1. FAR PART 45 – Government Property

2. FAR PART 45
Under this FAR, contractors are required to maintain property management systems that establish the contractor’s processes for receiving, safeguarding, and disposing of Government Property.

3. FAR PART 45
Sets forth Policy and Procedures for Providing Government Property (GP)
Definitions peculiar to GP –
Policy on Providing –
Contractor PMS Compliance –
Contract Clauses for GP –
Solicitation & Evaluation Procedures re: GP – 45.2
Use and Rental of GP – 45.3
Title to GP – 45.4
Support Property Administration for GP – 45.5
Reporting, Reutilization and Disposal of GP – 45.6

4. What is Government Property?
“all property owned or leased by the government…[and] includes both Government-furnished property and contractor-acquired property.”
Real Property
Equipment
Special Tooling
Special Test Equipment
Repairables
Material
Side NOTE:
Intellectual Property is NOT covered by this rule.
One point of clarification – Government property does not include “items” the contractor leases – even if the Government pays for it in full or in part. When the contractor leases property, even though the Government may pay for that lease, either in part or in full, there is no transfer of title and the Government does not really care what the contractor does with the items. The contractor, the lessee, and the leasing company, the lessor, have a contractual relationship – and the Government is not involved with that issue.vii The leasing company retains title to the property – the English translation – if it is not REAL PROPERTY it is PERSONAL PROPERTY.

5. CONTRACT- ACQUIRED PROPERTY
“property acquired, fabricated, or otherwise provided by the contractor for performing a contract, and to which the Government has title.”

6. GOVERNMENT- FURNISHED PROPERTY
“property in the possession of, or directly acquired by, the Government and subsequently furnished to the contract for performance of a contract”.

7. PROPERTY RECORDS
“the records created and maintained by the contractor in support of its stewardship responsibilities for the management of Government Property.”
Such records are to be appropriately safeguarded and retained for four years
These systems may be based on voluntary consensus standards or industry-leading practices and are overseen by and subject to approval of a property administrator, who represents the contracting agency and is an authorized representative of the CO.

8. 45.105 Contractor’s Property Management System Compliance
a) “The agency responsible for contract administration shall conduct an analysis of the contractor’s property management policies, procedures, practices, and system
b) The property administrator shall notify the contractor in writing when the contractor’s property management system does not comply with contractual requirements, and shall request prompt correction of deficiencies…” Failure to take corrective action may result in:
Revocation of the Government’s assumption of risk
Other rights and remedies available to the Contracting Officer

9. Property Records – Contractor’s Responsibility
“Contractors shall develop property management plans and systems, at the contract, program, site or entity level that reflect their efforts to obtain best value”
Acquisition
Receipt
Records
Physical Inventory
Sub-contractor control
Reports
Utilization
Maintenance
Contract close-out

10. PROPERTY PLAN Description of System to Manage Property Outcomes
Standards Implemented
E Standard Practice for Establishing the Guiding Principles of Property Management
E Standard Practice for Administrative Control of Property
E Standard Practice for Equipment Management Process Maturity (EMPM) Model
Self Assessment
Property Covered
Company Property; Customer Property; All Property
PMPs are to be Executive Level Documents where the contractor BRIEFLY describes its Property Management Processes

11. FAR 52.245-1 Applicability of the Property Clause
All cost-reimbursement, time and material, and labor hour type solicitations and contracts
All fixed-price solicitations and contracts when the Government will provide Government Property (e.g. FP contract awarded on the basis of submission of cost or pricing data)
All Contracts or modifications awarded under FAR Part 12 procedures where Government Property that exceeds the simplified acquisition threshold
– Note: Service contracts for repair are not excluded--they still require the property clause!

