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  • Question

    Can (or should) other vendors be solicited to perform these services or is a warranty a valid basis for going sole source?


    Answer

    You ask two questions:
     
    1.  Is [preserving] a warranty a valid basis for going sole source? No. Only when the circumstances of FAR Subpart 6.3 Other Than Full and Open Competition are present may a sole source contract be awarded.  Sole sourcing a contract to save money or to keep a warranty from being voided are not included in the FAR Subpart 6.3 list.  
     
    Your customer needs to inspect, repair and maintain aircraft shelters.  The company that installed these shelters is threatening to void the entire warranty unless they are awarded a sole source contract to do this new work.  Presumably, the company believes that their warranty makes them “the one responsible source” cited in FAR Section 6.6.302-1, and as such, the only company that can satisfy the new requirement to inspect, repair and maintain the shelters.  That is illogical. The company is, indeed, the only company that can make good on their warranty, but it is clearly NOT the only company that can inspect, repair and maintain the shelters.  
     
    Instead, encourage the shelter installing company to propose on the solicitation (see 2, below). A competitive contract award to that company (at the lowest price, of course) could avoid future problems. 
     
    2.  Should vendors be openly and competitively solicited to inspect, repair and maintain the aircraft shelters?  Yes, but the terms and conditions of the existing warranty must be considered while developing the solicitation. EXAMINE THE WARRANTY!!  Seek the advice of your agency’s counsel, if necessary to fully understand the rights and responsibilities of the company and the government. My answer gives only general guidance based on limited facts.  
     
    At a minimum, answer these questions  before soliciting: 
     
    -  What actions, if any, void the warranty? For example, merely inspecting the shelters would not void the warranty. How else, but by an inspection, could a defect be found and claimed under the warranty?
     
    -  What exactly does the warranty include and what exactly does it exclude?  Typically, warranties cover defects (but not the effects from normal wear and use).  For example, if a warranty guarantees that a  shelter will withstand winds of up to 50 mph and during a storm with 40 mph wind, the shelter collapses, the company must repair or replace it. Conversely, if the warranty does not guarantee (excludes) glass windows and a window in the shelter breaks, the warranty is NOT voided by the owner of the shelter replacing the glass, nor is the owner obligated to hire the shelter installer to replace the glass.
     
    Compare the warranty with the new services. Optimally, the warranty should remain intact for all shelter items that are not (negatively) affected by the new services. For example, finding a structural defect (which is included in the warranty) should not be voided merely because your customer paints the roof (via the new contract to inspect, repair and maintain the shelter).  
     
    One last note:  this problem could have been avoided had the requirement for inspection, repair and maintenance been included in the initial purchase of the aircraft shelters. 
     
     

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