PART 18

QUALITY ASSURANCE

# Table of Contents

18.1 RESPONSIBILITY FOR QUALITY. [1](#responsibility-for-quality.)

18.2 COMPENSATION FOR INNOVATIVE IDEAS.
[1](#compensation-for-innovative-ideas.)

18.3 INSPECTION AND ACCEPTANCE. [1](#inspection-and-acceptance.)

18.3.1 Clause Usage Prescriptions. [2](#clause-usage-prescriptions.)

18.4 RESPONSIBILITY FOR DAMAGE OR LOSS OF SUPPLIES.
[2](#__RefHeading___Toc431005796)

18.4.1 Clause Usage Prescriptions. [2](#clause-usage-prescriptions.-1)

18.5 WARRANTIES. [3](#__RefHeading___Toc431005798)

18.5.1 Clause Usage Prescriptions. [4](#clause-usage-prescriptions.-2)

18.6 DEFECTS AND CONSEQUENTIAL DAMAGES.
[4](#__RefHeading___Toc431005800)

18.6.1 Clause Usage Prescriptions. [5](#clause-usage-prescriptions.-3)

18.50 CLAUSES. [5](#__RefHeading___Toc431005802)

### 18.1 RESPONSIBILITY FOR QUALITY.

***POLICY***: The Contractor is responsible for quality. BPA is not
obligated to pay for the Contractor\'s cost of correcting work
(including work performed under cost reimbursement contracts) which does
not meet the requirements of the contract. Therefore, specifications or
statements of work should clearly state the standards of acceptance by
which the Contractor\'s work will be measured.

### 18.2 COMPENSATION FOR INNOVATIVE IDEAS.

\(a\) ***POLICY:*** BPA encourages Contractors to propose innovative
ideas which reduce BPA\'s costs or increase the quality of goods or
services purchased in a cost-effective manner.

(b ***INFORMATION:*** BPA\'s pre-award policies are designed, in part,
to encourage innovative ideas from potential Contractors. See BPI
12.3(c). If Contractors trust BPA to recognize innovative ideas and give
them appropriate consideration during the proposal evaluation process,
no additional incentive may be necessary to encourage Contractors to
offer innovative ideas.

\(c\) ***INFORMATION:*** In some cases, Contractors may develop
innovative approaches after award of a contract which they reasonably
could not have thought of before award. In such cases, it may be
appropriate to share a portion of the value of the benefit derived from
Contractor-initiated innovations with the Contractor.

\(d\) ***PROCEDURE:*** BPA may share with the Contractor a portion of
the benefits of Contractor initiated innovations which could not have
reasonably been suggested before award. The CO and Program Office shall
jointly document the total benefit to BPA, and explain the basis for the
amount \"shared\" with the Contractor. This documentation shall be
approved by the CO\'s supervisor. A copy shall be sent to the HCA for
purposes of monitoring the success of such activity.

### 18.3 INSPECTION AND ACCEPTANCE.

***INFORMATION***: \"Inspection\" is the act of determining whether
deliverables conform to the contract requirements. \"Acceptance\" is the
recognition that deliverables conform to the contract and the passing of
responsibility for the product or service from the Contractor to BPA.
Other contract clauses sometimes refer to \"the date of acceptance\" as
a benchmark for taking action (e.g., payment, warranty, latent defects,
consequential damages, etc.) When this is the case, it is important that
the CO clearly describe in the contract the timing and conditions of
acceptance, unless the risk of negative consequences is low.

#### 18.3.1 Clause Usage Prescriptions.

***PROCEDURE:***

\(a\) The CO shall include a clause similar to that at 18-1, Inspection
and Acceptance - Commercial Supplies/Services, in solicitations and
contracts under \$50,000, unless a clause similar to 18-2, Inspection -
Supplies is used, and in solicitations and contracts of any dollar
amount for commercial supplies and commercial services.

