Overview
FAR 46.316 prescribes the mandatory and discretionary use of the "Responsibility for Supplies" clause in government contracts to define when risk of loss or damage transfers from the contractor to the government.
Key Rules
- Mandatory Inclusion: The Contracting Officer must include clause 52.246-16 in solicitations and contracts for supplies, services involving supplies, or research and development when:
- A fixed-price contract is contemplated; and
- The contract value is expected to exceed the simplified acquisition threshold (SAT).
- Discretionary Inclusion: The clause may be included in contracts below the SAT if authorized by specific agency procedures.
Practical Implications
- This section ensures that risk of loss remains with the contractor until formal acceptance or delivery to a specific point, protecting the government's interest in fixed-price acquisitions.
- Contractors must account for the cost of insuring or protecting goods while in transit or storage until the legal point of responsibility shifts to the government.