[Federal Register Volume 74, Number 150 (Thursday, August 6, 2009)]
[Proposed Rules]
[Pages 39262-39268]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-18799]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 2, 4, 15, 32, 42, 45, and 52
[FAR Case 2008-011; Docket 2009-0029; Sequence 1]
RIN 9000-AL41
Federal Acquisition Regulation; FAR Case 2008-011; Government
Property
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Proposed rule.
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SUMMARY: The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council (Councils) are proposing to amend the
Federal Acquisition Regulation (FAR) to revise coverage in regard to
Government property and its associated clauses. These changes are to
add clarity and correction to the previous FAR rule for Part 45,
Government Property, published under Federal Acquisition Circular 2005-
17, FAR case 2004-025.
DATES: Interested parties should submit written comments to the
Regulatory Secretariat on or before October 5, 2009 to be considered in
the formulation of a final rule.
ADDRESSES: Submit comments identified by FAR case 2008-011 by any of
the following methods:
Regulations.gov: http://www.regulations.gov.
Submit comments via the Federal eRulemaking portal by inputting
``FAR Case 2008-011'' under the heading ``Comment or Submission''.
Select the link ``Send a Comment or Submission'' that corresponds with
FAR Case 2008-011. Follow the instructions provided to complete the
``Public Comment and Submission Form''. Please include your name,
company name (if any), and ``FAR Case 2008-011'' on your attached
document.
Fax: 202-501-4067.
Mail: General Services Administration, Regulatory
Secretariat (VPR), 1800 F Street, NW., Room 4041, ATTN: Hada Flowers,
Washington, DC 20405.
Instructions: Please submit comments only and cite FAR case 2008-
011 in all correspondence related to this case. All comments received
will be posted without change to http://www.regulations.gov, including
any personal and/or business confidential information provided.
FOR FURTHER INFORMATION CONTACT: Ms. Jeritta A. Parnell, Procurement
Analyst, at (202) 501-4082 for clarification of content. For
information pertaining to status or publication schedules, contact the
Regulatory Secretariat at (202) 501-4755. Please cite FAR case 2008-
011.
SUPPLEMENTARY INFORMATION:
A. Background
The Civilian Agency Acquisition Council and the Defense Acquisition
Regulations Council revised Federal Acquisition Regulation (FAR)
contract property management requirements as a final rule under Federal
Acquisition Circular 2005-17 (72 FR 27364, May 15, 2007). The new
regulation amended, updated and revised the FAR Part 45, Government
Property, and associated clauses related to the management and
disposition of Government property in
[[Page 39263]]
the possession of contractors. The final rule replaced outmoded
regulations that were essentially unchanged for many years.
After publication of the final rule in May 2007, DoD received
feedback on the FAR revisions. An Ad Hoc team comprised of members from
DoD, GSA, and the Defense Contract Management Agency (DCMA) was formed
to review comments from industry, academia and Government sources. As a
result of the Ad Hoc team recommendations, FAR case 2008-011 was
established to address the recommendations.
The proposed changes include the following:
(1) 2.101 Definitions.
The definitions of ``plant clearance officer'' and ``special
tooling'' were clarified.
(2) 4.705-3 Acquisition and supply records.
Paragraph (h) ``Property records'' was added to the list of
acquisition and supply records.
(3) 15.404-4 Profit.
Language was added to FAR 15.404-4(a)(3) as follows-- ``Unless the
contractor acquired property is a deliverable under the contract, no
profit or fee shall be permitted on the cost of the property.''
(4) 42.302(a)(30) Contract administration functions.
(A) In paragraph (iii), ``approve use'' was changed to ``evaluate
the use.''
(B) Paragraph (v) was deleted in its entirety and replaced with
``modify contracts to reflect addition of Government furnished property
and ensure appropriate consideration.''
(5) 45.101 Definitions.
(A) The definitions of ``cannibalize,'' ``equipment,'' ``Government
furnished property,'' ``Government property,'' ``material,'' and ``real
property'' were clarified.
(B) The definition of ``property records'' was added.
(C) The definition of ``plant equipment'' was deleted in its
entirety.
(6) 45.102(d) Policy.
Language was added to paragraph (d) to the effect that property
furnished under contracts for maintenance and modification as well as
property furnished for repair or overhaul are exceptions from the
requirements of FAR 45.102(b).
(7) 45.104 Responsibility and liability for Government property,
and 45.105 Contractors' property management system compliance.
