Overview
This section prescribes the requirements for Contracting Officers to establish clear, enforceable warranty terms, ensuring that the scope, duration, and specific remedies for defects are explicitly defined. It provides a framework for allocating risk between the Government and the contractor based on design responsibility and commercial practices.
Key Rules
- Mandatory Clarity: Every warranty must explicitly state the nature of the warranted items, the extent of the contractor's obligations, specific remedies available to the Government, and the warranty's duration.
- Design Responsibility: If the Government provides the design, the warranty is typically limited to materials and workmanship; if the contractor provides the design, the warranty also covers the "usefulness" of that design.
- Remedy Standards: At a minimum, warranties should allow the Government to either obtain an equitable adjustment or require the contractor to repair/replace defective items at the contractor's expense (including labor, materials, and transportation).
- Negation of Implied Warranties: For non-commercial items, the use of express FAR warranty clauses negates implied warranties of merchantability and fitness for a particular purpose.
- Notice and Marking: The contract must specify a "notice period" that allows the Government sufficient time to discover and report defects, and supplies must be marked or stamped to inform end-users of the warranty's existence and terms.
- Cost Responsibility: Unless stated otherwise, the contractor is responsible for costs associated with reinspection, testing, and transportation of defective items from the original delivery point.
Practical Implications
- Contracting Officers must ensure that the "notice period" accounts for administrative lead times and the geographic realities of where the equipment will be used to avoid losing warranty rights.
- Contractors must factor in the potential costs of "in-place" repairs and transportation for defective components when pricing a contract containing these warranty terms.