52.241-2
Order of Precedence-Utilities
In utility contracts containing FAR 52.241-2, the negotiated contract always overrides conflicting rate schedules, riders, exhibits, and the utility provider’s standard rules.
Overview
- FAR 52.241-2 establishes a simple but important hierarchy rule for utility service contracts: if there is a conflict between the contract itself and any incorporated rate schedule, rider, exhibit, or the utility contractor’s own rules and regulations, the contract terms govern.
- Its purpose is to prevent external utility documents from overriding negotiated Federal contract requirements.
Key Rules
- Order of Precedence-Utilities
- Any inconsistency between the contract, including specifications, and incorporated utility documents is resolved in favor of the contract.
- Incorporated Utility Documents
- Rate schedules, riders, exhibits, and the contractor’s rules and regulations may be part of the agreement, but they do not supersede the contract when terms conflict.
- Clause Use
- The clause is inserted as prescribed by FAR 41.501(c)(1) for applicable utility contracting situations.
Responsibilities
- Contracting Officers: ensure the clause is included when required and review incorporated utility documents for conflicts with negotiated contract terms.
- Contractors: perform in accordance with the contract first, even if their standard tariffs, riders, or internal utility rules say otherwise.
- Agencies: rely on the clause to preserve Federal contract terms and avoid unintended incorporation of inconsistent utility provisions.
Practical Implications
- This clause exists to protect the Government from being bound by conflicting utility tariffs or standard service rules.
- It affects contract drafting, review of incorporated documents, and dispute resolution.
- A common pitfall is assuming a utility’s standard rate schedule automatically controls all service terms; under this clause, it does not if the contract says otherwise.