52.246-19 Warranty of Systems and Equipment under Performance Specifications or Design Criteria
Source: FAR 52.246-19 on acquisition.gov
FAR 52.246-19 requires contractors to promptly correct defects in systems and equipment delivered under performance-based contracts, with strict notification, reporting, and cost responsibilities to ensure Government interests are protected.
Overview
FAR 52.246-19 establishes the warranty requirements for systems and equipment delivered under contracts with performance specifications or design criteria. This clause defines the contractor’s obligations to correct defects discovered within a specified warranty period, outlines the procedures for notification and correction, and details the remedies available to the Government. It also addresses the responsibilities for transportation costs, the exclusion of implied warranties, and the handling of Government-furnished property. Alternate versions of the clause provide flexibility for transportation costs, incentive contracts, and situations involving significant disassembly/reassembly costs.
Key Rules
- Warranty Period and Defect Correction
- Contractors must correct defects discovered within the warranty period specified in the contract, at no additional cost to the Government.
- Notification and Reporting
- Contractors must promptly notify the Contracting Officer of any defects and submit recommendations for corrective action within specified timeframes.
- Government Remedies
- The Government retains broad rights to require correction, obtain corrective recommendations, or recover costs if the contractor fails to comply.
- Transportation and Liability
- Contractors are generally responsible for transportation costs related to defect correction, unless an alternate clause is used.
- Exclusion of Implied Warranties
- All implied warranties of merchantability and fitness for a particular purpose are excluded.
Responsibilities
- Contracting Officers: Must specify warranty periods, notification timeframes, and may select alternate clauses as appropriate. Responsible for notifying contractors of defects and directing corrective actions.
- Contractors: Must correct defects, submit timely notifications and proposals, provide data/reports, and bear costs as specified. Must comply with all directions regarding defect correction.
- Agencies: Oversee compliance, enforce remedies, and may recover costs for noncompliance.
Practical Implications
- This clause ensures the Government receives defect-free systems and equipment that meet contract requirements. Contractors must have robust quality control and defect reporting processes. Failure to comply can result in significant cost recovery actions, loss of payment, or contract modifications. Common pitfalls include missing notification deadlines, inadequate corrective action proposals, or misunderstanding transportation responsibilities.
As prescribed in 46.710(c)(1), the contracting officer may insert a clause substantially as follows:
Warranty of Systems and Equipment under Performance Specifications or Design Criteria (May 2001)
(a) Definitions. As used in this clause-
Acceptance means the act of an authorized representative of the Government by which the Government assumes for itself, or as an agent of another, ownership of existing and identified supplies, or approves specific services rendered, as partial or complete performance of the contract.
Defect means any condition or characteristic in any supplies or services furnished by the Contractor under the contract that is not in compliance with the requirements of the contract.
Supplies means the end items furnished by the Contractor and related services required under this contract. Except when this contract includes the clause entitled Warranty of Data, supplies also mean "data."
(b) Contractor’s obligations.
(1) The Contractor’s warranties under this clause shall apply only to those defects discovered by either the Government or the Contractor __________ [Contracting Officer shall state the warranty period; e.g.,"at the time of delivery;" "within 45 days after delivery," or the specified event whose occurrence will terminate the warranty period; e.g.,the number of miles or hours of use, or combination of any applicable events or periods of time.].
(2) If the Contractor becomes aware at any time before acceptance by the Government (whether before or after tender to the Government) that a defect exists in any supplies or services, the Contractor shall-
(i) Promptly correct the defect; or
(ii) Promptly notify the Contracting Officer, in writing, of the defect, using the same procedures prescribed in paragraph (b)(3) of this clause.
(3) If the Contracting Officer determines that a defect exists in any of the supplies or services accepted by the Government under this contract, the Contracting Officer shall promptly notify the Contractor of the defect, in writing, within _____ [Contracting Officer shall insert the specific period of time in which notice shall be given to the Contractor; e.g.,"30days after delivery of the nonconforming supplies;" "90days of the last delivery under this contract;" or "90days after discovery of the defect."]. Upon timely notification of the existence of a defect, or if the Contractor independently discovers a defect in accepted supplies or services, the Contractor shall submit to the Contracting Officer, in writing, within _____ [Contracting Officer shall insert period of time] a recommendation for corrective actions, together with supporting information in sufficient detail for the Contracting Officer to determine what corrective action, if any, shall be undertaken.
(4) The Contractor shall promptly comply with any timely written direction from the Contracting Officer to correct or partially correct a defect, at no increase in the contract price.
(5) The Contractor shall also prepare and furnish to the Contracting Officer data and reports applicable to any correction required under this clause (including revision and updating of all other affected data called for under this contract) at no increase in the contract price.
(6) In the event of timely notice of a decision not to correct or only to partially correct, the Contractor shall submit a technical and cost proposal within _______. [Contracting Officer shall insert period of time] to amend the contract to permit acceptance of the affected supplies or services in accordance with the revised requirement, and an equitable reduction in the contract price shall promptly be negotiated by the parties and be reflected in a supplemental agreement to this contract.
