General Services Administration Acquisition Regulation; GSAR Implementation of Executive Order 14275, Acquisition of Utility Services
GSA is proposing to amend the General Services Administration Acquisition Regulation (GSAR) part 541 which outlines procedures and guidance for the procurement of utility servic...
[GSAR Case 2026-G502; Docket No. GSA-GSAR-2026-0595; Sequence No. 1]
RIN 3090-AL14
AGENCY:
Office of Acquisition Policy, General Services Administration (GSA).
ACTION:
Proposed rule.
SUMMARY:
GSA is proposing to amend the General Services Administration Acquisition Regulation (GSAR) part 541 which outlines procedures and guidance for the procurement of utility services. GSA guidance does not apply to agencies using their special authorities listed in Federal Acquisition Regulation (FAR) section 41.103(a)(2) and (3). This proposed rule would align the GSAR with the FAR Council's proposed rule for FAR part 41.
DATES:
Interested parties should submit written comments to the Regulatory Secretariat Division at the address shown below on or before November 4, 2026 to be considered in the formation of the final rule.
ADDRESSES:
Submit comments in response to GSAR case 2026-G502 to:
www.regulations.gov
via the Federal eRulemaking portal by searching for “GSAR Case 2026-G502”. Select the link “Comment Now” that corresponds with GSAR Case 2026-G502. Follow the instructions provided at the “Comment Now” screen. Please include your name, company name (if any), and “GSAR Case 2026-G502” on your attached document. If your comment cannot be submitted using
www.regulations.gov,
call or email the points of contact in the
FOR FURTHER INFORMATION CONTACT
section of this document for alternate instructions.
To view the docket summary, click on “View docket” on the top left corner of the screen.”
Instructions:
Please submit comments only and cite GSAR Case 2026-G502, in all correspondence related to this case. Comments received generally will be posted without change to
www.regulations.gov,
including any personal and/or business confidential information provided. To confirm receipt of your comment(s), please check
www.regulations.gov,
approximately two to three days after submission to verify posting.
FOR FURTHER INFORMATION CONTACT:
For clarification of content, contact Bryon Boyer at
GSARPolicy@gsa.gov
or call 202-430-0972 and cite “GSAR Case 2026-G502”. For information pertaining to status or publication schedules, contact the Regulatory Secretariat Division at 202-501-4755 or
GSARegSec@gsa.gov.
Please cite GSAR Case 2026-G502.
SUPPLEMENTARY INFORMATION:
I. Background
Office of Federal Procurement Policy (OFPP), Office of Management and Budget (OMB); Department of Defense (DoD); General Services Administration (GSA); and National Aeronautics and Space Administration (NASA) (collectively referred to as the Federal Acquisition Regulatory Council or FAR Council) are working to amend the FAR to implement Executive Order (E.O.) 14275, Restoring Common Sense to Federal Procurement. The E.O. directs the elimination of excessive acquisition regulations to stop the inefficient use of American taxpayer dollars. In response to E.O. 14275, the Office of Management and Budget issued memorandum M-25-26, Overhauling the Federal Acquisition Regulation. The Memo directed the FAR Council to complete a “revolutionary overhaul” of the FAR (herein referred to as “Revolutionary FAR Overhaul” or “RFO”). The FAR Council is issuing several proposed rules that collectively will streamline the FAR in its entirety.
One of the FAR Council's RFO proposed rules (FAR case 2026-002) revises FAR part 41, acquisitions of utility services, to only include regulations applicable to the Department of Defense and Department of Energy when using their special statutory authorities (see FAR 41.103), and directs other agencies (and Department of Defense and Department of Energy when not using their special statutory authorities) to use the procedures and guidance provided by GSA. As a result, GSA is proposing to amend the GSAR to adopt relevant regulations in GSAR part 541.
II. Discussion and Analysis
This proposed change would simplify the acquisition process for agencies when ordering utility services, and further encourages the use of GSA's “areawide” contracts, which are governmentwide ordering vehicles, to ensure efficient and consolidated procurement to the maximum extent practicable.
A. General
The proposed revisions move the regulations governing utilities currently found in FAR part 41 to GSA's Federal Acquisition Supplement—the GSAR—which reflects the principles of the RFO and directs agencies to contact GSA prior to making any utility-related acquisition. This will allow GSA subject-matter experts to ensure the most efficient procurement strategy, typically use of GSA areawide contracts.
B. Summary of Changes
1. Statutory Requirements
Statutory requirements and principles retained in the revised ordering procedures include 40 U.S.C. 501, Services for Executive Agencies.
