FAR 46.316—Responsibility for supplies.
Plain-English Summary
FAR 46.316 tells contracting officers when to include the clause at FAR 52.246-16, Responsibility for Supplies, in solicitations and contracts. It applies to three broad types of acquisitions: supplies, services that include furnishing supplies, and research and development, but only when a fixed-price contract is contemplated and the expected contract amount exceeds the simplified acquisition threshold. The section also allows, but does not require, use of the clause for smaller acquisitions when agency procedures authorize it. In practice, this rule is about allocating responsibility for the condition, custody, and accountability of supplies under fixed-price arrangements, so the government and contractor understand who bears the risk and what quality/acceptance expectations apply. It matters because clause inclusion affects solicitation drafting, contract administration, and the contractor’s pricing and performance assumptions. Contracting officers must make the clause decision early, based on contract type, dollar value, and agency policy, and contractors should look for the clause because it can materially affect their obligations and risk exposure.
Key Rules
Required for fixed-price buys
The contracting officer must insert FAR 52.246-16 when the acquisition is for supplies, services involving supplies, or research and development, and a fixed-price contract is contemplated. The rule is mandatory only when the expected contract amount is above the simplified acquisition threshold.
Applies to multiple acquisition types
This section is not limited to pure supply contracts. It also covers service contracts that require the contractor to furnish supplies and research and development contracts, so long as the other conditions for mandatory use are met.
Threshold controls mandatory use
If the expected contract amount does not exceed the simplified acquisition threshold, the clause is not automatically required under this section. The decision becomes discretionary and depends on whether agency procedures permit inclusion.
Agency procedures may authorize use
For lower-dollar acquisitions, the contracting officer may include the clause only if agency procedures allow it. This means local or agency-level policy can expand use of the clause, but cannot override the basic requirement that mandatory use is tied to fixed-price contracts above the threshold.
Clause selection must be deliberate
The rule is a clause prescription, so the contracting officer must evaluate the acquisition early and ensure the solicitation and resulting contract contain the correct clause when required. Omitting a required clause can create administration and enforceability problems.
Responsibilities
Contracting Officer
Determine whether the acquisition is for supplies, services involving supplies, or research and development; confirm that a fixed-price contract is contemplated; estimate whether the contract amount will exceed the simplified acquisition threshold; insert FAR 52.246-16 when required; and follow agency procedures if considering discretionary use below the threshold.
Agency
Establish procedures governing whether FAR 52.246-16 may be used in acquisitions at or below the simplified acquisition threshold. Agencies may authorize discretionary inclusion, but they must do so through their own procedures.
Contractor
Review the solicitation and contract for the Responsibility for Supplies clause, understand the associated obligations and risk allocation, and price and plan performance accordingly. If the clause is missing or appears inconsistent with the acquisition, the contractor should raise the issue during solicitation review.
Practical Implications
This clause decision affects risk allocation in fixed-price work, so it should be checked during acquisition planning, not after award.
A common pitfall is overlooking service contracts that include furnishing supplies; those contracts can still trigger the clause.
Another frequent mistake is focusing only on the contract type and ignoring the expected dollar value relative to the simplified acquisition threshold.
If the clause is required but omitted, contract administration can become messy because the parties may disagree about responsibility for supplies and related losses or defects.
Contractors should watch for this clause because it can affect pricing, insurance, inventory control, and how they manage custody and accountability for government-related supplies.
Official Regulatory Text
The contracting officer shall insert the clause at 52.246-16 , Responsibility for Supplies, in solicitations and contracts for (a) supplies, (b) services involving the furnishing of supplies, or (c) research and development, when a fixed-price contract is contemplated and the contract amount is expected to exceed the simplified acquisition threshold. The contracting officer may insert the clause in such solicitations and contracts when the contract amount is not expected to exceed the simplified acquisition threshold and inclusion of the clause is authorized under agency procedures.