2.6 Reliability and Maintainability Warranty - EverySpec

TABLE OF CONTENTS
1. WARRANTIES 1 1.1 Scope 1
1.2 Statute 1
1.3 Definition 2
1.4 Criteria for Use of Warranties 3
1.4.1 Nature and use of the supplies or services 4
1.4.2 Cost 4
1.4.3 Administration and enforcement 4
1.4.4 Trade practice 4
1.4.5 Reduced requirements 5
1.5 Authority for use of Warranties 5
1.6 Warranty Terms and Conditions guidelines 5
1.6.1 Extent of contractor obligations 5
1.6.2 Remedies 6
1.6.3 Duration of the warranty 7
1.6.4 Notice 7
1.6.5 Markings 7
1.6.6 Consistency 8
1.7 Tailoring Warranty Terms and Conditions 8
1.8 Warranty Analyses 8
1.9 Developing the Cost Benefit Analysis 12
1.10 The Warranty Analysis Process 12
1.10.1 Analysis Steps 12
Step 1 -- Establish and Define Objectives 12
Step 2 -- Specify Ground Rules and Assumptions 14
Step 3 -- Identify Alternatives 14
Step 4 -- Determine Costs of Each Candidate 14
Step 5 -- Determine Benefits of Each Candidate 14
Step 6 -- Compare Candidates 15
Step 7 -- Evaluate Risk and Uncertainty 15
Step 8 -- Analyze/Update as Needed 15
Step 9 -- Provide Recommendations 16
Step 10 -- Document the Analysis 16
1.10.2 Personnel 16
1.10.3 Data Research, Collection, and Analysis 16
1.11 Questions Concerning the Warranty CBA 17
1.12 applicable documents 18
1.13 Conclusion 19 2. Warranty of Systems and Equipment Under Performance Specifications or
Design Criteria 21 2.1 Warranty of Supplies 21
2.2 Warranty of Technical Data 21
2.3 Warranty of Technical Publications 23
2.4 Reliability Warranty 23
2.5 Maintainability Guarantee 23
2.6 Reliability and Maintainability Warranty 25
2.7 Reliability Improvement Warranty (RIW) 25
2.8 Reliability and Maintainability Improvement Warranty (R&MIW) 25
2.9 Mean Time BETWEEN Failure--Verification Test (MTBF-VT) 27
2.10 RIW with MTBF-VT 27
2.11 R&MIW with MTBF-VT 27
2.12 Component Reliability Warranty 28
2.13 Chronic WRA/LRU Guarantee 28
2.14 Availability Guarantee 29
2.15 Logistics Support Cost (LSC) Guarantee 29
2.16 Maximum Parts Cost Guarantee 30
2.17 Spare Parts-Level Warranty 30
2.18 Utility Functions Guarantee 30
2.19 Ultimate Life Warranty 31
2.20 Commercial Service Life Warranty 31
2.21 Software Design Commitment Guarantee 31
2.22 WRA/LRU Software Configuration Control and Support Agreement 32
2.23 Fault Detection, Isolation, and Repair Warranty 32
2.24 Test and Repair Improvement Guarantee 33
2.25 Quality of Training Warranty 33
2.26 Rewarranty of Repair/Overhaul Equipment 34
2.27 Repair and Exchange Agreements 35 3. checklists 36 3.1 Warranty Development Checklist 36
3.2 WARRANTY ADMINISTRATION PLAN CHECKLIST 40
3.3 INDEPENDENT lOGISTICS ASSESSMENT(ILA) CHECKLIST 44
1. WARRANTIES
1.1 Scope It is NAVAIR policy to pursue cost effective warranties on all
procurements. The NAVAIR Program Managers (PMs) are responsible for the
development and inclusion of appropriate warranty provisions in
solicitations. The program manager should include the expertise of the
integrated product team when determining warranty requirements.
Additionally, warranty periods must be clearly stated in the solicitation.
Warranty clauses should explain what benefit would be derived by the
Government; for example, explain how the warranty would improve fleet
readiness and mission effectiveness. Because most business considerations
are metric driven, a cost/benefit analysis is required to support the
specific business case for use of a warranty. If a warranty can not be
supported by a cost/benefit analysis, then the program manager should not
invoke warranty clauses. This means the warranty clause should only be
invoked to support a smart business decision. The warranty is the
exception rather than a legal requirement. 1.2 Statute Section 847 of the 1998 National Defense Authorization Act (NDAA) repealed
10 U.S.C. 2403. Under 10 U.S.C. 2403, defense departments and agencies
could not contract for the production of a weapon system with a unit weapon
system cost of more than $100,000 or an estimated total procurement cost in
excess of $10 million unless each contractor for the weapon system provided
the government written warranties that (1) the weapon system conformed to
the design and manufacturing requirements in the contract, (2) the weapon
system was free from all defects in materials and workmanship, and (3) the
weapon system, if manufactured in mature full-scale production, conformed
to the essential performance requirements of the contract. Language from
the NDAA and Conference report is as follows:
NDAA Section 847: "REPEAL OF REQUIREMENT FOR CONTRACTOR GUARANTEES ON MAJOR WEAPON SYSTEMS
(a) Repeal.--Section 2403 of title 10, United States Code, is repealed."
