00-115. Federal Acquisition Regulation; Government Property  

  • [Federal Register Volume 65, Number 6 (Monday, January 10, 2000)]
    [Proposed Rules]
    [Pages 1438-1481]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 00-115]
    
    
    
    [[Page 1437]]
    
    
    
    Part II
    
    Department of Defense
    
    General Services Administration
    
    National Aeronautics and Space Administration
    _______________________________________________________________________
    
    
    
    48 CFR Parts 1, 2, 4 et al.
    
    
    
    Federal Acquisition Regulation; Government Property; Proposed Rules
    
    Federal Register / Vol. 65, No. 6 / Monday, January 10, 2000 / 
    Proposed Rules
    
    [[Page 1438]]
    
    
    
    DEPARTMENT OF DEFENSE
    
    GENERAL SERVICES ADMINISTRATION
    
    NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
    
    48 CFR Parts 1, 2, 4, 7, 8, 15, 16, 17, 22, 27, 28, 31, 32, 35, 37, 
    42, 43, 44, 45, 49, 51, 52, and 53
    
    [FAR Case 1995-013]
    RIN 9000-AH60
    
    
    Federal Acquisition Regulation; Government Property
    
    AGENCIES: Department of Defense (DoD), General Services Administration 
    (GSA), and National Aeronautics and Space Administration (NASA).
    
    ACTION: Proposed rule.
    
    -----------------------------------------------------------------------
    
    SUMMARY: The Civilian Agency Acquisition Council and the Defense 
    Acquisition Regulations Council (Councils) are proposing to amend the 
    Federal Acquisition Regulation (FAR) to simplify procedures, reduce 
    recordkeeping, and eliminate requirements related to the management and 
    disposition of Government property in the possession of contractors. In 
    addition, this proposed rule provides contractors the option of 
    managing Government property under a standard process based system or 
    managing Government property using the same business practices the 
    contractors use to manage their own property. Contractors may use 
    either system at a particular site (primary location at which a 
    contract will be performed) but must use only one system at that site. 
    Contractors that elect to use their property management practices to 
    manage the Government's property in lieu of the standard processes must 
    accept increased liability for property losses.
        Based on the significant changes made to this rule from an earlier 
    proposed rule, the Councils have agreed to republish the rule as a 
    proposed rule and provide an opportunity for the public to comment on 
    the changes.
    
    DATES: Interested parties should submit comments in writing on or 
    before March 10, 2000 to be considered in the formulation of a final 
    rule.
    
    ADDRESSES: Interested parties should submit written comments to: 
    General Services Administration, FAR Secretariat (MVRS), 1800 F Street, 
    NW, Room 4035, ATTN: Laurie Duarte, Washington, DC 20405. Address e-
    mail comments submitted via the Internet to: farcase.1995-013@gsa.gov.
        Please submit comments only and cite FAR case 1995-013 in all 
    correspondence related to this case.
    
    FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS 
    Building, Washington, DC, 20405, at (202) 501-4755 for information 
    pertaining to status or publication schedules. For clarification of 
    content, Ms. Angelena Moy at (703) 695-1097/1098 (e-mail: 
    moyac@acq.osd.mil), or Ms. Linda Klein, at (202) 501-3775. Please cite 
    FAR case 1995-013.
    
    SUPPLEMENTARY INFORMATION:
    
    A. Background
    
        On June 2, 1997, the Civilian Agency Acquisition Council and the 
    Defense Acquisition Regulations Council (Councils) published a proposed 
    rule to simplify the management and disposition of Government property 
    in the possession of contractors (see 62 FR 30186). As a result of 
    public comments received on that rule and comments received during and 
    in response to public meetings conducted on February 18, 1998, and May 
    18, 1999, the Councils have revised and restructured the rule.
        An interagency team (Department of Defense, Environmental 
    Protection Agency, General Services Administration, and the National 
    Aeronautics and Space Administration) analyzed each comment received in 
    response to the June 2, 1997, proposed rule and the public meetings 
    conducted on February 18, 1998, and May 18, 1999. Because this proposed 
    rule significantly changes the June 1997 proposed rule, a summary of 
    the comments received and recommended disposition is not included with 
    this rule.
        Based upon comments received in response to this proposed rule, and 
    other information that might become available during the public comment 
    period, the final rule might contain only the standard Government 
    property and Government property administration clauses and related 
    material discussed in this proposed rule, only the alternate Government 
    property and Government property administration clauses and related 
    material discussed in this rule, or both the standard and alternate 
    Government property and Government property administration clauses and 
    related material. The Councils are particularly interested in public 
    comment on whether the final rule should contain only the standard 
    Government property and Government property administrative clauses and 
    related material discussed in this proposed rule, only the alternate 
    Government property and Government property administration clauses and 
    related material discussed in this proposed rule, or both the standard 
    and alternate Government property and Government property 
    administration clauses and related material.
        This rule was not subject to Office of Management and Budget 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 because it continues the re-engineering of the Government 
    property management processes and procedures and is not expected to 
    affect significantly the profitability of contractors who have 
    Government property in their possession.
    
    B. Regulatory Flexibility Act
    
        The Initial Regulatory Flexibility Analysis (IRFA) submitted to the 
    Chief Counsel for Advocacy of the Small Business Administration is 
    applicable to this revised proposed rule. A summary of the analysis was 
    published in the Federal Register on June 2, 1997.
    
    C. Paperwork Reduction Act
    
        The Paperwork Reduction Act (Pub. L. 104-13) applies because the 
    proposed rule contains information collection requirements. The Office 
    of Management and Budget (OMB) approved the information collection 
    requirements contained in the proposed rule dated June 2, 1997, under 
    OMB Clearance Number 9000-0151. In response to public comments on the 
    proposed rule, this revised proposed rule eliminates one additional 
    notification requirement, replaces three of the reports identified in 
    the proposed rule with notices, and simplifies the information 
    collection requirements for the annual report of Government property in 
    the possession of contractors. These changes slightly reduce the 
    proposed rule's estimated information collection hours. The Councils 
    will recalculate the paperwork burden using the latest labor and 
    overhead rates when this proposed rule is finalized. It is estimated 
    that this rule, when final, will reduce the public paperwork associated 
    with Government property management by approximately 3,147,000 hours 
    per year.
    
    List of Subjects in 48 CFR Parts 1, 2, 4, 7, 8, 15, 16, 17, 22, 27, 
    28, 31, 32, 35, 37, 42, 43, 44, 45, 49, 51, 52, and 53
    
        Government procurement.
    Edward C. Loeb,
    Director, Federal Acquisition Policy Division.
        Therefore, DoD, GSA, and NASA propose that 48 CFR parts 1, 2, 4, 7, 
    8,
    
    [[Page 1439]]
    
    15, 16, 17, 22, 27, 28, 31, 32, 35, 37, 42, 43, 44, 45, 49, 51, 52, and 
    53 be amended as set forth below:
        1. The authority citation for 48 CFR parts 1, 2, 4, 7, 8, 15, 16, 
    17, 22, 27, 28, 31, 32, 35, 37, 42, 43, 44, 45, 49, 51, 52, and 53 
    continues to read as follows:
    
        Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42 
    U.S.C. 2473(c).
    
