OFFlCE OF THE UNDER SECRETARY OF DEFENSE

3000 DEFENSE PENTAGON

WASHINGTON DC 20301-3000

February 6, 1998

DP (DAR)

In reply refer to DFARS Case: 97-D326 D.L.98-002

MEMORANDUM FOR DIRECTORS OF DEFENSE AGENCIES

DEPUTY FOR ACQUISITION AND BUSINESS MANAGEMENT, ASN (RD&A) /ABM

DEPUTY ASSISTANT SECRETARY OF THE AIR FORCE (CONTRACTING), SAF/AQC

DEPUTY ASSISTANT SECRETARY OF THE ARMY (PROCUREMENT)

DEPUTY DIRECTOR (ACQUISITION), DEFENSE LOGISTICS AGENCY

SUBJECT: Warrantees in Weapon System Acquisitions

We have amended Subpart 246.7 of the Defense Federal Acquisition Regulation Supplement (DFARS) to implement Section 847 of the National Defense Authorization Act for Fiscal Year 1998 (Pub. L. 108-85).

Section 847 repeals the requirement for contractor guarantees on major weapon systems.

This final DFARS rule is effective immediately and will be published in a future Defense Acquisition Circular.

Eleanor R. Spector

Director, Defense Procurement

Attachment

DFARS Case 97-D326, Warranties in Wespon System Acquisitions

Final Rule

SUBPART 246.7--WARRANTIES

246.701 Definitions.

"Acceptance," as defined in FAR 46.701 and as used in this subpart and in the warranty clauses at FAR 52.246-17, Warranty of Supplies of a Noncomplex Nature; FAR 52.246-18, Warranty of Supplies of a Complex Nature; FAR 52.246-19, Warranty of Systems and Equipment Under Performance Specifications or Design Criteria; and FAR 52.246-20, Warranty of Services, includes the execution of an official document (e.g., DD Form 250, Material Inspection and Receiving Report) by an authorized representative of the Government.

"Defect," as used in this subpart, means any condition or characteristic in any supply or service furnished by the contractor under the contract that is not in compliance with the requirements of the contract.

246.702 General

(c) Departments and agencies shall establish procedures to track and accumulate data on warranty costs.

246.703 Criteria for use of warranties.

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(b)Cost.

Contracting officers may include the cost of a warranty as part of an item's price or as a separate contract line item.

246.704 Authority for use of warranties.

The chief of the contracting office must approve use of a warranty, except in acquisitions for--

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([1])Commercial items (see FAR 46.709);

([2])Technical data, unless the warranty provides for extended liability (see 246.708);

([3])Supplies and services in fixed price type contracts containing quality assurance provisions that reference higher-level contract quality requirements (see DFARS 246.202- 4); or

([4])Supplies and services in construction contracts when using the warranties that are contained in Federal, military, or construction guide specifications.

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[ parts 246.770 through 246.770-8 are deleted]