All references to ``loss, damage, destruction, or theft'' are
changed to ``loss, theft, damage, or destruction.''
(8) 45.201 Solicitation.
(A) Paragraph (a)(4), the term ``unique-item identifier'' was
changed to ``item unique identifier.''
(B) Paragraph (d) was revised to delete ``when use of property on
more than one contract is anticipated.''
(9) 45.402 Title to contractor-acquired property.
The first sentence of this subsection is deleted and the second
sentence is modified to include that ``title vests in the Government
for all property ...''
(10) 45.502 Subcontractor and alternate prime contractor locations.
(A) Paragraph (a) was revised to delete existing language and
replace with new language to make clear the need for prime contractor
approval when support property administration at subcontractor
locations is necessary.
(B) Paragraph (b) was edited to state that the prime property
administrator shall ``advise the prime contractor of the results of
property management reviews, including deficiencies found with the
subcontractor's property management system.''
(C) Paragraph (c) was added.
(D) Section title has been changed.
(11) 45.602-3(b) Screening.
Paragraph (b)(3) is revised to correct the address for the Public
Printer.
(12) 45.604-3 Sale of surplus personal property.
(A) The reference to CFR Part 101-45 is changed to CFR Part 102-38.
(B) Section title has been changed.
(13) 45.606-1 Contractor with an approved scrap procedure.
Paragraph (b) was reformatted to separate categories of property
requiring preparation of an inventory disposal schedule into a new
paragraph (c). Language was added for ``all aircraft regardless of
condition'' and ``flight safety critical aircraft parts.'' In addition,
scrap was revised to include ``economically beneficial to recover''
precious metals.
(14) 52.232-16, Progress Payments, and 52.232-32, Performance Based
Payments.
(A) The clause at 52.232-16(d)(2)(ii) and the clause at 52.232-
32(f)(2)(ii) are revised to delete the language ``under any other
clause of this contract.'' This language is no longer necessary.
(B) The clause at 52.232-16(d)(3) and the clause at 52.232-32(f)(3)
are revised to delete the language ``or special tooling.'' This
language is no longer necessary.
(15) Loss, Damage, Theft, or Destruction.
All references to ``loss, damage, destruction, or theft'' are
changed to ``loss, theft, damage, or destruction'' in the coverage in
32.503-16(a) and 32.1010(a) and the clauses at 52.232-16, 52.232-32 and
52.245-1.
(16) Clauses.
Sec. 52.245-1 Government Property.
(A) Definitions at 52.245-1(a) are changed to be consistent with
the definitions in FAR 45.101.
(B) In paragraph (b)(2), ``sale (as surplus property), or other''
disposition was added.
(C) Paragraph (c) was reformatted and information regarding
modifications or alterations of Government property was added to
clarify that modifications or alterations must be reasonable and
necessary due to the scope of work under this contract or its terms and
conditions, required for normal maintenance, or otherwise authorized by
the contracting officer. In addition, language was added to clarify
when cannibalization occurs.
(D) Paragraph (e)(2)(ii) was revised to clarify title under fixed
price contracts.
(E) The term ``material'' was changed to ``property'' in
paragraphs (e)(2)(iii) and (f)(1)(i).
(F) Paragraphs (f)(1)(iii)(A)(4) and (f)(1)(vi)(B)(4) ``Unique-
item'' identifier was revised to ``Item unique'' identifier.
(H) Paragraph (f)(1)(viii)(B), references to ``property'' were
changed to ``material.''
(I) Paragraph (g), Systems analysis, was revised to reflect the
coverage in FAR 45.502 that provides for support property
administration for subcontractors and prime contractor alternate
locations.
(J) Paragraph (i) deleted the language ``the right to an equitable
adjustment shall be the Contractor's exclusive remedy.''
(K) Paragraph (j)(1)(i)(B) was reformatted into paragraphs (B) and
(C) to separate categories of property requiring preparation of an
inventory disposal schedule. Language was added for ``all aircraft
regardless of condition'' and ``flight safety critical aircraft
parts.'' In addition, scrap was revised to include ``economically
beneficial to recover'' precious metals.
(L) Paragraph (j)(3)(iii)(E), the phrase ``in raw or bulk form''
was added.
(M) Paragraph (j)(3)(iv) was revised to add a list of items for
which additional descriptive information is required during
disposition.