    PART 1--FEDERAL ACQUISITION REGULATIONS SYSTEM
    
        2. Amend section 1.106 in the table following the introductory 
    paragraph by--
        a. Revising the OMB Control Number at entries for FAR segments 45, 
    SF 1428, and SF 1429 to read ``9000-0151'';
        b. Removing the FAR segment entries and their corresponding OMB 
    Control Numbers at 52.216-13, 52.232-21, 52.245-2, 52.245-3, 52.245-5, 
    52.245-7, 52.245-8, 52.245-9, 52.245-10, 52.245-11, 52.245-16, 52.245-
    17, 52.245-18, SF 1423, SF 1424, SF 1426, SF 1427, SF 1430, SF 1432, 
    and SF 1434; and
        c. Adding entries to read as follows:
    
    
    1.106  OMB approval under the Paperwork Reduction Act.
    
    * * * * *
    
    ------------------------------------------------------------------------
                                                                 OMB control
                            FAR segment                              No.
    ------------------------------------------------------------------------
     
                  *         *         *         *     *
    52.245-1...................................................    9000-0151
    52.245-2...................................................    9000-0151
    52.245-3...................................................    9000-0151
    52.245-4...................................................    9000-0151
    52.245-5...................................................    9000-0151
    52.245-6...................................................    9000-0151
    52.245-7...................................................    9000-0151
    52.245-8...................................................    9000-0151
     
                  *         *         *         *     *
    SF 1450....................................................    9000-0151
     
                  *         *         *         *     *
    ------------------------------------------------------------------------
    
    PART 2--DEFINITIONS OF WORDS AND TERMS
    
        3. Amend section 2.101 by revising the definition ``Supplies''; and 
    by adding, in alphabetical order, the definitions ``Property'', ``Real 
    property'', and ``Personal property'' to read as follows:
    
    
    2.101  Definitions.
    
    * * * * *
        Personal property means property of any kind or interest in it 
    except real property, battleships, cruisers, aircraft carriers, 
    destroyers, submarines, and records of the Federal Government.
    * * * * *
        Property means real and personal property.
        Real property means land and rights in land, ground improvements, 
    utility distribution systems, and buildings and other structures. It 
    does not include foundations and other work necessary for installing 
    special tooling, special test equipment, or equipment.
        Supplies means all property except land or interest in land. It 
    includes (but is not limited to) public works and buildings; ships, 
    floating equipment, and vessels of every character, type, and 
    description, together with parts and accessories; aircraft and aircraft 
    parts, accessories, and equipment; machine tools; and the alteration or 
    installation of any of the foregoing.
    * * * * *
    
    PART 4--ADMINISTRATIVE MATTERS
    
        4. Amend section 4.703 by revising the first sentence of paragraph 
    (b)(3) to read as follows:
    
    
    4.703  Policy.
    
    * * * * *
        (b) * * *
        (3) The contractor does not meet the original due date for 
    submission of final indirect cost rate proposals specified in paragraph 
    (e)(2) of the clause at 52.216-7, Allowable Cost and Payment. * * *
    * * * * *
        5. Amend section 4.804-4 by revising paragraph (b) to read as 
    follows:
    
    
    4.804-4  Physically completed contracts.
    
    * * * * *
        (b) Rental, use, and storage agreements are considered physically 
    complete when the performance period stipulated in the agreement 
    expires.
    
    PART 7--ACQUISITION PLANNING
    
        6. Amend section 7.105 by revising paragraph (b)(14) to read as 
    follows:
    
    
    7.105  Contents of written acquisition plans.
    
    * * * * *
        (b) * * *
        (14) Government-furnished property. Identify any property to be 
    furnished to contractors and discuss any associated considerations, 
    such as the property's availability and compliance with the 
    requirements at 45.201.
    * * * * *
    
    
    7.501  [Amended]
    
        7. Amend section 7.501 in the second sentence of paragraph (b) by 
    removing ``facilities operations and maintenance,'' and adding 
    ``property management,'' in its place.
    
    PART 8--REQUIRED SOURCES OF SUPPLIES AND SERVICES
    
        8. Revise section 8.101 to read as follows:
    
    
    8.101  Definition.
    
        Excess personal property means any personal property (see 2.101) 
    under the control of a Federal agency that the agency head or a 
    designee determines is not required for its needs or for the discharge 
    of its responsibilities.
    
    PART 15--CONTRACTING BY NEGOTIATION
    
        9. Amend section 15.305 by redesignating paragraphs ``(a)(3)'' and 
    ``(a)(4)'' as ``(a)(4)'' and ``(a)(5)'', respectively, and by adding a 
    new paragraph (a)(3) to read as follows:
    
    
    15.305  Proposal evaluation.
    
    * * * * *
        (a) * * *
        (3) Government property adjustment. Offerors who will use 
    Government property to perform a contract usually have a price 
    advantage relative to competitors who will use their own property or 
    will acquire or fabricate property to perform that contract. When 
    evaluating offers, that advantage must be eliminated to the extent 
    practicable.
        (i) Contracting officers must adjust offers by applying a rental 
    adjustment determined, to the extent practicable, using the rental 
    guidelines in the clause at 52.245-6, Rental Charges for Commercial 
    Use.
        (ii) It is not necessary to calculate a Government property 
    adjustment when--
        (A) The solicitation requires the offerors to use specific 
    Government-furnished property items during contract performance; or
        (B) It is apparent that the difference between the offer or offers 
    most advantageous to the Government and competing offers is so great 
    that a rental adjustment will not affect source selection.
    * * * * *
    
    PART 16--TYPES OF CONTRACTS
    
    
    16.307  [Amended]
    
        10. Amend section 16.307--
        a. In the first sentence of paragraph (a)(1) by removing the 
    parenthetical ``(other than a facilities contract)'';
        b. In paragraph (b) by removing from the parenthetical the words 
    ``a facilities contract or'';
        c. In paragraph (d) by removing ``(other than a facilities 
    contract)'';
        d. In paragraph (e)(1) by removing ``or a facilities contract'';
    
    [[Page 1440]]
    
        e. In paragraph (f)(1) by removing ``(other than a facilities 
    contract)'';
        f. By removing paragraphs (g) and (h); and
        g. By redesignating paragraph ``(i)'' as paragraph ``(g)'', and 
    amending it by removing the last sentence.
    
    PART 17--SPECIAL CONTRACTING METHODS
    
        11. Amend section 17.603 by revising paragraph (a)(5) to read as 
    follows:
    
    
    17.603  Limitations.
    
        (a) * * *
        (5) Functions that can more properly be accomplished in accordance 
    with subpart 45.2, Furnishing Government Property.
    * * * * *
    
    PART 22--APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS
    
    
    22.400  [Amended]
    
        12. Amend section 22.400 by removing the parenthetical ``(See 
    definition of Construction in section 22.401.)''.
    
    
    22.405  [Amended]
    
        13. Amend section 22.405, in the first sentence, by removing 
    ``Facilities Contracts'' and adding ``Government-Furnished Real 
    Property'' in its place.
        14. Amend section 22.407 by revising paragraph (d) to read as 
    follows:
    
    
    22.407  Contract clauses.
    
    * * * * *
        (d) The contracting officer shall insert the clause at 52.222-17, 
    Labor Standards for Construction Work--Government-Furnished Real 
    Property, when the Government will furnish real property for 
    performance of a contract and the Government is not certain at the time 
    of contract award that it may require covered construction work (see 
    22.402(b)) to be performed in the United States.
    
    PART 27--PATENTS, DATA, AND COPYRIGHTS
    
    
    27.409  [Amended]
    
        15. Amend section 27.409 in the first sentence of paragraph (e) by 
    removing the word ``facilities'' and adding ``property'' in its place.
    
    PART 28--BONDS AND INSURANCE
    
        16. Revise section 28.303 to read as follows:
    
    
    28.303  Insurance against loss of or damage to Government property.
    
        When the Government requires or approves insurance to cover loss, 
    theft, or destruction of or damage to Government property, it may be 
    provided by specific insurance policies or by inclusion of the risks in 
    the contractor's existing policies. The policies shall disclose the 
    Government's interest in the property.
    
