41.402
Rate changes and regulatory intervention
Agencies must promptly evaluate and properly document all utility rate or service changes, ensuring contract modifications and coordination with GSA when necessary.
Overview
FAR 41.402 outlines the procedures and requirements for handling changes to rates or terms and conditions of utility services provided to the Government. It addresses both regulated and unregulated utility suppliers and establishes the process for evaluating, documenting, and implementing such changes in government contracts. The section also covers agency responsibilities for regulatory intervention and coordination with the General Services Administration (GSA) when changes may impact multiple federal agencies.
Key Rules
- Evaluation of Proposed Changes
- Agencies must promptly assess whether proposed changes to rates or terms are reasonable, justified, and non-discriminatory.
- Regulatory Intervention
- If a proposed change could affect other agencies and regulatory intervention is warranted, the matter should be referred to GSA, which may delegate authority for agency intervention.
- Regulated Utility Rate Changes
- For regulated services, approved rate changes must be incorporated into the contract via unilateral modification or documented per agency procedures, with effective dates set by the regulatory body.
- Unregulated Utility Rate Changes
- For unregulated services, negotiated rate changes must be incorporated into the contract by modification, with proper notification to the agency’s paying or billing verification office.
Responsibilities
- Contracting Officers: Must evaluate proposed changes, ensure proper contract modifications, and distribute documentation to relevant offices.
- Contractors: Must comply with contract modification procedures for rate changes and provide necessary documentation.
- Agencies: Must coordinate with GSA for regulatory intervention and ensure timely payment of approved rates.
Practical Implications
- Ensures transparency and fairness in utility rate changes for government contracts.
- Requires prompt action and documentation to avoid late payment penalties.
- Highlights the importance of coordination between agencies and GSA for regulatory matters.