(N) Paragraph (j)(3)(v) was revised to delete the language
``describe the property in sufficient detail to permit an understanding
of its intended use.''
(O) Paragraph (j)(3)(vi) was added.
(P) Paragraph (j)(7)(ii) was revised to change ``facility'' to
``area.''
(Q) Paragraph (j)(8)(ii) was revised to add ``unless otherwise
directed by the contracting officer or by the plant clearance officer
the Contractor shall
[[Page 39264]]
remove and destroy any Government affixed markings...''
(R) Alternate I, 52.245-1, paragraph (h)(1) and 52.245-2 (b) were
revised to change the reference from ``loss, damage, destruction, or
theft'' to ``loss, theft, damage, or destruction.''
52.245-9 Use and Charges.
The clause at 52.245-9 was revised to delete definitions contained
in 52.245-1 and to include language that definitions applicable to this
contract are provided in the clause at 52.245-1. 52.245-9 may only be
used when 52.245-1 is included in the contract.
52.251-1 Government Supply Sources.
The clause at 52.251-1 was revised to update the reference to the
clause at 52.245-1.
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 Councils do not expect this proposed rule to have a significant
economic impact on a substantial number of small entities within the
meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq.,
because the rule does not impose any additional requirements on small
businesses. The rule does not affect the method of managing Government
property. The rule merely clarifies and corrects the previous FAR rule.
An Initial Regulatory Flexibility Analysis has, therefore, not been
performed. We invite comments from small businesses and other
interested parties. The Councils will consider comments from small
entities concerning the affected FAR Parts 2, 4, 15, 42, 45, and 52 in
accordance with 5 U.S.C. 610. Interested parties must submit such
comments separately and should cite 5 U.S.C. 601, et seq. (FAR case
2008-011), in correspondence.
C. Paperwork Reduction Act
The Paperwork Reduction Act does not apply because the proposed
changes to the FAR do not impose information collection requirements
that require the approval of the Office of Management and Budget under
44 U.S.C. Chapter 35, et seq.
List of Subjects in 48 CFR Parts 2, 4, 15, 32, 42, 45, and 52
Government procurement.
Dated: July 30, 2009.
Al Matera,
Director, Office of Acquisition Policy.
0
Therefore, DoD, GSA, and NASA propose amending 48 CFR parts 2, 4, 15,
32, 42, 45, and 52 as set forth below:
1. The authority citation for 48 CFR parts 2, 4, 15, 32, 42, 45,
and 52 continues 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 2--DEFINITIONS OF WORDS AND TERMS
2.101 [Amended]
2. Amend section 2.101, in paragraph (b)(2), by removing from the
definition ``Plant clearance officer'' the words ``contractor-operator
plants, and Federal installations'' and adding ``contractor-operator
plants, Federal installations and Federal and non-Federal industrial
operations'', in its place; and removing from the definition ``Special
tooling'' the words ``test equipment, and'' and adding ``tooling, and''
in its place.
PART 4--ADMINISTRATIVE MATTERS
3. Amend section 4.705-3 by adding paragraph (h) to read as
follows:
4.705-3 Acquisition and supply records.
* * * * *
(h) Property records (see 45.101 and 52.245-1): Retain 4 years.
PART 15--CONTRACTING BY NEGOTIATION
4. Amend section 15.404-4 by adding a sentence to the end of
paragraph (a)(3) to read as follows:
15.404-4 Profit.
(a) * * *
(3) * * * Unless the contractor acquired property is a deliverable
under the contract, no profit or fee shall be permitted on the cost of
the property.
* * * * *
PART 32--CONTRACT FINANCING
32.503-16 [Amended]
5. Amend section 32.503-16 by removing from paragraph (a) ``loss,
theft, destruction, or damage to'' and adding ``lost, stolen, damaged,
or destroyed'' in its place.
32.1010 [Amended]
6. Amend section 32.1010 by removing from paragraph (a) ``loss,
theft, destruction, or damage to'' and adding ``lost, stolen, damaged,
or destroyed'' in its place.
PART 42--CONTRACT ADMINISTRATION AND AUDIT SERVICES
7. Amend section 42.302 by revising paragraphs (a)(30)(iii) and
(a)(30)(v) to read as follows:
42.302 Contract administration functions.
(a) * * *
(30) * * *
(iii) Evaluate the use of Government property on a non-interference
basis in accordance with the clause at 52.245-9, Use and Charges;
* * * * *
(v) Modify contracts to reflect addition of Government furnished
property and ensure appropriate consideration.
