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What tasks will the COR need to perform to successfully administer government property?

The COR must:

1. Supervise the initial transfer of government property

2. Monitor the contractor's use of government property

3. Monitor the disposition of government property.

Supervising the Initial Transfer of Government Property

What is the COR's role in supervising the initial transfer of government property?

The administration of government property starts at the beginning of the contract (i.e., when work on the contract begins) and ends when the government contract expires. (Refer to FAR Subpart 45.5.) The COR may be required by the CO to perform the following three steps at the start of the contract:

1. Monitor delivery of government property.

2. Monitor the contractor's property management system.

3. Resolve deficiencies in the contractor's property management system.

1. Monitoring delivery of government property

The COR should examine the contract at its onset to see what, if any, data, equipment, or other property the government has agreed to furnish the contractor. When monitoring the delivery of government property to the contractor, the COR should:

- Establish an inventory list of the property being delivered

- Set up management requirements (i.e., review the contractor's property management system)

- Inspect government-provided equipment

- Coordinate agency property information with the contractor to ensure complete inventory and accountability for all property or equipment furnished

- Prepare a report documenting all of the above actions and information.

Also, the COR should discuss the following with the contractor:

- The date specified in the contract for delivering the property to the contractor

- If no contract date is specified, the date that the contractor will need the property in order not to impair its ability to meet the contract completion date

- Location of the property[1]

- The condition of the property and any needed repairs, corrections, or other actions that must be taken to avoid delaying contract completion[1]

- Any special instructions or limitations regarding use of the property.[1]

Because the government may become subject to a claim by the contractor if there are any changes to the contract's terms, the COR must ensure that any inconsistencies or delays in the delivery of government property can be remedied by the CO.

Possible claims a contractor could make against the government include the following:

- GFP was not delivered to the contractor by the date agreed to in the contract, or, if no date was specified, the GFP was not delivered by a sufficiently early date to permit the contractor to finish the contract work by the agreed completion date

- GFP was not delivered in a condition suitable for the intended use of the property (e.g., poor copies of documents, illegible data)

- GFP was delivered without crucial information concerning techniques or conditions of the property's use, and the contractor is unable to use the property effectively or for its intended use.

Once a contractor has identified a problem with GFP or its delivery, it should be advised to submit a notice, in writing, to the CO. The following might occur:

If the property:

Then...

was delivered late

the CO may:

Extend the time for completion of the contract

Increase the estimated cost of, and fixed fee for, the work

Make some other equitable adjustment.

is not in a condition suitable for the intended use

the CO might direct the contractor to:

Repair the property

Modify the property

Return the property

Otherwise dispose of the property.

The contractor's right to claim contractual adjustment in these circumstances is granted by the government property clause in the contract. The contract adjustments that the contractor is entitled to claim include:

- An extension of the time for completion of the contract

- An increase in the estimated cost of, and fixed fee for, the work.

2. Monitoring the contractor's property management system

The property management system is a tracking method designed by the contractor to monitor and control the proper use of GFP in its possession. Once the contractor takes possession of the GFP, the COR should:

- Prepare reports on the contractor's overall property management system

- Perform periodic property audits

- Record any notification from the contractor that the government-furnished equipment is in need of repair

- Submit a written report of any shortages, losses, damage, destruction, or misuse of GFP to the CO.

Once the contractor takes possession of the government property, the contractor should:

- Incorporate the property into the contractor's property management system

- File a statement of any overages or shortages of or damages to the property as shipped

- Identify, mark, and record the property

- Furnish a receipt to the government, if necessary.

After reviewing the contractor's property management system, the COR should ensure that the contractor:

- Maintains an approved property management system

- Obtains all required approvals for use of the property

- Uses the property only for those purposes authorized in the contract

- Maintains, protects, and preserves the property

- Discloses the need for major repair, replacement, or other capital rehabilitation work.

3. Resolving deficiencies in the contractor's government property control system

The agency responsible for contract administration will conduct an analysis of the contractor's property management policies, procedures, practices, and systems. This analysis is to be accomplished as frequently as conditions warrant, in accordance with agency procedures. The property administrator will notify the contractor in writing when the contractor's property management system does not comply with contractual requirements.

The CO may request that the COR review the contractor's property management system to ensure compliance with the government property clause of the contract. If the contractor's property management system does not adequately maintain and monitor government property under the contract, the COR should:

- Notify the contractor of deficiencies in the system

- Specify, in writing, the required corrections needed and establish a schedule for completion of corrections

- Monitor compliance with the schedule of corrective actions.

If the deficiency is not corrected, the COR will notify the CO, who will send a written deficiency notice to the contractor advising it that its property management system will not be approved.

  • [1] This information may or may not be specified in the contract. If not, the COR will need to be sure to document these discussions with the contractor for future reference.
  • [2] This information may or may not be specified in the contract. If not, the COR will need to be sure to document these discussions with the contractor for future reference.
  • [3] This information may or may not be specified in the contract. If not, the COR will need to be sure to document these discussions with the contractor for future reference.
 
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