Overview
This section prescribes the mandatory inclusion of a specific inspection and acceptance clause in all solicitations and contracts designated as time-and-material (T&M) or labor-hour (LH). It ensures that the government maintains oversight and quality control mechanisms for contract types where the government bears a higher degree of cost risk.
Key Rules
- Mandatory Clause: The Contracting Officer (CO) is required to insert FAR clause 52.246-6, Inspection—Time-and-Material and Labor-Hour, whenever a T&M or LH contract is planned.
- Source Inspection Requirement: If the government intends to perform inspection and acceptance at the contractor’s facility (rather than at the destination), the CO must use the clause with its Alternate I.
- Applicability: These rules apply specifically to the unique nature of T&M/LH work, where the government pays for effort (hours) and materials rather than a firm-fixed price for a completed result.
Practical Implications
- Compliance Burden: Contractors must maintain an inspection system acceptable to the government that covers both the labor services performed and any materials provided.
- Site Readiness: If Alternate I is invoked, contractors must be prepared for government quality assurance representatives to conduct oversight and final acceptance within their own plants or facilities.