FAR 52.241-3—Scope and Duration of Contract.
Plain-English Summary
FAR 52.241-3, Scope and Duration of Contract, is a utility-services clause that defines the basic bargain for a federally purchased utility service: the period of service, the type of service to be furnished, the governing tariff/rules/regulations, the nonbinding nature of continuation beyond the stated term, the contractor’s duty to provide current rate and service terms, and the government’s payment obligations including any minimum monthly charge and prorating at start and end of the contract. The clause exists to align the contract with regulated utility pricing and service conditions, which are often controlled by an approved tariff or similar regulatory framework rather than negotiated line-by-line terms. In practice, it tells both sides exactly what service is being bought, for how long, under what regulatory documents, and how charges will be applied. It also makes clear that the government is not committing to renew or extend service beyond the stated expiration date, which is important in utility procurement where continuity of service must be managed carefully. For contractors, it establishes the obligation to furnish the service and provide current tariff information; for the government, it establishes payment responsibility for tariffed rates and any contract-specified minimum monthly charge. This clause is especially important where service start-up, termination, and rate changes can create billing disputes if the contract does not clearly address them.
Key Rules
Define service period
The contract must state the period during which the utility service will be furnished. The contractor agrees to provide, and the government agrees to buy, the identified utility service only for that stated period.
Tie service to tariffs
Service must be provided in accordance with the applicable tariff(s), rules, and regulations approved by the governing regulatory body, as also set out in the contract. This means the regulated utility framework controls the service terms and pricing to the extent applicable.
No automatic continuation
Neither party is obligated to continue service beyond the contract expiration date. The clause prevents any assumption that utility service will automatically renew or roll over after the stated term ends.
Provide current rate information
The contractor must furnish one complete set of the rates, terms, and conditions of service in effect on the contract date, plus any later approved rates. This ensures the government has the controlling pricing and service documents.
Pay tariff rates and minimums
The government must pay the applicable tariff rate(s) and any minimum monthly charge specified in the contract, starting when service is first furnished and continuing through the contract term. If a minimum charge applies, it must be equitably prorated for partial start or end periods.
Responsibilities
Contracting Officer
Insert the clause when prescribed and ensure the contract identifies the service period and type of utility service. The contracting officer should also make sure the contract reflects the applicable tariff framework and any minimum monthly charge terms so billing and terminations are clear.
Contractor
Furnish the specified utility service for the stated period in accordance with the applicable approved tariffs, rules, and regulations. The contractor must provide the government a complete set of current rates, terms, and conditions, including subsequently approved rates, and bill at the applicable tariff rate(s) and any contract-specified minimum charge.
Government/Agency
Purchase the identified utility service for the stated period and pay the applicable tariff rate(s) and any minimum monthly charge specified in the contract. The government must also manage the end of the contract term so service does not continue by assumption beyond expiration.
Practical Implications
This clause is mainly about avoiding disputes over what service is being bought, for how long, and at what price. If the period of service or type of service is left vague, billing and performance problems are likely.
Because utility service is often tariff-based, the contract should be checked against the governing regulatory documents and any later approved rate changes. Missing or outdated tariff information can lead to incorrect invoices or payment disputes.
The no-obligation-to-continue language means agencies must plan ahead for follow-on service or transition arrangements. If the contract expires without a new arrangement, service continuity can become a serious operational issue.
Minimum monthly charges can create unexpected costs, especially when service starts or ends mid-month. The prorating requirement helps, but only if the contract and invoices apply it correctly.
Contractors should keep the government informed of rate changes and updated terms, while contracting officers should verify that the contract file contains the current tariff set. This reduces the risk of unauthorized charges or misunderstandings about what rates apply.
Official Regulatory Text
As prescribed in 41.501 (c)(2) , insert a clause substantially the same as the following: Scope and Duration of Contract (Feb 1995) (a) For the period _______________________, [ insert period of service ] the Contractor agrees to furnish and the Government agrees to purchase _____________________ [ insert type of service ] utility service in accordance with the applicable tariff(s), rules, and regulations as approved by the applicable governing regulatory body and as set forth in the contract. (b) It is expressly understood that neither the Contractor nor the Government is under any obligation to continue any service under the terms and conditions of this contract beyond the expiration date. (c) The Contractor shall provide the Government with one complete set of rates, terms, and conditions of service which are in effect as of the date of this contract and any subsequently approved rates. (d) The Contractor shall be paid at the applicable rate(s) under the tariff and the Government shall be liable for the minimum monthly charge, if any, specified in this contract commencing with the period in which service is initially furnished and continuing for the term of this contract. Any minimum monthly charge specified in this contract shall be equitably prorated for the periods in which commencement and termination of this contract become effective. (End of clause)