Inspection of Construction
Also known as: Construction inspection clause, three-phase inspection
What you do here: Run a construction quality-control program and give the government access to inspect the work
At a Glance
- Applies to
- Fixed-price construction contracts (FAR Part 36)
- What you run
- A contractor quality-control (CQC) program adequate to ensure the work conforms
- Governing authority
- FAR 52.246-12, prescribed by FAR 46.311
- Government's rights
- Inspect and test all work at all times; require correction or re-execution of nonconforming work
- Who bears correction cost
- The contractor — correcting defective construction is at your expense
What It Is
FAR 52.246-12, Inspection of Construction, is the Inspection clause on fixed-price construction contracts, and it reflects how construction quality actually works — the government relies heavily on the contractor's own quality-control program because much of the work gets covered up as the project proceeds. The clause requires you to maintain an adequate inspection system and quality-control program and to perform the inspections and tests required to ensure the work conforms to the contract, keeping and furnishing records of that work. It reserves the government's right to inspect and test all work at all reasonable times and places before acceptance, and to direct that work be inspected. Critically, it addresses covered work: if the government hasn't inspected work that's about to be covered up, you may have to uncover it for inspection and recover it afterward — and if you cover work before required inspection, you can be required to uncover it at your expense. When work is defective or doesn't conform, the government can require you to correct or re-execute it at no increase in the contract price, and if you don't proceed promptly the government can have the work corrected by others and charge you, or terminate for default. Federal construction contracts commonly implement all this through a formal three-phase control system (preparatory, initial, and follow-up phases) that the government uses to verify each definable feature of work. In plain terms: on construction you own the quality-control program, you give the government access to inspect, and defective work comes out and goes back in on your dime.
When You See It
- On fixed-price construction contracts under FAR Part 36.
- When the contract requires a contractor quality-control (CQC) program and a three-phase control system.
- When work is about to be covered up and the government needs to inspect it first.
- When construction is defective or nonconforming and the government requires correction or re-execution.
Key Features
| Feature | What It Means |
|---|---|
| You run the quality-control program | Construction relies on your CQC program to catch defects, because work is progressively covered — the government inspects, but you control quality day to day. |
| Covered-work rule | Work covered before required inspection may have to be uncovered for inspection at your expense; plan inspections before you close things up. |
| Correct or re-execute at no added price | Defective or nonconforming work must be corrected or re-executed at no increase in the contract price — the cost is yours. |
| Government access at all times | The government may inspect and test all work at all reasonable times and places before acceptance and can direct inspection of any work. |
| Default and outside correction | If you don't correct promptly, the government can have others fix it and charge you, or terminate for default. |
The SDVOSB Angle
Construction set-asides carry the highest rework risk of any work type because defects can be buried in completed work and then have to be torn out. For an SDVOSB construction prime, the CQC program isn't bureaucratic overhead — it's the thing that keeps a re-execution order from eating the job. Schedule government inspections *before* you cover definable features of work, run the preparatory and initial phases the three-phase system requires, and document each feature so a later dispute is decided on your records. Watch the interaction with bonding and cash flow: correction at no added price plus a construction progress-payment schedule that holds retainage means defects hit your liquidity twice. And because construction primes lean on subcontractors, remember the self-performance limits — a construction SDVOSB generally must perform at least 15% of the cost with its own employees (25% for specialty trade) — while still owning every sub's quality in CPARS.
How to Handle It
- Stand up a contractor quality-control (CQC) program and, where required, a three-phase (preparatory/initial/follow-up) inspection system.
- Schedule government inspection of work before you cover it — avoid an uncover-at-your-expense order.
- Document each definable feature of work; contemporaneous records decide later disputes over conformance.
- Correct or re-execute defective work promptly to avoid outside correction charges or a default termination.
- Track how correction-at-no-added-price and retainage together hit your cash flow, and coordinate with your surety.
Watch Out For
- Covering up work before the required inspection — you may have to uncover and re-cover it at your own expense.
- Under-resourcing the CQC program, so defects surface at government inspection instead of during your own control.
- Underestimating how correction-at-no-added-price plus retainage strains a small construction firm's liquidity.
- Forgetting the construction self-performance limit (generally 15%, or 25% for specialty trade construction) while managing subs.
Run the Numbers
Frequently Asked
What is the Inspection of Construction clause?
FAR 52.246-12, Inspection of Construction, is the Inspection clause on fixed-price construction contracts. It requires the contractor to maintain a quality-control program and perform the inspections and tests needed to ensure the work conforms, gives the government the right to inspect and test all work before acceptance, and lets the government require the contractor to correct or re-execute defective or nonconforming work at no increase in the contract price. Work covered up before required inspection may have to be uncovered at the contractor's expense.
What is a three-phase inspection system in federal construction?
The three-phase control system is how federal construction quality control is commonly implemented: a preparatory phase (before a feature of work starts — reviewing submittals, materials, and requirements), an initial phase (at the start of the work, to check that the crew and methods produce conforming work), and a follow-up phase (ongoing checks to ensure continued conformance). It operationalizes the contractor quality-control program the Inspection of Construction clause requires and gives the government defined points to verify each definable feature of work.
Who pays to fix defective construction work?
The contractor. Under FAR 52.246-12, defective or nonconforming construction must be corrected or re-executed at no increase in the contract price. If work was covered up before a required inspection, the contractor can be required to uncover it, allow inspection, and recover it — at the contractor's expense. If the contractor fails to correct promptly, the government can have the work done by others and charge the contractor, or terminate for default. Realistic rework and inspection allowances belong in a construction bid.
Primary Sources
- FAR 52.246-12 — Inspection of Construction
- FAR 46.311 — Fixed-price construction contracts
- FAR Part 36 — Construction and Architect-Engineer Contracts
Plain-English reference, not legal advice. Quality, inspection, acceptance, and warranty rules are fact-specific, and the FAR and agency supplements are amended from time to time — always read the current FAR text, follow the inspection and acceptance requirements in your specific contract clauses, confirm the requirements with the contracting officer, and consult qualified counsel before relying on an inspection, acceptance, rejection, or warranty position.
Change log (1)
- LaunchedPublished the federal contract quality assurance, inspection & acceptance reference covering how the government checks, rejects, accepts, and warrants an SDVOSB's work on a set-aside — government contract quality assurance (FAR Part 46), the Inspection of Supplies (52.246-2), Services (52.246-4), and Construction (52.246-12) clauses, higher-level quality requirements / ISO 9001 & AS9100 (52.246-11), acceptance and its near-finality (FAR Subpart 46.5), the rejection and correction of nonconforming work (FAR 46.407), the latent-defect / fraud / gross-mistake exceptions to conclusive acceptance, and contract warranties (FAR Subpart 46.7 / 52.246-17 to -21) — each with an at-a-glance quick-facts card, a when-you-see-it list, a key-features table, an SDVOSB-specific angle, a how-to-handle-it checklist, watch-outs, FAQPage, Article, Dataset, and BreadcrumbList structured data, primary-source FAR citations, and cross-links into the glossary, regulation explainers, clauses, forms, contract types, payment methods, protest & dispute forums, how-to guides, FAQ, and the limitations-on-subcontracting and price-to-win calculators.