FAR 52.246-19—Warranty of Systems and Equipment under Performance Specifications or Design Criteria.
Plain-English Summary
FAR 52.246-19, Warranty of Systems and Equipment under Performance Specifications or Design Criteria, sets out a government warranty regime for systems and equipment when the contract is based on performance specifications or design criteria rather than detailed contractor design responsibility. The clause defines key terms such as acceptance, defect, and supplies, then establishes the contractor’s warranty obligations, including the period of coverage, the duty to correct defects discovered before acceptance, and the process for government notice of defects discovered after acceptance. It also covers the contractor’s obligation to recommend corrective action, comply with government-directed corrections at no increase in price, provide related data and reports, and propose a contract amendment and equitable price reduction when the government elects not to require full correction. The clause further addresses the warranty treatment of corrected or replacement items, limits responsibility for defects in government-furnished property, allocates transportation and transit risk when items are returned for correction, and excludes implied warranties of merchantability and fitness for a particular purpose. Finally, it preserves the government’s remedies by stating that this warranty is not limited by inspection and acceptance language and is cumulative with other contract rights. In practice, this clause is important because it gives the government a structured post-acceptance remedy for defects in systems and equipment while also giving the contractor a defined process, notice framework, and limits on liability.
Key Rules
Defined warranty terms
The clause defines acceptance, defect, and supplies so the parties know exactly when the warranty applies and what kinds of items and services are covered. These definitions control the scope of the contractor’s obligations and the government’s rights.
Warranty period is inserted
The contracting officer must specify the warranty trigger or duration, such as at delivery, within a stated number of days after delivery, or upon a use-based event like miles or hours. The contractor’s warranty applies only to defects discovered within that stated period or event window.
Pre-acceptance defects must be addressed
If the contractor learns of a defect before government acceptance, it must promptly correct the defect or promptly notify the contracting officer in writing using the same procedures that apply to post-acceptance defects. This prevents known nonconformities from being passed to the government unnoticed.
Post-acceptance notice and response
If the contracting officer finds a defect in accepted supplies or services, the officer must notify the contractor in writing within the specified notice period. After timely notice, the contractor must submit a written corrective-action recommendation with supporting detail within the required time.
Government may direct correction
The contractor must promptly comply with any timely written direction from the contracting officer to correct or partially correct a defect, and must do so at no increase in contract price. The clause also requires the contractor to provide related data and reports, including revisions to affected data, at no extra cost.
Partial correction and price adjustment
If the government decides not to require full correction, or only partial correction, the contractor must submit a technical and cost proposal to amend the contract. The parties then negotiate an equitable reduction in price and document it in a supplemental agreement.
Corrected items get a new warranty
Any repaired, replaced, or reperformed items are subject to the same warranty conditions as the original items, and the warranty period runs again from the date of delivery of the corrected or replaced supplies. This prevents a defective repair from ending the government’s protection too soon.
Limits on contractor responsibility
The contractor is generally not responsible for defects in government-furnished property, except for installation defects, unless the contractor performs or is obligated to perform modifications or other work on that property. In that case, the contractor is responsible for defects resulting from its modifications or work.
Transportation and transit risk
If the government returns supplies for correction or replacement, the contractor must pay transportation charges up to the cost of usual commercial shipment to and from the contractor’s plant. The contractor also bears responsibility for the supplies while they are in transit.
Implied warranties are excluded
The clause expressly excludes implied warranties of merchantability and fitness for a particular purpose. The warranty obligations are therefore limited to the express terms of the contract and this clause.
Government remedies remain cumulative
The government’s rights under this clause are not affected by inspection and acceptance language and are in addition to any other rights under the contract. This means the government can still rely on other contractual remedies if appropriate.
Responsibilities
Contracting Officer
Insert the warranty period, the notice period for defects, and the time allowed for the contractor’s corrective-action recommendation and any technical/cost proposal. Determine whether a defect exists in accepted supplies or services, provide timely written notice, review the contractor’s corrective-action recommendation, and decide in sole discretion whether to require correction, partial correction, or no correction.
Contractor
Monitor for defects before acceptance and either promptly correct them or notify the contracting officer in writing. After timely notice of a defect in accepted supplies or services, submit a written corrective-action recommendation with supporting information, comply with any timely written direction to correct or partially correct defects at no increase in price, furnish related data and reports, and submit a technical and cost proposal when the government elects not to require full correction.
Government
Inspect, accept, and later identify defects within the stated notice period; provide written notice to the contractor; and, when appropriate, direct correction or negotiate an equitable price reduction. If supplies are returned for correction, handle shipment consistent with the clause and maintain the government’s rights under the contract.