* * * * *
PART 45--GOVERNMENT PROPERTY
8. Amend section 45.101 by--
a. Revising the definitions ``Cannibalize'', ``Equipment'',
``Government-furnished property'', and ``Government property'';
b. Removing from the definition ``Material'' the words ``test
equipment'' and adding ``test equipment or real property'' in its
place;
c. Removing the definition ``Plant equipment'';
d. Adding the definition ``Property records''; and
e. Revising the definition ``Real property.
The revised and added text reads as follows:
45.101 Definitions.
* * * * *
Cannibalize means to remove parts from equipment, special tooling
or special test equipment in order to install them on other property.
* * * * *
Equipment means a tangible item that is functionally complete for
its intended purpose, durable, nonexpendable, and needed for the
performance of a contract. Equipment is not intended for sale, and does
not ordinarily lose its identity or become a component part of another
article when put into use. Equipment does not include material or real
property.
Government-furnished property means property in the possession of,
or directly acquired by, the Government and subsequently furnished to
the contractor for performance of a contract. Government-furnished
property includes spares and property furnished for repair,
maintenance, overhaul, or modification.
Government property means all property owned or leased by the
[[Page 39265]]
Government. Government property 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.
* * * * *
Property records means the records created and maintained by the
contractor in support of its stewardship responsibilities for the
management of Government property.
* * * * *
Real property. See Federal Management Regulation 102-71.20 (41 CFR
102-71.20.)
* * * * *
9. Amend section 45.102 by revising paragraph (d) to read as
follows:
45.102 Policy.
* * * * *
(d) Exception. Property provided under contracts for repair,
maintenance, overhaul, or modification is not subject to the
requirements of paragraph (b) of this section.
10. Amend section 45.104 by revising the introductory text of
paragraph (a) to read as follows:
45.104 Responsibility and liability for Government property.
(a) Generally, contractors are not held liable for loss, theft,
damage, or destruction of Government property under the following types
of contracts:
* * * * *
11. Amend section 45.105 by revising paragraph (b)(1); and removing
from paragraph (d) ``damage, destruction, or theft'' and adding
``theft, damage, or destruction'' in its place. The revised text reads
as follows:
45.105 Contractors' property management system compliance.
* * * * *
(b) * * *
(1) Revocation of the Government's assumption of risk for loss,
theft, damage, or destruction; and/or
* * * * *
45.201 [Amended]
12. Amend section 45.201 by removing from paragraph (a)(4)
``Unique-item'' and adding ``Item unique'' in its place; and removing
from paragraph (d) ``When use of property on more than one contract is
anticipated, any'' and adding ``Any'' in its place.
13. Amend section 45.402 by revising paragraph (a) to read as
follows:
45.402 Title to contractor-acquired property.
(a) Title vests in the Government for all property acquired or
fabricated by the Contractor in accordance with the financing
provisions or other specific requirements for passage of title in the
contract. Under fixed price type contracts, in the absence of financing
provisions or other specific requirements for passage of title in the
contract, the Contractor retains title to all property acquired by the
Contractor for use on the contract, except for property identified as a
deliverable end item. If a deliverable item is to be retained by the
Contractor for use after inspection and acceptance by the Government,
it shall be made accountable to the contract through a contract
modification listing the item as Government-furnished property.
* * * * *
14. Revise section 45.502 to read as follows:
45.502 Subcontractor and alternate prime contractor locations.
(a) To ensure subcontractor compliance with Government property
administration requirements, and with prime contractor consent, the
property administrator assigned to the prime contract may request
support property administration from another contract administration
office. If the prime contractor does not provide consent to support
property administration at subcontractor locations, the property
administrator shall refer the matter to the contracting officer for
resolution.
(b) The prime property administrator shall accept the findings of
the delegated support property administrator and advise the prime
contractor of the results of property management reviews, including
deficiencies found with the subcontractor's property management system.
(c) Prime contractor consent is not required for support
delegations involving prime contractor alternate locations.
45.602-3 [Amended]
15. Amend section 45.602-3 by removing from paragraph (b)(3)
``North Capitol and H Streets'' and adding ``732 North Capitol Street''
in its place.
16. Revise section 45.604-3 to read as follows:
45.604-3 Sale of surplus personal property.
