this bid protest (Cyberlux Corp., B-499770, Jan. 23, 2009), my opposition (the protester; I represented the intervening awardee) argued that the contracting officer made oral promises about how the pricing should be handled in the proposals. The protester claimed that the contracting offer gave the protester instructions about the pricing that were not given to the awardee. The contracting officer denied that the conversation took place. GAO said it really didn’t matter.

“[E]ven if it could be shown that the contracting officer gave the disputed direction, the protester was not permitted to rely on such a statement since offerors cannot reasonably rely on oral modifications to an RFP that are inconsistent with its written terms, absent a written amendment or confirmation of the oral modification. 83 LTD, B-287019.2 et al., Sept. 14, 2001, 2001 CPD 165 at 6.”

There is a fair amount of lore that oral contracts with the government are not enforceable. This comes in part from FAR 2-101, which defines a contract as a commitment that is reduced to writing. It is also based on 31 U.S.C. § 1501(a)(1), a fiscal law provision which says that an obligation must be supported by an agreement in writing. The courts have not always felt bound by this analysis and have on occasion enforced an oral contract against the government; however, in every case, the essential elements of an enforceable contract, primarily an agreement, must be proven. Proving that of one actually has an enforceable contract is an inevitable problem with oral agreements, whether or not the government is involved.

But in addition, with the government, you have to prove that the individual from whom you have any commitment actually has the authority to enter into a contract. Confidential informants to law enforcement agencies run into this problem fairly often. But that is another topic for another day.

So unless you are eager to litigate, when dealing with the government, get it in writing if you expect to hold the government to the commitment.

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