[Federal Register Volume 69, Number 65 (Monday, April 5, 2004)]
[Rules and Regulations]
[Pages 17741-17763]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-7405]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 1, 2, 8, 45, 49, 52, and 53
[FAC 2001-22; FAR Case 1995-013; Item I]
RIN 9000-AH60
Federal Acquisition Regulation; Government Property Disposal
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Final rule.
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SUMMARY: The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council (Councils) have agreed on a final rule
amending the Federal Acquisition Regulation (FAR) to simplify
procedures, reduce recordkeeping, and eliminate requirements related to
the disposition of Government property in the possession of
contractors.
DATES: Effective Date: May 5, 2004.
FOR FURTHER INFORMATION CONTACT: The FAR Secretariat at (202) 501-4755
for information pertaining to status or publication schedules. For
clarification of content, contact Ms. Jeritta Parnell, Procurement
Analyst, at (202) 501-4082. Please cite FAC 2001-22, FAR case 1995-013.
SUPPLEMENTARY INFORMATION:
A. Background
DoD, GSA, and NASA published a proposed rule in the Federal
Register at 65 FR 1438, January 10, 2000, to simplify the management
and disposition of Government property in the possession of
contractors. The FAR Council agreed to publish a final rule revising
FAR Subpart 45.6, entitled Reporting, Reutilization, and Disposal.
Comments on the other portions of the proposed Part 45 rewrite are
still being evaluated.
Forty-five respondents provided public comments. Nineteen of the
forty-five respondents provided comments on the reporting,
reutilization, and disposal of Government property provisions in the
proposed rule, and those comments were considered in drafting the final
rule. Consideration of these comments resulted in only minor changes to
the rule. The streamlining of the disposal process and the reductions
in reporting requirements made it imperative that we finalize this FAR
subpart. The resolution of the significant categories of comments
concerning reporting, reutilization, and disposal of Government
property follows:
Summary of Comments Received/Disposition
PR: Proposed Rule; FR: Final Rule
1. PR: 45.001, 52.245-2, and 52.245-7. FR: 45.601, 52.245-2(i),
52.245-5(i). Recommend you revisit your definition of ``sensitive
property'' and separate the different types of materials, similar to
the separate inventory disposal schedules called for in 52.245-
2(g)(3)(B)(iii) and 52.245-7(g)(3)(B)(iii). Nonconcur. Under this final
rule, the inventory disposal schedules do not separate the different
types of materials.
2. Allow contractors to return Government property to the
Government and have the Government dispose of the property. Nonconcur.
Government cost would be prohibitive if all property was returned
(shipping, packing, crating & handling).
3. PR: 45.506. FR: 45.603, 45.604-2. Do not allow unilateral
abandonment by the Government on contractor premises. Nonconcur.
Abandonment is consistent with current policy and to do otherwise would
increase costs to the Government.
4. FR: 45.605-1, 52.245-2(i)(8)(iii), 52.245-5(i)(8)(iii). Do not
impose demilitarization on the contractor. Nonconcur. Items have to be
demilitarized. It is more cost effective for the Government to require
the contractor to perform or be responsible for demilitarization of the
property on a reimbursable basis than ship the property to the
Government and have the Government demilitarize the property. [VOL]*[/
VOL][NO]*[/NO][DATE]*[/DATE][RULES][RULE][PREAMB][AGENCY]*[/
AGENCY][SUBJECT]*[/SUBJECT][/PREAMB][SUPLINF][HED]*[/HED]?]?
5. PR: 45.507-2(b)(1). FR: 45.606-3(b), 52.245-2(i)(8)(i), 52.245-
5(i)(8)(i). Disposition of scrap. Recommend changing to 30 days.
Partially concur. We revised the timeframe for disposition instructions
from 60 days to 45 days.
6. PR: 52.245-2(g)(2)(i). FR: 45.602-1(c), 52.245-2(i)(2)(i),
52.245-5(i)(2)(i). Delete. The cost burden of attempting to have
vendors accept ``returned inventory'' far out-weighs the costs saved in
this exercise. Nonconcur. Government experience has shown that property
is returned both before and after being reported excess to plant
clearance demonstrating cost recovery (it only applies to new
property). This is the current FAR requirement.
7. PR: 52.245-2(g)(4)(i). FR: 52.245-2(i)(4)(i), 52.245-5(i)(4)(i).
Thirty days following the contractor's determination that a Government
property item is no longer required for performance of the contract is
too frequent. Nonconcur. We believe these timeframes are reasonable and
will instill discipline to the process and is consistent with
commercial practices. This is an effort to expedite the process and
reduce costs.
8. PR: 52.245-2(g)(5). FR: 52.245-2(i)(5), 52.245-5(i)(5). Quantity
reductions found after inventory schedule has been submitted should not
be grounds for rejecting an inventory schedule. Nonconcur. The
contractor is expected to submit accurate inventory disposal schedules.
Adjustment or rejections are based on the severity or number of errors
on a particular schedule.
9. PR: 52.245-2(g)(6). FR: 52.245-2(i)(6), 52.245-5(i)(6). The
proposed statement reads; ``The Contractor shall provide the Plant
Clearance Officer (PLCO) at least 10 working days advance written
notice of its intent to remove a property item from an approved
inventory disposal schedule.'' Delete timeframe. Revise statement to
read: ``The Contractor shall provide the Plant Clearance Officer
written notice of its intent to remove a property item from an approved
inventory disposal schedule.'' Nonconcur. The property belongs to
Government agencies. The time is needed to coordinate with the owning
agency. It is a Government decision to delete property off the
schedule.
10. Several contractors questioned why or how the Government
performed internal Government processes. Response. After reviewing
these comments the Government decided the Government internal processes
are appropriate as stated.
[[Page 17742]]
11. PR: 45.507. FR: 45.606. Several comments addressed the
requirement to screen scrap. Once scrap is reported, the Government
makes the decision whether to screen, sell or abandon scrap. Not all
scrap is screened.
12. PR & FR: SF 1428. Several comments addressed making the use of
electronic submission of inventory disposal schedules mandatory. Other
comments addressed the difference in distribution of paper copies and
electronic copies. Nonconcur. To allow flexibility, the Government
provides for electronic or paper copy submission of inventory disposal
schedules. The paper copy process requires separate inventory disposal
schedules in order for the different agencies to screen the items.
13. PR: 52.245-7(g)(9). FR: 45.604-4, 52.245-2(i)(9); 52.245-
5(i)(9). The proposed statement reads; ``The Contractor shall credit
the net proceeds from a disposal of Government property in accordance
with instructions received from the PLCO.'' Revise the statement to
read: ``* * * PLCO or in the case of scrap, in accordance with the
Contractor's approved Property procedures.'' Same as 52.245-2.
Nonconcur. This is an internal Government decision. The Government
needs to reserve the right to direct proceeds.
14. PR: 52.245-2(g)(10). FR: 52.245(i)(10), 52.245-5(i)(10). The
proposed statement reads ``The Contractor shall require a subcontractor
that is using property accountable under this contract at a
subcontractor-managed site to submit inventory disposal schedules to
the Contractor in sufficient time for the Contractor to comply with the
requirements of paragraph (g)(4) of this clause.'' Revise the statement
to read: ``* * * to the Contractor as soon as reasonably possible.''
Same as 52.245-7. Nonconcur. Prime contractor should set limits to
subcontractor, so that prime is in compliance.
15. PR & FR. 49.108-4(a)(1)(ii)(B). 45.504 reference is
inconsistent. Make it 45.602-4. Concur. Changed in final rule to
45.602-3.
16. PR: 45.001. FR: 2.101. Definition of ``plant clearance
officer.'' The proposed definition fails to address that the plant
clearance officer is a Government representative and is an authorized
representative of the contracting officer. Concur. Made change.
17. PR: 45.505-1. Placed within 45.5, the proposed language has no
force or effect. Relocate the provisions at proposed 45.505-1 within
the applicable contract clauses at 52.245-xx. Concur. Removed from
45.505-1 and included in the appropriate provisions.
18. PR: 45.507-2(a). FR: 52.245-2(i)(1)(i)(B), 52.245-
5(i)(1)(i)(B). This is not contractually binding. Relocate within the
applicable clauses at 52.245. Concur. Coverage in clauses.
