[Code of Federal Regulations]
[Title 48, Volume 1]
[Revised as of October 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 48CFR45]

[Page 806-807]
 
            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM
 
                CHAPTER 1--FEDERAL ACQUISITION REGULATION
 
PART 45_GOVERNMENT PROPERTY--Table of Contents
 
                          Subpart 45.1_General
 
Sec.  45.103  Responsibility and liability for Government property.

    (a) Contractors are responsible and liable for Government property 
in their possession, unless otherwise provided by the contract.
    (b) Generally, Government contracts do not hold contractors liable 
for loss of or damage to Government property when the property is 
provided under--
    (1) Negotiated fixed-price contracts for which the contract price is 
not based upon an exception at 15.403-1;
    (2) Cost-reimbursement contracts;
    (3) Facilities contracts; or
    (4) Negotiated or sealed bid service contracts performed on a 
Government installation where the contracting officer determines that 
the contractor has

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little direct control over the Government property because it is located 
on a Government installation and is subject to accessibility by 
personnel other than the contractor's employees and that by placing the 
risk on the contractor, the cost of the contract would be substantially 
increased.
    (c) When justified by the circumstances, the contract may require 
the contractor to assume greater liability for loss of or damage to 
Government property than that contemplated by the Government property 
clauses or the clause at 52.245-8, Liability for the Facilities. For 
example, this may be the case when the contractor is using Government 
property primarily for commercial work rather than Government work.
    (d) If the Government provides Government property directly to a 
subcontractor, the terms of paragraph (b) above shall apply to the 
subcontractor.
    (e) Subcontractors are liable for loss of or damage to Government 
property furnished through a prime contractor. However, if the prime 
contract is of a type listed in subparagraph (b)(1) or (2) above, the 
prime contractor may, after obtaining the contracting officer's consent, 
reduce the subcontractor's liability by including in the subcontract a 
clause similar to paragraph (g), Limited risk of loss, as provided in 
Alternate I of the clause at 52.245-2, Government Property (Fixed-Price 
Contracts), (for fixed-price contracts) or similar to the same paragraph 
of the clause at 52.245-5, Government Property (Cost-Reimbursement, 
Time-and-Material, or Labor-Hour Contracts) (for cost-reimbursement 
contracts). Before consenting to a clause that reduces the 
subcontractor's liability, the contracting officer should ensure that 
the Government's interests are sufficiently protected.
    (f) A prime contractor that provides Government property to a 
subcontractor shall not be relieved of any responsibility to the 
Government that the prime contractor may have under the terms of the 
prime contract.

[48 FR 42392, Sept. 19, 1983, as amended at 53 FR 663, Jan. 11, 1988; 60 
FR 48218, Sept. 18, 1995; 62 FR 51271, Sept. 30, 1997]