If the Government accepts a non-commercial deliverable on a fixed-price contract and a defect is later found which was not discoverable upon reasonable inspection, who bears the cost of correcting the defect?

In the context of a fixed-price contract, when the Government accepts a non-commercial deliverable, it assumes that the deliverable meets the agreed-upon specifications and quality standards at the time of acceptance. If a defect is later discovered that could not have been reasonably discovered during inspection, the responsibility for correcting that defect typically falls to the contractor.

The rationale behind this is based on the principles of fixed-price contracting, where the contractor is held accountable for the performance of their deliverable. The contractor assumes the risk for any defects or issues that arise after acceptance, as they have agreed to deliver a product or service that fulfills specific criteria. Even if the defect was not apparent at the time of acceptance, the contractor remains liable for ensuring that the deliverable is free from defects unless otherwise specified in the contract.

This principle encourages contractors to maintain a high standard of quality and thoroughness in their work to minimize potential defects after contract acceptance. In contrast, the other parties involved, such as the project manager, the Government, or a supplier, would not be responsible for these defects under the terms of the fixed-price contract.