Contractor and industry groups expressed support for a new proposal by the General Services Administration to amend the GSA Acquisition Regulation to supplement and expand the limited waiver of consequential damages currently provided in FAR 52.212-4, Contract Terms and Conditions – Commercial Items.  The current provisions are intended to promote commercial acquisition practices by limiting liability for commercial items that may be defective or deficient but have been accepted by the government.  The contractor and industry groups hope to go further and protect contractors from consequential damages that have or have not been accepted.  The groups encourage the change but advocate a broadening of the FAR 52.212 clause to protect companies from open-ended and unlimited liability of consequential damages that may arise from the performance of commercial services or products.  They state that currently contractors include a “risk premium” in the contract price to account for potential harm for consequential damages and the government can avoid such increased costs if the contract terms completely protected contractors.

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