[Code of Federal Regulations]

[Title 48, Volume 1]

[Revised as of October 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 48CFR46]



[Page 873-874]

 

            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM

 

                CHAPTER 1--FEDERAL ACQUISITION REGULATION

 

PART 46_QUALITY ASSURANCE--Table of Contents

 

                         Subpart 46.7_Warranties

 

46.706  Warranty terms and conditions.



    (a) To facilitate the pricing and enforcement of warranties, the 

contracting officer shall ensure that warranties clearly state the--

    (1) Exact nature of the item and its components and characteristics 

that the contractor warrants;

    (2) Extent of the contractor's warranty including all of the 

contractor's obligations to the Government for breach of warranty;

    (3) Specific remedies available to the Government; and

    (4) Scope and duration of the warranty.

    (b) The contracting officer shall consider the following guidelines 

when preparing warranty terms and conditions:

    (1) Extent of contractor obligations (i) Generally, the contractor's 

obligations under warranties extend to all defects discovered during the 

warranty period, but do not include damage caused by the Government. 

When a warranty for the entire item is not advisable, a warranty may be 

required for a particular aspect of the item that may require special 

protection (e.g., installation, components, accessories, subassemblies, 

preservation, packaging, and packing, etc.).

    (ii) If the Government specifies the design of the end item and its 

measurements, tolerances, materials, tests, or inspection requirements, 

the contractor's obligations for correction of defects shall usually be 

limited to defects in material and workmanship or failure to conform to 

specifications. If the Government does not specify the design, the 

warranty extends also to the usefulness of the design.

    (iii) If express warranties are included in a contract (except 

contracts for commercial items), all implied warranties of 

merchantability and fitness for a particular purpose shall be negated by 

the use of specific language in the clause (see clauses 52.246-17, 

Warranty of Supplies of a Noncomplex Nature; 52.246-18, Warranty of 

Supplies of a Complex Nature; and 52.246-19, Warranty of Systems and 

Equipment under Performance Specifications or Design Criteria).

    (2) Remedies (i) Normally, a warranty shall provide as a minimum 

that the Government may (A) obtain an equitable adjustment of the 

contract, or (B) direct the contractor to repair or replace the 

defective items at the contractor's expense.

    (ii) If it is not practical to direct the contractor to make the 

repair or replacement, or, because of the nature of the item, the repair 

or replacement does not afford an appropriate remedy to the Government, 

the warranty should provide alternate remedies, such as authorizing the 

Government to--

    (A) Retain the defective item and reduce the contract price by an 

amount equitable under the circumstances; or

    (B) Arrange for the repair or replacement of the defective item, by 

the Government or by another source, at the contractor's expense.

    (iii) If it can be foreseen that it will not be practical to return 

an item to the contractor for repair, to remove it to an alternate 

source for repair, or to



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replace the defective item, the warranty should provide that the 

Government may repair, or require the contractor to repair, the item in 

place at the contractor's expense. The contract shall provide that in 

the circumstance where the Government is to accomplish the repair, the 

contractor will furnish at the place of delivery the material or parts, 

and the installation instructions required to successfully accomplish 

the repair.

    (iv) Unless provided otherwise in the warranty, the contractor's 

obligation to repair or replace the defective item, or to agree to an 

equitable adjustment of the contract, shall include responsibility for 

the costs of furnishing all labor and material to (A) reinspect items 

that the Government reasonably expected to be defective, (B) accomplish 

the required repair or replacement of defective items, and (C) test, 

inspect, package, pack, and mark repaired or replaced items.

    (v) If repair or replacement of defective items is required, the 

contractor shall generally be required by the warranty to bear the 

expense of transportation for returning the defective item from the 

place of delivery specified in the contract (irrespective of the f.o.b. 

point or the point of acceptance) to the contractor's plant and 

subsequent return. When defective items are returned to the contractor 

from other than the place of delivery specified in the contract, or when 

the Government exercises alternate remedies, the contractor's liability 

for transportation charges incurred shall not exceed an amount equal to 

the cost of transportation by the usual commercial method of shipment 

between the place of delivery specified in the contract and the 

contractor's plant and subsequent return.

    (3) Duration of the warranty. The time period or duration of the 

warranty must be clearly specified and shall be established after 

consideration of such factors as (i) the estimated useful life of the 

item, (ii) the nature of the item including storage or shelf-life, and 

(iii) trade practice. The period specified shall not extend the 

contractor's liability for patent defects beyond a reasonable time after 

acceptance by the Government.

    (4) Notice. The warranty shall specify a reasonable time for 

furnishing notice to the contractor regarding the discovery of defects. 

This notice period, which shall apply to all defects discovered during 

the warranty period, shall be long enough to assure that the Government 

has adequate time to give notice to the contractor. The contracting 

officer shall consider the following factors when establishing the 

notice period:

    (i) The time necessary for the Government to discover the defects.

    (ii) The time reasonably required for the Government to take 

necessary administrative steps and make a timely report of discovery of 

the defects to the contractor.

    (iii) The time required to discover and report defective 

replacements.

    (5) Markings. The packaging and preservation requirements of the 

contract shall require the contractor to stamp or mark the supplies 

delivered or otherwise furnish notice with the supplies of the existence 

of the warranty. The purpose of the markings or notice is to inform 

Government personnel who store, stock, or use the supplies that the 

supplies are under warranty. Markings may be brief but should include 

(i) a brief statement that a warranty exists, (ii) the substance of the 

warranty, (iii) its duration, and (iv) who to notify if the supplies are 

found to be defective. For commercial items (see 46.709), the 

contractor's trade practice in warranty marking is acceptable if 

sufficient information is presented for supply personnel and users to 

identify warranted supplies.

    (6) Consistency. Contracting officers shall ensure that the warranty 

clause and any other warranty conditions in the contract (e.g., in the 

specifications or an inspection clause) are consistent. To the extent 

practicable, all of the warranties to be contained in the contract 

should be expressed in the warranty clause.