(7) Any supplies or parts thereof corrected or furnished in replacement and any services reperformed shall also be subject to the conditions of this clause to the same extent as supplies or services initially accepted. The warranty, with respect to these supplies, parts, or services, shall be equal in duration to that set forth in paragraph (b)(1) of this clause, and shall run from the date of delivery of the corrected or replaced supplies.
(8) The Contractor shall not be responsible under this clause for the correction of defects in Government-furnished property, except for defects in installation, unless the Contractor performs, or is obligated to perform, any modifications or other work on such property. In that event, the Contractor shall be responsible for correction of defects that result from the modifications or other work.
(9) If the Government returns supplies to the Contractor for correction or replacement under this clause, the Contractor shall be liable for transportation charges up to an amount equal to the cost of transportation by the usual commercial method of shipment from the place of delivery specified in this contract (irrespective of the f.o.b. point or the point of acceptance) to the Contractor’s plant and return to the place of delivery specified in this contract. The Contractor shall also bear the responsibility for the supplies while in transit.
(10) All implied warranties of merchantability and "fitness for a particular purpose" are excluded from any obligation under this contract.
(c) Remedies available to the Government.
(1) The rights and remedies of the Government provided in this clause-
(i) Shall not be affected in any way by any terms or conditions of this contract concerning the conclusiveness of inspection and acceptance; and
(ii) Are in addition to, and do not limit, any rights afforded to the Government by any other clause of this contract.
(2) Within ____________ [Contracting Officer shall insert period of time] after receipt of the Contractor’s recommendations for corrective action and adequate supporting information, the Contracting Officer, using sole discretion, shall give the Contractor written notice not to correct any defect, or to correct or partially correct any defect within a reasonable time at ________ [Contracting Officer shall insert locations where corrections may be performed].
(3) In no event shall the Government be responsible for any extension or delays in the scheduled deliveries or periods of performance under this contract as a result of the Contractor’s obligations to correct defects, nor shall there be any adjustment of the delivery schedule or period of performance as a result of the correction of defects unless provided by a supplemental agreement with adequate consideration.
(4) This clause shall not be construed as obligating the Government to increase the contract price.
(5)
(i) The Contracting Officer shall give the Contractor a written notice specifying any failure or refusal of the Contractor to-
(A) Present a detailed recommendation for corrective action as required by paragraph (b)(3) of this clause;
(B) Correct defects as directed under paragraph (b)(4) of this clause; or
(C) Prepare and furnish data and reports as required by paragraph (b)(5) of this clause.
(ii) The notice shall specify a period of time following receipt of the notice by the Contractor in which the Contractor must remedy the failure or refusal specified in the notice.
(6) If the Contractor does not comply with the Contracting Officer’s written notice in paragraph (c)(5)(i) of this clause, the Contracting Officer may by contract or other-wise-
(i) Obtain detailed recommendations for corrective action and either-
(A) Correct the supplies or services; or
(B) Replace the supplies or services, and if the Contractor fails to furnish timely disposition instructions, the Contracting Officer may dispose of the nonconforming supplies for the Contractor’s account in a reasonable manner, in which case the Government is entitled to reimbursement from the Contractor, or from the proceeds, for the reasonable expenses of care and disposition, as well as for excess costs incurred or to be incurred;
(ii) Obtain applicable data and reports; and
(iii) Charge the Contractor for the costs incurred by the Government.
(End of clause)
Alternate I (Apr 1984). If it is desirable to specify that necessary transportation incident to correction or replacement will be at the Government’s expense (as might be the case if, for example, the cost of a warranty would otherwise be prohibitive), substitute a paragraph substantially the same as the following paragraph (b)(9) for paragraph (b)(9) of the basic clause:
Alternate II (Apr 1984). If a fixed-price incentive contract is contemplated, add a paragraph substantially the same as the following paragraph (c)(7) to the basic clause:
(7) All costs incurred or estimated to be incurred by the Contractor in complying with this clause shall be considered when negotiating the total final price under the Incentive Price Revision clause of this contract. After establishment of the total final price, Contractor compliance with this clause shall be at no increase in the total final price. Any equitable adjustments made under paragraph (b)(6) of this clause shall be governed by the paragraph entitled "Equitable Adjustments Under Other Clauses" in the Incentive Price Revision clause of this contract.
Alternate III (Apr 1984). If it is anticipated that recovery of the warranted item will involve considerable Government expense for disassembly and/or reassembly of larger items, add a paragraph substantially the same as the following paragraph (c)(7) to the basic clause. Redesignate the additional paragraph as "(c)(8)" if Alternate II is also being used:
(7) The Contractor shall be liable for the reasonable costs of disassembly and/or reassembly of larger items when it is necessary to remove the supplies to be inspected and/or returned for correction or replacement.