Defense Departmental Letter D. L. 98-002 implemented the changes required
by the repeal of the Law requiring warranties. These changes were
incorporated into Change 4 of DOD 5000.2-R, dtd 6/11/99.
The final release of DOD 5000. 2R, dated 10, June, 2001 states in
C2.9.3.7: The PM shall examine the
value of warranties on major systems and pursue them when
appropriate and cost-effective. If appropriate, the PM shall
incorporate warranty requirements into major systems contracts in
accordance with FAR Subpart 46.7.
1.3 Definition A warranty is a promise or affirmation given by a contractor to the
government regarding the natures, usefulness, or condition of the supplies
or the performance of services furnished under the contract.
The principal purposes of a warranty in a government contract are:
To delineate the rights and obligations of the contractor and the
government for defective items and services and
To foster quality performance.
Generally, a warranty should provide:
A contractual right for the correction of defects notwithstanding any other
requirement of the contract pertaining to acceptance of the supplies or
services by the government, and
A stated period of time or use, or the occurrence of a specified event,
after acceptance by the government to assert a contractual right for the
correction of defects.
Life cycle cost estimates must support warranty cost/benefit analysis
efforts. Warranty cost can increase or decrease a system's life cycle
costs. The benefits to be derived from a warranty must be commensurate with
the cost of the warranty to the government.
In assessing the cost effectiveness of a proposed warranty, perform an
analysis which considers both the quantitative and qualitative costs and
benefits of the warranty. Consider:
Costs of warranty acquisition, administration, enforcement, and user costs,
and any costs resulting from limitations imposed by the warranty
provisions,
Costs incurred during development specifically for the purpose of reducing
production warranty risks,
Logistical and operational benefits as a result of the warranty as well as
the impact of the additional contractor motivation provided by the
warranty.
Where possible, make a comparison with the costs of obtaining and enforcing
similar warranties on similar systems.
Document the analysis in the contract file. If the warranty is not cost
effective, initiate a waiver request. 1.4 Criteria for Use of Warranties As specified in FAR 46.703 -- Criteria for Use of Warranties. "The use of warranties is not mandatory. In determining whether a warranty
is appropriate for a specific acquisition, the contracting officer shall
consider the following factors: (a) Nature and use of the supplies or services. This includes such factors
as -- (1) Complexity and function;
(2) Degree of development;
(3) State of the art;
(4) End use;
(5) Difficulty in detecting defects before acceptance; and
(6) Potential harm to the Government if the item is defective. (b) Cost. Warranty costs arise from -- (1) The contractor's charge for accepting the deferred liability
created by the warranty; and (2) Government administration and enforcement of the warranty (see
paragraph (c) of this section). (c) Administration and enforcement. The Government's ability to enforce the
warranty is essential to the
effectiveness of any warranty. There must be some assurance that an
adequate administrative system for
reporting defects exists or can be established. The adequacy of a reporting
system may depend upon such
factors as the -- (1) Nature and complexity of the item;
(2) Location and proposed use of the item;
(3) Storage time for the item;
(4) Distance of the using activity from the source of the item;
(5) Difficulty in establishing existence of defects; and
(6) Difficulty in tracing responsibility for defects. (d) Trade practice. In many instances an item is customarily warranted in
the trade, and, as a result of that
practice, the cost of an item to the Government will be the same whether or
not a warranty is included. In those
instances, it would be in the Government's interest to include such a
warranty. (e) Reduced requirements. The contractor's charge for assumption of added
liability may be partially or
completely offset by reducing the Government's contract quality assurance
requirements where the warranty
provides adequate assurance of a satisfactory product." The use of warranties is not mandatory. In determining whether a
warranty is appropriate for a specific acquisition, the contracting officer
shall consider the following factors: 1.4.1 Nature and use of the supplies or services This includes such factors as:
Complexity and function,
Degree of development,
State of the art,
End use,
Difficulty in detecting defects before acceptance, and
Potential harm to the government if the item is def