52.246-16 Responsibility for Supplies
Source: FAR 52.246-16 on acquisition.gov
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.
As prescribed in 46.316 , insert the following clause:
Responsibility for Supplies (Apr 1984)
(a) Titleto supplies furnished under this contract shall pass to the Government upon formal acceptance, regardless of when or where the Government takes physical possession, unless the contract specifically provides for earlier passage of title.
(b) Unless the contract specifically provides otherwise, risk of loss of or damage to supplies shall remain with the Contractor until, and shall pass to the Government upon-
(1) Delivery of the supplies to a carrier, if transportation is f.o.b. origin; or
(2) Acceptance by the Government or delivery of the supplies to the Government at the destination specified in the contract, whichever is later, if transportation is f.o.b. destination.
(c) Paragraph (b) of this clause shall not apply to supplies that so fail to conform to contract requirements as to give a right of rejection. The risk of loss of or damage to such nonconforming supplies remains with the Contractor until cure or acceptance. After cure or acceptance, paragraph (b) of this clause shall apply.
(d) Under paragraph (b) of this clause, the Contractor shall not be liable for loss of or damage to supplies caused by the negligence of officers, agents, or employees of the Government acting within the scope of their employment.
(End of clause)