Policy for the sale of surplus personal property is contained in
the Federal Management Regulations, at Part 102-38 (41 CFR Part 102-
38). Agencies may specify implementing procedures.
17. Amend section 45.606-1 by revising paragraph (b) and adding
paragraph (c) to read as follows:
45.606-1 Contractor with an approved scrap procedure.
* * * * *
(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).
(c) Inventory disposal schedules shall be submitted for all
aircraft regardless of condition, flight safety critical 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 that are economically beneficial to
recover; or
(6) Is dangerous to the public health, safety, or welfare.
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
52.232-16 [Amended]
18. Amend section 52.232-16 by--
a. Removing from the clause heading ``(JUL 2009)'' and adding
``(DATE)'' in its place;
b. Removing from paragraph (d)(2)(ii) ``under any other clause of
this contract'';
c. Removing from paragraph (d)(3) ``or special tooling''; and
d. Removing from paragraph (e) ``is damaged, lost, stolen, or'' and
adding ``is lost, stolen, damaged, or'' in its place.
52.232-32 [Amended]
19. Amend section 52.232-32 by--
a. Removing from the clause heading ``(JAN 2008)'' and adding
``(DATE)'' in its place;
b. Removing from paragraph (f)(2)(ii) ``under any other clause of
this contract'';
c. Removing from paragraph (f)(3) ``or special tooling''; and
d. Removing from paragraph (g) ``is damaged, lost, stolen, or'' and
adding ``is lost, stolen, damaged, or'' in its place.
20. Amend section 52.245-1 by--
a. Revising the date of the clause;
b. In paragraph (a) by--
1. Revising the definition ``Cannibalize'';
2. Removing from the definition ``Equipment'' the word ``asset''
and adding the word ``item'' in its place; and adding a sentence to the
end of the definition;
[[Page 39266]]
3. Adding a sentence to the end of the definition ``Government-
furnished property'';
4. Adding a sentence to the end of the definition ``Government
property'';
5. Adding the words ``or real property'' to the end of the
definition ``Material'';
6. Removing the definition ``Plant equipment'';
7. Adding, in alphabetical order, the definition ``Property
records''; and
8. Revising the definition ``Real property'';
c. Revising the first sentence of paragraph (b)(2), (c), and
(e)(2)(ii);
d. Removing from paragraphs (e)(2)(iii) and (f)(1)(i) the word
``material'' and adding the word ``property'' wherever it occurs (8
times);
e. Removing from paragraph (f)(1)(iii)(A)(4) the word ``Unique-
item'' and adding the words ``Item unique'' in its place;
f. Revising paragraph (f)(1)(v)(A), introductory text of paragraph
(f)(1)(vi), paragraphs (f)(1)(vi)(A), (f)(1)(vi)(B)(4),
(f)(1)(vi)(B)(10), (f)(1)(vii)(A), (f)(1)(viii)(B), (f)(1)(x), (g),
introductory text of paragraph (h)(1), the first sentence of paragraph
(h)(1)(ii), (h)(1)(iii), the first sentence of paragraph (h)(2),
paragraph (h)(3), the second sentence of paragraph (i), and paragraph
(j)(1)(i)(B);
h. Add paragraph (j)(1)(i)(C);
i. Revise paragraphs (j)(3)(iii)(E), and (j)(3)(iv);
g. Add paragraphs (j)(3)(v), and (j)(3)(vi);
j. Remove from paragraph (j)(7)(ii) the word ``facility'' and add
the word ``area'' in its place;
k. Revise paragraph (j)(8)(ii);
l. In Alternate I, revise the date of the alternate, and the first
sentence of paragraph (h)(1).
The added and revised text reads as follows:
52.245-1 Government Property.
* * * * *
GOVERNMENT PROPERTY (DATE)
(a) * * *
* * * * *
Cannibalize means to remove parts from equipment, special tooling
or special test equipment in order to install them on other property.
* * * * *
Equipment * * * Equipment does not include material or real
property.
Government-furnished property * * * Government-furnished property
includes spares and property furnished for repair, maintenance,
overhaul, or modification.
Government property * * * Government property includes material,
equipment, special tooling, special test equipment, and real property.
Government property does not include intellectual property, and
software.
* * * * *
Property records means the records created and maintained by the
contractor in support of its stewardship responsibilities for the
management of Government property.
* * * * *
Real property. See Federal Management Regulation 102-71.20 (41 CFR
102-71.20).
