FAR 52.241-2—Order of Precedence-Utilities.
Plain-English Summary
FAR 52.241-2, Order of Precedence—Utilities, addresses how to resolve conflicts when a utilities contract contains multiple sources of terms, such as the main contract, specifications, rate schedules, riders, exhibits, and the contractor’s own rules and regulations. Its purpose is to make clear which document controls if there is any inconsistency, so the parties do not dispute whether a tariff-like schedule, special rider, or utility company policy can override the negotiated contract language. In practice, this clause protects the Government by ensuring the written contract and its specifications take priority over incorporated utility documents that may contain conflicting pricing, service, operational, or liability terms. It is especially important in utility procurements because utility service arrangements often rely on standardized schedules and regulatory-style documents that can be lengthy, technical, and not fully tailored to the Government’s needs. The clause gives the contracting parties a simple hierarchy: if there is a conflict, the contract itself governs. This helps reduce ambiguity, supports enforceability, and gives contracting officers a clear basis for rejecting inconsistent utility-provided terms.
Key Rules
Contract controls over conflicts
If any inconsistency exists between the contract and other incorporated utility documents, the terms of the contract control. This includes the specifications and any other express contract provisions.
Applies to schedules and riders
The clause specifically covers rate schedules, riders, and exhibits whether they are incorporated by reference or otherwise included in the contract. These documents cannot override conflicting contract language.
Utility rules do not prevail
The contractor’s own rules and regulations are subordinate to the contract. Any internal utility policies, service rules, or standard conditions that conflict with the contract are ineffective to the extent of the conflict.
Covers the entire contract package
The order-of-precedence rule applies across the contract as a whole, not just to pricing terms. It can resolve conflicts involving service obligations, technical requirements, administrative terms, and other provisions.
Only resolves actual inconsistencies
The clause is triggered only when there is a real inconsistency between documents. It does not eliminate otherwise valid incorporated terms that are consistent with the contract.
Responsibilities
Contracting Officer
Ensure the clause is included when prescribed for utilities contracts and use it to establish a clear hierarchy of controlling documents. Review incorporated schedules, riders, exhibits, and utility rules for conflicts with the contract and specifications before award.
Contractor
Provide rate schedules, riders, exhibits, and rules that are consistent with the contract, and comply with the contract terms when a conflict exists. Do not rely on standard utility language to override negotiated Government requirements.
Agency/Customer Activity
Identify the utility service needs and contract requirements clearly so the contract language can be drafted to control over conflicting utility documents. Flag any operational or technical provisions that must take priority over standard utility forms.
Practical Implications
This clause is a conflict-resolution tool, so it matters most when utility companies use standard tariffs, riders, or service conditions that may not fit Government needs.
Contracting officers should check for hidden conflicts in incorporated documents, especially pricing adjustments, service interruption rights, liability limits, access rules, and termination provisions.
Contractors should not assume their standard utility terms automatically apply; if they conflict with the contract, they are overridden.
The clause helps avoid disputes later by making the hierarchy explicit up front, but it does not cure poorly drafted specifications or incomplete incorporation of needed terms.
When reviewing a utility contract, always compare the main contract, specifications, and all incorporated schedules or riders to confirm the intended terms are consistent and enforceable.
Official Regulatory Text
As prescribed in 41.501 (c)(1) , insert a clause substantially the same as the following: Order of Precedence-Utilities (Feb 1995) In the event of any inconsistency between the terms of this contract (including the specifications) and any rate schedule, rider, or exhibit incorporated in this contract by reference or otherwise, or any of the Contractor’s rules and regulations, the terms of this contract shall control. (End of clause)