Overview
FAR 41.101 establishes the foundational terminology used for the acquisition of utility services, defining the legal and operational framework for contracts involving electricity, gas, water, and related infrastructure. These definitions clarify the relationships between federal agencies, the General Services Administration (GSA), and utility suppliers within specific geographic franchise territories.
Key Rules
- Contract Types: Distinguishes between "Areawide contracts" (pre-negotiated GSA umbrella agreements) and "Separate contracts" (individual agency agreements used when an areawide contract is unavailable or inappropriate).
- Ordering Mechanism: Defines "Authorization" as the specific legal document used to initiate or change service under a GSA areawide contract.
- Financial Protections: Establishes "Termination liability" as a contingent obligation to pay for unrecovered connection costs if the government terminates service early.
- Scope of Service: Broadly defines "Utility service" to include energy and water services, while allowing for the inclusion of services like trash or snow removal only if the Service Contract Labor Standards do not apply.
- Authority: Clarifies that "Delegated agencies" must have written authority from GSA to enter into utility contracts for periods of up to ten years.
- Regulatory Participation: Defines "Intervention" as the formal process by which GSA or a delegated agency represents federal interests in utility regulatory proceedings.
Practical Implications
- Streamlined Ordering: Contracting Officers can save time by using the "Authorization" form under existing GSA areawide contracts rather than negotiating a new "Separate contract" from scratch.
- Budgetary Risk: Agencies must carefully evaluate "Connection charges" and "Termination liability" during the planning phase, as these represent significant nonrecurring costs and potential financial risks if a facility closes.