A certificate of conformance (see 46.315) may be used in certain instances instead of source inspection (whether the contract calls for acceptance at source or destination) at the discretion of the contracting officer if the following conditions apply:

1. (a) Acceptance on the basis of a contractor’s certificate of conformance is in the Government’s interest.

2. (b)

   1. (1) Small losses would be incurred in the event of a defect; or

   2. (2) Because of the contractor’s reputation or past performance, it is likely that the supplies or services furnished will be acceptable and any defective work would be replaced, corrected, or repaired without contest. In no case shall the Government’s right to inspect supplies under the inspection provisions of the contract be prejudiced.