52.246-16
Responsibility for Supplies
FAR 52.246-16 defines when title and risk of loss for supplies transfer from contractor to government, ensuring clear responsibility during delivery and acceptance.
Overview
FAR 52.246-16, Responsibility for Supplies, establishes when title and risk of loss for supplies pass from the contractor to the government in federal contracts. The clause clarifies that title to supplies transfers to the government upon formal acceptance, unless otherwise specified. Risk of loss remains with the contractor until delivery or acceptance, depending on the shipping terms (f.o.b. origin or f.o.b. destination). Special provisions apply to nonconforming supplies, and contractors are not liable for loss or damage caused by government personnel acting within their official capacity.
Key Rules
- Passage of Title
- Title to supplies passes to the government upon formal acceptance, unless the contract states otherwise.
- Risk of Loss
- Risk of loss remains with the contractor until delivery to the carrier (f.o.b. origin) or until acceptance/delivery at the destination (f.o.b. destination), unless otherwise specified.
- Nonconforming Supplies
- For supplies that do not meet contract requirements, risk of loss remains with the contractor until the issue is cured or the supplies are accepted.
- Liability Exception
- Contractors are not liable for loss or damage caused by government employees acting within the scope of their employment.
Responsibilities
- Contracting Officers: Ensure the clause is included in applicable contracts and clarify any exceptions or special terms.
- Contractors: Maintain risk of loss and title responsibilities as outlined, and address nonconforming supplies promptly.
- Agencies: Oversee compliance and resolve disputes regarding title, risk, and liability.
Practical Implications
- This clause protects both parties by clearly defining when ownership and risk transfer. Contractors must be vigilant about delivery terms and acceptance procedures. Misunderstandings about title or risk can lead to disputes or financial loss, especially with nonconforming supplies or damage during transit.