FAR 41.202—Procedures.
Plain-English Summary
FAR 41.202 explains the procedures contracting officers and agencies must follow before and during the acquisition of utility services, especially when a bilateral written contract cannot be obtained. It covers required compliance with FAR Parts 6 and 7 and with FAR 41.201(d) and (e), market surveys and acquisition planning, the meaning of “entire utility service,” and the use of alternative sources such as GSA areawide contracts, separate contracts, and interagency agreements. It also addresses what to do when a utility supplier refuses to sign a tendered contract, including obtaining a written definite and final refusal, notifying GSA, and, in limited circumstances, proceeding without a signed contract through a purchase order or invoice payment process. The section requires creation and maintenance of a utility history file with specific supporting documents and data, and it imposes an annual duty to keep trying to secure a bilateral written contract after a refusal. In practice, this section is about documenting the procurement path, preserving the Government’s legal and financial position, and ensuring agencies do not bypass competition, planning, or required coordination with GSA when acquiring utility services.
Key Rules
Follow planning and competition rules
Before executing a utility service contract, the contracting officer must comply with FAR Parts 6 and 7 and FAR 41.201(d) and (e). Agencies must conduct market surveys and acquisition planning to support full and open competition, unless the contracting officer determines the resulting contract would be inconsistent with applicable state law governing electric utility services.
Define the full utility requirement
If competition for the entire utility service is not available, the market survey may be used to identify competitive sources for only portions of the requirement. The term “entire utility service” is broad and includes capacity, energy, water, sewage, transportation, standby or back-up service, transmission and distribution, quality assurance, system reliability, system operation and maintenance, metering, and billing.
Consider all acquisition alternatives
In conducting the market survey, the contracting officer must consider not only alternative competitive sources but also GSA areawide contracts, separate contracts, and interagency agreements. This ensures the agency evaluates the full range of authorized procurement approaches before selecting a utility acquisition method.
Document a supplier refusal
If a utility supplier refuses to execute a tendered contract, the agency must obtain a written definite and final refusal signed by a corporate officer or other responsible official, or document an unwritten refusal if a signed statement cannot be obtained. The agency must also send the refusal, reasons, and negotiation record to GSA at the address in FAR 41.301(a).
Notify GSA before proceeding without a contract
Unless urgent and compelling circumstances exist, the contracting officer must notify GSA before acquiring utility services without an executed tendered contract. After notification, the agency may proceed and pay for the service either by issuing a purchase order under FAR 13.302 or by ordering the service and paying an invoice, if the head of the contracting activity approves a determination that a written contract cannot be obtained and a purchase order is not feasible.
Maintain a utility history file
When utility service is obtained without a bilateral written contract, the contracting officer must establish a utility history file for each acquisition. In addition to the records required by FAR 4.803, the file must include the unsigned tendered contract, transmittal letter, refusal documentation, services and estimated annual cost, historical connection charges, historical capital credits, and the applicable rate schedule.
Keep trying for a bilateral contract
If the Government is receiving utility service under paragraph (c), the contracting officer must make annual efforts, starting from the date of final refusal, to execute a bilateral written contract. Those efforts must be documented in the utility history file, and the agency must notify GSA in writing if the utility continues to refuse to sign.
Responsibilities
Contracting Officer
Ensure compliance with FAR Parts 6 and 7 and FAR 41.201(d) and (e) before executing a utility contract; conduct or oversee market surveys and acquisition planning; evaluate whether state law affects electric utility competition; consider GSA areawide contracts, separate contracts, and interagency agreements; obtain and document supplier refusal; notify GSA before proceeding without a signed contract unless urgent and compelling circumstances exist; establish and maintain the utility history file; and make annual efforts to secure a bilateral written contract.
Agency
Support market surveys and acquisition planning; obtain utility services in a manner consistent with competition and applicable law; transmit refusal documentation and negotiation records to GSA; and notify GSA in writing if the utility continues to refuse to execute a bilateral contract.
Utility Supplier
Review the tendered contract and, if refusing to sign, provide a written definite and final refusal signed by a corporate officer or other responsible official when possible, or otherwise communicate the refusal in a way the agency can document.
