Overview
FAR 41.205 establishes the procedures and documentation requirements for agencies to procure utility services through standalone "separate contracts" when areawide contracts or interagency agreements are unavailable. It also provides the specific justifications required to enter into multi-year utility contracts exceeding one year.
Key Rules
- Default Usage: Separate contracts must be used if an agency has the necessary contracting authority and no areawide contract or interagency agreement exists.
- Mandatory Documentation: The Contracting Officer (CO) must document the contract file with seven specific data points, including the number of suppliers, rates, connection charges, termination liabilities, and the utility’s wheeling/transportation policies.
- GSA Assistance: If an agency seeks GSA’s help in awarding a separate contract, it must furnish all technical and acquisition data required by this section and FAR 41.301.
- Multi-year Justification: Contracts may exceed one year (up to a maximum of 10 years) if:
- The government receives lower rates or more favorable terms.
- Connection charges or termination liabilities are reduced or eliminated.
- The supplier refuses to provide service on a short-term (1-year) basis.
Practical Implications
- Administrative Burden: Contracting Officers must ensure a robust administrative record; the seven-point documentation list in 41.205(b) serves as a mandatory compliance checklist for the contract file.
- Long-term Cost Savings: This section encourages multi-year contracting as a tool for leverage, allowing agencies to trade longer commitment terms for reduced up-front infrastructure costs and lower consumption rates.