19. PR: 45.001, 52.245-2, 52.245-7. Add definition of ``Export
control and high risk property.'' Export controlled information means
unclassified U.S. Government information if proposed for export by the
private sector, would require a U.S. Department of Commerce or U.S.
Department of State validated license, and which, if given uncontrolled
release, could reasonably be expected to adversely affect U.S. national
security or nuclear nonproliferation objectives. In suggesting the
definition below it is recognized that the sensitive property
definition is similar. Would suggest an incorporation of the two or
additions of the portions of the high risk personal property definition
that are not already included in the sensitive property definition. ``
`High risk personal property' means property that, because of its
potential impact on public health and safety, the environment, national
security interests, or proliferation concerns, must be controlled and
disposed of in other than the routine manner. The categories of high
risk property are automatic data processing equipment, especially
designed or prepared property, export controlled information, export
controlled property, hazardous property, nuclear weapons components or
weapon-like components, proliferation sensitive property, radioactive
property, special nuclear material, and unclassified controlled nuclear
information.'' Nonconcur. Subject is not referred to in text.
Therefore, no definition is required.
20. PR: 52.245-2(g)(8). FR: 52.245-2(i)(8), 52.245-5(i)(8). Include
a requirement that the contractor be notified in the disposal
instructions that the property may be subject to U.S. Export Control
regulations. Should also be a part of subcontract terms and conditions.
Nonconcur. The PLCO will notify the contractor concerning disposal
instructions of property that is subject to U.S. Export Control
regulations.
21. PR: 45.506(c). FR: 45.604-2. Amend to permit agencies to
abandon property that requires demilitarization if the contractor
consents by adding; ``to perform all required demilitarization at its
own expense is a condition for the abandonment of the property.''
Concur. See 52.245-2(i)(8) and 52.245-5(i)(8)(iii).
22. FR: 45.606, 52.245-2(i)(1), 52.245-5(i)(1). Several contractors
made comments relating to approved scrap procedures such as eliminating
these procedures. Nonconcur. Not all contractors have approved scrap
procedures.
23. PR: 45.505-2, 52.245-2(g)(6), and 52.245-7(g)(6). FR: 45.602-1,
52.245-2(i)(6), 52.245-5(i)(6). Replace (c) with: ``If, before final
disposition, the contractor becomes aware that any items of contractor
acquired property listed in the inventory schedules are usable on other
work without financial loss, the contractor shall purchase the items or
retain them at cost and amend the inventory schedules and claim
accordingly. Upon notifying the plant clearance officer, the contractor
may purchase or retain at cost any other items of property included in
the inventory schedules. Withdrawal of any Government-furnished
property is subject to the written approval of the plant clearance
officer. If withdrawal is requested after screening has started, the
plant clearance officer shall notify immediately the appropriate
screening activity.'' Nonconcur. This is a contractor option before
reporting property for disposal, after reporting it for disposal it is
a Government action.
24. PR: 45.507-1. FR: 45.606-1. Revise proposed statement to read:
``Contractors may dispose of scrap left-over from the normal production
process that has no further intrinsic value without Government approval
provided the scrap does not contain precious metals, hazardous
materials or wastes, nuclear materials, or classified materials; or
requires demilitarization.'' Nonconcur. It is impracticable to list all
items that could be included. See definition of scrap in 2.101.
25. PR: 52.245-2(g). FR: 52.245-2(i). Change (g) to read: ``Except
as provided in paragraphs (c)(8), (g)(1), (g)(2), and (g)(8) of this
clause, the Contractor shall not dispose of Government property until
authorized to do so by the Plant Clearance Officer.'' Concur. Clause
updated.
26. PR: 45.001. FR: 45.601. Recommend you delete this definition,
Demilitarization, in its entirety and substitute in lieu thereof the
definition of demilitarization found in the DoD Federal Acquisition
Regulation Supplement. Nonconcur. The definition is more understandable
and current.
27. PR: 45.505-3. FR: 45.602-2. This section should be consistent
with GSA's requirement at 41 CFR 102-36.250. Nonconcur. 41 CFR 102-
36.250 deals with excess property and is a different subject.
[[Page 17743]]
28. PR: 45.505-4. FR: 45.602-3. Screening requirements should be
consistent with the provisions as contained in 41 CFR 101-43.4801,
which excludes items that cost under $5,000. Nonconcur. FPMR has been
changed. A low acquisition cost is no longer an exception to screening.
29. PR: 45.506. FR: 45.603. The Government should be able to
abandon certain property items where there is not a good reason for the
Government to retain title. 40 U.S.C. Sec. 483(h) does not require an
item to be excess in order to be abandoned. This provision of the law
provides for abandonment based upon commercial value or estimated cost
of continued care and handling. Nonconcur. 40 U.S.C. Sec 483(h) (now 40
U.S.C. 527) deals with excess property.
30. PR: 45.507-2. FR: 45.606-2. The approved scrap procedure should
facilitate the efficient disposition of scrap while requiring the
contractor to provide the Plant Clearance Officer the necessary
information to make reasonable determinations. Requiring the contract
number for each item of scrap necessitates the generation of a
different scrap list for each contract, causing excessive
administrative burden on the Government and the contractor. The
quantity of scrap is generally measured in short tons--most contractors
do not have the equipment to weigh scrap. Nonconcur. Scrap
reimbursement is allocable to specific contracts.
31. PR: 52.245-2(g)(7). FR: 52.245-2(i)(7), 52.245-5(i)(7). Storage
is a given requirement under the contract. When business conditions
require the movement of stored items, this cost is merely a cost of
doing business. These costs should always be allowable unless they are
deemed unreasonable. Nonconcur. It is unreasonable to move property
without prior approval of the Government after the property is
submitted for disposal.
32. PR: 52.245-2(h). FR: 52.245-2(j), 52.245-5(j). Should provide
for a request for abandonment in an effort to reduce cost of
dismantlement, movement, storage and administration. Nonconcur. The FAR
does not prohibit the contractor from asking that property be
considered for abandonment.
33. Move property disposal into the FPMR. No need for the new SF
1428, because of the SF 120. Remove revisions to 45.505-3. Make 45.506
and 45.508-1 similar to 101-45.9. Nonconcur. It is not cost effective
to change the current electronic processing systems just for
convenience. The FAR allows for both electronic and paper forms to be
used.
34. PR: 52.245-2(g). FR: 52.245-5(i). This paragraph gives disposal
authority to the PLCO. Clarify what authority the CO has or does not
have to authorize disposal (including abandonment). Concur. Changed
definition of plant clearance officer. The CO has the authority but
must follow the statutory and regulatory requirements (screening).
35. PR: 52.245-2(g)(2)(i). FR: 52.245-2(i)(2)(i). Address what must
be done with proceeds if the fair market value of unused property
returned to the supplier is higher than the original cost. Nonconcur.
In the cases where the fair market value is higher than the original
cost it will be addressed at the agency level because it creates an
allocation issue rather than a regulatory issue.
36. PR & FR SF 1428. Require adequately detailed or commercial
descriptions on inventory schedules for excess property and revise
schedule format to allow space for this. Nonconcur. Item 14 of the SF
1428 requires description in sufficient detail.
37. Prescribe the length of the agency screening period as a
maximum time period. Concur. The time period is 20 days.
38. PR: 45.506. FR: 45.603. Add language on abandonment of excess
property or reference FPMR 101-45.900 to require a reviewing official
for abandonment determinations, to require public notice and to define
the circumstances when public notice is not required. Nonconcur. This
is not a commercial practice and would add another layer of bureaucracy
to the process with little added value.
39. Abandonment in lieu of sale of surplus property should
reference FPMR 101-44.7 for details of requirements for abandonment of
surplus property in lieu of sale. Nonconcur. The specific requirements
are stated in 45.603 and 45.604-2.
40. Government involvement in disposal of other than scrap should
be limited to assisting in the disposal process. Nonconcur. This is
Government property and disposal must be at Government direction.