    PART 31--CONTRACT COST PRINCIPLES AND PROCEDURES
    
    
    31.106  [Removed and Reserved]
    
        17. Remove and reserve sections 31.106 through 31.106-3.
    
    
    31.205-40  [Amended]
    
        18. Amend section 31.205-40 in paragraph (a) by removing the 
    citation ``45.101'' and inserting ``45.001'' in its place.
    
    PART 32--CONTRACT FINANCING
    
    
    32.403  [Amended]
    
        19. Amend section 32.403 by removing and reserving paragraph (c).
    
    
    32.407  [Amended]
    
        20. Amend section 32.407 by removing and reserving paragraph (c).
    
    
    32.503-15  [Removed and Reserved]
    
        21. Remove and reserve section 32.503-15.
    
    
    32.704  [Amended]
    
        22. Amend section 32.704 in the introductory text of paragraph 
    (a)(1) by removing ``52.232-21, Limitation of Cost (Facilities);''.
        23. Amend section 32.705-2 by revising paragraph (a); by removing 
    paragraph (b); and by redesignating paragraph (c) as paragraph (b). The 
    revised text reads as follows:
    
    
    32.705-2  Clauses for limitation of cost or funds.
    
        (a) The contracting officer shall insert the clause at 52.232-20, 
    Limitation of Cost, in solicitations and contracts if a fully funded 
    cost-reimbursement contract is contemplated whether or not the contract 
    provides for payment of a fee.
    * * * * *
    
    PART 35--RESEARCH AND DEVELOPMENT CONTRACTING
    
        24. Revise the section heading and text of 35.014 to read as 
    follows:
    
    
    35.014  Title to tangible personal property.
    
        The provisions of 31 U.S.C. 6306 for vesting title to equipment and 
    other tangible property in nonprofit organizations whose primary 
    purpose is the conduct of scientific research or nonprofit institutions 
    of higher education are implemented through Alternate II to the clause 
    at 52.245-2, Government Property, and Alternate II to the clause at 
    52.245-7, Government Property--Alternate Procedures. It is generally in 
    the Government's interests to vest title with such contractors unless 
    an agency head has provided otherwise or the property can be used for 
    follow-on contracts to be performed on real property owned or leased by 
    the Government.
    
    PART 37--SERVICE CONTRACTING
    
        25. Amend section 37.101 by revising paragraph (e) of the 
    definition ``Service contract'' to read as follows:
    
    
    37.101  Definitions.
    
    * * * * *
        Service Contract * * *
    * * * * *
        (e) Operation of Government-owned equipment, real property, and 
    systems.
    * * * * *
    
    PART 42--CONTRACT ADMINISTRATION AND AUDIT SERVICES
    
        26. Amend section 42.302 by revising paragraphs (a)(26), (a)(27), 
    and (a)(28), and by removing and reserving (a)(30) to read as follows:
    
    
    42.302  Contract administration functions.
    
        (a) * * *
        (26) Perform property administration (see part 45), including 
    review and approval of contractor property management systems, 
    assessment of contractor processes for the acquisition or fabrication 
    of property under cost-reimbursement contracts, and the management and 
    disposal of Government property.
        (27) Determine reasonable rentals for noninterference use of 
    Government property for commercial purposes (see 52.245-2, 52.245-6, 
    and 52.245-7).
        (28) Perform necessary screening, redistribution, and disposal of 
    Government property.
    * * * * *
        (30) [Reserved]
    * * * * *
    
    
    42.705-1  [Amended]
    
        27. Amend section 42.705-1 in the first sentence of paragraph 
    (b)(1) by removing ``or 52.216-13''.
    
    
    42.708  [Amended]
    
        28. Amend section 42.708 in paragraph (b) by removing ``or 52.216-
    13''.
    
    [[Page 1441]]
    
    42.709-6  [Amended]
    
        29. Amend section 42.709-6 by removing ``52.216-13,''.
    
    PART 43--CONTRACT MODIFICATIONS
    
    
    43.205  [Amended]
    
        30. Amend section 43.205 by removing paragraph (b)(5); by 
    redesignating paragraph ``(b)(6)'' as ``(b)(5)'', and amending it by 
    removing ``Alternate V'' and adding ``Alternate IV'' in its place.
    
    PART 44--SUBCONTRACTING POLICIES AND PROCEDURES
    
    
    44.101  [Amended]
    
        31. Amend section 44.101 by removing the definition ``Facilities''.
        32. Amend section 44.202-2 by revising paragraph (a)(2); by 
    removing paragraph (a)(10); and by redesignating paragraphs (a)(11) 
    through (a)(13) as (a)(10) through (a)(12), respectively. The revised 
    text reads as follows:
    
    
    44.202-2  Considerations.
    
        (a) * * *
        (2) Is the subcontract for property identified in the solicitation 
    as property the Government will furnish for contract performance?
    * * * * *
        33. Revise part 45 to read as follows:
    
    PART 45--GOVERNMENT PROPERTY IN THE POSSESSION OF CONTRACTORS
    
    Sec.
    45.000  Scope of part.
    45.001  Definitions.
    
    Subpart 45.1--General
    
    45.101  Property management procedures.
    45.102  Policy.
    
    Subpart 45.2--Furnishing Government Property
    
    45.201  Furnishing property for performance of a Government 
    contract.
    45.201-1  Criteria for furnishing Government property.
    45.201-2  Restrictions on furnishing Government property.
    45.201-3  Documentation and approval requirements.
    45.202  Competitive advantage.
    45.203  Solicitation and contract requirements.
    45.204  Postaward requests for Government property.
    45.205  Repair or replacement of Government-furnished property.
    45.205-1  Maintenance.
    45.205-2  Property losses.
    45.206  Government-furnished property to be returned to a Government 
    activity.
    45.207  Solicitation provision and contract clauses.
    45.207-1  Solicitation provision.
    45.207-2  Contract clauses.
    
    Subpart 45.3--Contractor-Acquired or Produced Property
    
    45.301  General.
    45.302  Fixed-price and labor-hour contracts.
    45.303  Cost-reimbursement and time-and-materials contracts.
    45.304  Contract clause.
    
    Subpart 45.4--Liability for Property Losses
    
    45.400  General.
    45.401  Liability for property losses--contracts that include the 
    clause at 52.245-2, Government Property.
    45.401-1  Government liability.
    45.401-2  Contractor liability.
    45.402  Liability for property losses--contracts that include the 
    clause at 52.245-7, Government Property--Alternate Procedures.
    45.402-1  Government liability.
    45.402-2  Contractor liability.
    45.403  Post delivery considerations.
    45.404  Contract clause.
    
    Subpart 45.5--Government Property Management
    
    45.501  Preaward considerations.
    45.502  Standard and alternate property management systems.
    45.502-1  Property management under the clause at 52.245-5, 
    Government Property Administration.
    45.502-2  Property management under the clause at 52.245-8, 
    Government Property Administration--Alternate Procedures.
    45.503  Government property records and reports.
    45.504  Property accountability.
    45.504-1  Accountability.
    45.504-2  Transferring accountability to other contracts.
    45.505  Reutilization, transfer, and donation of Government 
    property.
    45.505-1  Contractor actions.
    45.505-2  Inventory disposal schedules.
    45.505-3  Reutilization priorities.
    45.505-4  Screening.
    45.505-5  Waiver of screening requirements.
    45.505-6  Interagency property transfer costs.
    45.506  Abandonment, destruction, or donation of excess agency 
    property.
    45.507  Disposal of scrap.
    45.507-1  Production scrap.
    45.507-2  Other scrap.
    45.508  Disposal of surplus Government property.
    45.508-1  Abandonment, destruction, or donation of surplus property 
    in lieu of sale.
    45.508-2  Sale of surplus property.
    45.508-3  Proceeds from sales.
    45.509  Inventory Disposal Reports.
    45.510  Contract clause.
    