2. Plain Language Requirements
The revised utility services acquisition procedures align with the federal plain language guidelines as directed by the Plain Writing Act of 2010 (Pub. L. 111-274). Plain language revisions include the following:
Changes to active voice.
Edits to improve readability and clarity.
Reorganization to present information more logically.
Replacing the term “shall” with “must” or “will,” as appropriate.
3. Harmonization With the RFO
The proposed rule harmonizes utility services ordering requirements and moves them to the GSAR in support of the RFO. Revisions include moving requirements into the GSAR and directing agencies to follow GSA guidance and collaborate with GSA prior to making acquisitions.
4. Applicability to Agencies and GSA's Guidance
The proposed rule directs agencies to first contact GSA for assistance prior to acquiring utility services (so that GSA can offer expert advice and direct agencies to the most efficient vehicles for acquiring utility services). Next, the proposed rule provides a mechanism for agencies to request GSA to delegate contracting authority and specific contracting assistance requests, specific to utilities-related acquisitions.
( printed page 63244)
5. Transfer of Provisions and Clauses
This proposed rule moves the provisions and clauses and their prescriptions from the FAR into the GSAR.
III. Expected Impact of the Rule
This proposed rule creates no significant new or additional costs. The rule moves the procedures from the FAR to GSA and streamlines the language.
The revisions proposed by this rule will significantly benefit the agencies. GSA anticipates that these revisions will result in qualitative benefits, such as: (1) improving agency satisfaction and agency costs (
e.g.,
time) associated with acquiring utility services; (2) reducing administrative costs for agencies who acquire utility services; and (3) encouraging the use of consolidated procurement vehicles (namely GSA areawide contracts) in the name of efficient procurement.
GSA anticipates minimal non-recurring costs associated with familiarization and training related to the rule, as the primary message is to obtain utility services through GSA. Entities looking to award their own utility contracts will need to take the time to familiarize themselves with the new location of the utility procedures (
i.e.,
from FAR part 41 to GSAR part 541).
GSA calculates the estimated cost for ordering activities to familiarize themselves with the proposed rule as $5,000 (rounded).[1]
GSA calculates the estimated cost for existing utility business concerns to familiarize themselves with the proposed rule as $3,047 (rounded).[2]
In whole, the streamlined procedures—removing unnecessary requirements not based in statute or executive order—and the qualitative benefits outlined offset any new, de minimis non-recurring costs identified above.
GSA anticipates no additional or new recurring costs beyond those exclusively due to moving utility procedures from FAR part 41 to GSAR part 541.
IV. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is a significant regulatory action under section 3(f) of E.O. 12866 and, therefore, was subject to review under Section 6(b) of E.O. 12866.
This proposed rule, if finalized as proposed, is not an E.O. 14192 regulatory action because it does not impose any more than de minimis regulatory costs. See discussion in the “Expected Impact of the Rule” section of this preamble.
VI. Regulatory Flexibility Act
GSA does not expect this proposed rule to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601,
et seq.,
because this rule is simply removing the existing procedures from the FAR and placing them into the GSAR. However, an Initial Regulatory Flexibility Analysis (IRFA) has been prepared consistent with 5 U.S.C. 603.
The analysis is summarized as follows:
1.
Reasons for the action.
OFPP, DoD, GSA, and NASA (collectively referred to as the Federal Acquisition Regulatory Council or FAR Council) are proposing to amend the Federal Acquisition Regulation (FAR) to implement Executive Order (E.O.) 14275, Restoring Common Sense to Federal Procurement, and Office of Management and Budget issued memorandum M-25-26, Overhauling the Federal Acquisition Regulation. This effort is collectively referred to as the Revolutionary FAR Overhaul (RFO).
One of the FAR Council's proposed rules includes the complete revision to FAR part 41, which currently contains requirements, guidance, and procedures for ordering utility services. The FAR Council's proposed rule proposes to apply only to the Department of Defense and Department of Energy (when using certain statutory authorities) and directs all other agencies (and the Department of Defense and Department of Energy when not using their statutory authorities) to follow procedures and guidance established by GSA at GSAR Part 541. This approach simplifies the acquisition process for agencies when acquiring utility services.
As a result, GSA is proposing to amend the GSAR to provide procedures and guidance to agencies for the acquisition of utility services. GSA is proposing to add these procedures and guidance to GSAR part 541.
2.
Objective of, and legal basis for, the rule.
The rewrite of the FAR represents a paradigm shift in federal acquisition. It emphasizes streamlining, clarity, and accessibility, while ensuring that the regulation focuses only on statutory mandates and foundational procurement principles. The RFO is designed to streamline compliance for contracting professionals, improve acquisition speed and agility, and reinforce mission outcomes over process formalities.
