52.241-2 Order of Precedence-Utilities
Source: FAR 52.241-2 on acquisition.gov
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.
As prescribed in 41.501(c)(1), insert a clause substantially the same as the following:
Order of Precedence-Utilities (Feb 1995)
In the event of any inconsistency between the terms of this contract (including the specifications) and any rate schedule, rider, or exhibit incorporated in this contract by reference or otherwise, or any of the Contractor’s rules and regulations, the terms of this contract shall control.
(End of clause)