    Subpart 45.6--Authorizing the Use of Government Property for Commercial 
    Purposes
    
    45.601  Policy.
    45.602  Contract clause.
    
    
    45.000  Scope of part.
    
        This part prescribes policies for furnishing Government property to 
    contractors, contractors' use and management of Government property, 
    and, except for real property, the disposal of Government property. It 
    does not apply to--
        (a) Property leased under the provisions of 10 U.S.C. 2667, Leases: 
    nonexcess property; or
        (b) Property to which the Government has obtained title, a lien, or 
    other security interest solely as a result of financing arrangements 
    under fixed-price contracts.
    
    
    45.001  Definitions.
    
        As used in this part--
        Commercial purpose means any purpose other than performance of a 
    U.S. Government contract or subcontract thereunder.
        Contractor's managerial personnel means the contractor's directors, 
    officers, and any of the contractor's managers, superintendents, or 
    equivalent representatives who have supervision or direction of all or 
    substantially all of the contractor's business or operations at a site 
    connected with performance of a Government contract.
        Demilitarization means rendering a product unusable for, and not 
    restorable to, the purpose for which it was designed or is customarily 
    used.
        Equipment means nonexpendable, tangible personal property. The term 
    does not include property that satisfies the definition in this part of 
    material, unique Federal property, special tooling, or special test 
    equipment.
        Expendable property means property that is customarily consumed 
    during design, manufacture, or testing of a product or performance of a 
    service.
        General purpose equipment means items that can be used, or with 
    only minor modification could be used, to develop, produce, test, or 
    maintain more than one type of item or perform more than one type of 
    service.
        Government-furnished property means Government property that a 
    contracting officer authorizes a contractor to use for performance of a 
    Government contract.
        Government property means property the Government owns or leases.
        Low value property means equipment, special tooling, or special 
    test equipment that has an acquisition cost less than $5,000 and is not 
    sensitive property.
        Material means expendable property and property incorporated into 
    or attached to an item deliverable under a contract.
        Natural disaster means a sudden and unusual natural occurrence 
    causing catastrophic damage, including floods, hurricanes, tornadoes, 
    cyclones,
    
    [[Page 1442]]
    
    atmospheric electrical storms, tidal waves, avalanches, mudslides, 
    landslides, volcanic eruptions, earthquakes, and other similar perils. 
    The term does not include fire or explosion, unless directly or 
    indirectly caused by a covered peril.
        Nonprofit organization means a business entity organized and 
    operated exclusively for charitable, scientific, or educational 
    purposes, the net earnings of which do not inure to the benefit of any 
    private shareholder or individual, that is exempt from Federal income 
    taxation under section 501 of the Internal Revenue Code and does not 
    conduct a substantial portion of its activities carrying on propaganda 
    or otherwise attempting to influence legislation or participating in 
    any political campaign on behalf of any candidate for public office.
        Personal property (see 2.101).
        Plant clearance officer means a person appointed to disposition 
    property accountable under Government contracts.
        Precious metals means silver, gold, platinum, palladium, iridium, 
    osmium, rhodium, and ruthenium.
        Property (see 2.101).
        Property administrator means a person appointed to perform property 
    administration for the Government.
        Real property (see 2.101).
        Rental period means the calendar period during which Government 
    property is made available for commercial purposes.
        Rental time means the number of hours, to the nearest whole hour, 
    rented property is actually used for commercial purposes. It includes 
    time to set up the property for such purposes, perform required 
    maintenance, and restore the property to its condition prior to rental 
    (less normal wear and tear).
        Scrap means personal property that has no value except its basic 
    metallic, mineral, or organic content.
        Sensitive property means property potentially dangerous to the 
    public safety or security if stolen, lost, or misplaced, or that must 
    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.
        Special test equipment means--
        (1) Test equipment designed specifically to conduct testing 
    required by a Government contract provided such equipment cannot be 
    used for other purposes;
        (2) General purpose test equipment or modifications thereof that 
    are interconnected and interdependent to form a new functional entity 
    that can only be used to perform testing required by a contract while 
    so interconnected and interdependent; or
        (3) Any combination of specifically designed, general purpose, or 
    modified general purpose test equipment that are so interconnected and 
    interdependent to form a new functional entity that can only be used to 
    perform special purpose testing required by a contract while so 
    interconnected and interdependent.
        Special tooling means items, such as jigs, dies, fixtures, molds, 
    patterns, taps, gauges, or other equipment and manufacturing aids, that 
    are of such a specialized nature that without substantial modification 
    or alteration their use is limited to the development, production, 
    repair, or maintenance of particular supplies or components thereof, or 
    to the performance of particular services.
        Unique Federal property means Government-owned personal property, 
    or components thereof, that is specially designed to perform or support 
    the mission of one or more Federal agencies and is not available to the 
    public. The term does not include property that is incorporated into or 
    attached to an item deliverable under a contract.
        Work in process means bench stock materials, complete or incomplete 
    fabricated parts, subassemblies, assemblies, and similar items that are 
    created during production of deliverable end items, or are required to 
    construct special tooling or special test equipment needed to produce 
    deliverable end items, or are otherwise needed for design or testing 
    required by a contract.
    
    Subpart 45.1--General
    
    
    45.101  Property management procedures.
    
        (a) The Government permits offerors to elect to manage Government 
    property under a standard, process based system or, alternatively, to 
    manage Government property using the same business practices the 
    contractors use to manage their own property. The solicitation 
    provision at 52.245-1, Government Property Availability and Information 
    Required from Offerors, is used for the election. See the clause at 
    52.245-5, Government Property Administration, for the standard, process 
    based system, and the clause at 52.245-8, Government Property 
    Administration--Alternate Procedures, if the election is to use the 
    contractor's own business practices. Subparts 45.4 and 45.5 provide 
    guidance regarding contractors' property liability and property 
    management responsibilities.
        (b) It is in the Government's interest to have a contractor use a 
    single property management system at each location at which the 
    contractor will perform Government contracts. Therefore, contracting 
    officers should not question a contractor's election to use the 
    alternate property management procedures if the contractor's election 
    is consistent with the contractor's practices at a particular location. 
    If the contractor's election is not consistent, the contracting officer 
    should advise the contractor of the inconsistency and request the 
    contractor to withdraw the election or agree to include the elective 
    procedures in all contracts being performed at that location at no 
    increase in the price or fee of such contracts.
    
    
    45.102  Policy.
    
        (a) Agencies must not--
        (1) Furnish Government property to contractors except as provided 
    in subpart 45.2;
        (2) Specify, direct, or require for contract performance the use of 
    specific (e.g., brand name, brand name or equal, part number, or 
    similar identifier) commercial items that will become Government 
    property under a contract unless the contract's stated purpose is the 
    acquisition of such items;
        (3) Acquire commercial items or general purpose equipment for the 
    sole purpose of subsequently furnishing such items as Government-
    furnished property to any contractor unless the commercial items are 
    components of deliverable items; or
        (4) Authorize contractors to acquire for the Government--
        (i) Property not required for performance of a contract or 
    subcontract thereunder;
        (ii) Real property, alterations thereof, or improvements thereto, 
    unless the contract's primary purpose is the maintenance of an 
    essential industry capability or the contract requires the performance 
    of alterations or improvements to real property; or
        (iii) General purpose equipment, unless the contract's stated 
    purpose is the acquisition of the equipment (see paragraph (b) of this 
    section for nonprofit organizations).
        (b) Under contracts for basic or applied scientific research, 
    contracting officers may authorize nonprofit organizations whose 
    primary purpose is the conduct of scientific research, or nonprofit 
    institutions of higher education, to acquire tangible personal property 
    for the Government, including commercial items.
    
