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FAR 52.245-1 Alt I (FRoL) still being used?


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Recently, I was informed that DoD as well as all the other government agencies as a matter of policy are NOT including FAR 52.245-1 Alternate I Full Risk of Loss (FRoL) and instead affording contractors the privilege of Limited Risk of Loss (LRoL) per the basic (regular) provision of  FAR 52.245-1(h) irrespective of contract type or method of procurement.  My question is to what extent is FAR 52.245-1 Alt 1 being used?

My interpretation of FAR 45.104 is for non-DoD agencies, is that Alt I is required  in (1) those non-competitive proposal negotiated fixed-price contracts under the current 2M threshold;  (2)  competitive negotiated fixed-price contracts demonstrating adequate price competition as provided for in FAR 15.403-1 (c) (A) and (3) fixed-price contracts awarded by sealed bid procedures.

DoD partially resolved the issue in DFARS 245.104 which states that "In addition to the contract types listed at FAR 45.104, contractors are not held liable for loss of Government property under negotiated fixed-price contracts awarded on a basis other than submission of certified cost or pricing data.

 DFARS 245.107 (1)(ii)  reaffirms this by stating "For negotiated fixed-price contracts awarded on a basis other than submission of certified cost or pricing data for which Government property is provided, use the clause at FAR 52.245-1, Government Property, without its Alternate I."

Because of these DFARS provisions, for DoD , ONLY firm-fixed price contracts awarded by sealed bidding would require Alternate I.  Of course, Full Risk of loss applies if the government chooses to contractors limited risk of loss per the other provisions of FAR 52.245-1.

I have diligently searched for this “policy” and have found nothing. I am sure that contractors are not complaining but it is not in accord with the clear language of the FAR and DFARS.  Clearly there is a major inconsistency for DoD versus other agencies in whether to use Alternate I.  Any guidance or direction to appropriate sources would be greatly appreciated!  Suggestions as to point of contact are also appreciated. This research is for a manuscript to be submitted to a professional journal. Thanks.

 

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“45.107 Contract clauses.

(a)

(1) Except as provided in paragraph (d) of this section, the contracting officer shall insert the clause at 52.245-1, Government Property, in - 

(i) All cost-reimbursement and time-and-material type solicitations and contracts, and labor-hour solicitations when property is expected to be furnished for the labor-hour contracts.

(ii) Fixed-price solicitations and contracts when the Government will provide Government property.

(iii) Contracts or modifications awarded under FAR Part 12procedures where  Government property that exceeds the simplified acquisition threshold, as defined in FAR 2.101, is furnished or where the contractor is directed to acquire property for use under the contract that is titled in the Government.

(2) The contracting officer shall use the clause with its Alternate I in contracts other than those identified in FAR 45.104(a), Responsibility and Liability for  Government Property.“
 

“ 245.107  Contract clauses.

(1)(i)  In lieu of the prescription at FAR 45.107(d), use the clause at FAR 52.245-1, Government Property, in all purchase orders for repair, maintenance, overhaul, or modification of Government property regardless of the unit acquisition cost of the items to a be repaired. “

       (ii)  For negotiated fixed-price contracts awarded on a basis other than submission of certified cost or pricing data for which Government property is provided, use the clause at FAR 52.245-1, Government Property, without its Alternate I.”

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