* * * * *
(b) * * *
(2) The Contractor's responsibility extends from the initial
acquisition and receipt of property, through stewardship, custody, and
use until formally relieved of responsibility by authorized means,
including delivery, consumption, expending, sale (as surplus property),
or other disposition, or via a completed investigation, evaluation, and
final determination for lost, stolen, damaged, or destroyed property. *
* *
* * * * *
(c) Use of Government property. (1) The Contractor shall use
Government property, either furnished or acquired under this contract,
only for performing this contract, unless otherwise provided for in
this contract or approved by the Contracting Officer.
(2) Modifications or alterations of Government property are
prohibited, unless they are--
(i) Reasonable and necessary due to the scope of work under this
contract or its terms and conditions;
(ii) Required for normal maintenance; or
(iii) Otherwise authorized by the Contracting Officer.
(3) The Contractor shall not cannibalize Government property unless
otherwise provided for in this contract or approved by the Contracting
Officer.
* * * * *
(e) * * *
(2) * * *
(ii) Title vests in the Government for all property acquired or
fabricated by the Contractor in accordance with the financing
provisions or other specific requirements for passage of title in the
contract. Under fixed price type contracts, in the absence of financing
provisions or other specific requirements for passage of title in the
contract, the Contractor retains title to all property acquired by the
Contractor for use on the contract, except for property identified as a
deliverable end item. If a deliverable item is to be retained by the
Contractor for use after inspection and acceptance by the Government,
it shall be made accountable to the contract through a contract
modification listing the item as Government-furnished property.
* * * * *
(f) * * *
(1) * * *
(v) * * *
(A) The Contractor shall award subcontracts that clearly identify
assets to be provided and shall ensure appropriate flow down of
contract terms and conditions (e.g., extent of liability for loss,
theft, damage, or destruction of Government property).
* * * * *
(vi) Reports. The Contractor shall have a process to create and
provide reports of discrepancies; loss, theft, damage, or destruction;
physical inventory results; audits and self-assessments; corrective
actions; and other property related reports as directed by the
Contracting Officer.
(A) Loss, theft, damage, or destruction. Unless otherwise directed
by the Property Administrator, the Contractor shall investigate and
promptly furnish a written narrative of all incidents of loss, theft,
damage, or destruction to the property administrator as soon as the
facts become known or when requested by the Government.
(B) * * *
(4) Item unique Item Identifier (if available).
* * * * *
(10) A statement that the Government will receive any reimbursement
covering the loss, theft, damage, or destruction in the event the
Contractor was or will be reimbursed or compensated.
* * * * *
(vii) * * *
(A) Consumed or expended, reasonably and properly, or otherwise
accounted for, in the performance of the contract, including reasonable
inventory adjustments of material as determined by the Property
Administrator; or a Property Administrator granted relief of
responsibility for loss, theft, damage, or destruction of Government
property;
* * * * *
(viii) * * *
(B) Unless otherwise authorized in this contract or by the Property
Administrator the Contractor shall not commingle Government material
with material not owned by the Government.
* * * * *
(x) Property closeout. The Contractor shall promptly perform and
report to the Property Administrator contract
[[Page 39267]]
property closeout, to include reporting, investigating and securing
closure of all loss, theft, damage, or destruction cases; physically
inventorying all property upon termination or completion of this
contract; and disposing of items at the time they are determined to be
excess to contractual needs.
* * * * *
(g) Systems analysis. (1) The Government shall have access to the
Contractor's premises and all Government property, at reasonable times,
for the purposes of reviewing, inspecting and evaluating the
Contractor's property management plan, systems, procedures, records,
and supporting documentation that pertains to Government property. This
access includes all site locations and, with the Contractor's consent,
all subcontractor premises.
(2) Records of Government property shall be readily available to
authorized Government personnel and shall be appropriately safeguarded.
(3) Should it be determined by the Government that the Contractor's
(or subcontractor's) property management practices are inadequate or
not acceptable for the effective management and control of Government
property under this contract, or present an undue risk to the
Government, the Contractor shall immediately take all necessary
corrective actions as directed by the Property Administrator.
