FAR 41.101—Definitions.
Plain-English Summary
FAR 41.101 defines the core terms used throughout FAR Part 41, which governs the acquisition of utility services by federal agencies. This section covers the meaning of areawide contract, authorization, connection charge, delegated agency, Federal Power and Water Marketing Agency, franchise territory, intervention, multiple service locations, rates, separate contract, termination liability, and utility service. It also explains that Part 41 may sometimes apply to other services, such as rubbish or snow removal, when those services are not subject to the Service Contract Labor Standards. In practice, these definitions control how agencies structure utility acquisitions, who has authority to contract, how service is ordered and priced, when termination costs may apply, and when GSA or a delegated agency may participate in utility regulatory proceedings. Because utility procurement often involves regulated monopolies, tariffs, and long-term infrastructure costs, these definitions are essential for determining the correct contracting vehicle and the Government’s financial exposure.
Key Rules
Areawide contracts defined
An areawide contract is a GSA contract with a utility supplier that covers utility needs for federal agencies within the supplier’s franchise territory. Each areawide contract includes an authorization form used to request service, connection, disconnection, or changes in service.
Authorization orders service
An authorization is the document executed by the ordering agency and the utility supplier to place service under an areawide contract. It is the mechanism that turns the broader areawide arrangement into a specific service order.
Connection charges include startup costs
A connection charge includes all nonrecurring costs paid to the utility supplier for required connecting facilities that the supplier installs, owns, operates, and maintains. These charges are tied to termination liability because they may not be fully recovered immediately.
Delegated agencies have limited authority
A delegated agency is one that has received written delegation from GSA to contract for utility services for periods not exceeding ten years. The delegation is a specific authority and does not create unlimited contracting power.
Franchise territory controls service rights
Franchise territory is the geographic area a utility supplier has the legal right to serve under a franchise, certificate of public convenience and necessity, or other legal authority. This concept matters because utility service is often tied to legally protected service areas.
Intervention is regulatory participation
Intervention means GSA or a delegated agency formally participating in a utility regulatory proceeding on behalf of all federal executive agencies. This allows the Government to protect its interests in rate and service matters.
Multiple locations may be covered together
Multiple service locations are the various delivery points in a supplier’s service area that are served under a single contract. This definition supports consolidated utility contracting across several sites.
Rates include tariff terms and charges
Rates are not limited to a base price; they may include rate schedules, riders, rules, terms and conditions of service, and other tariff or service charges such as facilities use charges. Agencies must review the full tariff structure, not just the headline rate.
Separate contracts are distinct vehicles
A separate contract is any utility services contract other than a GSA areawide contract, an authorization under an areawide contract, or an interagency agreement. This definition distinguishes standalone utility contracts from other authorized utility acquisition methods.
Termination liability protects supplier recovery
Termination liability is the Government’s contingent obligation to pay the unamortized portion of a connection charge and any other applicable nonrefundable service charge if the contract ends before the supplier recovers its connection costs. It limits the Government’s ability to terminate without financial consequences.
Utility service is broadly defined
Utility service includes electricity, natural or manufactured gas, water, sewerage, thermal energy, chilled water, steam, hot water, and high temperature hot water. Part 41 may also apply to other services, such as rubbish or snow removal, when the acquisition is not subject to Service Contract Labor Standards.
Responsibilities
Contracting Officer
Identify the correct utility acquisition method, ensure the applicable definitions are used in the contract, verify whether the supplier has franchise rights, and determine whether termination liability or connection charges apply. The contracting officer must also ensure any delegation, authorization, or separate contract is used within the limits of Part 41.
Ordering Agency
Execute authorizations under areawide contracts when ordering service, request service changes as needed, and manage utility needs at multiple locations under the applicable contract structure. The agency must also understand and account for any termination liability or nonrecurring charges before committing to service.
GSA
Establish areawide contracts, issue written delegations to agencies when appropriate, and intervene in utility regulatory proceedings on behalf of federal executive agencies. GSA also helps coordinate utility contracting policy and Government-wide interests.
Delegated Agency
Use the delegated authority only within the scope and time limits granted by GSA, contract for utility services for no more than ten years when authorized, and participate in regulatory proceedings when acting under that delegation. The agency must follow the terms of the written delegation.
Utility Supplier
Provide service within its franchise territory, execute authorizations under areawide contracts, disclose applicable rates and tariff terms, and install, own, operate, and maintain connecting facilities when connection charges are involved. The supplier must also apply contract and tariff charges consistently with the governing utility arrangement.
Federal Power and Water Marketing Agency
When acting as a Government utility provider, furnish, manage, transport, control, and sell electrical or water supply service to customers. Its role is distinct from a private utility supplier and may affect how service is acquired.
Practical Implications
These definitions determine the contracting vehicle, so misclassifying a utility arrangement can lead to using the wrong authority or missing required approvals.
Agencies should review the full tariff, not just the base rate, because riders, facilities use charges, and other terms can materially change cost and obligations.
Termination liability is a common pitfall: if connection facilities are not fully amortized, ending service early can create a real Government payment obligation.
Franchise territory matters in source selection and service planning because a utility supplier may be the only lawful provider in a given area.
Part 41 can sometimes apply to non-utility services like rubbish or snow removal, but only when Service Contract Labor Standards do not apply, so agencies must check coverage carefully before relying on Part 41.
Official Regulatory Text
As used in this part, Areawide contract means a contract entered into between the General Services Administration (GSA) and a utility service supplier to cover utility service needs of Federal agencies within the franchise territory of the supplier. Each areawide contract includes an "Authorization" form for requesting service, connection, disconnection, or change in service. Authorization means the document executed by the ordering agency and the utility supplier to order service under an areawide contract. Connection charge means all nonrecurring costs, whether refundable or nonrefundable, to be paid by the Government to the utility supplier for the required connecting facilities, which are installed, owned, operated, and maintained by the utility supplier (see Termination liability). Delegated agency means an agency that has received a written delegation of authority from GSA to contract for utility services for periods not exceeding ten years (see 41.103 (b)). Federal Power and Water Marketing Agency means a Government entity that produces, manages, transports, controls, and sells electrical and water supply service to customers. Franchise territory means a geographical area that a utility supplier has a right to serve based upon a franchise, a certificate of public convenience and necessity, or other legal means. Intervention means action by GSA or a delegated agency to formally participate in a utility regulatory proceeding on behalf of all Federal executive agencies. Multiple service locations means the various locations or delivery points in the utility supplier’s service area to which it provides service under a single contract. Rates may include rate schedules, riders, rules, terms and conditions of service, and other tariff and service charges, e.g., facilities use charges. Separate contract means a utility services contract (other than a GSA areawide contract, an Authorization under an areawide contract, or an interagency agreement), to cover the acquisition of utility services. Termination liability means a contingent Government obligation to pay a utility supplier the unamortized portion of a connection charge and any other applicable nonrefundable service charge as defined in the contract in the event the Government terminates the contract before the cost of connection facilities has been recovered by the utility supplier (see "Connection charge"). Utility service means a service such as furnishing electricity, natural or manufactured gas, water, sewerage, thermal energy, chilled water, steam, hot water, or high temperature hot water. The application of part 41 to other services ( e.g., rubbish removal, snow removal) may be appropriate when the acquisition is not subject to the 41 U.S.C. chapter 67 , Service Contract Labor Standards (see 37.107 ).