46.304
Fixed-price service contracts
FAR 46.304 mandates the use of the Inspection of Services—Fixed-Price clause in fixed-price service contracts above the simplified acquisition threshold, ensuring enforceable inspection standards.
Overview
FAR 46.304 requires contracting officers to include the clause at 52.246-4, Inspection of Services—Fixed-Price, in solicitations and contracts for services (or supplies involving services) when a fixed-price contract is planned and the contract value exceeds the simplified acquisition threshold (SAT). For contracts at or below the SAT, the clause may be included at the contracting officer’s discretion if it serves the Government’s interest. This ensures that service contracts have clear inspection and acceptance standards, protecting the Government’s interests in contract performance and quality assurance.
Key Rules
- Mandatory Clause Inclusion Above SAT
- The Inspection of Services—Fixed-Price clause (52.246-4) must be included in fixed-price service contracts exceeding the SAT.
- Discretionary Clause Inclusion at or Below SAT
- The clause may be included in contracts at or below the SAT if the contracting officer determines it is in the Government’s interest.
Responsibilities
- Contracting Officers: Must ensure the correct clause is included in applicable solicitations and contracts, and exercise judgment for contracts at or below the SAT.
- Contractors: Must comply with the inspection and acceptance requirements outlined in clause 52.246-4 when it is included in their contract.
- Agencies: Should provide oversight to ensure proper clause usage and compliance with inspection standards.
Practical Implications
- This section ensures that service quality is contractually enforceable in fixed-price service contracts, especially for larger procurements.
- Contractors should be aware that inclusion of 52.246-4 subjects them to specific inspection and acceptance procedures.
- Common pitfalls include failing to include the clause when required or misunderstanding its applicability at lower contract values.