Clauses · FAR · Insurance and liability
FAR 52.246-23 Limitation of Liability
Does the regulation require it to flow down?
No
No mandate and no subcontract paragraph. Unusually, this clause is RELIEF, not duty: the Government elects to act as self-insurer (46.803(a)). Primes flow it down to hand the sub the same relief they got — but often in a narrowed form. GDMS's SCM-TMP-005 (2026-07-20) redefines it: "'Acceptance of supplies delivered under this Subcontract' shall mean acceptance by the Government under the prime Contract of the supplies delivered hereunder or as incorporated in supplies delivered to BUYER." That single sentence pushes the moment the sub's shield switches on from the sub's own delivery to Government acceptance of the prime's end item — potentially years later.
A clause can reach your subcontract without a mandate. Once it is in your document, it is a contract term all the same. The missing mandate is a fact about the regulation. It is not a ruling on your order.
Checked against acquisition.gov on 2026-08-05 · edition FEB 1997 · base v0.9.3 Read the text ↗
What it makes you produce
One item for your checklist.
Nothing to send now
It does not hold the order. It decides what money moves later — what you can claim, what can be claimed from you, and what can be held back — and none of that changes after signature.
The bill for Government property that a defect in your accepted supplies damages — the Government carries it, and the delivered supplies themselves stay outside that and remain yours
FAR 52.246-23(a)
When it is used
FAR 46.805(a)(1): contracts requiring delivery of end items that are NOT high-value items, when the amount is expected to exceed the SAT ($350k) and the contract is subject to subpart 46.8. FAR 46.801 is the real gate: subpart 46.8 does NOT apply to commercial products or commercial services, and applies only to contracts other than those for information technology (including telecommunications), construction, architect-engineer services, and maintenance or rehabilitation of real property. High-value items — normally over $100,000 per unit AND designated as such by the CO (46.802) — take 52.246-24 instead; a mixed order takes both plus Alt I of 52.246-24 (46.805(a)(3)). Below the SAT the clause is not required, but the CO may insert it at the contractor's specific request and may seek a price reduction for doing so (46.805(b)).
Read closely
What this clause leaves uncovered is the expensive half. (a) yields to any remedy expressly provided elsewhere in the contract, so a warranty or indemnity article takes the cover back out. (b) switches it off for willful misconduct or lack of good faith by managerial personnel, defined in the clause. (c) is the counterintuitive paragraph: insurance carried, or a self-insurance reserve established, makes you liable to the extent of it, so the size of the tower is the size of the exposure. Where a prime redefines acceptance as Government acceptance of its own end item, everything before that date sits outside.
The 1 template that name it, with the line
Source: acquisition.gov, FAR 52.246-23, FAR 46.805(a)(1), FAR 46.801, FAR 46.802, FAR 46.803 and FAR 52.212-4(p); RFO Part 46 model text (verified 2026-08-05)
This is research, not legal advice. It states what the regulation says about this clause and cites the paragraph behind it. It does not rule on your order, and it does not rule on whether a prime's markings are correct.