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  • Question

    If the Government take beneficial occupancy, does this start the one year warrant period? Or does the warranty start at acceptance of the entire facility renovation?


    Answer

    The following response is based solely on the question and background information provided. As we do not have all of the facts particular to your contract, program, and situation, we highly recommend, as applicable, you consult your contracting officer and/or Legal Office for guidance.

    The interpretation of this questions goes beyond
    FAR 52.236-11, Use and Possession Prior to Completion, but is actual Phased Construction where the contractor completes a portion or one of several buildings and turns it over to the government for use. 

    Beneficial Occupancy Date (BOD) is defined as the date the customer can expect to receive useful occupancy of the facility or construction work. For military construction, the BOD will be the date the project is officially transferred to the customer for occupancy and intended use, and follow-on contracts (such as IT or furniture installation) may commence.  It is possible to have multiple BOD’s on a single project (Phased Construction).  To see how the warranty is effected by this phased BOD you need to look to
    FAR 52.246-21 -- Warranty of Construction clause.  The following is an excerpt from the clause:
    (a) In addition to any other warranties in this contract, the Contractor warrants, except as provided in paragraph (i) of this clause, that work performed under this contract conforms to the contract requirements and is free of any defect in equipment, material, or design furnished, or workmanship performed by the Contractor or any subcontractor or supplier at any tier.
    (b) This warranty shall continue for a period of 1 year from the date of final acceptance of the work. If the Government takes possession of any part of the work before final acceptance, this warranty shall continue for a period of 1 year from the date the Government takes possession.

    Based on
    paragraph (b) of this clause it is clear that if you do a phased BOD then the warranty will start upon acceptance of each phase of the work. So, you will have to track several different warranty periods.  You will also need to keep separate “punch lists” for each phased accepted.  The phased acceptance does have the benefit of allowing your end user earlier occupancy if this is beneficial for them.

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