41. Demilitarization. The proposed rewrite does not adequately
address the longstanding issue of demilitarization. Perhaps this is
more appropriate for a DFARS revision, but references to
demilitarization in the FAR should be deleted until a final policy is
in place within DoD. Nonconcur. Needs to be addressed not just for DoD,
but also NASA, DOE, Coast Guard, etc.
42. PR: 1.106. FR: 1.106, 45.605. Delete reference to SF 1424. See
Part 53. SF 1424 is still being used. FAR 45.509 which is appropriately
titled ``Inventory Disposal Reports.'' Concur. SF 1424 is still being
used. Language at 1.106 was updated for OMB clearance purposes.
43. PR: 45.505-1(a). FR: 45.602-1(c). Text states: Make reasonable
efforts to return Government property that was acquired or produced by
the contractor and is no longer needed for contract performance to the
appropriate supplier or to use the property in performance of other
contracts * * * 1036 no longer makes reference to restocking
charges or other charges for returns. Needs to be added. This
definition is not consistent with the definition for GP. Concur. Added
restocking charge.
44. PR: 45.505-2. FR: 45.602-1. Please consider slight reduction in
some PLCO schedule acceptance times. Concur. It now reads 10 days.
45. PR: 52.245-2(g)(7)(ii). FR: 52.245-2(i)(7)(ii). To ``If
approval is granted, any costs incurred by the Contractor to transport
or store the property shall not increase the price or fee of any
Government contract.'' Add: ``, unless incurred due to the Government's
failure to provide disposal instructions within 120 days of receipt of
* * *'' Nonconcur. Covered in paragraph 52.245-2(g)(7)(i) (now 52.245-
2(i)(7)(i).
46. PR: 45.505-4. FR: 45.602-3(b)(4). Paragraph 45.505-4(b)(4)
addresses the screening of hazardous waste. This should read ``property
contaminated with hazardous wastes.'' Waste of any kind should not be
screened. If hazardous waste is a by-product of work performed on a
contract, the contract should require its disposal in accordance with
applicable Federal, State, and local laws. Nonconcur. Contractors must
dispose of Government property in accordance with the new 45.602. The
contractor is responsible for contractor-owned property and must
dispose of it in accordance with applicable Federal, State, and local
laws.
47. PR: 45.506. FR: 45.603. Paragraph 45.506(a)(2) provides a cost
based justification for using abandonment, destruction, or donation in
lieu of sale. The justification, as written, does not take into account
that there are costs associated with these disposal alternatives. The
Defense Reutilization and Marketing Service has long recognized that
fact and has developed an economy formula to address the costs of
disposal alternatives. There are times when a net sale loss can be less
costly to the Government than exercising a disposal alternative.
Therefore, this paragraph should be rewritten to require consideration
of the cost of disposal alternatives in the decision process.
Nonconcur. The plant clearance officer already considers these costs in
all disposal determinations.
[[Page 17744]]
48. PR: 45.506(c). FR: 45.604-2. Paragraph (c) states: ``* * *
property that requires demilitarization may be abandoned. * * *''
Property that requires demilitarization should not be abandoned unless
the required demilitarization has been performed. Paragraph should
read: ``* * * property that has been demilitarized may be abandoned.''
Concur in principle. See new paragraph 45.604-2.
49. PR: 45.508. FR: 45.604-2. The title of this section is
incorrect. Part of the disposal process involving surplus property has
already occurred at this point. On the 42nd day of screening, property
that has not been selected for transfer to another Federal agency
becomes surplus property which then becomes available for donation to
eligible donees * * *. This section addresses what is done to surplus
property that survives donation screening. Therefore, the section
should be titled ``Disposal of undonated surplus Government property.''
45.508(a), first sentence, should be written to read, ``this section
addresses the disposal of Government property * * * that, * * * has not
been reutilized, transferred, or donated to eligible donees (i.e.,
public airports, service educational activities, and State agencies for
surplus property). The parenthetical phrase ``(hereafter referred to as
surplus property)'' at the end of the sentence should be deleted.
Concur. Corrected text, but not the title. ``Undonated'' was not added
to the title because once an item has been donated it is no longer
available for disposal.
50. PR: 45.505-3. FR: 45.602-2. Clarify. Subparagraph (b) seems to
indicate that donation of educationally useful property to schools and
non-profit organizations can only be accomplished after all Federal
agencies have declined the property. However, subparagraph (c)
identifies other agency screening as lower in priority than donation to
schools or non-profit organizations. Nonconcur. The order of priority
of 45.602-2 is clear as written.
The other comments concerning the other subparts of FAR Part 45
were conflicting and a satisfactory resolution of those comments was
not attained. Therefore, the other subparts of FAR Part 45 are not
being revised by this final rule. This final rule amends the FAR by--
Replacing five inventory disposal forms with
one;
Clearly delineating the responsibilities of the
plant clearance officer;
Decreasing the time for Government acceptance of
inventory disposal schedules from 15 to 10 days;
Decreasing the time for Government inventory
verification from 30 days to 20 days;
Decreasing agency and Federal screening time
from 90 days to 46 days;
Eliminating the Government requirement to screen
most scrap;
Allowing contractors with approved scrap
procedures to submit scrap lists instead of inventory disposal
schedules;
Eliminating reporting of production scrap for
contractors with approved scrap procedures;
Authorizing contractors to dispose of production
scrap without Government approval under most conditions; and
Placing contractor responsibilities in clauses
rather than the FAR text.
Some terminology found in the FAR, while appearing in the Federal
Property Management Regulation (FPMR) and Federal Management Regulation
(FMR), may not have the same intended meaning or be used in the same
manner (e.g., reutilization, disposal, disposition). For this reason,
the Councils are committed to the future establishment of a separate
case for the purpose of reviewing and resolving possible inconsistent
uses of terminology between the FAR and the FMR.
This is not a significant regulatory action and, therefore, was not
subject to review under Section 6(b) of Executive Order 12866,
Regulatory Planning and Review, dated September 30, 1993. This rule is
not a major rule under 5 U.S.C. 804.
B. Regulatory Flexibility Act
The Regulatory Flexibility Act, 5 U.S.C. 601, et seq., applies to
this final rule. The Councils prepared a Final Regulatory Flexibility
Analysis (FRFA), and it is summarized as follows:
This final rule amends the FAR to simplify procedures, reduce
recordkeeping, and eliminate requirements related to the disposition
of Government property in the possession of contractors. No comments
concerning the Initial Regulatory Flexibility Analysis were received
that related to disposition of Government property. We estimate that
approximately 6,850 contractors have Government property in their
possession. Approximately 65 percent of DoD's contractors are small
businesses. Given that property in the possession of contractors is
overwhelmingly DoD property, it is estimated that the DoD ratio of
small to total businesses having such property is a reasonable
approximation for all Government contractors. Therefore, it is
estimated that approximately 4,450 small businesses have Government
property in their possession that at some point will need to be
dispositioned. This final rule decreases the impact of the current
FAR provisions by simplifying recordkeeping requirements, reducing
the number of records to be maintained, reducing the number of
reports to be submitted, and replacing five inventory disposal
schedules with one inventory disposal schedule. The rule also
streamlines the Government property disposal process by decreasing
agency, Federal, and donation screening times and virtually
eliminating the requirement to screen scrap. The records and reports
required by this rule have been reduced to the minimum necessary to
assure compliance with the Government's statutory accountability and
disposal requirements.
Interested parties may obtain a copy of the FRFA from the FAR
Secretariat. The FAR Secretariat has submitted a copy of the FRFA to
the Chief Counsel for Advocacy of the Small Business Administration.
C. Paperwork Reduction Act
The Paperwork Reduction Act does apply; however, these changes to
the FAR do not impose additional information collection requirements to
the paperwork burden previously approved under OMB Control Number 9000-
0075 on October 28, 2003. This final rule reduces the annual reporting
burden for disposal of Government property.
List of Subjects in 48 CFR Parts 1, 2, 8, 45, 49, 52, and 53
Government procurement.
Dated: March 26, 2004.
Laura Auletta,
Director, Acquisition Policy Division.
