Government Contract Warranty: A Research

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Government Contract Warranty "The use of warranties is not mandatory" (Subpart 46.7 - Warranties). To determine the appropriateness of a warranty for a specific acquisition the nature and use of the goods and services, warranty costs, administration and enforcement, trade warranties, and reduced requirements need to be considered. The nature and use of the goods or services need to consider the complexity and function, the degree of development, state of art, end use, difficulty of detecting defects before acceptance, and the potential harm to the government if item is defective. The cost that arises from the warranty needs to consider the contractor's charge for accepting the deferred liability created by the warranty and the government administration and enforcement of the warranty. The administration and enforcement need to consider the government's ability to enforce the warranty is essential to the effectiveness of any warranty. Some assurance must be that an adequate administration system for reporting defects exists or can be implemented. The adequacy depends on the nature and complexity of the item, location and proper use, storage time, distance of using activity from the source of the item, difficulty in detecting the existence of defects, and difficulty in tracing the responsibility for defects. Some items have trade warranties that are adequate. A contractor's charge for assumption of liability may be offset, or partially offset, by reducing the contract's
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