\(b\) The CO shall include a clause similar to that at 18-2,
Inspection - Supplies, in solicitations and contracts for supplies which
will be manufactured in accordance with a BPA specification. The CO may
substitute a paragraph similar to (d) of Alternative I (fill-in current
BPA overhead percentage) if, based on past history, the CO wants the
right to make immediate correction of non-conforming supplies without
notice to the Contractor and charge the Contractor for BPA\'s costs.

\(c\) The CO shall include a clause similar to that at 18-3,
Acceptance - Supplies, in solicitations and contracts for supplies which
will be manufactured in accordance with a BPA specification. The CO
should consider increasing the 60 day constructive acceptance period
cited in the clause if freight terms are FOB origin and shipment will
require more than a few days.

\(d\) The CO shall include a clause similar to that at 18-4,
Inspection - Services and Construction, in solicitations and contracts
for services over \$50,000 (except commercial services) or for
construction under \$50,000 and commercial construction for any amount.

\(e\) The CO shall include a clause similar to that at 18-5, Inspection
and Acceptance - Construction, in all contracts for construction over
\$50,000, except for commercial construction.

### 18.4 RESPONSIBILITY FOR DAMAGE OR LOSS OF SUPPLIES.

\(a\) ***POLICY:*** CO\'s shall specify the FOB point in supply
contracts based on the particular risks associated with the purchase.

\(b\) ***INFORMATION:*** Where FOB destination is specified, the
Contractor retains responsibility for damage or loss of supplies until
delivery to BPA. BPA is responsible for any damage or loss to conforming
goods after delivery (including the period between delivery and
acceptance or rejection.) Although FOB destination is typically more
advantageous to BPA where loss or damage of the supplies would result in
substantial cost to BPA, other terms may be appropriate for low dollar
transactions or in other instances if the CO deems appropriate. Special
FOB terms are appropriate for Design-Supply-Construct contracts and
Furnish-and-Install contracts because the Contractor should retain
responsibility for damage or loss of supplies after delivery to the site
but before acceptance.

#### 18.4.1 Clause Usage Prescriptions.

***PROCEDURE:*** The CO shall include a clause similar to Clause 18-6,
Responsibility For Damage Or Loss Of Supplies, in
Design-Supply-Construct contracts and Furnish-and-Install solicitations
and contracts over \$50,000.

### 18.5 WARRANTIES.

\(a\) ***INFORMATION:*** The Uniform Commercial Code (UCC) provides
substantial warranty protection to buyers. Most commercial Contractors
are familiar with its provisions. Although the UCC has been written for
the purchase of supplies, it can be applied to services as well. The BPI
takes advantage of the UCC\'s warranty provisions by using them for
purchases of commercial supplies and services. This is the only portion
of UCC incorporated into BPA contracts.

\(b\) ***INFORMATION:*** Special warranty clauses whose terms
substantially differ from those typically offered by suppliers to their
customers will likely result in a higher contract price. The decision to
include a special warranty provision in a contract is a business
decision. COs should consider the standard market practices for each
commodity as well as the costs and benefits to BPA when making that
decision. Most special warranty clauses described in the BPI for use
with supplies or equipment use the date of receipt (rather than the date
of acceptance) to start the warranty period. COs should be aware of this
when drafting contracts.

\(c\) ***POLICY:*** When purchasing commercial supplies or services, BPA
will generally rely on the warranty provisions of the Uniform Commercial
Code.

\(d\) ***INFORMATION:*** The following selected portions of the UCC
apply to warranties of merchantability and suitability for a particular
purpose. They have not been edited. See Section 2 of UCC for additional
information.

**UCC §2-314. Implied Warranty: Merchantability; Usage of Trade.**

\(1\) Unless excluded or modified (Section 2-316), a warranty that the
goods shall be merchantable is implied in a contract for their sale if
the seller is a merchant with respect to goods of that kind.

\(2\) Goods to be merchantable must be at least such as:

\(a\) pass without objection in the trade under the contract
description; and

\(b\) in the case of fungible goods, are fair average quality within the
description; and

\(c\) are fit for the ordinary purposes for which such goods are used;
and

\(d\) run, within the variations permitted by the agreement, of even
kind, quality and quantity within each unit and among all units
involved; and

\(e\) are adequately contained, packaged, and labeled as the agreement
may require; and

\(f\) conform to the promises or affirmations of fact made on the
container or label if any.