0
Therefore, DoD, GSA, and NASA amend 48 CFR parts 1, 2, 8, 45, 49, 52,
and 53 as set forth below:
0
1. The authority citation for 48 CFR parts 1, 2, 8, 45, 49, 52, and 53
is revised to read as follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
PART 1--FEDERAL ACQUISITION REGULATIONS SYSTEM
1.106 [Amended]
0
2. Amend section 1.106 in the table following the introductory
paragraph by--
0
a. Revising the OMB Control Number, ``9000-0015'' at entries for FAR
segments SF 1428 and SF 1429, to read ``9000-0075''; and
0
b. Removing the FAR segment entries and their corresponding OMB Control
Numbers at SF 1423, 1424, 1426, 1427, 1430, 1431, 1432, 1433, and 1434.
PART 2--DEFINITIONS OF WORDS AND TERMS
0
3. Amend section 2.101 in paragraph (b) by adding, in alphabetical
order, the definitions ``Excess personal property,''
[[Page 17745]]
``Personal property,'' ``Plant clearance officer,'' ``Scrap,'' and
``Termination inventory,'' to read as follows:
2.101 Definitions.
* * * * *
(b) * * *
* * * * *
Excess personal property means any personal property under the
control of a Federal agency that the agency head determines is not
required for its needs or for the discharge of its responsibilities.
* * * * *
Personal property means property of any kind or interest in it
except real property, records of the Federal Government, and naval
vessels of the following categories:
(1) Battleships;
(2) Cruisers;
(3) Aircraft carriers;
(4) Destroyers; and
(5) Submarines.
* * * * *
Plant clearance officer means an authorized representative of the
contracting officer appointed to disposition property accountable under
Government contracts.
* * * * *
Scrap means personal property that has no value except its basic
metallic, mineral, or organic content.
* * * * *
Termination inventory means any property purchased, supplied,
manufactured, furnished, or otherwise acquired for the performance of a
contract subsequently terminated and properly allocable to the
terminated portion of the contract. It includes Government-furnished
property. It does not include any facilities, material, special test
equipment, or special tooling that are subject to a separate contract
or to a special contract requirement governing their use or
disposition.
* * * * *
PART 8--REQUIRED SOURCES OF SUPPLIES AND SERVICES
8.101 [Reserved]
0
4. Remove and reserve section 8.101.
8.104 [Amended]
0
5. Amend section 8.104 by removing ``Federal Property Management
Regulations (41 CFR 101-43.312)'' and adding ``Federal Management
Regulations (41 CFR 102-36.90)'' in its place.
PART 45--GOVERNMENT PROPERTY
0
6. Amend section 45.102 by revising paragraph (g) to read as follows:
45.102 Policy.
* * * * *
(g) Ensure maximum practical reutilization of Government property
(see 45.602) within the Government.
45.501 [Amended]
0
7. Amend section 45.501 by removing the definition ``Scrap.''
0
8. Revise Subpart 45.6 to read as follows:
Subpart 45.6--Reporting, Reutilization, and Disposal
Sec.
45.600 Scope of subpart.
45.601 Definitions.
45.602 Reutilization of Government property.
45.602-1 Inventory disposal schedules.
45.602-2 Reutilization priorities.
45.602-3 Screening.
45.602-4 Interagency property transfer costs.
45.603 Abandonment, destruction or donation of excess personal
property.
45.604 Disposal of surplus property.
45.604-1 Disposal methods.
45.604-2 Abandonment, destruction, or donation of surplus property.
45.604-3 Sale of surplus property.
45.604-4 Proceeds from sales of surplus property.
45.605 Inventory disposal reports.
45.606 Disposal of scrap.
45.606-1 Contractor with an approved scrap procedure.
45.606-2 Contractor without an approved scrap procedure.
45.606-3 Procedures.
Subpart 45.6--Reporting, Reutilization, and Disposal
45.600 Scope of subpart.
This subpart establishes policies and procedures for the reporting,
reutilization, and disposal of Government property excess to contracts
and of property that forms the basis of a claim against the Government
(e.g., termination inventory under fixed-price contracts). This subpart
does not apply to the disposal of real property or to property for
which the Government has a lien or title solely as a result of advance
or progress payments that have been liquidated.
45.601 Definitions.
As used in this subpart--
Common item means material that is common to the applicable
Government contract and the contractor's other work.
Demilitarization means rendering a product designated for
demilitarization unusable for, and not restorable to, the purpose for
which it was designed or is customarily used.
Precious metals means silver, gold, platinum, palladium, iridium,
osmium, rhodium, and ruthenium.
Sensitive property means property potentially dangerous to the
public safety or security if stolen, lost, or misplaced, or that shall
be subject to exceptional physical security, protection, control, and
accountability such as classified property, weapons, ammunition,
explosives, controlled substances, radioactive materials, hazardous
materials or wastes, or precious metals.
Surplus property means excess personal property not required by any
Federal agency as determined by the Administrator of General Services
(GSA).
45.602 Reutilization of Government property.
This section is applicable to the reutilization, including transfer
and donation, of Government property that is not required for continued
performance of a Government contract. Except for 45.602-1, this section
does not apply to scrap other than scrap aircraft parts.
45.602-1 Inventory disposal schedules.
(a) Plant clearance officers should review and accept, or return
for correction, inventory disposal schedules within 10 days following
receipt from a contractor. Schedules that are completed in accordance
with the instructions for Standard Form 1428 should be accepted.
(b) Plant clearance officers shall--
(1) Use Standard Form 1423 to verify, in accordance with agency
procedures, accepted schedules within 20 days following acceptance;
(2) Require a contractor to correct any discrepancies found during
verification;
(3) Require a contractor to correct any failure to complete
predisposal requirements of the contract; and
(4) Provide the contractor disposition instructions for property
identified on an acceptable inventory disposal schedule within 120
days. A failure to provide timely disposition instructions might
entitle the contractor to an equitable adjustment.
(c) Contractors shall obtain the plant clearance officer's approval
to remove Government property from an inventory disposal schedule.
(1) Plant clearance officers should approve removal when--
(i) The contractor wishes to purchase a contractor-acquired or
contractor-produced item at acquisition cost and credit the contract;
[[Page 17746]]
(ii) The contractor is able to return unused property to the
supplier at fair market value and credit the contract (less, if
applicable, a reasonable restocking fee that is consistent with the
supplier's customary practices);
(iii) The Government has authorized the contractor to use the
property on another Government contract; or
(iv) The contractor has requested continued use of Government
property, and the plant clearance officer has consulted with the
appropriate program and technical personnel.
(2) If the screening process (see 45.602-3) has not begun, the
plant clearance officer shall adjust the schedule or return the
schedule to the contractor for correction. If screening has begun, the
plant clearance officer shall promptly notify the activity performing
the screening that the items should be removed from the screening
process.
45.602-2 Reutilization priorities.
Plant clearance officers shall initiate reutilization actions using
the highest priority method appropriate for the property. Authorized
methods, listed in descending order from highest to lowest priority,
are--
(a) Reuse within the agency (see 45.603 for circumstances under
which excess personal property may be abandoned, destroyed, or
donated);
(b) Transfer of educationally useful equipment, with GSA approval,
to other Federal agencies that have expressed a need for the property;
(c) Transfer of educationally useful equipment to schools and
nonprofit organizations (see Executive Order 12999, Educational
Technology: Ensuring Opportunity For All Children In The Next Century,
April 17, 1996), and 15 U.S.C. 3710(i);
(d) Reuse within the Federal Government; and
(e) Donation to an eligible donee designated by GSA.
45.602-3 Screening.
The screening period begins upon the plant clearance officer's
acceptance of an inventory disposal schedule. The plant clearance
officer shall determine whether standard or special screening is
appropriate and initiate screening actions.
(a) Standard screening. The standard screening period is 46 days.
(1) First through twentieth day--Screening by the contracting
agency. The contracting agency has 20 days to screen property reported
on the inventory disposal schedule for: Other use within the agency;
transfer of educationally useful equipment to other Federal agencies
that have expressed a need for the property; and transfer of
educationally useful equipment to schools and nonprofit organizations
if a Federal agency has not expressed a need for the property. Excess
personal property, meeting the conditions of 45.603, may be abandoned,
destroyed, or donated to public bodies. No later than the 21st day, the
plant clearance officer shall submit four copies of the revised
schedules and Standard Form (SF) 120, Report of Excess Personal
Property, or an electronic equivalent to GSA (see 41 CFR 102-36.215).
