52.241-3
Scope and Duration of Contract
FAR 52.241-3 ensures both parties understand the duration, rates, and obligations for government utility service contracts, including required disclosures and payment terms.
Overview
FAR 52.241-3, Scope and Duration of Contract, outlines the terms under which utility services are provided to the government. This clause specifies the contract period, the type of utility service, and the obligations of both the contractor and the government regarding continuation, rates, and minimum charges. It ensures that both parties understand the duration of the agreement, the applicable tariffs and regulations, and the payment structure, including any minimum monthly charges and their proration at the start and end of the contract term.
Key Rules
- Contract Period and Service Commitment
- The contractor must provide, and the government must purchase, specified utility services for a defined period, following approved tariffs and regulations.
- No Obligation Beyond Expiration
- Neither party is required to continue service after the contract expires.
- Disclosure of Rates and Terms
- The contractor must provide the government with a complete set of current and subsequently approved rates, terms, and conditions.
- Payment and Minimum Charges
- The government pays the applicable tariff rates and is liable for any minimum monthly charges, which must be prorated for partial months at the start or end of the contract.
Responsibilities
- Contracting Officers: Ensure the contract includes the correct period, service type, and incorporates current tariffs and regulations; verify receipt of rate and term disclosures.
- Contractors: Provide utility services as specified, disclose all rates and terms, and invoice according to the contract and applicable tariffs.
- Agencies: Oversee compliance with contract terms and ensure payments are made as required.
Practical Implications
- This clause clarifies the scope, duration, and payment obligations for utility service contracts, reducing ambiguity and disputes.
- Contractors must be diligent in providing updated rate information and ensuring accurate billing, especially regarding minimum charges and proration.
- Failure to comply with disclosure or payment requirements can result in contract disputes or nonpayment.