41.201 Policy.

(a) Subject to paragraph (d) of this section, it is the policy of the Federal Government that agencies

obtain required utility services from sources of supply which are most advantageous to the

Government in terms of economy, efficiency, reliability, or service.

(b) Except for acquisitions at or below the simplified acquisition threshold, agencies shall acquire

utility services by a bilateral written contract, which must include the clauses required by 41.501,

regardless of whether rates or terms and conditions of service are fixed or adjusted by a regulatory

body. Agencies may not use the utility supplier’s forms and clauses to avoid the inclusion of

provisions and clauses required by 41.501 or by statute. (See 41.202(c) for procedures to be used

when the supplier refuses to execute a written contract.)

(c) Specific operating and management details, such as procedures for internal agency contract

assistance and review, delegations of authority, and approval thresholds, may be prescribed by an

individual agency subject to compliance with applicable statutes and regulations.

(d)

(1) Section 8093 of the Department of Defense Appropriations Act of1988, Pub.L.100-202, provides

that none of the funds appropriated by that Act or any other Act with respect to any fiscal year by

any department, agency, or instrumentality of the United States, may be used for the purchase of

electricity by the Government in any manner that is inconsistent with state law governing the

providing of electric utility service, including state utility commission rulings and electric utility

franchises or service territories established pursuant to state statute, state regulation, or stateapproved territorial agreements.

(2) The Act does not preclude-

(i) The head of a Federal agency from entering into a contract pursuant to 42 U.S.C.8287 (which

pertains to the subject of shared energy savings including cogeneration);

(ii) The Secretary of a military department from entering into a contract pursuant to 10 U.S.C. 2922a

(which pertains to contracts for energy or fuel for military installations including the provision and

operation of energy production facilities); or

(iii) The Secretary of a military department from purchasing electricity from any provider when the

utility or utilities having applicable state-approved franchise or other service authorizations are

found by the Secretary to be unwilling or unable to meet unusual standards for service reliability

that are necessary for purposes of national defense.

(3) Additionally, the head of a Federal agency may-

(i) Consistent with applicable state law, enter into contracts for the purchase or transfer of

electricity to the agency by a non-utility, including a qualifying facility under the Public Utility

Regulatory Policies Act of1978;

(ii) Enter into an interagency agreement, pursuant to 41.206 and 17.5, with a Federal power

marketing agency or the Tennessee Valley Authority for the transfer of electric power to the agency;

and
(iii) Enter into a contract with an electric utility under the authority or tariffs of the Federal Energy

Regulatory Com-mission.

(e) Prior to acquiring electric utility services on a competitive basis, the contracting officer shall

determine, with the advice of legal counsel, by a market survey or any other appropriate means,

e.g.,consultation with the state agency responsible for regulating public utilities, that such

competition would not be inconsistent with state law governing the provision of electric utility

service, including state utility commission rulings and electric utility franchises or service territories

established pursuant to state statute, state regulation, or state-approved territorial agreements.

Proposals from alternative electric suppliers shall provide a representation that service can be

provided in a manner consistent with section 8093 of Public Law100-202 (see 41.201(d)).

Parent topic: Subpart 41.2 - Acquiring Utility Services