For purposes of adding procedures and guidance for acquiring utility services into the GSAR, GSA is generally moving the existing requirements and procedures currently codified in FAR part 41 into GSAR part 541. The proposed changes support the RFO objectives and do not create any new burden on the Government or industry. Instead these changes simplify and reduce the requirements needed for agencies to acquire utility services, thereby making the acquisition process faster and more efficient.
The basis for the RFO, which encompasses the basis for this rule, is E.O. 14275, Restoring Common Sense to Federal Procurement. GSA's authority for promulgation of ordering procedures for the FSS Program is 10 U.S.C. 3012(3); 40 U.S.C. 121(c); 40 U.S.C. 501; 41 U.S.C. 152(3); and 41 U.S.C. 3302. These procedures have been coordinated with The Administrator for Federal Procurement Policy in accordance with 41 U.S.C. 4104(c).
3.
Description of, and estimate of, the number of small entities to which the rule will apply.
The proposed changes to the GSAR do not impose any new requirements or burdens on small business concerns. The proposed changes impact the internal procedures of the Government concerning the acquisition of utility services. Therefore, the changes proposed by this rule are not expected to have a significant economic impact
( printed page 63245)
on a substantial number of small entities. The GSA has always maintained a website at
gsa.gov
for utilities services acquisition for the benefit of the government acquisition workforce and industry. The changes due to this proposed rule are merely enhancements and improvements to the existing website.
It is recognized that small business concerns seeking to do business with the Federal Government as utility services contractors, if any, will have to familiarize themselves with the reorganized, streamlined, and revised provisions and clauses for the acquisition of utility services, however, these clauses are “substantially the same as” the clauses found in the FAR. As of January 2026, there were 92 utility suppliers with federal government contracts (not necessarily represented in
SAM.gov). At the end of Fiscal Year 2025, there were approximately 92 active vendors selling utilities services (out of which approximately 12 (13 percent) were small business contractors). GSA anticipates non-recurring costs associated with familiarization and training related to the rule (
i.e.,
from FAR part 41 to GSAR part 541). GSA calculates the estimated cost for small businesses to familiarize themselves with the proposed rule as $199 (rounded).[3]
4.
Description of projected reporting, recordkeeping, and other compliance requirements of the rule.
The proposed rule does not impose any new reporting, recording keeping, or compliance requirements. Any existing reporting, recordkeeping, or other compliance requirements were captured by the FAR rule for part 41.
5.
Relevant Federal rules which may duplicate, overlap, or conflict with the rule.
The proposed rule, if finalized, would not duplicate, overlap, or conflict with other Federal rules.
6.
Description of any significant alternatives to the rule which accomplish the stated objectives of applicable statutes and which minimize any significant economic impact of the rule on small entities.
There are no significant alternatives that would minimize the impact of the rule on small entities.
The Regulatory Secretariat Division has submitted a copy of the IRFA to the Chief Counsel for Advocacy of the Small Business Administration. A copy of the IRFA may be obtained from the Regulatory Secretariat Division. The FAR Council invites comments from small business concerns and other interested parties on the expected impact of this proposed rule on small entities.
GSA will also consider comments from small entities concerning the existing regulations in subparts affected by the rule in accordance with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 U.S.C. 610 (GSAR Case 2026-G502), in correspondence.
VII. Paperwork Reduction Act
The Paperwork Reduction Act does not apply because the changes to the GSAR do not impose recordkeeping or information collection requirements, or the collection of information from offerors, contractors, or members of the public that require the approval of the Office of Management and Budget (OMB) under 44 U.S.C. 3501,
et seq.
In accordance with FAR 41.102(a), agencies must follow GSA procedures and guidance for the acquisition of utilities located on the website available at:
gsa.gov/utilities.
Requests for contracting assistance or contracting authority from GSA are made via email request to GSA at
utilities@gsa.gov.
Guidance for agencies to submit requests is located at
gsa.gov/utilities.
GSA may require additional information based on the request.
3. Add subpart 541.6 to read as follows:
Subpart 541.6—Solicitation Provision and Contract Clauses
Because the terms and conditions under which utility suppliers furnish services may vary from area to area, the differences may influence the terms and conditions appropriate to a particular utility's contracting situation. To accommodate requirements that are peculiar to the contracting situation, this section prescribes provisions and clauses on a “substantially the same as” basis, which permits the contracting officer to prepare and utilize variations of the prescribed provisions and clauses in accordance with agency procedures. Insert the following provisions and clauses in solicitations and contracts for utility services, as prescribed, including utility services that are commercial services:
(a) Insert a provision substantially the same as the provision at 552.241-1, Electric Service Territory Compliance Representation, in solicitations when proposals from alternative electric suppliers are sought.
