CON 090 Module 4 Student Guide Exercise: The Inspection and Acceptance Case Scenario:

CON 090 Module 4 Student Guide

Exercise: The Inspection and Acceptance Case

Scenario: You are an administrative contracting officer (ACO) responsible for the administration of three contracts with the Acme Corporation—Contract A, Contract B, and Contract C. Contract A is for 100 commercial widgets to be delivered in two lots of 50 each. Contract B is a fixed-price contract for 100 noncommercial widgets to be delivered in two lots of 50 each. Contract C is a cost-reimbursement contract for the development of next generation widgets that requires the delivery of four prototypes. All three contracts exceed the simplified acquisition threshold and contain the applicable FAR and DFARS clauses.

Situation: The contractor has delivered, and the Government has accepted, the first lot of widgets under both Contract A and Contract B. The second lots for each contract are due to be delivered in 30 days. Under Contract C, the contractor has delivered all prototypes, but they all failed the Government's inspection. As such, the Government has not accepted any of the prototypes.

Shortly after delivery of the first lots, you receive complaints from the end users that some of the widgets that have been delivered are defective or nonconforming. Upon further investigation, you find that some of the widgets delivered under Contract A are, in fact, defective.  In addition, some of the widgets delivered under Contract B are defective because they were not built in accordance with the Government's specification (The nonconformance was obvious by visual inspection).

You decide to conduct an inspection of the finished widgets from the lots that have not yet been delivered. You find that some of the widgets under Contract A are defective and that some of the widgets under Contract B were not built in accordance with the contract specification. You review both contracts and find that neither contract contains an express warranty.

1. Who should bear the cost of correcting the defective widgets delivered in the first lot under Contract A?

2. Who should bear the cost of correcting the defective widgets delivered in the first lot under Contract B?

3. Who should bear the cost of correcting the defective widgets to be delivered in the second lot under Contract A?

4. Who should bear the cost of correcting the defective widgets to be delivered in the second lot under Contract B?

5. Who should bear the cost of correcting the defective prototypes under Contract C?