12. FAR 52.245-1 Alternate Clauses
ALTERNATE I: used in contracts with adequate price competition, i.e., Fixed Price.
Different liability provision. For such contracts, the contractor is liable for loss, damage, destruction, theft
Contractor not responsible for normal wear and tear or consumption in performing the contract
Government position is that it has already paid for any insurance required by the award – any additional coverage for loss, damage, destruction, or theft would require
ALTERNATE II: used in contracts involving basic or
applied research at non profit institutions of higher education or non profit organizations involved in scientific research
Provides Vesting of TITLE to Contractor Acquired Property in the Non-Profit

13. FAR 52.245-2 Government Property Installations Operation Services
Used in service contracts to be performed on a Government installation when Government- Furnished property will be provided
This Clause provides for the initial provisioning of property; the Government is not responsible for repair or replacement
Property provided “as-is”
When Property is provided “as-is”:
– Government makes no warranty regarding the suitability for use of the Government property specified in the contract
– Must be carefully inspected prior to acceptance
– May be rejected if unsuitable
– Once accepted, contractor is responsible for replacement of the property at Contractor expense
– The Contractor shall have title to all replacement property and shall continue to be responsible for
contract performance

14. FAR USE AND CHARGES
Describes the amount of rent that will be charged for use of government property.
Removes the term “equipment” and substitutes it with “plant equipment”
Personal property of a capital nature, including equipment, machine tools, test equipment, furniture and vehicles.
Special tooling and Special Test Equipment are not included

15. SOLICITATION REQUIREMENTS AND EVALUATION
The contracting officer shall insert a listing of the Government property [available] to be offered in all solicitations where Government-furnished property is anticipated (see FAR ).
The solicitation shall describe the evaluation procedures to be followed, including rental charges or equivalents and other costs or savings to be evaluated, and shall require all
offerors to submit the following information with their offers

16. SOLICITATION REQUIREMENTS AND EVALUATION
FAR – Solicitation
The solicitation shall include…(c) (4) The voluntary consensus standard or industry leading practices and standards to be used in the management of Government property, or existing property management plans, methods, practices, or procedures for accounting for property.
FAR – Evaluation procedures
The contracting officer shall ensure the offeror’s property management plans, methods, practices, or procedures for accounting for property are consistent with the requirements of the solicitation.

17. 42.302(a)(26) through (30)
(26) Perform property administration (see Part 45).
(27) [Reserved]
(28) Perform necessary screening, redistribution, and disposal of contractor inventory.
(29) Issue contract modifications requiring the contractor to provide packing, crating, and handling services on excess Government property. When the ACO determines it to be in the Government’s interests, the services may be secured from a contractor other than the contractor in possession of the property.
Discusses the Contract Administration Delegation:
THERE ARE ACTIONS within FAR PART 45 that require the CO’s AUTHORITY

18. 42.302(a)(26) through (30)
(30) When contractors request Government property—
(i) Evaluate the contractor’s requests for Government property and for changes to existing Government property and provide appropriate recommendations to the contracting officer;
(ii) Ensure required screening of Government property before acquisition by the contractor;
(iii) Approve use of Government property on a noninterference basis in accordance with the clause at , Use and Charges;
(iv) Ensure payment by the contractor of any rental due; and
(v) Ensure reporting of items no longer needed for Government production.
Discusses the Contract Administration Delegation:

19. DISPOSAL OF GOVERNMENT PROPERTY
Contractor, for GP, is required to:
PREPARE FOR SHIPMENT
DELIVER FOB ORIGIN
Government MAY have to Pay for the Disposal of GP That May:
Be Hazardous
Require Demilitarization
Exceed Contractually Authorized PROCESSING TIME (120 Days) (Yes, the Government may have to PAY!)

20. DO Ensure That The GP Clause Is In The Contract (When Applicable)
DO Ensure the PROPER LISTING of GFP
Furnished WITH Government Warranties
Furnished “AS IS”
Furnished under FAR
Do Contact The Appropriate Government Property Administrator If You Have Technical Questions About GP!
DO Mod The Contract When Adding Or Decreasing GP