(b) Insert in solicitations and contracts for utility services clauses substantially the same as the clauses at—
(1) 552.241-2, Order of Precedence—Utilities;
(2) 552.241-3, Scope and Duration of Contract;
(3) 552.241-4, Change in Class of Service;
(4) 552.241-5, Contractor's Facilities; and
(5) 552.241-6, Service Provisions.
(6) 552.241-7, Disputes (Utility Contracts).
(c) Insert clauses substantially the same as the clauses listed below in solicitations and contracts under the prescribed conditions—
(1) 552.241-8, Change in Rates or Terms and Conditions of Service for Regulated Services, when the utility services are subject to a regulatory body.
(2) 552.241-9, Change in Rates or Terms and Conditions of Service for Unregulated Services, when the utility services are not subject to a regulatory body.
(3) 552.241-10, Connection Charge, when a refundable connection charge is required to be paid by the government to compensate the contractor for furnishing additional facilities
( printed page 63246)
necessary to supply service. (Use Alternate I to the clause if a nonrefundable charge is to be paid. When conditions require the incorporation of a nonrecurring, nonrefundable service charge or a termination liability, see paragraphs (c)(4) and (c)(6) of this section.)
(4) 552.241-11, Termination Liability, when payment is to be made to the contractor upon termination of service in conjunction with, or in lieu of, a connection charge upon completion of the facilities.
(5) 552.241-12, Multiple Service Locations, when providing for possible alternative service locations, except under areawide contracts, is required.
(6) 552.241-13, Nonrefundable, Nonrecurring Service Charge, when the government is required to pay a nonrefundable, nonrecurring membership fee, a charge for initiation of service, or a contribution for the cost of facilities construction. The government may provide for inclusion of such agreed amount or fee as a part of the connection charge, a part of the initial payment for services, or as periodic payments to fulfill the government's obligation.
(7) 552.241-14, Cooperative Membership, when the government is a member of a cooperative.
(8) 552.241-15, Economic Price Adjustment—Deregulated Electric Supply, when procuring electricity from deregulated electricity providers.
PART 552—SOLICITATION PROVISIONS AND CONTRACT CLAUSES
4. The authority citation for part 552 continues to read as follows:
Electric Service Territory Compliance Representation.
As prescribed in 541.501(a), insert a provision substantially the same as the following:
Electric Service Territory Compliance Representation (Date)
(a) Section 8093 of Public Law 100-202 generally requires purchases of electricity by any department, agency, or instrumentality of the United States to be consistent 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.
(b) By signing this offer, the offeror represents that this offer to sell electricity is consistent with Section 8093 of Public Law 100-202.
As prescribed in 541.501(b)(1), insert a clause substantially the same as the following:
Order of Precedence—Utilities (Date)
In the event of any inconsistency between the terms of this contract (including the specifications) and any rate schedule, rider, or exhibit incorporated in this contract by reference or otherwise, or any of the contractor's rules and regulations, the terms of this contract control.
As prescribed in 541.501(b)(2), insert a clause substantially the same as the following:
Scope and Duration of Contract (Date)
(a) For the period ____, [contracting officer to insert period of service] the contractor agrees to furnish and the government agrees to purchase [contracting officer to insert type of service] utility service in accordance with the applicable tariff(s), rules, and regulations as approved by the applicable governing regulatory body and as set forth in the contract.
(b) It is expressly understood that neither the contractor nor the government is under any obligation to continue any service under the terms and conditions of this contract beyond the expiration date.
(c) The contractor must, in the same manner that it customarily or regularly provides notice to its non-government customers, provide the government with one complete set of rates, terms, and conditions of service which are in effect as of the date of this contract and any subsequently approved rates, which may specifically be satisfied by the contractor publishing their rates on publicly available websites.
(d) The contractor will be paid at the applicable rate(s) under the tariff and the government will be liable for the minimum monthly charge, if any, specified in this contract commencing with the period in which service is initially furnished and continuing for the term of this contract. Any minimum monthly charge specified in this contract must be equitably prorated for the periods in which commencement and termination of this contract become effective.
As prescribed in 541.501(b)(3), insert a clause substantially the same as the following:
Change in Class of Service (Date)
(a) In the event of a change in the class of service, such service must be provided at the contractor's lowest available rate schedule applicable to the class of service furnished.
(b) Where the contractor does not have on file with the regulatory body approved rate schedules applicable to services provided, no clause in this contract precludes the government and the contractor from negotiating a rate schedule applicable to the class of service furnished.