\(3\) Unless excluded or modified (Section 2-316), other implied
warranties may arise from course of dealing or usage of trade.

**UCC §2-315. Implied Warranty: Fitness for Particular Purpose.**

Where the seller at the time of contracting has reason to know any
particular purpose for which the goods are required and that the buyer
is relying on the seller\'s skill or judgment to select or furnish
suitable goods, there is, unless excluded or modified under the next
section (Section 2-316), an implied warranty that the goods shall be fit
for such purpose.

#### 18.5.1 Clause Usage Prescriptions.

***PROCEDURE:***

\(a\) The CO shall include a clause similar to that at 18-7, Warranty -
Commercial Supplies And Services, in solicitations and contracts, except
construction, under \$50,000, and in solicitations and contracts of any
dollar amount for commercial supplies and commercial services.

\(b\) The CO shall include a clause similar to that at 18-8, Warranty --
Supplies, in solicitations and contracts for supplies other than heavy
electrical supplies, tower steel, or commercial supplies and services.
For Design-Supply-Construct contracts and Furnish-and-Install contracts,
the clause should be modified so that the warranty begins upon
acceptance rather than delivery.

\(c\) The CO shall include a clause similar to that at 18-9, Warranty -
Heavy Electrical Equipment, in solicitations and contracts for heavy
electrical equipment or other circumstances where BPA wants to retain
the ability to correct defective equipment itself rather than require
the Contractor to do so. The clause may be modified to shift
responsibility for transit of the equipment or removal of adjacent
equipment to BPA rather than the Contractor. For Design-Supply-Construct
contracts and Furnish-and-Install contracts, the clause should be
modified so that the warranty begins upon acceptance rather than
delivery (Fill-in current BPA overhead percentages).

\(d\) The CO shall include a clause similar to that at 18-10, Warranty -
Tower Steel, in solicitations and contracts for tower steel.

\(e\) The CO may include a clause similar to that at 18-11, Warranty -
Services, in solicitations and contracts for services exceeding \$50,000
except for commercial services.

\(f\) The CO shall include a clause similar to either that at 18-12,
Warranty - Construction, or that at 18-13, Warranty - Small Construction
Contracts, in solicitations and contracts for construction.

### 18.6 DEFECTS AND CONSEQUENTIAL DAMAGES.

***INFORMATION:***

\(a\) \"Patent defects\" are defects which are plainly visible or which
can be discovered by reasonable inspection or customary tests. An
example would be the delivery of incorrectly-colored suspension
insulators. After payment has been made, BPA is only able to recover for
patent defects if the contract includes a warranty clause. This places
significant importance on the inspection conducted before supplies or
services are accepted. If reasonable inspection should have detected the
defect, and it did not, BPA may bear the risk of loss.

\(b\) \"Latent defects\" are defects which cannot be determined by
reasonable inspection or customary tests, and which are unknown to BPA
when the item is accepted. An example would be the use of the wrong
electronic component in a computer system. If reasonable inspection
would not have detected the defect, the Contractor bears the risk of
loss. This concept protects BPA from the risk of accepting
supplies/services which contain hidden defects which cannot easily be
located or identified.

\(c\) \"Consequential damages\" are damages which result indirectly from
either patent or latent defects. An example would be damage to a piece
of equipment due to failure of another piece of equipment.

\(d\) BPA can recover for latent defects and consequential damages
discovered after acceptance without a limitation of time. A clause is
not required in the contract in order for BPA to exercise this right. In
certain instances, the long service life of some types of equipment
results in a high risk of loss to manufacturers from a latent defect. As
a result, some offerors may include a contingency factor in their offers
to cover such potential liabilities. Placing a limitation in the
contract on the Contractor\'s liability for latent defects and for
consequential damages clarifies and limits the offeror\'s potential
exposure. This should result in the lowering of offered prices.

