What are reprocurement costs?

Failure to timely or adequately perform may result in rejection of the deliverables and/or termination of the contract. The contractor could be required to correct the performance. Alternatively, the contractor could be required to pay the purchaser for any costs they incur in reprocuring the goods or services, i.e. “reprocurement costs.”

Do federal contracts require agreement to pay reprocurement costs?

Yes. For fixed price supplies, default by the contractor gives the government the right to reprocure and charge the contractor those costs (covered in the termination clauses). For R&D contracts, the contractor has the option to correct the work. If the contractor fails to correct the work, the government can correct and charge the contractor increased costs under the FAR 52.246-8, Inspection of Research and Development Cost Reimbursement. Under the FAR 52.246-8 Inspection of Research and Development (Short Form) there is no requirement for corrective costs. This short form clause is to be included when appropriate. Try and get the short form clause included in our contracts with the government based upon our university status.

Can Virginia Tech agree to pay reprocurement costs?

No. The University has no source of funds to pay these costs.

What exception should be taken?

In federal contracts/subcontracts, get the FAR 52.246-8 clause included so there is no requirement to pay corrective costs.  In sponsored agreements, take the following exception:

As a non-profit state educational institution, the University has no source of funds to pay any reprocurement costs.  The University will use its best efforts to perform the work and can agree to the following contract clause:

Best Efforts

For services, the University makes no representations or warranties, expressed or implied, regarding its performance under this agreement, including, but not limited to the marketability, use or fitness for any particular purpose of the research results developed under this work. Further, it is understood that the University shall not be liable for special, consequential, or incidental damages, as a result of sponsor’s use of the final technical report and the results contained therein provided by the University.