As prescribed in 541.501(b)(4), insert a clause substantially the same as the following:
Contractor's Facilities (Date)
(a) The contractor, at its expense, unless otherwise provided for in this contract, must furnish, install, operate, and maintain all facilities required to furnish service hereunder, and measure such service at the point of delivery specified in the Service Specifications. Title to all such facilities remains with the contractor and the contractor is responsible for loss or damage to such facilities, except that the government will be responsible to the extent that loss or damage has been caused by the government's negligent acts or omissions.
(b) Notwithstanding any terms expressed in this clause, the contractor must obtain approval from the contracting officer prior to any equipment installation, construction, or removal. The government hereby grants to the contractor, free of any rental or similar charge, but subject to the limitations specified in this contract, a revocable permit or license to enter the service location for any proper purpose under this contract. This permit or license includes use of the site or sites agreed upon by the parties hereto for the installation, operation, maintenance, and repair of the facilities of the contractor required to be located upon government premises. All applicable taxes and other charges in connection therewith, together with all liability of the contractor in construction, operation, maintenance and repair of such facilities, are the obligation of the contractor.
( printed page 63247)
(c) Authorized representatives of the contractor will be allowed access to the facilities on government premises at reasonable times to perform the obligations of the contractor regarding such facilities. It is expressly understood that the government may limit or restrict the right of access herein granted in any manner considered necessary (
e.g.,
national security, public safety).
(d) Unless otherwise specified in this contract, the contractor must, at its expense, remove such facilities and restore government premises to their original condition as near as practicable within a reasonable time after the government terminates this contract. In the event such termination of this contract is due to the fault of the contractor, such facilities may be retained in place at the option of the government for a reasonable time while the government attempts to obtain service elsewhere comparable to that provided for hereunder.
As prescribed in 541.501(b)(5), insert a clause substantially the same as the following:
Service Provisions (Date)
(a) Measurement of service.
(1) All service furnished by the contractor must be measured by suitable metering equipment of standard manufacture, to be furnished, installed, maintained, repaired, calibrated, and read by the contractor at its expense. When more than a single meter is installed at a service location, the readings thereof may be billed conjunctively, if appropriate. In the event any meter fails to register (or registers incorrectly) the service furnished, the government and contractor must agree upon the length of time of meter malfunction and the quantity of service delivered during such period of time. An appropriate adjustment must be made by the contractor to the next invoice for the purpose of correcting such errors. However, any meter which registers not more than _ [contracting officer to insert percentage variance] percent slow or fast is deemed correct.
(2) The contractor must read all meters at periodic intervals of approximately 30 days or in accordance with the policy of the cognizant regulatory body or applicable bylaws. All billings based on meter readings of less than _ [contracting officer to insert number of days] days must be prorated accordingly.
(b) Meter test.
(1) The contractor, at its expense, must periodically inspect and test contractor-installed meters at intervals not exceeding _ [contracting officer to insert interval—
e.g.,
number of month(s) or year(s) inspection/testing is required]. The government has the right to have representation during the inspection and test.
(2) At the written request of the contracting officer, the contractor must make additional tests of any or all such meters in the presence of government representatives. The cost of such additional tests will be borne by the government if the percentage of errors is found to be not more than _ [contracting officer to insert percentage variance] percent slow or fast.
(3) No meter may be placed in service or allowed to remain in service which has an error in registration in excess of _ [contracting officer to insert percentage variance] percent under normal operating conditions.
(c) Change in volume or character. Reasonable notice will be given by the contracting officer to the contractor regarding any material changes anticipated in the volume or characteristics of the utility service required at each location.
(d) Continuity of service and consumption. The contractor must use reasonable diligence to provide a regular and uninterrupted supply of service at each service location, but will not be liable for damages, breach of contract or otherwise, to the government for failure, suspension, diminution, or other variations of service occasioned by or in consequence of any cause beyond the control of the contractor, including but not limited to acts of God or of the public enemy, fires, floods, earthquakes, or other catastrophe, strikes, or failure or breakdown of transmission or other facilities. If any such failure, suspension, diminution, or other variation of service, in the aggregate is more than _ [contracting officer to insert amount of hours] hour(s) during any billing period hereunder, an equitable adjustment must be made by the contractor in the monthly billing specified in this contract (including the minimum monthly charge).
As prescribed in 541.501(b)(6), insert the following clause:
Disputes (Utility Contracts) (Date)
The requirements of the Disputes clause at FAR 52.233-1 are supplemented to provide that matters involving the interpretation of tariffed retail rates, tariff rate schedules, and tariffed terms provided under this contract are subject to the jurisdiction and regulation of the utility rate commission having jurisdiction.
