12.404
Warranties
FAR 12.404 requires that Government contracts for commercial products include appropriate implied and express warranties, ensuring the Government receives protections at least equal to those offered in the commercial marketplace.
Overview
FAR 12.404 outlines the requirements for warranties in contracts for commercial products and services. It addresses both implied and express warranties, ensuring the Government receives products that meet quality and performance expectations. The section mandates that contracting officers leverage commercial warranty practices and ensure warranties are adequate, cost-effective, and administrable for Government needs.
Key Rules
- Implied Warranties
- Contracts include the implied warranty of merchantability (item is fit for ordinary use) and fitness for a particular purpose (item is fit for the Government’s specific use if the contractor knows the intended use and the Government relies on their expertise).
- Contracting officers must consult legal counsel before asserting a claim for breach of implied warranty.
- Express Warranties
- Solicitations must require offerors to provide the Government with at least the same warranty terms as those offered to the general public, including extended warranties where customary.
- Contracting officers must analyze commercial warranties for adequacy, administration, and cost-effectiveness.
- If customary commercial practice limits implied warranties, the express warranty must still provide for repair or replacement within a reasonable period after acceptance.
- Express warranties must be included in the contract by addendum.
Responsibilities
- Contracting Officers: Ensure appropriate warranties are included, analyze and document warranty adequacy, consult legal counsel as needed, and include express warranties by addendum.
- Contractors: Offer warranties at least equal to those provided to the public, disclose warranty terms, and honor warranty obligations.
- Agencies: Oversee compliance with warranty requirements and support contracting officers in warranty administration.
Practical Implications
- This section ensures the Government receives commercially reasonable warranty protections, reducing risk of defective or unsuitable products.
- Contractors must be transparent about warranty terms and cannot offer the Government less than what is standard in the commercial market.
- Common pitfalls include failing to analyze warranty adequacy or omitting required warranty terms from contracts.