52.236-22 Design Within Funding Limitations
Source: FAR 52.236-22 on acquisition.gov
Contractors must design federal construction projects to stay within specified funding limits and may be required to redesign at no extra cost if bids exceed those limits, unless due to uncontrollable factors.
Overview
FAR 52.236-22, "Design Within Funding Limitations," requires contractors providing design services for federal construction projects to ensure their designs can be built within a specified funding limit. The clause mandates that the design must allow for the award of a construction contract at or below the estimated construction contract price stated in the contract. If construction bids exceed this estimate, the contractor must redesign at no additional cost, unless the overage is due to factors beyond their control. Contractors must also promptly notify the Contracting Officer if they believe the project cannot be designed within the funding limitation. The Government may then adjust the project scope, materials, or the funding limit as needed. This clause ensures fiscal discipline and accountability in the design phase of government construction projects.
Key Rules
- Design Within Funding Limit
- Contractors must design facilities so construction can be awarded within the specified funding limitation.
- Redesign Obligation
- If bids exceed the funding limit, contractors must redesign at no extra cost unless the overage is outside their control.
- Notification Requirement
- Contractors must promptly inform the Contracting Officer if the design cannot meet the funding limitation.
- Government Review and Adjustment
- The Government may adjust the project scope, materials, or funding limit if the estimate is too low or bids are delayed.
Responsibilities
- Contracting Officers: Monitor compliance, review cost estimates, and authorize changes if needed.
- Contractors: Design within funding limits, provide timely notifications, and perform redesigns as required.
- Agencies: Oversee project funding and ensure fiscal discipline.
Practical Implications
- This clause enforces budget discipline in federal construction projects.
- Contractors must manage design choices to stay within budget and be proactive in communicating cost issues.
- Failure to comply can result in redesign obligations without additional compensation, unless justified by external factors.
As prescribed in 36.609-1(c), insert the following clause:
Design Within Funding Limitations (Apr 1984)
(a) The Contractor shall accomplish the design services required under this contract so as to permit the award of a contract, using standard Federal Acquisition Regulation procedures for the construction of the facilities designed at a price that does not exceed the estimated construction contract price as set forth in paragraph (c) of this clause. When bids or proposals for the construction contract are received that exceed the estimated price, the contractor shall perform such redesign and other services as are necessary to permit contract award within the funding limitation. These additional services shall be performed at no increase in the price of this contract. However, the Contractor shall not be required to perform such additional services at no cost to the Government if the unfavorable bids or proposals are the result of conditions beyond its reasonable control.
(b) The Contractor will promptly advise the Contracting Officer if it finds that the project being designed will exceed or is likely to exceed the funding limitations and it is unable to design a usable facility within these limitations. Upon receipt of such information, the Contracting Officer will review the Contractor’s revised estimate of construction cost. The Government may, if it determines that the estimated construction contract price set forth in this contract is so low that award of a construction contract not in excess of such estimate is improbable, authorize a change in scope or materials as required to reduce the estimated construction cost to an amount within the estimated construction contract price set forth in paragraph (c) of this clause, or the Government may adjust such estimated construction contract price. When bids or proposals are not solicited or are unreasonably delayed, the Government shall prepare an estimate of constructing the design submitted and such estimate shall be used in lieu of bids or proposals to determine compliance with the funding limitation.
(c) The estimated construction contract price for the project described in this contract is $______.
(End of clause)