46.702 General
Source: FAR 46.702 on acquisition.gov
Warranties in government contracts must clearly define defect correction rights and be cost-justified to ensure quality performance and value for the government.
Overview
FAR 46.702 outlines the general principles and purposes of warranties in government contracts. Warranties are used to clearly define the rights and obligations of both the contractor and the government regarding defective items or services, and to encourage high-quality performance. The regulation specifies that warranties should grant the government a contractual right to require correction of defects, regardless of other contract acceptance provisions, and should specify a time period, usage limit, or event after which the right to correction expires. Importantly, the cost of the warranty must be justified by the benefits it provides to the government.
Key Rules
- Purpose of Warranties
- Warranties clarify contractor and government responsibilities for defects and promote quality performance.
- Warranty Provisions
- Warranties must allow the government to require defect correction after acceptance, for a defined period or event.
- Cost-Benefit Requirement
- The value of the warranty must be proportional to its cost to the government.
Responsibilities
- Contracting Officers: Ensure warranties are included when appropriate, and that their terms are clear and cost-justified.
- Contractors: Understand and comply with warranty obligations, including defect correction within the specified period.
- Agencies: Evaluate the necessity and value of warranties to ensure cost-effectiveness.
Practical Implications
- Warranties protect the government’s interests by ensuring defects are addressed post-acceptance.
- Contractors must be prepared to remedy defects within the warranty period.
- Overly costly warranties should be avoided unless justified by significant benefits.
(a) The principal purposes of a warranty in a Government contract are-
(1) To delineate the rights and obligations of the contractor and the Government for defective items and services; and
(2) To foster quality performance.
(b) Generally, a warranty should provide-
(1) A contractual right for the correction of defects notwithstanding any other requirement of the contract pertaining to acceptance of the supplies or services by the Government; and
(2) A stated period of time or use, or the occurrence of a specified event, after acceptance by the Government to assert a contractual right for the correction of defects.
(c) The benefits to be derived from a warranty must be commensurate with the cost of the warranty to the Government.