#### 18.6.1 Clause Usage Prescriptions.

***PROCEDURE:***

\(a\) The CO may include a clause similar to that at 18-14, Limitation
Of Liability For Latent Defects, in contracts if, during negotiations,
the offeror raises the issue and the CO agrees that their liability
should be limited.

\(b\) The CO may include a clause similar to that at 18-15, Limitation
of Liability for Consequential Damages, if, during negotiations, the
offeror raises the issue and the CO agrees that their liability should
be limited.

### 18.50 CLAUSES.

The following clauses are referred to in BPI Part 18:

18-1 Inspection And Acceptance - Commercial Supplies/Services

18-2 Inspection - Supplies

18-3 Acceptance- Supplies

18-4 Inspection - Services and Construction

18-5 Inspection And Acceptance - Construction

18-6 Responsibility For Damage Or Loss Of Supplies

18-7 Warranty - Commercial Supplies And Services

18-8 Warranty - Supplies

18-9 Warranty - Heavy Electrical Equipment

18-10 Warranty - Tower Steel

18-11 Warranty - Services

18-12 Warranty - Construction

18-13 Warranty - Small Construction Contracts

18-14 Limitation Of Liability For Latent Defects

18-15 Limitation Of Liability For Consequential Damages

######### CLAUSE 18-1 INSPECTION AND ACCEPTANCE - COMMERCIAL SUPPLIES/SERVICES (Sep 98)(BPI 18.3.1)

Inspection and acceptance will be at the place specified for delivery or
performance.

(End of clause)

######### CLAUSE 18-2 INSPECTION - SUPPLIES (Sep 98)(BPI 18.3.1)

\(a\) The Contractor shall provide and maintain a quality system
covering supplies (\"supplies\" includes equipment, fabrication
processes, raw materials, and intermediate assemblies) in accordance
with Unit 4 of this contract.

\(b\) BPA may inspect and test all supplies called for by the contract
at any place and time. If inspection and tests are performed on the
Contractors\' site, the Contractor shall provide BPA reasonable
facilities and assistance. Except as otherwise provided in the contract,
BPA shall bear the expense of BPA inspections or tests made at other
than the Contractor\'s or subcontractor\'s premises; provided that, in
case of rejection, BPA shall not be liable for any reduction in the
value of inspection or test samples. BPA is not obligated to perform any
inspection and test for the benefit of the Contractor unless
specifically set forth elsewhere in this contract. BPA will perform
inspections and tests in a manner that will not unduly delay the work.

\(c\) The Contractor may be charged for BPA\'s costs of inspection if
supplies are not ready at the time specified by the contract for
inspection and tests or where prior rejection makes reinspection and
retesting necessary. If the Contractor fails to perform tests required
by the contract, BPA may perform the tests and charge the Contractor for
the costs of such.

\(d\) BPA may either reject or require correction of nonconforming
supplies.

\(e\) If this contract provides for inspection at the factory (see Unit
4), supplies shall not be shipped until all factory tests and
inspections have been made and the supplies released by BPA\'s
Contracting Officer's Technical Representative (COTR), unless waived in
writing by the Contracting Officer or an authorized representative.

\(1\) If the BPA COTR exercises BPA\'s right of inspection at the
factory, then the materials and equipment will not be reinspected at
destination other than for shipping damage and shortages; however, this
will apply only to (i) those items specifically inspected at the
factory, and (ii) those characteristics and attributes which are
verified during factory inspection.

\(2\) Factory inspection and release for shipment shall not constitute
acceptance of the contract items by BPA..

\(f\) Inspections and tests by BPA do not relieve the Contractor of
responsibility for defects or other failures to meet contract
requirements discovered before acceptance. Lack of inspection by BPA
shall not relieve the Contractor of any obligations under this contract.