    [[Page 1443]]
    
    Subpart 45.2--Furnishing Government Property
    
    
    45.201  Furnishing property for performance of a Government contract.
    
        Government property may be furnished for performance of a 
    Government contract, subject to the restrictions in 45.201-2, only when 
    at least one of the criteria in 45.201-1 and the corresponding 
    documentation and approval requirements in 45.201-3 are satisfied.
    
    
    45.201-1  Criteria for furnishing Government property.
    
        The criteria for furnishing Government property are:
        (a) The Government is the sole source of property required to 
    perform a contract.
        (b) The property will be incorporated into or attached to a 
    deliverable end item.
        (c) The property's use will result in substantial measurable cost 
    savings to the Government when compared to estimated costs of contract 
    performance without such property (consider the Government's costs to 
    activate property or maintain property in an active status of ownership 
    when determining cost savings).
        (d) The Government must furnish the property to assure that items 
    delivered under a contract are compatible with other Government items.
        (e) The property must be furnished to accomplish repairs to, or 
    maintenance or reconditioning of, Government-furnished property or 
    items to be delivered under a contract and such repair, maintenance, or 
    reconditioning is not the contractor's responsibility under the 
    contract.
        (f) The property must be furnished to respond to an unusual and 
    compelling urgency for supplies or services (see 6.302-2) or to support 
    contingency contracting.
        (g) The property will be used on a contract for scientific research 
    conducted by an institution of higher education or a nonprofit 
    organization.
        (h) Government-furnished equipment or real property is needed for 
    the retention or operation of an essential Government-owned capability.
    
    
    45.201-2  Restrictions on furnishing Government property.
    
        The restrictions on furnishing Government property are:
        (a) Government-owned material may be furnished to contractors only 
    under the criteria in 45.201-1(a), (b), (c), (f), or (g). The quantity 
    furnished may include reasonable amounts for repairs or corrections to 
    work in process, scrap, or spoilage.
        (b) Government-owned equipment may be furnished to contractors only 
    under the criteria in 45.201-1 (c), (f), (g), or (h).
        (c) Contracting officers may furnish commercial computer software 
    or commercial computer software documentation to contractors only when 
    the Government has a license in the software or documentation that 
    permits release or disclosure to and use by third parties and the 
    software or documentation is required to operate, maintain, or install 
    other Government property furnished for performance of a Government 
    contract.
        (d) Contracting officers must not furnish noncommercial computer 
    software or noncommercial computer software documentation (software or 
    documentation that does not satisfy the requirements in 2.101 for 
    commercial items) to contractors unless the Government is the software 
    or documentation licensor or, prior to furnishing the software or 
    documentation, the Government obtains a license in the software or 
    documentation that permits release or disclosure to, or use by, third 
    parties and the intended recipient has completed any use and 
    nondisclosure agreement required by part 27 or an agency supplement.
    
    
    45.201-3  Documentation and approval requirements.
    
        Decisions to furnish property to contractors must be documented in 
    the contract file. Contracting officers may make decisions based upon 
    the criteria in 45.201-1(b) and (d) through (g). Unless otherwise 
    designated in agency regulations, approval is required by--
        (a) The contracting officer's first level supervisor when using the 
    criterion in 45.201-1(c);
        (b) The contracting officer's second level supervisor when using 
    the criterion in 45.201-1(a); or
        (c) The head of the contracting activity when using the criterion 
    in 45.201-1(h).
    
    
    45.202  Competitive advantage.
    
        Offerors who will use Government property to perform a contract 
    usually have a price advantage relative to competitors who will 
    acquire, fabricate, or use their own property to perform that contract. 
    When evaluating offers, that advantage must be eliminated to the extent 
    practicable (see 15.305(a)(3)).
    
    
    45.203  Solicitation and contract requirements.
    
        When the Government will make property available for contract 
    performance--
        (a) Competitive solicitations must--
        (1) List the available property by item name, national stock number 
    (if the item has a national stock number), or other appropriate 
    nomenclature; identify the quantity available; and, when known, 
    identify the date the property was acquired;
        (2) Include, or offer to provide, real property maps, drawings, 
    plans, or similar information in sufficient detail to enable an offeror 
    to prepare its offer;
        (3) Separately identify property available on an ``as is'' basis;
        (4) Separately identify property the Government will reactivate, 
    rehabilitate, or convert;
        (5) Identify the adjustment that will be applied to the cost or 
    price of offers that contemplate use of Government-furnished property. 
    The adjustment may be specified as a dollar amount, a formula, or any 
    combination thereof; and
        (6) Identify any special requirements for security, maintenance, 
    liability, or property administration.
        (b) Contracts must--
        (1) List and identify (nomenclature, quantity, serial number or 
    other appropriate identifier, or, for real property, maps, drawings, 
    plans, or similar information) the Government property furnished for 
    performance of the contract;
        (2) Separately identify property furnished ``as is'';
        (3) Provide that costs incurred by the contractor to transport ``as 
    is'' property to its place of business or to modify or otherwise make 
    such property suitable for the contractor's use must not result in an 
    increase in contract price or fee;
        (4) Identify any constraints on the period for, or amount of, use;
        (5) Identify any special requirements for security, maintenance, 
    liability, or property control applicable to a particular Government-
    furnished item;
        (6) Identify any Government-furnished property that is to be 
    returned directly to a Government activity in lieu of initiating 
    disposal action and specify the method and point of return;
        (7) For fixed-price construction contracts that contemplate 
    furnishing property f.o.b. railroad cars or f.o.b. truck, specify the 
    point of delivery and include appropriate terms and conditions if the 
    Government or another person will install, prepare, or test the 
    property; and
        (8) To the extent known, identify the Government-furnished 
    property's acquisition cost and acquisition date.
    
    
    45.204  Postaward requests for Government property.
    
        (a) Contracting officers must not furnish Government property to
    
    [[Page 1444]]
    
    contractors subsequent to contract award unless adequate consideration 
    is received. If a contractor requests the use of property that is 
    accountable under another contract, the contracting officer for the 
    contract under which the property is accountable must authorize the 
    proposed use, and the contracting officer responsible for the contract 
    under which the property's use has been requested must agree with such 
    use. Modify each contract for which use is authorized to identify the 
    conditions for use and the applicable consideration.
        (b)(1) The clause at 52.245-2, Government Property, authorizes a 
    contractor to use Government property accountable under a contract in 
    performance of all Government contracts at the same location if--
        (i) The Contracting officer has agreed to such use; or
        (ii) The contractor requests the use of the property and the 
    contracting officer does not object within 30 days following receipt of 
    the contractor's request.
        (2) Generally, the contracting officer should not object unless--
        (i) The program manager for the contract under which the property 
    is accountable, or his designee, advises that the requested use of the 
    property will have an adverse affect on the property's capability to 
    perform that contract or on program budgets; or
        (ii) A contracting officer responsible for a contract on which use 
    has been requested (an affected contracting officer) advises that the 
    pricing structure of that contract would be affected or the property is 
    not suitable for use under that contract.
        (3) If the program manager (or designee) or an affected contracting 
    officer objects to the requested use, the contracting officer must 
    advise the contractor of the Government's objection within 30 days 
    following receipt of the contractor's request.
        (4) The contracting officer may negotiate with the contractor to 
    remove the Government's objections by rescoping the contractor's 
    proposal or obtaining other consideration acceptable to the program 
    manager (or designee) and the affected contracting officers.
    
    
    45.205  Repair or replacement of Government-furnished property.
    
    
    45.205-1  Maintenance.
    
