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ADMINISTRATION OF GOVERNMENT PROPERTY

The COR is often the individual responsible for assisting the CO in monitoring government property under a contract. This section will identify the tasks that the COR will be required to perform to ensure that the property is properly transferred, used, and disposed of. See Chapter 3, Government Property Considerations, for basic definitions and information regarding the decision to furnish property under the contract.

What is the FAR's policy on administration of government property?

FAR 45.102 states that:

Contractors are ordinarily required to furnish all property necessary to perform government contracts. Contracting officers shall provide property to contractors only when it is clearly demonstrated:

To be in the government's best interest

That the overall benefit to the acquisition significantly outweighs the increased cost of administration, including ultimate property disposal

That providing the property does not substantially increase the government's assumption of risk, and

That government requirements cannot otherwise be met.

The contractor's inability or unwillingness to supply its own resources is not sufficient reason for the furnishing or acquisition of property.

What are some key terms the COR needs to know to successfully carry out his or her property administration duties?

The following are key terms related to the administration of government property:

Property

Government property

Government-furnished property

Contractor-acquired property

Contractor's property management system

Property records

Property administrator

Plant clearance officer.

Property denotes all tangible property, both real and personal, and may include:

Equipment

Material

Special tooling

Special test equipment

Plant equipment.

Government property refers to all property owned or leased by the government under the terms of a contract. It includes both government-furnished property and contractor-acquired property. Government property includes material, equipment, special tooling, special test equipment, and real property. Government property does not include intellectual property and software.

Government-furnished property (GFP) is property in the possession of, or directly acquired by, the government and subsequently furnished to the contractor for performance of a contract. It includes, but is not limited to, spares and property furnished for repair, maintenance, overhaul, or modification. It also includes contractor-acquired property if the contractor-acquired property is a deliverable under a cost contract when accepted by the government for continued use under the contract.

When contractors are issued GFP, the government will:

Eliminate to the maximum practical extent any competitive advantage that might arise from using such property

Require contractors to use government property to the maximum practical extent in performing government contracts

Permit the property to be used only when authorized

Charge appropriate rentals when the property is authorized for use on other than a rent-free basis

Require contractors to review and provide justification for retaining government property not currently in use

Ensure maximum practical reutilization of contractor inventory within the government.

Contractor-acquired property is property acquired, fabricated, or otherwise provided by the contractor for performing a contract and to which the government has title.

A contractor's property management system is a method of recording, identifying, and marking government property, used while working under a government contract, that the government requires the contractor to establish.

However, agencies will not generally require contractors to establish property management systems that are separate from a contractor's established procedures, practices, and systems used to account for and manage contractor-owned property.

Agencies must allow and encourage contractors to use voluntary consensus standards and industry leading practices and standards to manage government property in their possession.

Voluntary consensus standards means common and repeated use of rules, conditions, guidelines or characteristics for products, or related processes and production methods and related management systems.

Property records are the records created and maintained by the contractor in support of its stewardship responsibilities for the management of government property.

At a minimum, the contractor's property management system should:

Be reasonably accessible to authorized government personnel

Provide a complete, current, and auditable record of all transactions

Contain basic information about the GFP being used, including:

- The name of the agency from which the property was acquired

- A description of the property

- The quantity of items being used

- The unit price of each item

- The contract number

- The location of the property

- The disposition or transfer of GFP.

Include other information, such as:

- Records of all government-furnished materials

- Special reports, including information on property being returned for rework, if applicable

- A listing of GFP being used for other contracts

- An explanation of how property will be safeguarded from tampering or destruction.

Information on the contractor's property management system will become part of the government's official contract administration office contract file.

A property administrator is a government employee designated as responsible for monitoring and maintaining the GFP inventory.

A plant clearance officer is an authorized representative of the CO, appointed in accordance with agency procedures, responsible for screening, redistributing, and disposing of contractor inventory from a contractor's plant or work site.

 
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