Change in Rates or Terms and Conditions of Service for Regulated Services.
As prescribed in 541.501(c)(1), insert a clause substantially the same as the following:
Change in Rates or Terms and Conditions of Service for Regulated Services (Date)
(a) This clause applies to the extent services furnished under this contract are subject to regulation by a regulatory body. The contractor agrees to give *_____[Except for GSA areawide contracts, contracting officer to insert their name. For GSA areawide contracts, the contracting officer must insert the following: “GSA and each areawide customer with annual billings that exceed the Simplified Acquisition Threshold at the time of contract award.”] written notice to the contracting officer, in the same manner that it customarily or regularly provides notice to its non-government customers, of (1) the filing of an application for change in rates or terms and conditions of service concurrently with the filing of the application and (2) any changes pending with the regulatory body as of the date of contract award. If, during the term of this contract, the regulatory body having jurisdiction approves any changes, the contractor must forward to the contracting officer a copy of any documentation of such changes that it customarily or regularly provides to its non-government customers within 15 days after the effective date thereof. The contractor agrees to continue furnishing service under this contract in accordance with the amended tariff, and the government agrees to pay for such service at the higher or lower rates as of the date when such rates are made effective.
(b) The contractor agrees that throughout the life of this contract the applicable published and unpublished rate schedule(s) cannot be in excess of the lowest cost published and unpublished rate schedule(s) available to any other customers of the same class under similar conditions of use and service.
(c) In the event that the regulatory body promulgates any regulation concerning matters other than rates which affects this contract, the contractor must immediately provide a copy to the contracting officer in the
( printed page 63248)
same manner that it customarily or regularly provides to its non-government customers. The government is not bound to accept any new regulation inconsistent with Federal laws or regulations.
(d) Any changes to rates or terms and conditions of service must be made a part of this contract by the issuance of a unilateral contract modification by the government, unless otherwise specified in the contract. The effective date of the change is the effective date by the regulatory body. Any factors not governed by the regulatory body will have an effective date as agreed to by the parties.
Change in Rates or Terms and Conditions of Service for Unregulated Services.
As prescribed in 541.501(c)(2), insert a clause substantially the same as the following:
Change in Rates or Terms and Conditions of Service for Unregulated Services (Date)
(a) This clause applies to the extent that services furnished hereunder are not subject to regulation by a regulatory body.
(b) After___ [contracting officer to insert date], either the government or the contractor may request a change in rates or terms and conditions of service, unless otherwise provided in this contract. Both the government and the contractor agree to enter in negotiations concerning such changes upon receipt of a written request detailing the proposed changes and specifying the reasons for the proposed changes.
(c) The effective date of any change is as agreed to by the government and the contractor. The contractor agrees that throughout the life of this contract the rates so negotiated will not be in excess of published and unpublished rates charged to any other customer of the same class under similar terms and conditions of use and service.
(d) The failure of the government and the contractor to agree upon any change after a reasonable period of time is a dispute under the Disputes clause of this contract.
(e) Any changes to rates, terms, or conditions as a result of such negotiations must be made a part of this contract by the issuance of a bilateral contract modification.
As prescribed in 541.501(c)(3), insert a clause substantially the same as the following:
Connection Charge (Date)
(a)
Charge.
In consideration of the contractor furnishing and installing at its expense the new connection facilities described herein, the government will pay the contractor a connection charge. The payment will be in the form of progress payments, advance payments or as a lump sum, as agreed to by the government and the contractor, and as permitted by applicable law. The total amount payable [s the lower of either: the estimated cost of $___[contracting officer to insert dollar amount] less the agreed to salvage value of $___[contracting officer to insert dollar amount], or the actual cost less the salvage value. As a condition precedent to final payment, the contractor must execute a release of any claims against the government arising under or by the virtue of such installation.
(b)
Ownership, operation, maintenance and repair of new facilities to be provided.
The facilities to be supplied by the contractor under this clause, notwithstanding the payment by the government of a connection charge, are the property of the contractor and must, at all times during the life of this contract or any renewals thereof, be operated, maintained, and repaired by the contractor at its expense. All taxes and other charges in connection therewith, together with all liability arising out of the construction, operations, maintenance, or repair of such facilities, are the obligation of the contractor.
(c)
Credits.
(1) The contractor agrees to allow the government, on each monthly bill for service furnished under this contract to the service location, a credit of ___[contracting officer to insert percentage] percent of the amount of each such bill as rendered until the accumulation of credits equals the amount of such connection charge, provided that the contractor may at any time allow a credit up to 100 percent of the amount of each such bill.
