New DoD Warranty Guide Now Available
The Principal Director, Defense Pricing and Contracting (DPC) announced the publication of a new Department of Defense Warranty Guide, Version 2.0, dated October 30, 2020 now available on the DPC Contracting eBusiness (CeB) webpage.
According to DPC, "this guide should be used by program managers, project officers, logistics managers, contracting officers, and others within DoD responsible for warranty development and implementation."
Keep in mind, as the document indicates, that the use of a warranty is predicated on completion of a cost-benefit analysis (CBA). Per para 1.5, "In determining the value of a warranty, a CBA is used to measure the life cycle costs of the system with and without the warranty. A CBA is required to determine if the warranty will be cost beneficial. CBA is an economic analysis, which basically compares the Life Cycle Costs (LCC) of the system with and without the warranty to determine if warranty coverage will improve the LCCs. In general, five key factors will drive the results of the CBA: cost of the warranty + cost of warranty administration + compatibility with total program efforts + cost of overlap with Contractor support + intangible savings. Effective warranties integrate reliability, maintainability, supportability, availability, and life-cycle costs (emphasis added). Decision factors that must be evaluated include the state of the weapon system technology, the size of the warranted population, the likelihood that performance requirements can be achieved, and the warranty period of performance." Additionally, many of these considerations and desired outcomes can also be alternatively addressed through an effective performance-based life cycle product support (PBL) strategy.