FAR 46.702—General.
Plain-English Summary
FAR 46.702 explains the basic policy for using warranties in Government contracts. It covers three core topics: the principal purposes of a warranty, the elements a warranty should generally include, and the requirement that the value of the warranty justify its cost to the Government. In practice, this section tells contracting officers and contractors that a warranty is not just a promise of quality; it is a contractual tool for defining remedies when supplies or services are defective and for encouraging better performance. It also makes clear that a warranty should preserve a post-acceptance right to correction of defects for a defined period, event, or use, even if the contract otherwise addresses acceptance. Finally, it requires a cost-benefit judgment so the Government does not pay more for warranty coverage than the protection and quality improvement are worth.
Key Rules
Define defect remedies
A warranty’s main purpose is to spell out the rights and obligations of both the contractor and the Government when items or services are defective. This gives both sides a clear contractual basis for correction, replacement, or other warranty remedies.
Promote quality performance
Warranties are also intended to encourage better contractor performance and higher quality deliverables. The warranty should be structured so it motivates the contractor to avoid defects rather than simply react to them after acceptance.
Preserve correction rights
A warranty should give the Government a contractual right to have defects corrected even if the contract has already provided for acceptance of the supplies or services. In other words, acceptance does not eliminate the warranty remedy when the warranty applies.
Set a clear claim period
The warranty should specify the time, use, or event that starts and limits the Government’s right to assert a defect-correction claim after acceptance. This period must be stated clearly so both parties know when warranty rights begin and end.
Match value to cost
The benefits of the warranty must be commensurate with its cost to the Government. The contracting officer should only use a warranty when the expected protection, risk reduction, or quality improvement justifies the added price or administrative burden.
Responsibilities
Contracting Officer
Determine whether a warranty is appropriate, ensure the warranty terms clearly define defect-correction rights and the post-acceptance claim period, and confirm that the expected benefits justify the cost to the Government.
Contractor
Understand and comply with the warranty obligations, correct covered defects when required, and price and manage performance with the warranty risk in mind.
Government/Agency
Use warranties only when they provide a meaningful benefit, support quality objectives, and are worth the cost and administration involved.
Practical Implications
Warranties should be used deliberately, not automatically; a poorly chosen warranty can add cost without improving performance.
Contract language must be precise about what counts as a defect, how correction will occur, and when the Government can make a claim.
Acceptance clauses and warranty clauses must be read together so the warranty is not accidentally weakened or made ambiguous.
Contractors should account for warranty risk in pricing, staffing, quality control, and recordkeeping.
A common pitfall is failing to define the warranty period or triggering event clearly, which can lead to disputes over whether a claim is timely.
Official Regulatory Text
(a) The principal purposes of a warranty in a Government contract are- (1) To delineate the rights and obligations of the contractor and the Government for defective items and services; and (2) To foster quality performance. (b) Generally, a warranty should provide- (1) A contractual right for the correction of defects notwithstanding any other requirement of the contract pertaining to acceptance of the supplies or services by the Government; and (2) A stated period of time or use, or the occurrence of a specified event, after acceptance by the Government to assert a contractual right for the correction of defects. (c) The benefits to be derived from a warranty must be commensurate with the cost of the warranty to the Government.