(2) Twenty-first through forty-sixth day (21 days concurrent
screening plus 5 days donation processing).--(i) Screening by other
Federal agencies. GSA will normally honor requests for transfers of
property on a first-come-first-served basis through the 41st day. When
a request is honored, the GSA regional office shall promptly transmit
to the plant clearance officer an approved transfer order that includes
shipping instructions.
(ii) Screening for possible donation. Screening for donation is
also completed during days 21 through 41. Property is not available for
allocation to donees until after the completion of screening. Days 42
through 46 are reserved for GSA to make such allocation.
(3) Screening period transfer request. If an agency receives an
intra-agency transfer request during the screening periods described in
paragraph (a)(2) of this subsection, the plant clearance officer shall
request GSA approval to withdraw the item from the inventory disposal
schedule.
(b) Special screening requirements.--(1) Special tooling and
special test equipment without commercial components. Agencies shall
follow the procedures in paragraph (a) of this subsection. This
property owned by the Department of Defense (DoD) or the National
Aeronautics and Space Administration (NASA) may be screened for
reutilization only within these agencies.
(2) Special test equipment with commercial components.--(i)
Agencies shall complete the screening required by paragraph (a) of this
subsection. If an agency has no further need for the property and the
contractor has not expressed an interest in using or acquiring the
property by annotating the inventory disposal schedule, the plant
clearance officer shall forward the inventory disposal schedule to the
GSA regional office that serves the region in which the property is
located.
(ii) If the contractor has expressed an interest in using the
property on another Government contract, the plant clearance officer
shall contact the contracting officer for that contract. If the
contracting officer concurs with the proposed use, the contracting
officer for the contract under which the property is accountable shall
transfer the property's accountability to that contract. If the
contracting officer does not concur with the proposed use, the plant
clearance officer shall deny the contractor's request and shall
continue the screening process.
(iii) If the property is contractor-acquired or -produced, and the
contractor or subcontractor has expressed an interest in acquiring the
property, and no other party expresses an interest during agency or GSA
screening, the property may be sold to the contractor or subcontractor
at acquisition cost.
(3) Printing equipment. Agencies shall report all excess printing
equipment to the Public Printer, Government Printing Office, North
Capitol and H Streets, NW., Washington, DC 20401, after screening
within the agency (see 44 U.S.C. 312). If the Public Printer does not
express a need for the equipment within 21 days, the agency shall
submit the report to GSA for further use and donation screening as
described in paragraph (a) of this subsection.
(4) Non-nuclear hazardous materials, hazardous wastes, and
classified items. These items shall be screened in accordance with
agency procedures. Report non-nuclear hazardous materials to GSA if the
agency has no requirement for them.
(5) Nuclear materials. The possession, use, and transfer of certain
nuclear materials are subject to the regulatory controls of the Nuclear
Regulatory Commission (NRC). Contracting activities shall screen excess
nuclear materials in the following categories:
(i) By-product material. Any radioactive material (except special
nuclear material) yielded in or made radioactive by exposure to the
radiation incident to producing or using special nuclear material.
(ii) Source material. Uranium or thorium, or any combination
thereof, in any physical or chemical form; or ores that contain by
weight one-twentieth of 1 percent (0.05 percent) or more of uranium,
thorium, or any combination thereof. Source material does not include
special nuclear material.
(iii) Special nuclear material. Plutonium, Uranium 233, Uranium
enriched in the isotope 233 or in the isotope 235, any other material
that the NRC determines to be special nuclear material (but not
including source
[[Page 17747]]
material); or any material artificially enriched by any nuclear
material.
45.602-4 Interagency property transfer costs.
Agencies whose property is transferred to other agencies shall not
be reimbursed for the property in any manner unless the circumstances
of FMR 102-36.285 (41 CFR 102-36.285) apply. The agency receiving the
property shall pay any transportation costs that are not the
contractor's responsibility and any costs to pack, crate, or otherwise
prepare the property for shipment. The contract administration office
shall process appropriate contract modifications. To accelerate plant
clearance, the receiving agency shall promptly furnish funding data,
and transfer or shipping documents to the contract administration
office.
45.603 Abandonment, destruction or donation of excess personal
property.
(a) Plant clearance officers may abandon, destroy, or donate to
public bodies excess property that is not sensitive property and does
not require demilitarization.
(b) Plant clearance officers may abandon sensitive property that
does not require demilitarization, with contractor consent, provided
appropriate instructions are provided with respect to the proper care,
handling, and disposal of the property.
(c) The Government may donate excess personal property to eligible
donees in lieu of abandonment if the Government will not bear any of
the costs incident to a donation.
(d)(1) Before abandoning, destroying, or donating excess personal
property, the plant clearance officer shall determine in writing that
the property does not constitute a danger to public health or welfare
and--
(i) The property has no residual monetary value; or
(ii) The estimated cost to sell the property, including
advertising, storage, and other costs associated with making the sale,
is greater than the probable sale proceeds; and
(2) A Government reviewing official shall approve all written
determinations for abandonment and destruction actions.
45.604 Disposal of surplus property.
45.604-1 Disposal methods.
(a) Except as provided in paragraphs (b) and (c) of this
subsection, surplus property that has completed screening in accordance
with 45.602-3(a) shall be sold in accordance with 45.604-3 or
abandoned, destroyed, or donated to public bodies in accordance with
45.604-2.
(b) The following property that GSA has declared surplus or not
required to be screened by GSA shall be disposed of in accordance with
agency procedures:
(1) Classified items.
(2) Nonnuclear hazardous materials or hazardous wastes.
(3) Property that contains precious metals or requires
demilitarization.
(4) Government property physically located outside the United
States or its possessions (see 40 U.S.C. 701-705).
(c) Nuclear materials (see 45.602-3(b)(5)) shall be disposed of in
accordance with NRC or applicable state licenses, applicable Federal
regulations, and agency regulations.
45.604-2 Abandonment, destruction, or donation of surplus property.
(a) Plant clearance officers may abandon, destroy, or donate to
public bodies surplus property that is not sensitive property, and does
not require demilitarization.
(b) Plant clearance officers may abandon sensitive property that
does not require demilitarization, with contractor consent, provided
appropriate instructions are provided with respect to the proper care,
handling, and disposal of the property.
(c) The Government may donate surplus property to eligible donees
in lieu of abandonment if the Government will not bear any of the costs
incident to donation.
(d) Before abandoning, destroying, or donating surplus property,
the plant clearance officer shall determine in writing that the
property does not constitute a danger to public health or welfare and--
(1) The property has no residual monetary value; or
(2) The estimated cost to sell the property, including advertising,
storage, and other costs associated with making the sale, is greater
than the probable sale proceeds.
45.604-3 Sale of surplus property.
Policy for the sale of surplus property is contained in the Federal
Property Management Regulations, at Part 101-45 (41 CFR part 101-45).
Agencies may specify implementing procedures.
45.604-4 Proceeds from sales of surplus property.
Proceeds of any sale are to be credited to the Treasury of the
United States as miscellaneous receipts, unless otherwise authorized by
statute or the contract or any subcontract thereunder authorizes the
proceeds to be credited to the price or cost of the work (40 U.S.C. 571
and 574).
45.605 Inventory disposal reports.
The plant clearance officer shall promptly prepare an SF 1424,
Inventory Disposal Report, following disposition of the property
identified on an inventory disposal schedule or scrap list and the
crediting of any related proceeds. The report shall identify any lost,
stolen, damaged, destroyed, or otherwise unaccounted for property and
any changes in quantity or value of the property made by the contractor
after submission of the initial inventory disposal schedule. The report
shall be addressed to the administrative contracting officer or, for
termination inventory, to the termination contracting officer, with a
copy to the property administrator.
45.606 Disposal of scrap.
45.606-1 Contractor with an approved scrap procedure.
(a) The contractor may dispose of scrap resulting from production
or testing under this contract without Government approval. However, if
the scrap requires demilitarization or is sensitive property, then the
contractor shall submit the scrap on an inventory disposal schedule.