        Contractors are required to maintain Government property in a 
    condition suitable for intended use. The Government property clauses at 
    52.245-2, Government Property, and 52.245-7, Government Property--
    Alternate Procedures, require contractors to notify the Government when 
    the maintenance actions required by those clauses do not sustain the 
    property's suitability for use and request direction regarding repair, 
    rehabilitation, or replacement of the property.
        (a) Contracting officers may elect to--
        (1) Repair or replace the property;
        (2) Substitute other property for the property requiring additional 
    maintenance;
        (3) Authorize the contractor to repair, rehabilitate, or replace 
    the property;
        (4) Authorize the contractor to dispose of the property; or
        (5) Negotiate an equitable adjustment.
        (b) Contracting officers should not authorize the repair, 
    rehabilitation, or replacement of Government-furnished property, 
    including property furnished ``as is'', or make a repair, 
    rehabilitation, or replacement unless--
        (1) The property is required for continued performance of the 
    contract under which the property is accountable;
        (2) The Government is obligated contractually to provide the 
    property for performance of another contract; or
        (3) The property is needed for work to be performed by the 
    Government at a Government installation.
        (c) Contracting officers must consult with appropriate technical, 
    logistics, program office, and property specialists to determine 
    whether the Government-furnished property should be replaced, the 
    appropriate method and type of replacement, or if the contractor should 
    repair or rehabilitate the property. If the Government does not elect 
    to repair or replace Government-furnished property that is needed for 
    continued contract performance, the contractor might be entitled to an 
    equitable adjustment.
    
    
    45.205-2  Property losses.
    
        (a) Property losses for which the Government is liable. Generally, 
    the Government is responsible for property losses under contracts that 
    include the Government property clause at 52.245-2. The Government is 
    also liable for certain property losses under contracts that contain 
    the Government property clause at 52.245-7. Follow the guidance in 
    45.205-1(a) and (b) to remedy a property loss for which the Government 
    is liable.
        (b) Property losses for which the contractor is liable. When a 
    contractor is liable for a property loss under the Government property 
    clauses at 52.245-2 or 52.245-7, the contracting officer may authorize 
    the contractor to repair or replace the property at no change in 
    contract price or fee if the property is needed for continued 
    performance of the contract or negotiate an equitable reduction in 
    contract price or fee if the property is not needed for continued 
    contract performance.
    
    
    45.206  Government-furnished property to be returned to a Government 
    activity.
    
        When a contract requires the contractor to return Government-
    furnished property directly to a Government activity (in lieu of 
    entering the property into the disposal process), the property 
    administrator should determine the property's condition as near to the 
    return date as practicable and must promptly notify the contracting 
    officer if the property is not suitable for its intended use. The 
    contracting officer promptly must direct the contractor to take any 
    necessary corrective action or negotiate an equitable adjustment 
    incident to the contractor's failure to sustain the property's 
    suitability for intended use. When corrective action is not practical, 
    the contracting officer must direct the contractor to dispose of the 
    property (see 45.505-3) and promptly advise the property administrator 
    of the action directed.
    
    
    45.207  Solicitation provision and contract clauses.
    
    
    45.207-1  Solicitation provision.
    
        (a) Insert the provision at 52.245-1, Government Property 
    Availability and Information Required from Offerors, when soliciting 
    offers from more than one source, regardless of contract type, and the 
    Government contemplates furnishing property for performance of the 
    resulting contract.
    
    
    45.207-2  Contract clauses.
    
        (a) Except as provided in 45.207-2(d), insert the clause at 52.245-
    2, Government Property, in--
        (1) All cost-reimbursement and time-and-materials solicitations and 
    contracts for supplies, services, or research and development;
        (2) Fixed-price or labor-hour solicitations and contracts for 
    supplies, services, or research and development under which the 
    Government will furnish property for performance of the contract;
        (3) Contract modifications or orders for property repair under 
    fixed-price or labor-hour contracts that do not include that clause 
    when--(i) The aggregate acquisition cost of the property to be repaired 
    exceeds or is reasonably anticipated to exceed $100,000; or
        (ii) The Government will furnish property for performance of the 
    repairs.
        (b) Insert the clause with its Alternate I in solicitations and 
    contracts that contemplate fixed-price awards based upon adequate price 
    competition or
    
    [[Page 1445]]
    
    when the contract price is set by law or regulation.
        (c) Insert the clause with its Alternate II in cost-reimbursement 
    or time-and-materials solicitations and contracts for basic or applied 
    scientific research to be conducted by nonprofit organizations whose 
    primary purpose is the conduct of scientific research or by nonprofit 
    institutions of higher education (see 35.014).
        (d) Insert the clause at 52.245-7, Government Property--Alternate 
    Procedures, when an offeror has elected to use that clause in the 
    solicitation provision at 52.245-1, Government Property Availability 
    and Information required from Offerors.
        (1) Insert the clause with its Alternate I in contracts for 
    services to be performed primarily on real property owned or leased by 
    the Government and the contractor will not control access to or use of 
    the property furnished for performance of the contract.
        (2) Insert the clause with its Alternate II in cost-reimbursement 
    or time-and-materials solicitations and contracts for basic or applied 
    scientific research to be conducted by nonprofit organizations whose 
    primary purpose is the conduct of scientific research or by nonprofit 
    institutions of higher education (see 35.014).
    
    Subpart 45.3--Contractor-Acquired or Produced Property
    
    
    45.301  General.
    
        A contractor's contention that property was acquired to perform a 
    specific contract and is not needed for any other purpose does not 
    alter the fact that the property might not qualify for treatment as a 
    direct cost under the contractor's cost accounting practices and 
    31.202.
    
    
    45.302  Fixed-price and labor-hour contracts.
    
        (a) Property acquired or produced by the contractor for performance 
    of a fixed-price or labor-hour contract is not Government-furnished 
    property and is not subject to the clause at 52.245-5, Government 
    Property Administration, or the clause at 52.245-8, Government Property 
    Administration--Alternate Procedures, except--
        (1) Delivered property accepted by the Government that the 
    Government has directed the contractor to store; or
        (2) Special tooling and special test equipment the contractor is 
    required to store during the Government notice period under the clause 
    at 52.245-3, Delivery--Special Tooling and Special Test Equipment 
    (Fixed-Price Contracts) (see paragraphs (b) and (d) of this section).
        (b)(1) The clause at 52.245-3, Delivery--Special Tooling and 
    Special Test Equipment (Fixed-Price Contracts), requires a contractor 
    to notify the Government if the contractor has acquired or produced 
    special tooling or special test equipment that is not required to be 
    delivered under the contract. The contractor's notice is required not 
    later than the earlier of--
        (i) 30 days following the contractor's determination that such 
    special tooling or special test equipment is no longer required for 
    contract performance; or
        (ii) 120 days prior to completion of scheduled deliveries (other 
    than technical data) under the contract.
        (2) The Government has 120 days following receipt of the 
    contractor's notice (or such other period mutually agreed upon) to 
    notify the contractor that the Government requires delivery of any of 
    the items identified in the contractor's notice. The Government's 
    notice must identify the special tooling or special test equipment 
    item(s) to be delivered, and must--
        (i) Provide packing, packaging, marking, and shipping instructions;
        (ii) Direct the contractor to prepare the property for storage at 
    the contractor's facility or a Government facility; or
        (iii) Provide instructions when accountability is to be transferred 
    to another contract.
        (c) The contractor is obligated to store the property during the 
    notice period at no change in price. Storage subsequent to the 
    Government's delivery notice might entitle the contractor to an 
    equitable adjustment.
        (d) Prior to furnishing any property delivered to the Government 
    under the clause at 52.245-3 to a contractor for performance of a 
    Government contract, including the contract under which delivery 
    occurred, the contracting officer responsible for the receiving 
    contract must modify that contract to identify the property as 
    Government-furnished property. If the receiving contract does not 
    contain either the clause at 52.245-2 or the clause at 52.245-7, the 
    modification must add whichever of those clauses is appropriate for the 
    location at which the receiving contract is performed and other clauses 
    prescribed for use with the added clause. Notwithstanding any other 
    provision of the receiving contract, the modification must specify that 
    the property is furnished in accordance with the terms of the added 
    clauses.
        (e) Contracting officers must not exercise the Government's right 
    to require delivery of special tooling or special test equipment items 
    unless the items are needed for follow-on competitive procurements, 
    component breakout, mobilization, or to establish a Government repair 
    or maintenance capability.
    
