FAR 52.236-7—Permits and Responsibilities.
Plain-English Summary
FAR 52.236-7, Permits and Responsibilities, allocates several core performance risks to the contractor on construction and similar work. It covers three main subjects: obtaining any required licenses and permits, complying with all applicable Federal, State, and municipal laws, codes, and regulations, and bearing responsibility for damages to persons or property caused by the contractor’s fault or negligence. It also addresses when responsibility for materials and work transfers from the contractor to the Government by stating that the contractor remains responsible for all materials delivered and work performed until final completion and acceptance, except for any completed unit that has been separately accepted. In practice, this clause means the contractor must plan for regulatory compliance, secure approvals before starting work, and manage site and performance risk carefully. It also helps protect the Government by making clear that the contractor—not the Government—generally bears the cost and consequences of compliance failures, negligent acts, and loss or damage before acceptance.
Key Rules
Obtain required permits
The contractor must secure any licenses and permits needed to perform the work, and must do so without additional expense to the Government. This includes planning early for permit lead times, fees, inspections, and any conditions attached to approvals.
Comply with all laws
The contractor must follow all applicable Federal, State, and municipal laws, codes, and regulations that govern performance of the work. The obligation is broad and includes safety, environmental, building, labor, and other regulatory requirements that apply to the contract effort.
Bear negligence-based damages
The contractor is responsible for damages to persons or property that result from the contractor’s fault or negligence. This rule places liability on the contractor when harm is caused by careless, improper, or wrongful performance.
Maintain responsibility until acceptance
The contractor remains responsible for all materials delivered and work performed until the entire work is completed and accepted by the Government. Risk of loss does not fully shift to the Government until acceptance occurs.
Exception for accepted units
If the contract provides for acceptance of a completed unit of work before final completion, responsibility for that accepted unit shifts at the time of acceptance. This exception matters when contracts are structured around separable phases, units, or deliverables.
Responsibilities
Contractor
Obtain all necessary licenses and permits, pay associated costs, and ensure performance complies with all applicable Federal, State, and municipal laws, codes, and regulations. The contractor must also prevent and bear responsibility for damages caused by its fault or negligence and remain responsible for materials and work until acceptance, except for any separately accepted completed unit.
Contracting Officer
Ensure the clause is included when prescribed and administer the contract with awareness that permit acquisition, legal compliance, and pre-acceptance risk generally rest with the contractor. The contracting officer should also evaluate whether any contract terms or acceptance provisions create unit-by-unit acceptance points that affect risk transfer.
Government
Accept work only when it meets contract requirements and, where applicable, recognize acceptance of completed units as the point at which responsibility for those units may shift. The Government should not assume responsibility for contractor compliance obligations that the clause places on the contractor.
Practical Implications
Contractors should identify permit and licensing needs before mobilization, because delays or fees usually cannot be charged to the Government under this clause.
Compliance planning is essential: contractors must track all applicable codes and regulations, not just the contract specifications, and should coordinate with local authorities early.
The clause creates a strong risk-allocation rule for damage and loss before acceptance, so contractors should maintain adequate insurance, site controls, and quality assurance.
If the contract uses phased, unit-based, or partial acceptance, the parties should document exactly when each unit is accepted to avoid disputes over who bears the risk afterward.
A common pitfall is assuming the Government’s approval of plans or inspections transfers responsibility; this clause generally leaves the contractor responsible unless the contract clearly says otherwise.
Official Regulatory Text
As prescribed in 36.507 , insert the following clause: Permits and Responsibilities (Nov 1991) The Contractor shall, without additional expense to the Government, be responsible for obtaining any necessary licenses and permits, and for complying with any Federal, State, and municipal laws, codes, and regulations applicable to the performance of the work. The Contractor shall also be responsible for all damages to persons or property that occur as a result of the Contractor’s fault or negligence. The Contractor shall also be responsible for all materials delivered and work performed until completion and acceptance of the entire work, except for any completed unit of work which may have been accepted under the contract. (End of clause)