(2) In the event the contractor, before any termination of this contract but after completion of the facilities provided for in this clause, serves any customer other than the government (regardless of whether the government is being served simultaneously, intermittently, or not at all) by means of these facilities, the contractor must promptly notify the government in writing. Unless otherwise agreed by the government and the contractor in writing at that time, the contractor must promptly accelerate the credits provided for under subparagraph (c)(1) of this clause, up to 100 percent of each monthly bill until there is refunded the amount that reflects the government's connection costs for that portion of the facilities used in serving others.
(3) In the event the contractor terminates this contract, or defaults in performance, prior to full credit of any connection charge paid by the government, the contractor must pay to the government an amount equal to the uncredited balance of the connection charge as of the date of the termination or default.
(d)
Termination before completion of facilities.
The government reserves the right to terminate this contract at any time before completion of the facilities with respect to which the government is to pay a connection charge. In the event the government exercises this right, the contractor will be paid the cost of any work accomplished, including direct and indirect costs reasonably allocable to the completed work prior to the time of termination by the government, plus the cost of removal, less the salvage value.
(e)
Termination after completion of facilities.
In the event the government terminates this contract after completion of the facilities with respect to which the government has paid a connection charge, but before the crediting in full by the contractor of any connection charge in accordance with the terms of this contract, the contractor has the following options:
(1) To retain in place for ___[contracting officer to insert number of months] months after the notice of termination by the government such facilities on condition that—
(i) If, during such ___[contracting officer to insert number of months] month period, the contractor serves any other customer by means of such facilities, the contractor, must, in lieu of allowing credits, pay the government during such period installments in like amount, manner, and extent as the credit provided for under paragraph (c) of this clause before such termination; and
(ii) Immediately after such ___[contracting officer to insert number of months] month period the contractor must promptly pay in full to the government the uncredited balance of the connection charge.
(2) To remove such facilities at the contractor's own expense within ___[contracting officer to insert number of months] months after the effective date of the termination by the government. If the contractor elects to remove such facilities, the government has the option of purchasing such facilities at the agreed salvage value set forth herein;
( printed page 63249)
and provided further, that the contractor must, at the direction of the government, leave in place such facilities located on government property which the government elects to purchase at the agreed salvage value.
(End of clause)
Alternate I
[(Date)]. If the contracting officer determines that a nonrefundable charge is to be paid and no credits are due the government, delete paragraphs (c) and (e), renumber paragraph (d) as (c) and add the following as paragraph (d):
(d)
Termination after completion of facilities.
In the event the government terminates this contract after completion of the facilities with respect to which the government is to pay a connection charge, the contractor has the following options:
(1) To retain in place for ___ [contracting officer to insert number of months] months after the notice of termination by the government. If the contractor and the government have not agreed on terms for retention in place beyond ___ [contracting officer to insert number of months] months, then the contractor must remove the facilities pursuant to the terms of paragraph (d)(2) of this clause.
(2) To remove such facilities at the contractor's own expense within ___ [contracting officer to insert number of months] months after the effective date of the termination by the government. If the contractor elects to remove such facilities, the government then has the option of purchasing such facilities at the agreed salvage value set forth herein; and provided further, that the contractor must, at the direction of the government, leave in place such facilities located on government property which the government elects to purchase at the agreed salvage value.
As prescribed in 541.501(c)(4), insert a clause substantially the same as the following:
Termination Liability (Date)
(a) If the government discontinues utility service under this contract before completion of the facilities cost recovery period specified in paragraph (b) of this clause, in consideration of the contractor furnishing and installing at its expense, the new facility described herein, the government will pay termination charges, calculated as set forth in this clause.
(b)
Facility cost recovery period.
The period of time, not exceeding the term of this contract, during which the net cost of the new facility will be recovered by the contractor is—___ months. [contracting officer to insert negotiated duration.]
(c)
Net facility cost.
The cost of the new facility, less the agreed upon salvage value of such facility, is—$___ months. [contracting officer to insert appropriate dollar amount.]
(d)
Monthly facility cost recovery rate.
The monthly facility cost recovery rate which the government will pay the contractor whether or not service is received is—$___. [Divide the net facility cost in paragraph (c) of this clause by the facility's cost recovery period in paragraph (b) of this clause and insert the resultant figure.]
(e)
Termination charges.
Termination charges = $ [Multiply the remaining months of the facility's cost recovery period specified in paragraph (b) of this clause by the monthly facility cost recovery rate in paragraph (d) of this clause and insert the resultant figure.]
(f) If the contractor has recovered its capital costs at the time of termination there will be no termination liability charge.