    
    45.303  Cost-reimbursement and time-and-materials contracts.
    
        (a) Property acquired or produced by a contractor for performance 
    of a cost-reimbursement and time-and-materials contract is subject to 
    the clause at 52.245-5, Government Property Administration, or the 
    clause at 52.245-8, Government Property Administration--Alternate 
    Procedures, at the time the property's costs are properly allocable to 
    a contract as direct costs except--
        (1) Special tooling items, or special test equipment items to which 
    the contractor has title under the clause at 52.216-7, Allowable Cost 
    and Payment; and
        (2) Property to which title has been vested in the contractor under 
    Alternate II to the clause at 52.245-2, Government Property, or 
    Alternate I to the clause at 52.245-7, Government Property--Alternate 
    Procedures (See 35.014).
        (b) If a person responsible for establishing requirements has 
    determined that the Government requires delivery of certain low value 
    (less than $5,000 acquisition cost) special tooling items or low value 
    special test equipment items that do not contain general purpose test 
    units, such items must be identified as deliverable items under the 
    contract.
        (c) Property acquired or produced under a cost-reimbursement 
    contract is not property furnished for the performance of that 
    contract. If the contracting officer elects to furnish that property to 
    the contractor for performance of the contract under which the property 
    was acquired or produced, or to a contractor for performance of another 
    Government contract, the contracting officer must modify the receiving 
    contract to identify the property as Government-furnished property and, 
    if necessary, include the appropriate contract clauses. The 
    modification must specify that the property is furnished in accordance 
    with the terms of the clauses added.
        (d) To avoid unnecessary maintenance and storage costs, contractors 
    are required to enter into the disposal process property no longer 
    required for contract performance. Contracting officers must not 
    authorize the repair, rehabilitation, or replacement of property no 
    longer needed for performance of a cost-reimbursement or time-and-
    materials contract, except special tooling or special test equipment
    
    [[Page 1446]]
    
    items described in 45.303(b) that diligent exercise of the contractor's 
    contractual maintenance responsibilities cannot sustain in a condition 
    suitable for intended use.
    
    
    45.304  Contract clause.
    
        Insert the clause at 52.245-3, Delivery--Special Tooling and 
    Special Test Equipment (Fixed-Price Contracts), in fixed-price 
    solicitations and contracts for supplies, services, or research and 
    development where the effort to be performed will require the 
    contractor to acquire or produce special tooling or special test 
    equipment.
    
    Subpart 45.4--Liability for Property Losses
    
    
    45.400  General.
    
        (a) As used in this subpart, the terms loss and losses include the 
    physical loss of, the theft of, or the destruction of Government 
    property, and damage to Government property.
        (b) The clauses at 52.245-2, Government Property, and 52.245-7, 
    Government Property--Alternate Procedures, identify the conditions 
    under which either the Government or the contractor is liable for a 
    property loss. See 45.401 for guidance on contracts that include the 
    clause at 52.245-2 and 45.402 for contracts that include the clause at 
    52.245-7.
    
    
    45.401  Liability for property losses--contracts that include the 
    clause at 52.245-2, Government Property.
    
    
    45.401-1  Government liability.
    
        (a) The Government is liable for property losses that occur while 
    the contractor is maintaining a property management system that 
    satisfies contract requirements, except losses or any portion thereof--
        (1) For which the contractor expressly is liable under the terms of 
    a contract; or
        (2) Are identified in 45.401-2.
        (b) The Government's liability for a property loss is reduced by 
    the amount of any reimbursement the contractor receives from a third 
    party. Contracting officers may direct the contractor to use the 
    reimbursement proceeds to repair, rehabilitate, or replace the property 
    or may equitably adjust the contract. Repair, rehabilitation, or 
    replacement should be considered only when the property is needed for 
    continued performance of the contract, there is a known need for the 
    property at a Government repair activity, or the Government is 
    contractually obligated to furnish the property for performance of 
    another contract.
    
    
    45.401-2  Contractor liability.
    
        (a) The contractor is liable for losses that--
        (1) Occur at a time when the contractor has not established a 
    property management system that satisfies the requirements of this 
    contract;
        (2) Occur on or after the date of a written or electronic notice 
    from the property administrator that the Government has withdrawn 
    approval of the contractor's property management system, unless the 
    contractor can establish by clear and convincing evidence that a loss 
    did not result from the contractor's failure to maintain an approved 
    system;
        (3) Occur on or after the first calendar day following the 
    contractor's failure to correct a property system deficiency within the 
    time specified by the property administrator or such other mutually 
    agreed upon time for correction;
        (4) Result from the contractor's failure to take reasonable and 
    prudent steps to avoid losses resulting from acts of war, civil 
    insurrection, or natural disasters; or (5) Result from the willful 
    misconduct or lack of good faith on the part of the contractor's 
    managerial personnel.
        (b) The contractor's liability for a loss that results from a risk 
    expressly required to be insured under this contract is limited to the 
    extent of the insurance required to be purchased and maintained, or to 
    the extent of the insurance actually purchased and maintained, 
    whichever is greater.
        (c) The contractor's transfer of Government property to the 
    possession and control of a subcontractor does not affect the 
    contractor's liability for property losses.
    
    
    45.402  Liability for property losses--contracts that include the 
    clause at 52.245-7, Government Property-- Alternate Procedures.
    
    
    45.402-1  Government liability.
    
        (a) The Government is liable for losses to Government property--
        (1) Caused by acts of war, civil insurrection, or natural 
    disasters, regardless of property value, except a loss or portion 
    thereof caused by or attributable to the contractor's or a 
    subcontractor's failure to take reasonable and prudent steps to avoid 
    or reduce such losses; and (2) Losses to Government property items that 
    have an acquisition cost greater than $1,000,000 per item, except a 
    loss or portion thereof caused by willful misconduct or lack of good 
    faith on the part of the contractor's or a subcontractor's managerial 
    personnel.
        (b) The Government's liability for a property loss is reduced by 
    the amount of any reimbursement the contractor receives from a third 
    party. Contracting officers may direct the contractor to use the 
    reimbursement proceeds to repair, rehabilitate, or replace the property 
    or may equitably adjust the contract. Repair, rehabilitation, or 
    replacement should be considered only when the property is needed for 
    continued performance of the contract, there is a known need for the 
    property at a Government repair activity, or the Government is 
    contractually obligated to furnish the property for performance of 
    another contract.
    
    
    45.402-2  Contractor liability.
    
        The contractor is liable for all losses of property accountable 
    under the contract, except losses for which the Government is liable 
    under 45.402-1. The contractor's transfer of Government property to the 
    possession and control of a subcontractor does not affect the 
    contractor's liability for property losses.
    
    
    45.403  Post delivery considerations.
    
        Contractors are liable for losses to property delivered to or 
    accepted by the Government at a contractor or subcontractor managed 
    location until the property is placed on board a carrier's conveyance 
    (see appropriate f.o.b. clauses at 52.247-29 through 52.247-33).
    
    
    45.404  Contract clause.
    
        Insert the clause at 52.245-4, Liability for Government Property--
    Demolition Services Contracts, in addition to the clauses prescribed at 
    37.304, in solicitations and contracts for dismantling, demolition, or 
    removal of improvements.
    
