FAR 8.406-2—Inspection and acceptance.
Plain-English Summary
FAR 8.406-2 explains how inspection and acceptance work for Federal Supply Schedule orders, separating rules for supplies from rules for services. For supplies, it addresses when the consignee inspects at destination, when source inspection by the schedule contracting agency is required or may be requested, how the ordering activity coordinates source inspection, what happens when items have already been inspected at source, and the rule that acceptance is generally conclusive except for latent defects, fraud, or gross mistakes amounting to fraud. For services, it confirms the ordering activity’s right to inspect all services against contract and order requirements and ties that inspection to the order’s quality assurance surveillance plan. In practice, this section is important because it allocates inspection responsibility between the ordering activity, consignee, and schedule contracting agency, and it helps prevent duplicate inspection, improper acceptance, and disputes over whether delivered supplies or services meet requirements.
Key Rules
Destination inspection for supplies
As a general rule, consignees inspect supplies at destination. This is the default approach unless the schedule contract requires mandatory source inspection or the ordering activity determines that schedule contracting agency inspection assistance is needed for a product-described item.
When source inspection applies
Source inspection may be required by the schedule contracting agency for certain schedule contracts, or requested by the ordering activity for a product-described item when ordering volume, supply complexity, or the supplier’s past performance justify it. This is an exception to destination-only inspection.
Ordering activity must coordinate source inspection
If the schedule contracting agency performs the inspection, the ordering activity must send two copies of the order that specifies source inspection to that agency. The schedule contracting agency then informs the ordering activity whether the supplies are accepted or rejected.
No duplicate inspection for same purpose
If the schedule contracting agency has already inspected material at source and found it to conform to the schedule product description, the consignee may not reinspect it for the same purpose. The consignee’s inspection is limited to kind, count, and condition on receipt.
Acceptance is generally conclusive
Unless the schedule contract says otherwise, acceptance is final and binding except for latent defects, fraud, or gross mistakes that amount to fraud. This protects the government while also giving contractors certainty after acceptance.
Services are inspected by the ordering activity
For services, the ordering activity has the right to inspect all services against the contract requirements and the order. Those inspections and tests must follow the order’s quality assurance surveillance plan and must not unduly delay performance.
Responsibilities
Consignee
Inspect supplies at destination by default; when source inspection has already been performed and the supplies conform, limit inspection to kind, count, and condition on receipt.
Ordering Activity
Decide whether source inspection assistance is needed for a product-described item; provide two copies of the order to the schedule contracting agency when source inspection is required; inspect services under the contract and order; carry out inspections and tests under the quality assurance surveillance plan without undue delay.
Schedule Contracting Agency
Perform source inspection when required by the schedule contract or when requested through the ordering process; notify the ordering activity whether supplies are accepted or rejected after inspection.
Contractor/Supplier
Make supplies and services available for inspection as required; comply with source inspection, destination inspection, and service surveillance requirements; understand that acceptance is generally final except for the stated exceptions.
Practical Implications
This section prevents unnecessary duplicate inspection of supplies that have already been accepted at source, which saves time and reduces administrative burden.
Ordering activities need to decide early whether source inspection assistance is justified, especially for complex items, high-volume orders, or suppliers with weaker past performance.
For services, the quality assurance surveillance plan matters operationally; if it is vague or not followed, inspection disputes and performance delays are more likely.
Acceptance is usually final for supplies, so contracting personnel should document inspections carefully and identify latent defects or fraud issues promptly if they arise later.
Contractors should pay close attention to whether an order triggers source inspection or destination inspection, because the inspection path affects delivery coordination, acceptance timing, and dispute risk.
Official Regulatory Text
(a) Supplies. (1) Consignees shall inspect supplies at destination except when- (i) The schedule contract indicates that mandatory source inspection is required by the schedule contracting agency; or (ii) A schedule item is covered by a product description, and the ordering activity determines that the schedule contracting agency’s inspection assistance is needed (based on the ordering volume, the complexity of the supplies, or the past performance of the supplier). (2) When the schedule contracting agency performs the inspection, the ordering activity will provide two copies of the order specifying source inspection to the schedule contracting agency. The schedule contracting agency will notify the ordering activity of acceptance or rejection of the supplies. (3) Material inspected at source by the schedule contracting agency, and determined to conform with the product description of the schedule, shall not be reinspected for the same purpose. The consignee shall limit inspection to kind, count, and condition on receipt. (4) Unless otherwise provided in the schedule contract, acceptance is conclusive, except as regards latent defects, fraud, or such gross mistakes as amount to fraud. (b) Services . The ordering activity has the right to inspect all services in accordance with the contract requirements and as called for by the order. The ordering activity shall perform inspections and tests as specified in the order’s quality assurance surveillance plan in a manner that will not unduly delay the work.