If the Government accepts a commercial deliverable on a fixed-price contract and later finds a defect, who bears the cost of correcting the defect?

In a fixed-price contract, the contractor assumes the risk that the deliverables will meet the agreed-upon specifications and quality standards at the time of acceptance. Once the Government accepts the commercial deliverable, any defects that are discovered afterward are typically the responsibility of the contractor to correct, as the acceptance signifies that the Government has deemed the deliverable satisfactory at that point in time.

This contractual arrangement is designed to incentivize contractors to diligently ensure the quality of their products or services prior to delivering them. Therefore, if a defect is found after acceptance, it is expected that the contractor will cover the costs associated with remedying the situation. In this context, the financial responsibility lies with the contractor, reflecting the principle that they are accountable for delivering products that meet the contract's requirements without additional cost to the Government after acceptance.