DFARS Part 241: Acquisition of Utility Services

In plain English

DFARS Part 241 implements FAR Part 41 for DoD acquisitions of utility services, covering purchases from both regulated and nonregulated utility suppliers. It establishes policies for dealing with independent regulatory bodies, procedures for connection and service charges, and required solicitation provisions and contract clauses. This part matters to contractors because it determines how utility service contracts are priced, what charges the Government may pay, and which clauses must be included in solicitations and contracts.

Key rules

• This part applies to purchases of utility services from both regulated and nonregulated utility suppliers, including liquefied petroleum gas when purchased from regulated suppliers. (241.102)
• DoD generally complies with the regulations, practices, and decisions of independent regulatory bodies as a matter of comity, but this does not extend to nonindependent regulatory bodies. (241.201)
• Rates set by an independent regulatory body are considered prices set by law or regulation, are sufficient to set prices without certified cost or pricing data, and are a valid basis for determining fair and reasonable prices. (241.201)
• The Government may pay a connection charge when required to cover the cost of necessary connecting facilities, but a lump-sum connection charge must be no more than the agreed cost of the connecting facilities less net salvage. (241.202)
• There is an order of precedence for contractual treatment of connection and service charges: no connection charge, termination liability, refundable connection charge, then nonrefundable connection and service charges. (241.202)
• Use a clause substantially the same as FAR 52.241-7 for regulated services and FAR 52.241-8 for unregulated or nonindependent regulatory body services. (241.501)
• Use the clause at 252.241-7000, Superseding Contract, if the Government must execute a superseding contract and capital credits, connection charge credits, or termination liability exist. (241.501-70)
• Use the clause at 252.241-7001, Government Access, when the clause at FAR 52.241-5, Contractor's Facilities, is used. (241.501-70)

Who does what

In practice

• When bidding on a utility services contract, check whether the utility is regulated by an independent regulatory body, as this affects pricing and the applicable clauses.
• If a connection charge is required, understand the order of precedence and the limitations on what the Government can pay, such as the deduction of net salvage.
• Ensure that the correct FAR and DFARS clauses are included in the solicitation and contract, as specified in 241.501 and 241.501-70.

Common pitfalls

• Assuming that DoD will comply with the regulations of a nonindependent regulatory body; the policy of comity only applies to independent regulatory bodies.
• Including a connection charge that exceeds the agreed cost of the connecting facilities less net salvage, which is not allowed for lump-sum charges.
• Failing to use the required clause for superseding contracts when capital credits, connection charge credits, or termination liability exist.

Written by AI from this part's codified text (2026-10-04); cited sections are checked against the part. A guide, not legal advice: the regulation text, the solicitation and your contract rule.