Under what circumstances must a contracting officer document a contract action referral to a higher authority?

A contracting officer must document a contract action referral to a higher authority when a contractor insists on unreasonable profit or fee because this situation raises significant concerns regarding the fairness and reasonableness of the proposed cost. Such situations can indicate potential issues with compliance and may impact the integrity of the procurement process. By referring this matter to a higher authority, the contracting officer ensures that there is oversight and that the decision made considers the broader implications for Federal contracting practices, ultimately leading to a more accountable and transparent decision-making process.

In cases like excessive pass-through charges, deadlocked negotiations, or contract terminations for convenience, while they do require careful consideration, they do not necessarily prompt a referral to higher authority in the same way that concerns over unreasonable profit or fee do. Those issues may entail negotiation and resolution at the contracting officer's level without requiring additional oversight, unless they escalate or encompass more severe implications. Documenting and referring the situation regarding unreasonable profit ensures that all parties adhere to established guidelines and maintain the integrity of the procurement process.