(b) For scrap from other than production or testing, the contractor
may prepare scrap lists in lieu of inventory disposal schedules
(provided such lists are consistent with the approved scrap procedures)
except that inventory disposal schedules shall be submitted for scrap
aircraft or aircraft parts and scrap that--
(1) Requires demilitarization;
(2) Is a classified item;
(3) Is generated from classified items;
(4) Contains hazardous materials or hazardous wastes;
(5) Contains precious metals; or
(6) Is dangerous to the public health, safety, or welfare.
45.606-2 Contractor without an approved scrap procedure.
The contractor shall submit an inventory disposal schedule for all
scrap.
45.606-3 Procedures.
(a) The plant clearance officer shall process inventory disposal
schedules in accordance with 45.602-1.
(b) The plant clearance officer shall--
(1) Accept, reject, or return for correction scrap lists within 10
days following receipt;
(2) Accept scrap lists that are consistent with a contractor's
approved scrap procedure, correctly identify the
[[Page 17748]]
contracts under which the scrap is accountable, and correctly identify
the scrap's quantity and condition;
(3) Use Standard Form 1423 to verify accepted scrap lists, in
accordance with agency procedures;
(4) Require a contractor to correct any discrepancies found during
verification; and
(5) Provide disposition instructions to the contractor within 45
days following Government acceptance of a scrap list. If the plant
clearance officer does not provide disposition instructions within that
period, the contractor may dispose of scrap identified on a scrap list
without further Government approval.
PART 49--TERMINATION OF CONTRACTS
49.001 [Amended]
0
9. Amend section 49.001 by adding, in alphabetical order, the
definition ``Plant clearance period'', and removing the definition
``Termination inventory'' to read as follows:
49.001 Definitions.
* * * * *
Plant clearance period, as used in this subpart, means the period
beginning on the effective date of contract completion or termination
and ending 90 days (or such longer period as may be agreed to) after
receipt by the contracting officer of acceptable inventory schedules
for each property classification. The final phase of the plant
clearance period means that period after receipt of acceptable
inventory schedules.
* * * * *
0
10. Amend section 49.108-3 by revising paragraph (b)(1) to read as
follows:
49.108-3 Settlement procedure.
* * * * *
(b) * * *
(1) All subcontractor termination inventory be disposed of and
accounted for in accordance with the procedures contained in paragraphs
(i) and (j) of the clause at 52.245-2, Government Property (Fixed-Price
Contracts), and paragraphs (i) and (j) of the clause at 52.245-5,
Government Property (Cost-Reimbursement, Time-and-Material, or Labor-
Hour Contracts); and
* * * * *
0
11. Amend section 49.108-4 by revising paragraphs (a)(1)(ii) and (b) to
read as follows:
49.108-4 Authorization for subcontract settlements without approval or
ratification.
(a)(1) * * *
(ii) Any termination inventory included in determining the amount
of the settlement will be disposed of as directed by the prime
contractor, except that the disposition of the inventory shall not be
subject to--
(A) Review by the TCO under 49.108-3(c); or
(B) The screening requirements in 45.602-3; and
* * * * *
(b) Section 45.602 shall apply to disposal of completed end items
allocable to the terminated subcontract. However, these items may be
disposed of without review by the TCO under 49.108-3 and without
screening under 45.602-3, if the items do not require demilitarization
and the total amount (at the subcontract price) when added to the
amount of the settlement does not exceed the amount authorized under
this subsection.
* * * * *
0
12. Revise the section heading and text of 49.206-3 to read as follows:
49.206-3 Submission of inventory disposal schedules.
Subject to the terms of the termination clause, and whenever
termination inventory is involved, the contractor shall submit complete
inventory disposal schedules to the TCO reflecting inventory that is
allocable to the terminated portion of the contract. The inventory
disposal schedules shall be submitted within 120 days from the
effective date of termination unless otherwise extended by the TCO
based on a written justification to support the extension. The
inventory schedules shall be prepared on Standard Form 1428, Inventory
Disposal Schedule.
0
13. Revise the section heading and text of 49.303-2 to read as follows:
49.303-2 Submission of inventory disposal schedules.
Subject to the terms of the termination clause, and whenever
termination inventory is involved, the contractor shall submit complete
inventory disposal schedules to the TCO reflecting inventory that is
allocable to the terminated portion of the contract. The inventory
disposal schedules shall be submitted within 120 days from the
effective date of termination unless otherwise extended by the TCO
based on a written justification to support the extension. The
inventory disposal schedules shall be prepared on Standard Form 1428,
Inventory Disposal Schedule.
0
14. Revise the section heading and text of 49.602-2 to read as follows:
49.602-2 Inventory forms.
Standard Form (SF) 1428, Inventory Disposal Schedule, and SF 1429,
Inventory Disposal Schedule--Continuation Sheet, shall be used to
support settlement proposals submitted on the forms specified in
49.602-1(b) and (d).
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
15. Amend section 52.245-2 by revising the date of the clause and
paragraphs (i) and (j) to read as follows:
52.245-2 Government Property (Fixed-Price Contracts).
* * * * *
Government Property (Fixed-Price Contracts) (May 2004)
* * * * *
(i) Government property disposal. Except as provided in
paragraphs (i)(1)(i), (i)(2), and (i)(8)(i) of this clause, the
Contractor shall not dispose of Government property until authorized
to do so by the Plant Clearance Officer.
(1) Scrap (to which the Government has obtained title under
paragraph (c) of this clause).--(i) Contractor with an approved
scrap procedure.--(A) The Contractor may dispose of scrap resulting
from production or testing under this contract without Government
approval. However, if the scrap requires demilitarization or is
sensitive property, the Contractor shall submit the scrap on an
inventory disposal schedule.
(B) For scrap from other than production or testing the
Contractor may prepare scrap lists in lieu of inventory disposal
schedules (provided such lists are consistent with the approved
scrap procedures), except that inventory disposal schedules shall be
submitted for scrap aircraft or aircraft parts and scrap that--
(1) Requires demilitarization;
(2) Is a classified item;
(3) Is generated from classified items;
(4) Contains hazardous materials or hazardous wastes;
(5) Contains precious metals; or
(6) Is dangerous to the public health, safety, or welfare.
(ii) Contractor without an approved scrap procedure. The
Contractor shall submit an inventory disposal schedule for all
scrap.
(2) Pre-disposal requirements. When the Contractor determines
that a property item acquired or produced by the Contractor, to
which the Government has obtained title under paragraph (c) of this
clause, is no longer needed for performance of this contract, the
Contractor, in the following order of priority:
(i) May purchase the property at the acquisition cost.
(ii) Shall make reasonable efforts to return unused property to
the appropriate supplier at fair market value (less, if applicable,
a reasonable restocking fee that is consistent with the supplier's
customary practices).
(iii) Shall list, on Standard Form 1428, Inventory Disposal
Schedule, property that was not purchased under paragraph (i)(2)(i)
of this clause, could not be returned to a
[[Page 17749]]
supplier, or could not be used in the performance of other
Government contracts.
(3) Inventory disposal schedules.--(i) The Contractor shall use
Standard Form 1428, Inventory Disposal Schedule, to identify--
(A) Government-furnished property that is no longer required for
performance of this contract, provided the terms of another
Government contract do not require the Government to furnish that
property for performance of that contract; and
(B) Property acquired or produced by the Contractor, to which
the Government has obtained title under paragraph (c) of this
clause, that is no longer required for performance of that contract.
(ii) The Contractor may annotate inventory disposal schedules to
identify property the Contractor wishes to purchase from the
Government.
(iii) Unless the Plant Clearance Officer has agreed otherwise,
or the contract requires electronic submission of inventory disposal
schedules, the Contractor shall prepare separate inventory disposal
schedules for--
(A) Special test equipment with commercial components;
(B) Special test equipment without commercial components;
(C) Printing equipment;
(D) Computers, components thereof, peripheral equipment, and
related equipment;
(E) Precious Metals;
(F) Nonnuclear hazardous materials or hazardous wastes; or
(G) Nuclear materials or nuclear wastes.
