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required in another area. Various possibilities must be considered and
addressed in the contract.
Payment holdbacks may also be used as a means for guaranteeing perfor-
mance or at least keeping the vendor focused on the later stages of deployment.
Consideration can also be given to obligating the vendor to repay all moneys
in the event the entire System does not satisfy the contractual performance
requirements. While not traditional guarantees, these clauses help mitigate the
risk associated with the procurement. This is an area in which legal counsel will
provide valuable assistance.

9.7.6.7 Warranty
As noted previously, the warranty expresses the vendor’s promise of how the
hardware and software will perform and for how long it will perform without
problems. Requirements differ by jurisdiction; however, consideration should
be given to any warranty exclusions. Warranty language should be read in
concert with the acceptance testing requirements and the maintenance provi-
sions. In this section, the government may wish to propose a period for the war-
ranty to run and define when the warranty commences.

9.7.6.8 Damages Clauses
The damages clauses address the “what ifs” of an AFIS implementation and
deployment, such as what if the vendor does not deliver on time, what if the
vendor fails to meet acceptance testing, what if the vendor fails to meet the
maintenance standards or the availability requirements, or any of the other crit-
ical contractual requirements. These clauses are commonly subject to negotia-
tion because of the multitude of possible ways to address them. For example,
in a damages clause addressing late delivery, a critical component will be the
process for determining which party is responsible for the slip in schedule. It
would be unfair to hold the vendor to a delivery schedule if inaction or actions
of the government delayed the process, for example, if the government agreed
to provide specific environmental conditions for the hardware and failed to do
so on schedule.
The vendor may also seek to limit or cap its total liability under the contract.
It may wish to cap to the amounts paid under the contract or to a specific dollar
amount. Often such clauses seek to cover most every aspect of the contractual
relationship. Careful consideration must be given to such clauses, based on an
examination of the possible risks and nature of the procurement.

9.7.6.9 Indemnification Clause
Similar to warranty provisions, an indemnification clause is a vendor’s promise
that it will stand behind the actions of its employees and the operation of the