Notwithstanding FAR 46.703 and in accordance with 10 U.S.C. 8688, contracts for new construction shipbuilding, for which funds are expended from the Shipbuilding and Conversion, Navy account, shall require, as a condition of the contract, that the work performed under the contract is covered by a warranty for a period of at least one year.

(S-90) Waiver. If the contracting officer for a contract covered by the requirement for a new shipbuilding contract warranty determines that a limited liability of warranted work is in the best interest of the Government, the contracting officer may agree to limit the liability of the work performed under the contract to a level that the contracting officer determines is sufficient to protect the interests of the Government and is in keeping with historical levels of warranted work on similar vessels.