(End of clause)

######### Alternate I (Sep 98)

\(d\) BPA may either reject or require correction of nonconforming
supplies. If immediate correction of nonconforming supplies would tend
to mitigate damages, or if time limitations will not permit correction
by the Contractor, BPA may proceed with such necessary correction,
without prior notice to the Contractor of action taken, and the contract
price shall be reduced by the total amount of the costs for correcting
the supplies or equipment as determined by BPA. Such contract price
reduction shall be based on BPA\'s direct cost for the corrective work
plus \_\_\_ percent for management, supervision, and administrative
support, indirect construction, and administrative overhead.

(End of Alternate I)

######### Alternate II Reserved.

######### Clause 18-3 ACCEPTANCE - SUPPLIES (Sep 98)(BPI 18.3.1)

Unless explicitly accepted or rejected earlier, acceptance shall occur
60 days after date of delivery. Acceptance shall be conclusive, except
for latent defects, fraud, gross mistakes amounting to fraud, or as
otherwise provided in this contract.

(End of clause)

######### Clause 18-4 INSPECTION - SERVICES AND CONSTRUCTION (Sep 98)(BPI 18.3.1)

\(a\) BPA may inspect the work called for by the contract at any time
and place. BPA will perform inspections in a manner that will not unduly
delay the work.

\(b\) If any of the services do not conform with contract requirements
(including services performed on a cost-reimbursement or
time-and-materials basis), BPA may require the Contractor to perform the
services again in conformity with the contract at no cost to BPA. When
the defects in services cannot be corrected by re-performance, BPA may
deduct from the contract payments an amount which reflects the reduced
value of the services performed.

\(c\) Neither inspection, lack of inspection, acceptance, nor payment
shall relieve the Contractor of any of its obligations under this
contract.

(End of clause)

######### Clause 18-5 INSPECTION AND ACCEPTANCE - CONSTRUCTION (Sep 98)(BPI 18.3.1)

\(a\) Definition. \"Work\" includes, but is not limited to, materials,
workmanship, and manufacture and fabrication of components.

\(b\) The Contractor shall maintain an adequate inspection system and
perform such inspections as will ensure that the work performed under
the contract conforms to contract requirements. The Contractor shall
maintain complete inspection records and make them available to BPA. All
work shall be conducted under the general direction of the Contracting
Officer and is subject to BPA inspection and test at all places and at
all reasonable times before acceptance to ensure strict compliance with
the terms of the contract.

\(c\) BPA inspections and tests are for the sole benefit of BPA and do
not\--

\(1\) Relieve the Contractor of responsibility for providing adequate
quality control measures;

\(2\) Relieve the Contractor of responsibility for damage to or loss of
the material before acceptance;

\(3\) Constitute or imply acceptance; or

\(4\) Affect the continuing rights of BPA after acceptance of the
completed work under paragraph (i) below.

\(d\) The presence or absence of a BPA inspector does not relieve the
Contractor from any contract requirement, nor is the inspector
authorized to change any term or condition of the specification without
the Contracting Officer\'s written authorization.

\(e\) The Contractor shall promptly furnish, without additional charge,
all facilities, labor, and material reasonably needed for performing
such safe and convenient inspections and tests as may be required by the
Contracting Officer. BPA may charge to the Contractor any additional
cost of inspection or test when work is not ready at the time specified
by the Contractor for inspection or test, or when prior rejection makes
reinspection or retest necessary. BPA shall perform all inspections and
tests in a manner that will not unnecessarily delay the work. Special,
full size, and performance tests shall be performed as described in the
contract.

\(f\) The Contractor shall, without charge, replace or correct work
found by BPA not to conform to contract requirements, unless in the
public interest BPA consents to accept the work with an appropriate
adjustment in contract price. The Contractor shall promptly segregate
and remove rejected material from BPA property.

\(g\) If the Contractor does not promptly replace or correct rejected
work, BPA may (1) by contract or otherwise, replace or correct the work
and charge the cost to the Contractor, and may (2) terminate for default
the Contractor\'s right to proceed.

