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 241.201 Policy.
 241.202 Procedures.
 241.203 GSA assistance.
 241.205 Separate contracts.
 241.270 Preaward contract review.

241.201  Policy.


      (1)  Except as provided in FAR 41.201, DoD, as a matter of comity, will comply with the current regulations, practices and decisions of independent regulatory bodies which are subject to judicial appeal.  This policy does not extend to regulatory bodies whose decisions are not subject to appeal nor does it extend to nonindependent regulatory bodies.


      (2)  Purchases of utility services outside the United States may use—


              (i)  Formats and technical provisions consistent with local practice; and


              (ii)  Dual language forms and contracts.


      (3)  Rates established by an independent regulatory body are considered “prices set by law or regulation” and do not require submission of cost or pricing data (see FAR Subpart 15.4).


241.202  Procedures.


      (a)(i)  Competitive proposals.  When a new major utility service load develops or a new military installation is established, the contracting officer shall—


                    (A)  Determine whether more than one supplier can provide the required utility services.


                          (1)  Competition may be possible where dual franchises exist or where no franchise exists.


                          (2)  Competition should also be considered when an installation is served by one supplier and other potential suppliers exist even though one supplier has entered into a General Services Administration area-wide contract.


                    (B)  Where competition exists, solicit competitive proposals from all potential suppliers.


              (ii)  Periodic reviews for competition.  Conduct periodic review of ongoing contracts to determine the availability of competition.  If available, evaluate the need to rewrite the contract considering—


                    (A)  The possible loss of rights vested in the Government under the existing contract;


                    (B)  The age and quality of the contract; and


                    (C)  The number of contract modifications and the ease of administration with the existing contract documents.


              (iii)  Connection and service charges.  The Government may pay a connection charge when required to cover the cost of the necessary connecting facilities.  A connection charge based on the estimated labor cost of installing and removing the facility shall not include salvage cost.  A lump-sum connection charge shall be no more than the agreed cost of the connecting facilities less net salvage.  The order of precedence for contractual treatment of connection and service charges is—


                    (A)  No connection charge.


                    (B)  Termination liability.  Use when an obligation is necessary to secure the required services.  The obligation must be not more than the agreed connection charge, less any net salvage material costs.   Use of a termination liability instead of a connection charge requires the approval of the service power procurement officer or designee.


                    (C)  Connection charge, refundable.  Use a refundable connection charge when the supplier refuses to provide the facilities based on lack of capital or published rules which prohibit providing up-front funding.  The contract should provide for refund of the connection charge within five years unless a longer period or omission of the refund requirement is authorized by the service power procurement officer or designee.


                    (D)  Connection and service charges, nonrefundable.  The Government may pay certain nonrefundable, nonrecurring charges including service initiation charges, a contribution in aid of construction, membership fees, and charges required by the supplier's rules and regulations to be paid by the customer.  If possible, consider sharing with other than Government users the use of (and costs for) facilities when large nonrefundable charges are required.


              (iv)  Construction and labor requirements.


                    (A)  Do not use the connection charge provisions for the installation of Government-owned distribution lines and facilities.  The acquisition of such facilities must be authorized by legislation and accomplished in accordance with FAR Part 36.  Also, do not use the connection charge provisions for the installation of new facilities related to the supplier's production and general “backbone” system unless authorized by legislation.


                    (B)  Construction labor standards ordinarily do not apply to construction accomplished under the connection charge provisions of this part.  However, if installation includes construction of a public building or public work as defined in FAR 36.102, construction labor standards may apply.


241.203  GSA assistance.

The General Services Administration (GSA) has delegated to DoD the authority to enter into utility service contracts (see FAR 41.103); therefore, contracting officers need not seek assistance or approval from GSA.


241.205  Separate contracts.


      (a)(i)  Requests for proposals shall state the anticipated service period in terms of months or years.  Where the period extends beyond the current fiscal year, evaluate offers of incentives for a definite term contract.
              (ii)  The solicitation may permit offerors the choice of proposing on the basis of—


                    (A)  A definite term not to exceed the anticipated service period; or


                    (B)  An indefinite term contract.


              (iii)  Where the expected service period is less than the current fiscal year, the solicitation shall be on the basis of an indefinite term contract.


              (iv)  Contracts for utility services for leased premises shall identify the lease document on the face of the contract.


      (d)  Use an indefinite term utility service contract when it is considered to be in the Government's best interest to—


              (i)  Have the right to terminate on a 30-day (or longer) notice.  A notice of up to one year may be granted by an installation if needed to obtain a more favorable rate, more advantageous conditions, or for other valid reasons; or


              (ii)  Grant the supplier the right to terminate the contract when of benefit to the Government in the form of lower rates, larger discounts or more favorable terms and conditions.


241.270  Preaward contract review.

Departments/agencies shall conduct their own preaward contract reviews.




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