* * * * *
(h) * * *
(1) Unless otherwise provided for in the contract, the Contractor
shall not be liable for loss, theft, damage, or destruction to the
Government property furnished or acquired under this contract, except
when any one of the following applies--
* * * * *
(ii) The loss, theft, damage, or destruction is the result of
willful misconduct or lack of good faith on the part of the
Contractor's managerial personnel. * * *
(iii) The Contracting Officer has, in writing, revoked the
Government's assumption of risk for loss, theft, damage, or
destruction, due to a determination under paragraph (g) of this clause
that the Contractor's property management practices are inadequate,
and/or present an undue risk to the Government, and the Contractor
failed to take timely corrective action. If the Contractor can
establish by clear and convincing evidence that the loss, theft,
damage, or destruction of Government property occurred while the
Contractor had adequate property management practices or the loss,
theft, damage, or destruction of Government property did not result
from the Contractor's failure to maintain adequate property management
practices, the Contractor shall not be held liable.
(2) The Contractor shall take all reasonable actions necessary to
protect the Government property from further loss, theft, damage, or
destruction. * * *
(3) The Contractor shall do nothing to prejudice the Government's
rights to recover against third parties for any loss, theft, damage, or
destruction of Government property.
* * * * *
(i) Equitable adjustment. * * * However, the Government shall not
be liable for breach of contract for the following:
* * * * *
(j) * * *
(1) * * *
(i) * * *
(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.)
(C) Inventory disposal schedules shall be submitted for all
aircraft regardless of condition, flight safety critical 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 that are economically beneficial to
recover; or
(6) Is dangerous to the public health, safety, or welfare.
* * * * *
(3) * * *
(iii) * * *
(E) Precious metals in raw or bulk form;
* * * * *
(iv) The Contractor shall provide the information required by
52.245-1(f)(1)(iii) along with the following:
(A) For special tooling and special test equipment, identify each
part number with which the item is used.
(B) For work-in-progress, the estimated percentage of completion.
(C) For precious metals, the type of metal and estimated weight.
(D) For hazardous material or property contaminated with hazardous
material, the type of hazardous material.
(E) For metals in mill product form, the form, shape, treatment,
hardness, temper, specification (commercial or Government) and
dimensions (thickness, width and length.)
(F) Any additional information that may facilitate understanding of
the property's intended use.
(v) Property with the same description, condition code, and
reporting location may be grouped in a single line item.
(vi) Scrap should be reported by ``lot'' along with metal content,
estimated weight and estimated value.
* * * * *
(8) * * *
(ii) The Contractor shall prepare for shipment, deliver f.o.b.
origin, or dispose of Contractor inventory as directed by the Plant
Clearance Officer. Unless otherwise directed by the Contracting Officer
or by the Plant Clearance Officer, the Contractor shall remove and
destroy any Government affixed markings identifying the property as
U.S. Government-owned property prior to its disposal.
* * * * *
Alternate I (Date). * * *
(h)(1) The Contractor assumes the risk of, and shall be
responsible for, any loss, theft, damage, or destruction of
Government property upon its delivery to the Contractor as
Government-furnished property. * * *
* * * * *
20. Amend section 52.245-2 by revising the date of the clause, and
the first two sentences of paragraph (b) to read as follows:
52.245-2 Government Property Installation Operation Services.
* * * * *
GOVERNMENT PROPERTY INSTALLATION OPERATION SERVICES (DATE)
* * * * *
(b) The Government bears no responsibility for repair or
replacement of any loss, theft, damage, or destruction of Government
property. If any or all of the Government property is lost, stolen,
damaged, or destroyed or becomes no longer usable, the Contractor shall
be responsible for replacement of the property at Contractor expense. *
* *
* * * * *
21. Amend section 52.245-9 by revising the date of the clause, and
the introductory text of paragraph (a); and removing the definitions
``Acquisition cost'', ``Government property'', ``Plant equipment'', and
``Real property''. The revised text reads as follows:
52.245-9 Use and Charges.
* * * * *
USE AND CHARGES (DATE)
(a) Definitions. Definitions applicable to this contract are
provided in the clause at 52.245-1, Government
[[Page 39268]]
Property. Additional definitions as used in this clause include:
* * * * *
23. Amend section 52.251-1 by revising the date of the clause, and
the last sentence of the clause to read as follows:
52.251-1 Government Supply Sources.
* * * * *
GOVERNMENT SUPPLY SOURCES (DATE)
* * * The provisions of the clause entitled ``Government
Property,'' at 52.245-1, shall apply to all property acquired under
such authorization.
(End of clause)
[FR Doc. E9-18799 Filed 8-5-09; 8:45 am]
BILLING CODE 6820-EP-S