(iv) Property with the same description, condition code, and
reporting location may be grouped in a single line item. The
Contractor shall describe special test equipment in sufficient
detail to permit an understanding of the special test equipment's
intended use.
(4) Submission requirements. The Contractor shall submit
inventory disposal schedules to the Plant Clearance Officer no later
than--
(i) Thirty days following the Contractor's determination that a
Government property item is no longer required for performance of
the contract;
(ii) Sixty days, or such longer period as may be approved by the
Plant Clearance Officer, following completion of contract deliveries
or performance; or
(iii) One hundred twenty days, or such longer period as may be
approved by the Plant Clearance Officer, following contract
termination in whole or in part.
(5) Corrections. The Plant Clearance Officer may require the
Contractor to correct an inventory disposal schedule or may reject a
schedule if the property identified on the schedule is not
accountable under this contract or is not in the quantity or
condition indicated.
(6) Postsubmission adjustments. The Contractor shall provide the
Plant Clearance Officer at least 10 working days advance written
notice of its intent to remove a property item from an approved
inventory disposal schedule. Unless the Plant Clearance Officer
objects to the intended schedule adjustment within the notice
period, the Contractor may make the adjustment upon expiration of
the notice period.
(7) Storage.--(i) The Contractor shall store the property
identified on an inventory disposal schedule pending receipt of
disposal instructions. The Government's failure to provide disposal
instructions within 120 days following acceptance of an inventory
disposal schedule might entitle the Contractor to an equitable
adjustment for costs incurred to store such property on or after the
121st day.
(ii) The Contractor shall obtain the Plant Clearance Officer's
approval to remove Government property from the premises at which
the property is currently located prior to receipt of final
disposition instructions. If approval is granted, any costs incurred
by the Contractor to transport or store the property shall not
increase the price or fee of any Government contract. The storage
facility shall be appropriate for assuring the property's physical
safety and suitability for use. Approval does not relieve the
Contractor of any liability under this contract for such property.
(8) Disposition instructions.--(i) If the Government does not
provide disposition instructions to the Contractor within 45 days
following acceptance of a scrap list, the Contractor may dispose of
the listed scrap in accordance with the Contractor's approved scrap
procedures.
(ii) The Contractor shall prepare for shipment, deliver f.o.b.
origin, or dispose of Government property as directed by the Plant
Clearance Officer. The Contractor shall remove and destroy any
markings identifying the property as Government property prior to
disposing of the property.
(iii) The Contracting Officer may require the Contractor to
demilitarize the property prior to shipment or disposal. Any
equitable adjustment incident to the Contracting Officer's direction
to demilitarize Government property shall be made in accordance with
paragraph (h) of this clause.
(9) Disposal proceeds. The Contractor shall credit the net
proceeds from the disposal of Government property to the price or
cost of work covered by this contract or to the Government as the
Contracting Officer directs.
(10) Subcontractor inventory disposal schedules. The Contractor
shall require a subcontractor that is using property accountable
under this contract at a subcontractor-managed site to submit
inventory disposal schedules to the Contractor in sufficient time
for the Contractor to comply with the requirements of paragraph
(i)(4) of this clause.
(j) Abandonment of Government property.--(1) The Government will
not abandon sensitive Government property without the Contractor's
written consent.
(2) The Government, upon notice to the Contractor, may abandon
any nonsensitive Government property in place at which time all
obligations of the Government regarding such abandoned property
shall cease.
(3) The Government has no obligation to restore or rehabilitate
the Contractor's premises under any circumstances; however, if
Government-furnished property is withdrawn or is unsuitable for the
intended use, or if other Government property is substituted, then
the equitable adjustment under paragraph (h) of this clause may
properly include restoration or rehabilitation costs.
* * * * *
0
16. Amend section 52.245-5 by revising the date of the clause and
paragraphs (i) and (j) to read as follows:
52.245-5 Government Property (Cost-Reimbursement, Time-and-Material,
or Labor-Hour Contracts).
Government Property (Cost-Reimbursement, Time-and-Material, or Labor-
Hour Contracts) (May 2004)
* * * * *
(i) Government property disposal. Except as provided in
paragraphs (i)(1)(i), (i)(2), and (i)(8)(i) of this clause, the
Contractor shall not dispose of Government property until authorized
to do so by the Plant Clearance Officer.
(1) Scrap. (i) Contractor with an approved scrap procedure. (A)
The Contractor may dispose of scrap resulting from production or
testing under this contract without Government approval. However, if
the scrap requires demilitarization or is sensitive property, the
Contractor shall submit the scrap on an inventory disposal schedule.
(B) For scrap from other than production or testing, the
Contractor may prepare scrap lists in lieu of inventory disposal
schedules (provided such lists are consistent with the approved
scrap procedures), except that inventory disposal schedules shall be
submitted for scrap aircraft or aircraft parts and scrap that--
(1) Requires demilitarization;
(2) Is a classified item;
(3) Is generated from classified items;
(4) Contains hazardous materials or hazardous wastes;
(5) Contains precious metals; or
(6) Is dangerous to the public health, safety, or welfare.
(ii) Contractor without an approved scrap procedure. The
Contractor shall submit an inventory disposal schedule for all
scrap.
(2) Pre-disposal requirements. When the Contractor determines
that a property item acquired or produced by the Contractor, to
which the Government has obtained title under paragraph (c) of this
clause, is no longer needed for performance of this contract, the
Contractor, in the following order of priority:
(i) May purchase the property at the acquisition cost.
(ii) Shall make reasonable efforts to return unused property to
the appropriate supplier at fair market value (less, if applicable,
a reasonable restocking fee that is consistent with the supplier's
customary practices).
(iii) Shall list, on Standard Form 1428, Inventory Disposal
Schedule, property that was not purchased under paragraph (i)(2)(i)
of this clause, could not be returned to a supplier, or could not be
used in the performance of other Government contracts.
(3) Inventory disposal schedules. (i) The Contractor shall use
Standard Form 1428, Inventory Disposal Schedule, to identify--
[[Page 17750]]
(A) Government-furnished property that is no longer required for
performance of this contract, provided the terms of another
Government contract do not require the Government to furnish that
property for performance of that contract; and
(B) Property acquired or produced by the Contractor, to which
the Government has obtained title under paragraph (c) of this
clause, that is no longer required for performance of that contract.
(ii) The Contractor may annotate inventory disposal schedules to
identify property the Contractor wishes to purchase from the
Government.
(iii) Unless the Plant Clearance Officer has agreed otherwise,
or the contract requires electronic submission of inventory disposal
schedules, the Contractor shall prepare separate inventory disposal
schedules for--
(A) Special test equipment with commercial components;
(B) Special test equipment that does not contain commercial
components;
(C) Printing equipment;
(D) Computers, components thereof, peripheral equipment, and
related equipment;
(E) Precious Metals;
(F) Nonnuclear hazardous materials or hazardous wastes; or
(G) Nuclear materials or nuclear wastes.
(iv) Property with the same description, condition code, and
reporting location may be grouped in a single line item. The
Contractor shall describe special test equipment in sufficient
detail to permit an understanding of the special test equipment's
intended use.
(4) Submission requirements. The Contractor shall submit
inventory disposal schedules to the Plant Clearance Officer no later
than--
(i) Thirty days following the Contractor's determination that a
Government property item is no longer required for performance of
the contract;
(ii) Sixty days, or such longer period as may be approved by the
Plant Clearance Officer, following completion of contract deliveries
or performance; or
(iii) One hundred twenty days, or such longer period as may be
approved by the Plant Clearance Officer, following contract
termination in whole or in part.
(5) Corrections. The Plant Clearance Officer may require the
Contractor to correct an inventory disposal schedule or may reject a
schedule if the property identified on the schedule is not
accountable under this contract or is not in the quantity or
condition indicated.
(6) Postsubmission adjustments. The Contractor shall provide the
Plant Clearance Officer at least 10 working days advance written
notice of its intent to remove a property item from an approved
inventory disposal schedule. Unless the Plant Clearance Officer
objects to the intended schedule adjustment within the notice
period, the Contractor may make the adjustment upon expiration of
the notice period.
