Actual Authority Still Controls: Abare v. United States and the Risk of Relying on Government Representatives
Federal contractors routinely negotiate with contracting officers, program personnel, agency counsel, contracting specialists, and other government representatives. Abare v. United States, No. 22-1271 (Fed. Cl. Mar. 19, 2026), provides a useful reminder that the apparent completeness of those negotiations does not necessarily create an enforceable agreement with the United States. Actual authority remains an independent requirement of federal contract formation.
Abare arose outside the traditional procurement setting, but its lesson translates directly to government contracting. Margaret Abare, a Postal Service employee pursuing an employment discrimination matter, entered settlement discussions with a USPS attorney. Following a telephone negotiation, the government attorney communicated a $180,000 settlement amount and Abare’s counsel accepted it. The parties subsequently advised the administrative tribunal that they had reached an agreement in principle.
The difficulty was authority. The USPS attorney possessed standing settlement authority of only $5,000. The record contained no evidence that he had obtained authority for the $180,000 proposal, communicated with an official capable of granting that authority, or later secured ratification of the purported agreement. The Court therefore concluded that no genuine factual dispute existed concerning authority and granted summary judgment for the Government.
The result reflects a distinctive feature of contracting with the United States. A private contract generally requires mutual intent, consideration, and sufficiently definite offer and acceptance. A contract with the Federal Government requires something more: the government representative must possess actual authority to bind the United States. Apparent authority—the reasonable belief that an individual has authority because of position, conduct, or surrounding circumstances—is insufficient.
That distinction has significant practical consequences. Contractors should not assume that participation in negotiations, knowledge of program requirements, government titles, email communications, or even affirmative statements demonstrate authority to commit federal funds or modify contractual obligations. The relevant inquiry is whether the individual possesses the specific authority necessary for the particular action contemplated.
Abare also illustrates why authority should be addressed before negotiations reach the point of supposed agreement. The claimant acknowledged that she had not asked about the attorney’s settlement authority. The Court emphasized that parties dealing with the Government bear the burden of determining whether the government representative acts within the limits of actual authority.
For federal contractors, the operational lesson is straightforward. Before relying on a significant government commitment, identify who has authority, determine whether that authority is limited, and ensure that the resulting agreement is documented through the appropriate contractual mechanism. This discipline is particularly important for modifications, equitable adjustments, settlement negotiations, changes in scope, and government directions that may affect price or performance.
Recommended FedContractPros Tool:FedClause360 can support this discipline by helping contractors identify and understand the contractual clauses governing post-award rights, responsibilities, changes, and administrative mechanisms. Clause analysis does not replace verification of an official’s warrant or delegated authority, but it helps establish the contractual framework within which valid government direction must operate.
Disclaimer:
This article is provided for general informational and educational purposes only and does not constitute legal advice. Federal contracting requirements are fact-specific, and contractors should consult qualified counsel regarding particular agreements, claims, modifications, negotiations, or questions concerning government authority.