Overview
FAR 46.710 prescribes specific warranty clauses and their alternates for use in fixed-price solicitations and contracts for supplies, services, research and development, and construction. It provides Contracting Officers with the flexibility to tailor warranty terms and conditions to meet the unique needs of a specific acquisition, provided agency procedures for warranty use are followed.
Key Rules
- Agency Approval: Warranty clauses may only be used when their inclusion has been approved under specific agency procedures.
- Categorization of Clauses: The regulation establishes distinct clauses based on the nature of the procurement:
- 52.246-17: Warranty of Supplies of a Noncomplex Nature.
- 52.246-18: Warranty of Supplies of a Complex Nature.
- 52.246-19: Warranty of Systems and Equipment under Performance Specifications or Design Criteria.
- 52.246-20: Warranty of Services.
- 52.246-21: Warranty of Construction.
- Flexibility and Tailoring: Contracting Officers may use clauses that are "substantially the same as" the prescribed text and are authorized to vary terms and conditions to suit the particular situation.
- Design Liability: If a contractor provides their own design rather than following a Government-furnished design, the word "design" must be specifically added to the warranty coverage for supplies.
- Use of Alternates: Specific alternates allow the Government to assume certain risks to reduce contract costs, such as paying for transportation incident to repair or handling disassembly and reassembly expenses.
Practical Implications
- Risk Allocation: By selecting specific alternates (e.g., Alternate II for transportation costs), the Contracting Officer can prevent the price of a warranty from becoming "prohibitive" by shifting certain logistical costs back to the Government.
- Contractor Scrutiny: Contractors must carefully review which version and alternate of a warranty clause is included, as it dictates whether they are liable for design defects, transportation of failed items, or the high labor costs associated with disassembling larger systems to reach a warranted component.