Overview
FAR 52.241 provides standardized clauses and provisions for the acquisition of utility services, including electricity, gas, water, and steam. It establishes the legal framework for service territory compliance, rate adjustments, facility management, and the precedence of federal contract terms over utility-specific tariffs or regulations.
Key Rules
- Territory Compliance: Offerors must represent that their service is consistent with State laws and established utility service territories (specifically for electricity under Public Law 100-202).
- Order of Precedence: In the event of a conflict between the federal contract and a utility’s rate schedules, riders, or company rules, the terms of the federal contract take precedence.
- Rate Protections: Contractors are required to provide the lowest available rate schedule for the applicable class of service and must notify the government of any rate change filings with regulatory bodies.
- Facility Management: While the contractor generally owns and maintains the facilities required to provide service, they must obtain Contracting Officer approval before installation or removal and are granted a revocable permit to access government premises.
- Metering and Continuity: Service must be measured by standard meters provided by the contractor, with specific provisions for periodic testing and equitable billing adjustments in the event of meter failure or service interruptions.
- Financial Liabilities: The clauses outline specific procedures for "Connection Charges" and "Termination Liability" to ensure contractors recover costs for new infrastructure while providing the government credits if those facilities serve other customers.
Practical Implications
- Most-Favored-Customer Pricing: These clauses protect the government from overpaying by ensuring it receives the lowest rates available to similar classes of customers.
- Operational Risk Mitigation: By defining metering accuracy, maintenance responsibilities, and access rights, the FAR minimizes disputes regarding utility infrastructure located on federal installations.
- Infrastructure Recovery: Contracting Officers must carefully negotiate connection charges and recovery periods to ensure the government does not pay for unamortized facility costs if a contract is terminated early.