\(h\) If, before acceptance of the entire work, BPA decides to examine
already completed work by removing it or tearing it out, the Contractor,
on request, shall promptly furnish all necessary facilities, labor, and
material. If the work is found to be defective or nonconforming in any
material respect due to the fault of the Contractor or its
subcontractors, the Contractor shall defray the expenses of the
examination and of satisfactory reconstruction. However, if the work is
found to meet contract requirements, the Contracting Officer shall make
an equitable adjustment for the additional services involved in the
examination and reconstruction, including, if completion of the work was
thereby delayed, an extension of time.

\(i\) Unless otherwise specified in the contract, acceptance by BPA will
be in writing and shall be made as promptly as practicable after
completion and inspection of all work required by the contract or that
portion of the work the Contracting Officer determines can be accepted
separately. Acceptance shall be final and conclusive except for latent
defects, fraud, gross mistakes amounting to fraud, or BPA\'s rights
under any warranty or guarantee.

(End of clause)

######### Clause 18-6 RESPONSIBILITY FOR DAMAGE OR LOSS OF SUPPLIES (Sep 98)(BPI 18.4.1)

\(a\) The Contractor shall be responsible for the supplies covered by
this contract until acceptance, at the designated site, regardless of
the point of inspection.

\(b\) After delivery and installation at the designated site and prior
to acceptance or rejection, BPA shall be responsible for the loss,
destruction, or damage to the supplies only if such loss, destruction,
or damage results from the negligence of officers, agents, or employees
of BPA acting within the scope of their employment.

\(c\) The Contractor shall bear all risks as to rejected supplies after
notice of rejection, except that BPA shall be responsible for the loss,
or destruction of, or damage to the supplies only if such loss,
destruction or damage results from the gross negligence of officers,
agents, or employees of BPA acting within the scope of their employment.

(End of clause)

######### Clause 18-7 WARRANTY - COMMERCIAL SUPPLIES AND SERVICES (Sep 98)(BPI 18.5.1)

The Contractor\'s standard commercial warranty shall be deemed to be a
part of this contract unless otherwise specified. If the Contractor does
not have a standard warranty, the warranty provisions of UCC Article 2
shall apply.

(End of clause)

######### Clause 18-8 WARRANTY - SUPPLIES (Sep 98)(BPI 18.5.1)

\(a\) The Contractor warrants that the supplies (\"supplies\" includes
equipment, fabrication processes, raw or finished materials, and
intermediate assemblies) conform to contract requirements. The
Contractor also warrants that supplies are free of design defects
(except defects in BPA-provided final designs) and defects in materials
or workmanship.

\(b\) The Contractor shall replace or repair any supplies which fail in
operation within 12 months from the date of receipt. The Contracting
Officer will give written notice of any defect or nonconformance to the
Contractor within a reasonable period of time after discovery.
Replacements of contract items shall be made promptly and on an FOB
destination basis. BPA will install replacements at no expense to the
Contractor.

\(c\) Supplies replaced under the provisions of this warranty shall
remain the property of BPA unless the Contractor wishes to obtain
ownership. In this case, the Contractor shall notify BPA of such in
writing not later than the date of receipt by BPA of the replacement
supplies. The Contractor is responsible for packaging and shipping
costs.

\(d\) The rights and remedies of BPA provided in this clause are in
addition to and do not limit any rights afforded to BPA by any other
clause of this contract or under applicable Federal or State law,
including the Uniform Commercial Code.

(End of clause)

######### Clause 18-9 WARRANTY - HEAVY ELECTRICAL EQUIPMENT (Sep 98)(BPI 18.5.1)

\(a\) The Contractor warrants that all materials, equipment, and
supplies (including replacements and corrective repairs) will conform to
the requirements of this contract, will be reasonably fit for their
intended use, and will be free from defects in materials, workmanship,
and**,** design (except BPA designs). The Contractor will not be liable
for any deficiencies not discovered within 1 year from the date the
equipment was placed in service. If installation of the equipment is
delayed through no fault of the Contractor, the date of placing the
equipment in service shall be presumed to be 240 days after the date the
equipment was received at the specified contract destination.

\(b\) Correction or Replacement\--

\(1\) Promptly after notice of deficiencies, the Contractor shall, as
directed by BPA, either remove the materials, equipment, or supplies
referred to in the notice and correct or replace and retest them, or
correct and retest them in place.

