One of the first things that is taught upon entering an acquisition career field is who has the authority to make purchases. Depending on the organization the requirements that these chosen individuals need to meet may vary greatly. The ones given this authority are typically held in the upmost trust and are required to have additional training to better prepare themselves for this responsibility. Unfortunately not everyone knows and understands who may and who may not have the authority to enter into binding contracts with that particular company or that organization, furthermore they may not understand what their responsibilities are. To confuse a situation even further, there are times when one may either express or imply they have the authority when they truly don’t causing unauthorized purchases to be made. In situations like this these purchases would need to be ratified. The additional work involved in ratifying unauthorized commitments or purchases is why it is important that people know who is authorized to make purchases for an organization.
The purchasing officer is someone who has been given the power to act on behalf of some other person or some institution in a loyal, honest, and careful manner. (Goodale, 2003) This is the basic role that every purchasing officer holds. It’s their duty to act on behalf of a person or a company to purchase goods or services. A purchasing officer’s decisions must be legally and economically sound. It is their basic responsibility to conduct purchases using the instructions given to them by their employer while avoiding any legal issues. The basic understanding of contract or acquisition law can help the purchasing officer in the long run by equipping them with the general knowledge to avoid issues that can lead to legal involvements. At the very least it allows them to recognize when they may need to seek legal counsel. The person chosen for this position does not need to fall within a demographic and is completely up to the company to dictate the required experience level or education level. However when choosing someone for this position the company must ensure that the one chosen is of sound mind. What this means is that they purchasing officer must be in the right mental state to enter into contracts. They cannot be a mentally retarded individual, under the influence of a mind altering substance such as alcohol or a child. (Mote, 2011) A person entering an agreement or a contract that does not have the authority to do so or is mentally incapable of entering into an agreement will void the contract. For instance if a salesman representing a company signs and agreement or a contract with buyer for supplies to be delivered in 24 hours. The contract should voided because the salesman was acting outside of their authority to commit that company. The same would apply if a person signs a contract for between a former employee and a customer. That person did not have the capacity to act on the company’s behalf. Another instance is if it was discovered that the person entering a contract was discovered to have the understanding of a 12 year old. The contract would be void as a result of them being mentally incapable of of entering into an agreement. There comes a point where voiding the contract becomes difficult because of work already performed. In cases like this the situation must be remedied by ratifying the purchase which will be discussed later on.
The United Stated government employs their own purchasing officers. In Government acquisitions the government is the principal, the contracting officer is the agent or purchasing officer and the contractor is the third party. The contracting officer is granted the authority to enter into contract with a contractor one behalf of the government. Government contracting is regulated by the Federal Acquisition Regulation (FAR). According to FAR 1.602-1-Authority (FAR, 2011) “Contracting officers have...
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