As prescribed in 541.501(c)(5), insert a clause substantially the same as the following:
Multiple Service Locations (Date)
(a) At any time by written order, the contracting officer may designate any location within the service area of the contractor at which utility service must commence or be discontinued. Any changes to the service specifications must be made a part of the contract by the issuance of a bilateral contract modification to include the name and location of the service, specifying any different rate, the point of delivery, different service specifications, and any other terms and conditions.
(b) The applicable monthly charge specified in this contract must be equitably prorated from the period in which commencement or discontinuance of service at any service location designated under the Service Specifications is effective.
As prescribed in 541.501(c)(6), insert a clause substantially the same as the following:
Nonrefundable, Nonrecurring Service Charge (Date)
As provided herein, the government will pay a nonrefundable, nonrecurring charge when the rules and regulations of a contractor require that a customer pay: (1) a charge for the initiation of service, (2) a contribution in aid of construction, or (3) a nonrefundable membership fee. This charge may be in addition to or in lieu of a connection charge. Therefore, there is hereby added to the contractor's schedule a nonrefundable, nonrecurring charge for ___ [contracting officer to insert type of nonrecurring charge] in the amount of $___ [contracting officer to insert dollar amount] dollars payable.
As prescribed in 541.501(c)(7), insert a clause substantially the same as the following:
Cooperative Membership (Date)
The performance of this contract includes the requirement that the contractor must follow the bylaws of __________ [contracting officer to insert cooperative name].
Economic Price Adjustment-Deregulated Electric Supply.
As prescribed in 541.501(c)(8), insert a clause substantially the same as the following:
Economic Price Adjustment—Deregulated Electric Supply (Date)
(a) Definition.
Economic price adjustment method,
as used in this clause, means the agreed upon procedures by which pricing may be adjusted upwards or downwards throughout the contract period to include, but not limited to, the mechanism(s) to be used to adjust pricing (
e.g.,
adjustments based on regional transmission organizations and/or pricing groups), the pricing subject to adjustment, and any other requirements (
e.g.,
timing, frequency, limits on increases).
(b)
General.
This contract provides for economic price adjustment (EPA) to contract pricing based on the established EPA price adjustment method. EPA provides for the increase or decrease to contract pricing upon the occurrence of specified conditions described in the EPA price adjustment method, such as changes to charge categories incurred by the contractor and billed to the government (
e.g.,
capacity charges, transmission charges, reliability-must-run charges, Federal Energy Regulatory Commission Order 745 Charges) or changes to the formulas for calculating the amounts for such charge categories incurred by the contractor and billed to the government.
( printed page 63250)
(c)
Exceptions.
This clause does not cover—
(1) Adjustments based on statute, Executive Order, or regulatory changes other than those identified in the EPA price adjustment method;
(2) Adjustments based on a changes clause;
(3) Adjustments based on a contract clause that authorizes an adjustment based on other specified actions or conditions.
(End of clause)
Footnotes
1.
The anticipated costs is calculated as follows:
estimated .25 hours * $66.23 hourly rate * 300 (estimated impacted ordering entities). The hourly rate is based on GS-12 Step 5 base pay plus “Rest of US Locality Pay” plus “Fringe”). The hourly rate for GS-12 is $66.23 ($48.61 as a GS-12/step 5 salary OPM 2026 pay scale Rest of US, with a 36.25% ($17.62) fringe factor pursuant to OMB memorandum M-08-13). The total estimated impacted entities is calculated by estimating the number of contracting officers procuring utility services or establishing utility-related governmentwide vehicles.
2.
The anticipated costs is calculated as follows:
estimated .5 hour * $66.23 hourly rate * 92 (estimated impacted business entities). The hourly rate is based on GS-12 Step 5 base pay plus “Rest of US Locality Pay” plus “Fringe”). The hourly rate for GS-12 is $66.23 ($48.61 as a GS-12/step 5 salary OPM 2026 pay scale Rest of US, with a 36.25% ($17.62) fringe factor pursuant to OMB memorandum M-08-13). The total estimated impacted entities is calculated by estimating the number of utility-related business concerns.
3.
The anticipated costs is calculated as follows:
estimated .25 hours * $66.23 hourly rate * 12 (estimated 12 small businesses affected). The hourly rate is based on GS-12 Step 5 base pay plus “Rest of US Locality Pay” plus “Fringe”). The hourly rate for GS-12 is $66.23 ($48.61 as a GS-12/step 5 salary OPM 2026 pay scale Rest of US, with a 36.25% ($17.62) fringe factor pursuant to OMB memorandum M-08-13). The total estimated impacted entities is calculated by estimating the number of total small business concerns that offer utility services to the federal government.
www.regulations.gov
40 U.S.C. 501
48 CFR Parts 541