\(2\) If immediate correction would tend to mitigate damages or if time
limitations will not permit correction by the Contractor, BPA may
proceed with such necessary correction, without prior notice to the
Contractor.

\(c\) The Contractor shall bear the expense of removal, correction or
replacement, transportation charges, and reinstallation and retesting,
whether incurred by or on behalf of BPA or the Contractor. The cost of
removal of any appurtenant equipment shall be the responsibility of the
Contractor. If BPA performs the corrective work, the Contractor shall
reimburse BPA for direct costs plus \_\_\_ percent overhead on direct
labor costs and \_\_\_ percent overhead on direct material costs.

\(d\) The rights and remedies of BPA provided in this clause are in
addition to and do not limit any rights afforded to BPA by any other
clause of this contract or under applicable Federal or State law,
including the Uniform Commercial Code.

(End of clause)

######### Clause 18-10 WARRANTY - TOWER STEEL (Sep 98)(BPI 18.5.1)

\(a\) The Contractor warrants that the supplies furnished under this
contract are free of defects as to design, materials, or workmanship.
The period of this warranty shall extend for 24 months after the last
date of receipt of supplies.

\(b\) The Contractor shall replace or repair defective supplies and
shall provide replacements for shortages discovered during the warranty
period. The Contracting Officer will give written notice of any defect
to the Contractor within a reasonable period of time after discovery.

\(c\) If immediate correction of non-conforming supplies would tend to
mitigate damages, or if time limitations will not permit correction by
the Contractor, BPA may make corrections without prior notice to the
Contractor. The Contracting Officer will notify the Contractor
immediately after such corrections are initiated. The contract price
shall be reduced by the total amount of the costs for correcting the
supplies. The costs of correction per piece mark will be computed using
the following formula (No additional charge will be made for management,
supervision, administration, inspection overhead, or other loadings):

\(1\) Deficiencies found prior to issue to Construction Contractor:

\(A\) Repair: 0.6 x Weight of piece mark x Supply Contract price/kg.

\(B\) Replace: 1.75 x Weight of piece mark x Supply Contract price/kg.

\(2\) Deficiencies found after issue to Construction Contractor:

\(A\) Minor Repair: Cost per operation x 1.25 (see Note 1)

\(B\) Major Repair: 1.36 x Weight of piece mark x Supply Contract

price/kg.

\(C\) Replace: 2.5 x Weight of piece mark x Supply Contract price/kg.

Note 1: BPA Line Construction Contracts provide for payment to the
Construction Contractor for minor correction costs as follows:

\"Minor Correction: Payment for each operation that does not require
dismantling of previously erected steel will be made in accordance with
the following table:

[THICKNESS OF STEEL]{.underline}   [AMOUNT PER OPERATION]{.underline}

> 5mm thru 11mm 15.00
>
> 12mm thru 24mm 25.00
>
> 25mm or greater 35.00

This payment will be full compensation for all costs involved in
performing one operation including dismantling previously assembled, but
not erected steel, and painting to repair damaged galvanizing. One
operation is defined as: drilling or punching one hole; enlarging an
undersized hole one-eighth inch or more; or cutting one clip or one
cope.

It is these costs (with multiplier) which will be assessed to the Supply
Contractor under subparagraph (2)(A) above for minor repairs found after
issue to the Construction Contractor.

\(d\) Supplies replaced under the provisions of this warranty shall
remain the property of BPA unless the Contractor wishes to obtain
ownership. In this case, the Contractor shall notify BPA of such in
writing not later than the date of receipt by BPA of the replacement
supplies. The Contractor is responsible for packaging and shipping
costs.

\(e\) The rights and remedies of BPA provided in this clause are in
addition to and do not limit any rights afforded to BPA by any other
clause of this contract or under applicable Federal or State law,
including the Uniform Commercial Code.

