52.212-4
Contract Terms and Conditions—Commercial Products and Commercial Services
FAR 52.212-4 establishes the essential terms and conditions for commercial product and service contracts, outlining contractor and government rights, obligations, and remedies to ensure compliance and efficient contract administration.
Overview
FAR 52.212-4 sets forth the standard contract terms and conditions for commercial products and commercial services acquired by the federal government. This clause covers a wide range of requirements, including inspection and acceptance, assignment of claims, changes, disputes, excusable delays, invoicing, payment, risk of loss, taxes, termination, warranties, liability, compliance with laws, and order of precedence. It also addresses unique government contract requirements such as unauthorized obligations and incorporation by reference of contractor representations and certifications. Alternate I provides tailored provisions for time-and-materials or labor-hour contracts.
Key Rules
- Inspection/Acceptance
- Only conforming items may be tendered; the government may inspect, require correction, or seek price reductions for nonconforming items.
- Assignment
- Contractors may assign payment rights to financial institutions, except when third-party payment is used.
- Changes
- Contract terms can only be changed by written agreement.
- Disputes
- Disputes are resolved under FAR 52.233-1; contractors must continue performance during disputes.
- Excusable Delays
- Contractors are not liable for delays beyond their control but must notify the CO promptly.
- Invoice and Payment
- Invoices must include specific information; payments are governed by the Prompt Payment Act and may be made by EFT.
- Termination
- The government may terminate for convenience or cause, with specific payment and liability rules.
- Warranty and Liability
- Contractors warrant merchantability and fitness; liability for consequential damages is limited.
- Compliance
- Contractors must comply with all applicable laws and unique government contract statutes.
- Order of Precedence
- Specifies the hierarchy for resolving contract inconsistencies.
Responsibilities
- Contracting Officers: Enforce contract terms, handle disputes, process invoices, and manage terminations.
- Contractors: Deliver conforming products/services, submit proper invoices, comply with laws, and respond to government requests for correction or information.
- Agencies: Oversee contract compliance, ensure prompt payment, and enforce statutory requirements.
Practical Implications
- This clause standardizes expectations and protections for both parties in commercial acquisitions, streamlining compliance and dispute resolution. Contractors must pay close attention to invoicing, delivery, and compliance obligations to avoid payment delays, disputes, or termination. Common pitfalls include incomplete invoices, failure to notify of excusable delays, and misunderstanding the order of precedence or assignment restrictions.