Overview
FAR 41.501 prescribes the specific provisions and clauses required for utility service solicitations and contracts, offering flexibility to adapt language to local utility supplier conditions. It establishes a baseline of mandatory clauses while providing conditional clauses to address specific regulatory environments and financial arrangements.
Key Rules
- "Substantially the Same As" Authority: Recognizing that utility terms vary by region, Contracting Officers (COs) are authorized to modify prescribed clauses to fit specific situations, provided the variations align with agency procedures and FAR 52.101.
- Mandatory Standard Clauses: COs must include a standard set of clauses (52.241-2 through 52.241-6) covering essential topics such as order of precedence, scope and duration, changes in service class, and contractor facilities.
- Regulated vs. Unregulated Services: The regulation distinguishes between utility services subject to a regulatory body (requiring clause 52.241-7) and those that are unregulated (requiring clause 52.241-8).
- Financial and Facility Provisions: Specific clauses are mandated for complex financial scenarios, including refundable or nonrefundable connection charges (52.241-9), termination liabilities (52.241-10), and capital credits for cooperatives (52.241-13).
- Territory Compliance: When seeking proposals from alternative electric suppliers, the CO must include provision 52.241-1 to ensure compliance with established electric service territories.
Practical Implications
- Tailoring is Expected: Unlike many FAR sections where strict adherence to clause verbiage is mandatory, utility contracting requires COs to proactively negotiate and adapt clause language to reconcile federal requirements with local utility tariffs.
- Cost Management: COs must carefully select the correct financial clauses (such as connection charges or termination liabilities) to protect the government from unnecessary costs when new infrastructure is required to provide service to a federal installation.