(End of clause)

######### Clause 18-11 WARRANTY - SERVICES (Sep 98)(BPI 18.5.1)

\(a\) The Contractor warrants that all services performed under this
contract will be performed in a professional manner, be free from
defects in workmanship and conform to the requirements of this contract.
The Contractor further warrants that any materials provided will be free
from defects. This warranty is valid for 1 year from date of acceptance
by BPA. The Contracting Officer will give written notice of any defect
or nonconformance to the Contractor within a reasonable period of time
after discovery.

\(b\) Corrections shall be at no cost to BPA, and any services or
materials corrected or reperformed by the Contractor shall be subject to
this clause to the same extent as work initially performed.

(End of clause)

######### Clause 18-12 WARRANTY - CONSTRUCTION (Sep 98)(BPI 18.5.1)

\(a\) 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 BPA takes possession of any part of
the work before final acceptance, this warranty shall continue for a
period of 1 year from the date BPA takes possession.

\(c\) The Contractor shall remedy at the Contractor\'s expense any
failure to conform, or any defect. In addition, the Contractor shall
remedy at the Contractor\'s expense any damage to Government-owned or
controlled real or personal property, when that damage is the result of
-

\(1\) The Contractor\'s failure to conform to contract requirements; or

\(2\) Any defect of equipment, material, workmanship, or design
furnished by the Contractor.

\(d\) The Contractor shall restore any work damaged in fulfilling the
terms and conditions of this clause. The Contractor\'s warranty with
respect to work repaired or replaced will run for 1 year from the date
of repair or replacement.

\(e\) The Contracting Officer shall notify the Contractor, in writing,
within a reasonable time after the discovery of any failure, defect, or
damage.

\(f\) If the Contractor fails to remedy any failure, defect, or damage
within a reasonable time after receipt of notice, BPA shall have the
right to replace, repair, or otherwise remedy the failure, defect, or
damage at the Contractor\'s expense.

\(g\) With respect to all warranties, express or implied, from
subcontractors, manufacturers, or suppliers for work performed and
materials furnished under this contract, the Contractor shall\--

\(1\) Obtain all warranties that would be given in normal commercial
practice;

\(2\) Require all warranties to be executed, in writing, for the benefit
of BPA, if directed by the Contracting Officer; and

\(3\) Enforce all warranties for the benefit of BPA, if directed by the
Contracting Officer.

\(h\) Unless a defect is caused by the negligence of the Contractor or
subcontractor or supplier at any tier, the Contractor shall not be
liable for the repair of any defects of material or design furnished by
BPA nor for the repair of any damage that results from any defect in
Government-furnished material or design.

\(i\) This warranty shall not limit BPA\'s rights under the Inspection
and Acceptance clause of this contract with respect to latent defects,
gross mistakes, or fraud.

(End of clause)

######### Clause 18-13 WARRANTY - SMALL CONSTRUCTION CONTRACTS (Sep 98)(BPI 18.5.1)

\(a\) The Contractor warrants 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.

\(c\) The Contractor shall remedy at the Contractor\'s expense any
failure to conform or any defect. If the Contractor fails to remedy any
failure, defect, or damage within a reasonable time after receipt of
notice, BPA shall have the right to replace, repair, or otherwise remedy
the failure, defect, or damage at the Contractor\'s expense.

(End of clause)

######### Clause 18-14 LIMITATION OF LIABILITY FOR LATENT DEFECTS (Sep 98)(BPI 18.6.1)

Unless otherwise specifically provided in this contract, the Contractor
shall not be liable for latent defects discovered more than three years
after the date of expiration of the warranty. BPA will notify the
Contractor of any latent defects within a reasonable period after
discovery.

(End of clause)

######### Clause 18-15 LIMITATION OF LIABILITY FOR CONSEQUENTIAL DAMAGES (Sep 98)(BPI 18.6.1)

The Contractor\'s liability for consequential damages shall be limited
to the contract cost of the item, and from the date of receipt to the
end of the three-year period following the expiration of the warranty.
In the event that more than one item is furnished on a contract, the
foregoing provision shall apply separately to each item. Consequential
damages shall not include loss of revenue.

(End of clause)