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PART
1246 - QUALITY ASSURANCE
SUBPART 1246.1--GENERAL
1246.101
Definitions.
1246.101-70
Additional definitions.
At no
additional cost to the Government
means at no increase in price for firm-fixed-price contracts, at no increase in
target or ceiling price for fixed price incentive contracts (see (FAR) 48 CFR
46.707), or at no increase in estimated cost or fee for
cost-reimbursement contracts.
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.
Major acquisition means an acquisition or project as defined by TAM Chapter 1234, Major System
Acquisition.
Performance requirements
means the operating capabilities,
maintenance, and reliability characteristics of a system that are determined to
be necessary for it to fulfill the requirement for which the system is
designed.
SUBPART
1246.7--WARRANTIES
1246.705
Limitations.
(a) The following restrictions are applicable to DOT
contracts:
(1) The contractor shall not be required to honor the
warranty on any property furnished by the Government except for:
(i) Defects in installation; and
(ii) Installation or modification in such a manner that
invalidates a warranty provided by the manufacturer of the property.
(2) Any warranty obtained shall specifically
exclude coverage of damage in time of war (combat damage) or national
emergency.
(3) Contracting officers shall not include in a warranty
clause any terms that require the contractor to incur liability for loss,
damage, or injury to third parties.
(b) [Reserved]
1246.706
Warranty terms and conditions.
(a) When appropriate and cost effective, the contracting
officer shall comply with the following requirements when developing the
warranty terms and conditions:
(1) Identify the affected line item(s) and the applicable
specification(s);
(2) Require that the line item’s design and manufacture
will conform to:
(i) An identified revision of a top-level drawing; and/or
(ii) An identified specification or revision thereof;
(3) Require that the line item conform to the specified
Government performance requirements;
(4) Require that all line items and components delivered
under the contract will be free from defects in materials and workmanship;
(5) State that if the contractor fails to comply with
specification or there are defects in material and workmanship, the contractor
will bear the cost of all work necessary to achieve the specified performance
requirements, including repair and/or replacement of all parts;
(6) Require the timely replacement/repair of warranted
items and specify lead times for replacement/repair where possible;
(7) Identify the specific paragraphs containing Government
performance requirements that the contractor must meet;
(8) Ensure that any performance requirements identified as
goals or objectives beyond specification requirements are excluded from the
warranty provision;
(9) Specify what constitutes the start of the warranty
period (e.g., delivery, acceptance, in-service date), the ending of the
warranty (e.g., passing a test or demonstration, or operation without failure
for a specified time period), and circumstances requiring an extension of
warranty duration (e.g., extending the warranty period as a result of mass
defect correction during warranty period);
(10) Identify what transportation costs will be paid by the
contractor in relation to the warranty coverage;
(11) In addition to combat damage, identify any conditions
which will not be covered by the warranty, and
(12) Identify any limitation on the total dollar amount of
the contractor’s warranty exposure, or agreement to share costs after a certain
dollar threshold to avoid unnecessary warranty returns.
(b) In addition to the terms and
conditions listed in paragraph (a) of this section, the contracting officer
shall consider the following when a warranty clause is being used for a major
acquisition:
(1) For line items or components which are commercially
available, obtaining a warranty as is normally provided by the manufacturer or
supplier, in accordance with (FAR) 48 CFR
46.703(d) and (FAR) 48 CFR
46.710(b)(2).
(2) Obtaining a warranty of compliance with the stated
requirements for line items or components provided in accordance with either
design and manufacturing or performance requirements as specified in the
contract or any modification to that contract.
(3) The warranty provided under paragraph (b)(2) of this
section shall provide that in the event the line items or any components
thereof fails to meet the terms of the warranty provided, the contracting
officer may:
(i) Require the contractor to promptly take such corrective
action as the contracting officer determines to be necessary at no additional
cost to the Government, including repairing or replacing all parts necessary to
achieve the requirements set forth in the contract;
(ii) Require the contractor to pay costs reasonably
incurred by the
(iii) Equitably reduce the contract price.
(4) Inserting remedies, exclusions, limitations and
durations, provided these are consistent with the specific requirements of this
subpart and (FAR) 48 CFR
46.706.
(5) Excluding from the terms of the warranty certain
defects for specified supplies (exclusions) and limiting the contractor’s liability
under the terms of the warranty (limitations), as appropriate, if necessary to
derive a cost-effective warranty in light of the technical risk, contractor
financial risk, or other program uncertainties.
(6) Structuring of a broader and more comprehensive
warranty where such is advantageous. Likewise, the contracting officer may
narrow the scope of a warranty when appropriate (e.g., where it would be
inequitable to require a warranty of all performance requirements because a
contractor had not designed the system).
(c) Any
contract that contains a warranty clause must contain warranty implementation
procedures, including warranty notification content and procedures, and
identify the individuals responsible for implementation of warranty provisions.
The contract may also permit the contractor’s participation in investigation of
system failures, providing that the contractor is reimbursed at established
rates for fault isolation work, and that the Government receive credit for any
payments where equipment failure is covered by warranty provisions.