Contractor and Government
Negotiate and document any equitable reduction in contract price when the government accepts affected supplies or services with only partial correction or no correction. Ensure supplemental agreements accurately reflect the revised requirement and price adjustment.
Practical Implications
This clause is especially important for systems and equipment contracts where performance outcomes matter more than detailed design control, because it gives the government a post-acceptance remedy for latent or discovered defects.
The inserted time periods are critical. If the contracting officer leaves them vague or too short, the government may lose practical leverage; if they are too long or unclear, the contractor faces open-ended exposure.
Contractors should build internal defect-reporting and corrective-action procedures so known issues are escalated before acceptance and so written responses can be produced quickly after notice.
A common pitfall is assuming acceptance ends all responsibility. Under this clause, acceptance does not eliminate warranty rights, and the government’s remedies are expressly cumulative.
Another frequent issue is misunderstanding the scope of government-furnished property. Contractors are usually not liable for defects in GFP itself, but they can become responsible when their own installation, modification, or other work causes the defect.
When items are returned for repair or replacement, contractors should account for transportation cost exposure and transit risk in pricing, logistics planning, and insurance/handling procedures.
Because implied warranties are excluded, the contract’s express requirements and the clause’s procedures control. Both parties should make sure the contract clearly states performance expectations, notice deadlines, and corrective-action timelines.
Official Regulatory Text
As prescribed in 46.710 (c)(1) , the contracting officer may insert a clause substantially as follows: Warranty of Systems and Equipment under Performance Specifications or Design Criteria (May 2001) (a) Definitions. As used in this clause- Acceptance means the act of an authorized representative of the Government by which the Government assumes for itself, or as an agent of another, ownership of existing and identified supplies, or approves specific services rendered, as partial or complete performance of the contract. Defect means any condition or characteristic in any supplies or services furnished by the Contractor under the contract that is not in compliance with the requirements of the contract. Supplies means the end items furnished by the Contractor and related services required under this contract. Except when this contract includes the clause entitled Warranty of Data, supplies also mean "data." (b) Contractor’s obligations. (1) The Contractor’s warranties under this clause shall apply only to those defects discovered by either the Government or the Contractor __________ [ Contracting Officer shall state the warranty period; e.g.,"at the time of delivery;" "within 45 days after delivery," or the specified event whose occurrence will terminate the warranty period; e.g.,the number of miles or hours of use, or combination of any applicable events or periods of time. ] . (2) If the Contractor becomes aware at any time before acceptance by the Government (whether before or after tender to the Government) that a defect exists in any supplies or services, the Contractor shall- (i) Promptly correct the defect; or (ii) Promptly notify the Contracting Officer, in writing, of the defect, using the same procedures prescribed in paragraph (b)(3) of this clause. (3) If the Contracting Officer determines that a defect exists in any of the supplies or services accepted by the Government under this contract, the Contracting Officer shall promptly notify the Contractor of the defect, in writing, within _____ [ Contracting Officer shall insert the specific period of time in which notice shall be given to the Contractor; e.g.,"30days after delivery of the nonconforming supplies;" "90days of the last delivery under this contract;" or "90days after discovery of the defect." ] . Upon timely notification of the existence of a defect, or if the Contractor independently discovers a defect in accepted supplies or services, the Contractor shall submit to the Contracting Officer, in writing, within _____ [ Contracting Officer shall insert period of time ] a recommendation for corrective actions, together with supporting information in sufficient detail for the Contracting Officer to determine what corrective action, if any, shall be undertaken. (4) The Contractor shall promptly comply with any timely written direction from the Contracting Officer to correct or partially correct a defect, at no increase in the contract price. (5) The Contractor shall also prepare and furnish to the Contracting Officer data and reports applicable to any correction required under this clause (including revision and updating of all other affected data called for under this contract) at no increase in the contract price. (6) In the event of timely notice of a decision not to correct or only to partially correct, the Contractor shall submit a technical and cost proposal within _______. [ Contracting Officer shall insert period of time ] to amend the contract to permit acceptance of the affected supplies or services in accordance with the revised requirement, and an equitable reduction in the contract price shall promptly be negotiated by the parties and be reflected in a supplemental agreement to this contract. (7) Any supplies or parts thereof corrected or furnished in replacement and any services reperformed shall also be subject to the conditions of this clause to the same extent as supplies or services initially