(7) Storage. (i) The Contractor shall store the property
identified on an inventory disposal schedule pending receipt of
disposal instructions. The Government's failure to provide disposal
instructions within 120 days following acceptance of an inventory
disposal schedule, might entitle the Contractor to an equitable
adjustment for costs incurred to store such property on or after the
121st day.
(ii) The Contractor shall obtain the Plant Clearance Officer's
approval to remove Government property from the premises at which
the property is currently located prior to receipt of final
disposition instructions. If approval is granted, any costs incurred
by the Contractor to transport or store the property shall not
increase the price or fee of any Government contract. The storage
facility must be appropriate for assuring the property's physical
safety and suitability for use. Approval does not relieve the
Contractor of any liability under this contract for such property.
(8) Disposition instructions. (i) If the Government does not
provide disposition instructions to the Contractor within 45 days
following acceptance of a scrap list, the Contractor may dispose of
the listed scrap in accordance with the Contractor's approved scrap
procedures.
(ii) The Contractor shall prepare for shipment, deliver f.o.b.
origin, or dispose of Government property as directed by the Plant
Clearance Officer. The Contractor shall remove and destroy any
markings identifying the property as Government property prior to
disposing of the property.
(iii) The Contracting Officer may require the Contractor to
demilitarize the property prior to shipment or disposal. Any
equitable adjustment incident to the Contracting Officer's direction
to demilitarize Government property shall be made in accordance with
paragraph (h) of this clause.
(9) Disposal proceeds. The Contractor shall credit the net
proceeds from the disposal of Government property to the cost of
work covered by this contract, or to the Government as directed by
the Contracting Officer.
(10) Subcontractor inventory disposal schedules. The Contractor
shall require a subcontractor that is using property accountable
under this contract at a subcontractor-managed site to submit
inventory disposal schedules to the Contractor in sufficient time
for the Contractor to comply with the requirements of paragraph
(i)(4) of this clause.
(j) Abandonment of Government property. (1) The Government will
not abandon sensitive Government property without the Contractor's
written consent;
(2) The Government, upon notice to the Contractor, may abandon
any nonsensitive Government property in place at which time all
obligations of the Government regarding such abandoned property
shall cease.
(3) The Government has no obligation to restore or rehabilitate
the Contractor's premises under any circumstances; however, if
Government-furnished property is withdrawn or is unsuitable for the
intended use, or if other Government property is substituted, then
the equitable adjustment under paragraph (h) of this clause may
properly include restoration or rehabilitation costs.
* * * * *
0
17. Amend section 52.245-17 by revising the date of the clause and
paragraph (i)(2)(ii) to read as follows:
52.245-17 Special tooling.
* * * * *
Special Tooling (May 2004)
* * * * *
(i) Lists of special tooling.
* * * * *
(2) * * *
(ii) Termination inventory. The Contractor shall submit these
items on an SF 1428 or by computer list attached to an SF 1428 in
accordance with FAR 45.602-1. Format and content of this submission
will be as prescribed by paragraph (i)(3) of this clause, but will
contain information as prescribed by FAR Subpart 45.6, in effect on
the date of award of this contract.
* * * * *
52.249-2, 52.249-3, 52.249-6, 52.249-11 [Amended]
0
18. Revise the date of the clauses to read ``(May 2004)'' and remove
``45.6'' and add ``49.001'' in the following sections:
0
a. Section 52.249-2(d).
0
b. Section 52.249-3(d).
0
c. Section 52.249-6(e).
0
d. Section 52.249-11(d).
PART 53--FORMS
0
19. Revise section 53.245 to read as follows:
53.245 Government property.
The following forms are prescribed, as specified in this section,
for use in reporting, reutilization, and disposal of Government
property and in accounting for this property:
(a) SF 120 (GSA), Report of Excess Personal Property, and SF 120-A
(GSA), Continuation Sheet (Report of Excess Personal Property). See
45.602-3 and 41 CFR 102-36.215.)
(b) SF 126 (GSA), Report of Personal Property for Sale, and SF 126-
A (GSA), Report of Personal Property for Sale (Continuation Sheet). See
FPMR 101-45.303 (41 CFR 101-45.303.))
(c) SF 1423 (Rev. 5/04), Inventory Verification Survey. See 45.602-
1(b)(1) and 45.606-3.)
(d) SF 1424 (Rev. 5/04), Inventory Disposal Report (See 45.605). SF
1424 is authorized for local reproduction.
(e) SF 1428 (Rev. 5/04), Inventory Disposal Schedule, and SF 1429
(Rev. 5/04), Inventory Disposal Schedule--Continuation Sheet. (See
45.602-1, 49.303-2, 52.245-2(i), 52.245-5(i), and 53.249(b).) SF's 1428
and 1429 are authorized for local reproduction.
0
20. Amend section 53.249 by revising paragraphs (a)(3), (a)(5), and (b)
to read as follows:
[[Page 17751]]
53.249 Termination of contracts.
(a) * * *
(3) SF 1436 (Rev. 5/04), Settlement Proposal (Total Cost Basis).
(See 49.602-1(b).) Standard Form 1436 is authorized for local
reproduction.
* * * * *
(5) SF 1438 (Rev. 5/04), Settlement Proposal (Short Form). (See
49.602-1(d).) Standard Form 1438 is authorized for local reproduction.
* * * * *
(b) SF 1428 (Rev. 5/04), Inventory Disposal Schedule, and Standard
Form 1429 (Rev. 5/04), Inventory Disposal Schedule--Continuation Sheet,
shall be used to support termination settlement proposals listed in
paragraph (a) of this section, as specified in 49.602-2.
BILLING CODE 6820-EP-P
[[Page 17752]]
0
21. Revise section 53.301-1423 to read as follows:
53.301-1423 Inventory Verification Survey.
[GRAPHIC] [TIFF OMITTED] TR05AP04.000
[[Page 17753]]
0
22. Revise section 53.301-1424 to read as follows:
53.301-1424 Inventory Disposal Report.
[GRAPHIC] [TIFF OMITTED] TR05AP04.001
[[Page 17754]]
53.301-1426 [Removed]
0
23. Remove section 53.301-1426, Inventory Schedule A (Metals in Mill
Product Form).
0
24. Revise section 53.301-1428 to read as follows:
53.301-1428 Inventory Disposal Schedule.
[GRAPHIC] [TIFF OMITTED] TR05AP04.002
[[Page 17755]]
[GRAPHIC] [TIFF OMITTED] TR05AP04.003
[[Page 17756]]
0
25. Revise section 53.301-1429 to read as follows:
53.301-1429 Inventory Disposal Schedule--Continuation Sheet.
[GRAPHIC] [TIFF OMITTED] TR05AP04.004
[[Page 17757]]
53.301-1430 and 53.301-1431 [Removed]
0
26. Remove sections 53.301-1430, Inventory Schedule C (Work-in-
Process), and 53.301-1431, Inventory Schedule C--Continuation Sheet
(Work-in-Process).
53.301-1432 and 53.301-1433 [Removed]
0
27. Remove sections 53.301-1432, Inventory Schedule D (Special Tooling
and Special Test Equipment), and 53.301-1433, Inventory Schedule D--
Continuation Sheet (Special Tooling and Special Test Equipment).
53.301-1434 [Removed]
0
28. Remove section 53.301-1434, Termination Inventory Schedule E.
0
29. Revise section 53.301-1436 to read as follows:
53.301-1436 Settlement Proposal (Total Cost Basis).
[[Page 17758]]
[GRAPHIC] [TIFF OMITTED] TR05AP04.005
[[Page 17759]]
[GRAPHIC] [TIFF OMITTED] TR05AP04.006
[[Page 17760]]
[GRAPHIC] [TIFF OMITTED] TR05AP04.007
[[Page 17761]]
[GRAPHIC] [TIFF OMITTED] TR05AP04.008
[[Page 17762]]
0
30. Revise section 53.301-1438 to read as follows:
53.301-1438 Settlement Proposal (Short Form).
[GRAPHIC] [TIFF OMITTED] TR05AP04.009
[[Page 17763]]
[GRAPHIC] [TIFF OMITTED] TR05AP04.010
[FR Doc. 04-7405 Filed 4-2-04; 8:45 am]
BILLING CODE 6820-EP-C