Head of the Contracting Activity
Approve the determination that a written contract cannot be obtained and that issuing a purchase order is not feasible when the agency will order utility service and pay by invoice without a bilateral written contract.
GSA
Receive the refusal documentation, reasons, and negotiation record; be notified before the agency acquires utility services without an executed tendered contract when urgent and compelling circumstances do not exist; and receive written notice if the utility continues to refuse to execute a bilateral contract.
Practical Implications
This section is heavily documentation-driven: if the file does not show the market survey, refusal, negotiations, and annual follow-up efforts, the acquisition can be hard to defend later.
Contracting officers should not assume a utility must accept the Government’s tendered contract; the rule anticipates refusals and requires a formal process for handling them.
The utility history file is essential because utility acquisitions often continue for long periods and may proceed without a signed bilateral contract; missing rate schedules, connection charges, or capital credit history can create pricing and audit problems.
State law matters, especially for electric utility services, so competition analysis must be coordinated with legal and market research rather than treated as a routine procurement step.
When proceeding without a signed contract, agencies must be careful to use only the authorized payment paths and to secure the required approvals; skipping GSA notice or HCA approval can create compliance risk.
Official Regulatory Text
(a) Prior to executing a utility service contract, the contracting officer shall comply with parts 6 and 7 and subsections 41.201 (d) and (e) of this part. In accordance with parts 6 and 7 , agencies shall conduct market surveys and perform acquisition planning in order to promote and provide for full and open competition provided that the contracting officer determines that any resultant contract would not be inconsistent with applicable state law governing the provision of electric utility services. If competition for an entire utility service is not available, the market survey may be used to determine the availability of competitive sources for certain portions of the requirement. The scope of the term "entire utility service" includes the provision of the utility service capacity, energy, water, sewage, transportation, standby or back-up service, transmission and/or distribution service, quality assurance, system reliability, system operation and maintenance, metering, and billing. (b) In performing a market survey (see 7.101 ), the contracting officer shall consider, in addition to alternative competitive sources, use of the following: (1) GSA areawide contracts (see 41.204 ). (2) Separate contracts (see 41.205 ). (3) Interagency agreements (see 41.206 ). (c) When a utility supplier refuses to execute a tendered contract as outlined in 41.201 (b), the agency shall obtain a written definite and final refusal signed by a corporate officer or other responsible official of the supplier (or if unobtainable, document any unwritten refusal) and transmit this document, along with statements of the reasons for the refusal and the record of negotiations, to GSA at the address specified at 41.301 (a). Unless urgent and compelling circumstances exist, the contracting officer shall notify GSA prior to acquiring utility services without executing a tendered contract. After such notification, the agency may proceed with the acquisition and pay for the utility service under the provisions of 31 U.S.C. 1501(a)(8) - (1) By issuing a purchase order in accordance with 13.302 ; or (2) By ordering the necessary utility service and paying for it upon the presentation of an invoice, provided that a determination is approved by the head of the contracting activity that a written contract cannot be obtained and that the issuance of a purchase order is not feasible. (d) When obtaining service without a bilateral written contract, the contracting officer shall establish a utility history file on each acquisition of utility service provided by a contractor. This utility history file shall contain, in addition to applicable documents in 4.803 , the following information: (1) The unsigned, tendered contract and any related letter of transmittal. (2) The reasons stated by the utility supplier for not executing the tendered contract, the record of negotiations, and a written definite and final refusal by a corporate officer or other responsible official of the supplier (or if unobtainable, documentation of unwritten refusal). (3) Services to be furnished and the estimated annual cost. (4) Historical record of any applicable connection charges. (5) Historical record of any applicable ongoing capital credits. (6) A copy of the applicable rate schedule. (e) If the Government obtains utility service pursuant to paragraph (c) of this section, the contracting officer shall, on an annual basis beginning from the date of final refusal, take action to execute a bilateral written contract. The contracting officer shall document the utility history file with the efforts made and the agency shall notify GSA, in writing, if the utility continues to refuse to execute a bilateral contract.