accepted. The warranty, with respect to these supplies, parts, or services, shall be equal in duration to that set forth in paragraph (b)(1) of this clause, and shall run from the date of delivery of the corrected or replaced supplies. (8) The Contractor shall not be responsible under this clause for the correction of defects in Government-furnished property, except for defects in installation, unless the Contractor performs, or is obligated to perform, any modifications or other work on such property. In that event, the Contractor shall be responsible for correction of defects that result from the modifications or other work. (9) If the Government returns supplies to the Contractor for correction or replacement under this clause, the Contractor shall be liable for transportation charges up to an amount equal to the cost of transportation by the usual commercial method of shipment from the place of delivery specified in this contract (irrespective of the f.o.b. point or the point of acceptance) to the Contractor’s plant and return to the place of delivery specified in this contract. The Contractor shall also bear the responsibility for the supplies while in transit. (10) All implied warranties of merchantability and "fitness for a particular purpose" are excluded from any obligation under this contract. (c) Remedies available to the Government. (1) The rights and remedies of the Government provided in this clause- (i) Shall not be affected in any way by any terms or conditions of this contract concerning the conclusiveness of inspection and acceptance; and (ii) Are in addition to, and do not limit, any rights afforded to the Government by any other clause of this contract. (2) Within ____________ [ Contracting Officer shall insert period of time ] after receipt of the Contractor’s recommendations for corrective action and adequate supporting information, the Contracting Officer, using sole discretion, shall give the Contractor written notice not to correct any defect, or to correct or partially correct any defect within a reasonable time at ________ [ Contracting Officer shall insert locations where corrections may be performed ] . (3) In no event shall the Government be responsible for any extension or delays in the scheduled deliveries or periods of performance under this contract as a result of the Contractor’s obligations to correct defects, nor shall there be any adjustment of the delivery schedule or period of performance as a result of the correction of defects unless provided by a supplemental agreement with adequate consideration. (4) This clause shall not be construed as obligating the Government to increase the contract price. (5) (i) The Contracting Officer shall give the Contractor a written notice specifying any failure or refusal of the Contractor to- (A) Present a detailed recommendation for corrective action as required by paragraph (b)(3) of this clause; (B) Correct defects as directed under paragraph (b)(4) of this clause; or (C) Prepare and furnish data and reports as required by paragraph (b)(5) of this clause. (ii) The notice shall specify a period of time following receipt of the notice by the Contractor in which the Contractor must remedy the failure or refusal specified in the notice. (6) If the Contractor does not comply with the Contracting Officer’s written notice in paragraph (c)(5)(i) of this clause, the Contracting Officer may by contract or other-wise- (i) Obtain detailed recommendations for corrective action and either- (A) Correct the supplies or services; or (B) Replace the supplies or services, and if the Contractor fails to furnish timely disposition instructions, the Contracting Officer may dispose of the nonconforming supplies for the Contractor’s account in a reasonable manner, in which case the Government is entitled to reimbursement from the Contractor, or from the proceeds, for the reasonable expenses of care and disposition, as well as for excess costs incurred or to be incurred; (ii) Obtain applicable data and reports; and (iii) Charge the Contractor for the costs incurred by the Government. (End of clause) Alternate I (Apr 1984) . If it is desirable to specify that necessary transportation incident to correction or replacement will be at the Government’s expense (as might be the case if, for example, the cost of a warranty would otherwise be prohibitive), substitute a paragraph substantially the same as the following paragraph (b)(9) for paragraph (b)(9) of the basic clause: Alternate II (Apr 1984) . If a fixed-price incentive contract is contemplated, add a paragraph substantially the same as the following paragraph (c)(7) to the basic clause: (7) All costs incurred or estimated to be incurred by the Contractor in complying with this clause shall be considered when negotiating the total final price under the Incentive Price Revision clause of this contract. After establishment of the total final price, Contractor compliance with this clause shall be at no increase in the total final price. Any equitable adjustments made under paragraph (b)(6) of this clause shall be governed by the paragraph entitled "Equitable Adjustments Under Other Clauses" in the Incentive Price Revision clause of this contract. Alternate III (Apr 1984) . If it is anticipated that recovery of the warranted item will involve considerable Government expense for disassembly and/or reassembly of larger items, add a paragraph substantially the same as the following paragraph (c)(7) to the basic clause. Redesignate the additional paragraph as "(c)(8)" if Alternate II is also being used: (7) The Contractor shall be liable for the reasonable costs of disassembly and/or reassembly of larger items when it is necessary to remove the supplies to be inspected and/or returned for correction or replacement.