    Subpart 45.5--Government Property Management
    
    
    45.501  Preaward considerations.
    
        (a) Contracting officers should consider whether an offeror's 
    property management capabilities might affect source selection and must 
    structure appropriate evaluation criteria.
        (b) When property management capabilities will be evaluated, the 
    official responsible for source selection should obtain and consider 
    the cognizant property administrator's advice regarding the adequacy of 
    offerors' plans to establish acceptable property management systems 
    under contracts that contain the clause at 52.245-5, Government 
    Property Administration, or the adequacy of offerors' plans to 
    establish acceptable systems of property management practices under the 
    clause at 52.245-8,
    
    [[Page 1447]]
    
    Government Property Administration--Alternate Procedures.
    
    
    45.502  Standard and alternate property management systems.
    
        Contractors are required to have a property management system that 
    performs the processes identified in the clause at 52.245-5, Government 
    Property Administration, unless they have elected to use the clause at 
    52.245-8, Government Property Administration--Alternate Procedures. See 
    45.502-1 for guidance regarding property management under contracts 
    that include the clause at 52.245-2, Government Property, or 45.502-2 
    for guidance regarding the clause at 52.245-8, Government Property 
    Administration--Alternate Procedures.
    
    
    45.502-1  Property management under the clause at 52.245-5, Government 
    Property Administration.
    
        (a) General. (1) A contractor's property management system and 
    processes must provide for the control of property in the possession of 
    its subcontractors.
        (2) The periods for establishing a new system or submitting changes 
    to an existing system should be extended only when the contractor 
    demonstrates a reasonable need for an extension. When authorizing an 
    extension, the property administrator must specify the new 
    establishment or submission date(s).
        (b) Property management system reviews and approvals--(1) New 
    systems or systems not previously reviewed by the Government. Property 
    administrators must--
        (i) Review new property management systems or existing systems that 
    have not been reviewed by a property administrator as soon as 
    practicable;
        (ii) Approve a system if the system's processes are sufficient to 
    assure compliance with contract requirements;
        (iii) Require contractors to correct systems that do not include 
    all processes identified in 52.245-5(c) or that include processes that 
    are not sufficient to assure compliance with contract requirements. 
    Notify the contractor of the corrections required and specify the 
    date(s) by which the corrections must be made; and
        (iv) Promptly refer to the contracting officer a contractor's 
    failure to establish a property control system that satisfies the 
    requirements in the clause at 52.245-5.
        (2) Changes to previously approved systems. Contractors that have a 
    Government-approved property management system are required to submit 
    to the cognizant property administrator within 90 days following 
    contract award any changes to that system that are required to conform 
    the system to the contract's requirements. Property administrators 
    must--
        (i) Review the proposed changes within 90 days following receipt;
        (ii) Validate the system's approval if the contractor-proposed 
    changes are sufficient to assure contract compliance;
        (iii) Require the contractor to make changes only to the extent 
    necessary for contract compliance;
        (iv) Notify the contractor of the corrections required and specify 
    the date(s) by which the corrections must be made. The notice must 
    advise the contractor that the contractor's failure to correct its 
    system within the time specified might result in the contractor's 
    assumption of liability for property losses that the Government might 
    otherwise be liable for under the contract's Government Property 
    clause; and
        (v) Notify the contracting officer immediately following issuance 
    of a notice under paragraph (b)(2)(iv) of this section.
        (3) Corrections following property control system reviews. Property 
    administrators must provide a correction notice to a contractor 
    promptly following a control system review that discloses a previously 
    approved system no longer satisfies one or more requirements for an 
    approved system. The notice must specify the corrections required to 
    make the system compliant and the date for completing corrective 
    action. The notice must advise the contractor that the contractor's 
    failure to correct its system within the time specified might result in 
    the contractor's assumption of liability for property losses that the 
    Government otherwise would be liable for under those clauses.
        (c) Withdrawing system approval. The administrative contracting 
    officer's concurrence is required prior to withdrawing approval of an 
    approved property management system. Generally, approval should be 
    withdrawn only when a contractor fails to maintain a Government 
    property control system that satisfies contract requirements.
    
    
    45.502-2  Property management under the clause at 52.245-8, Government 
    Property Administration-- Alternate Procedures.
    
        (a) The Government will rely upon a contractor's use of sound 
    business practices to maintain, protect, preserve, control, and account 
    for Government property.
        (b) The property administrator must notify the contracting officer 
    responsible for contract administration promptly if experience under a 
    contract indicates that the contractor's property management practices 
    are not sufficient to maintain, protect, preserve, or control the 
    Government's property as required by the contract.
        (c) The contracting officer responsible for contract administration 
    may require the contractor to correct the property system deficiencies, 
    may negotiate an equitable reduction in contract price in lieu of 
    correction, or may negotiate other appropriate corrective action. The 
    procuring contracting officer should be consulted prior to implementing 
    any corrective action.
    
    
    45.503  Government property records and reports.
    
        (a) Generally, it is in the Government's interests to have a 
    contractor generate records and reports of Government property using 
    the same practices the contractor uses for its own property. The 
    property records maintained by a contractor are the Government's 
    official property records. A contracting office may elect to establish 
    and maintain the Government's property records and generate required 
    property reports when the contracting office retains contract 
    administration functions and the contracting officer considers 
    Government recordkeeping and reports generation to be in the 
    Government's interests. The circumstances under which Government 
    recordkeeping and reporting might be warranted are--
        (1) Contract performance periods less than 6 months; or
        (2) When Government property will be furnished for a contract for 
    services to be performed entirely at real property owned or leased by 
    the Government such as the management or operation of installations, 
    bases, or portions thereof, warehouses, libraries, stock rooms, 
    mailrooms, or computer centers.
        (b) The contracting office responsible for contract administration 
    must process property reports in accordance with agency procedures.
    
    
    45.504  Property accountability.
    
    
    45.504-1  Accountability.
    
        (a) Government-furnished property is accountable under the contract 
    for which it was furnished.
        (b) Property acquired or produced by a contractor to which the 
    Government has title is accountable under the contract for which the 
    property was acquired or produced until the contracting officer directs 
    a transfer of accountability, the property is placed aboard a carrier's 
    conveyance (f.o.b. origin), or is delivered at the specified f.o.b. 
    destination point.
    
    [[Page 1448]]
    
    45.504-2  Transferring accountability to other contracts.
    
        (a) Contract modification. Accountability transfers should be made 
    only when the property is currently needed for the performance of 
    another Government contract or is needed to preserve or maintain an 
    essential industrial capability. All transfers must be reflected in a 
    contract modification.
        (b) Special consideration for special tooling or special test 
    equipment. Accountability for a special tooling or special test 
    equipment item acquired or produced by a contractor to which the 
    Government has title, may be transferred to another contract with that 
    contractor provided the property is identified as property furnished 
    ``as is,'' the receiving contract's price or estimated cost and fee is 
    adjusted in accordance with paragraph (c) of this subsection, and 
    property records are adjusted in accordance with paragraph (d) of this 
    subsection. Accountability instructions should be included in the 
    notice required by paragraph (d) of the clause at 52.245-3, Delivery--
    Special Tooling and Special Test Equipment (Fixed-Price Contracts).
        (c) Price adjustment. When a property item's accountability is 
    transferred to another contract, the price or estimated cost and fee of 
    the receiving contract should be equitably reduced if the receiving 
    contract's current price or estimated cost and fee was established 
    without a requirement for the Government to furnish the item for that 
    contract.
        (d) Property records. All property accountability transfers must be 
    reflected in the property control records for the contract from which 
    accountability is transferred (the losing contract) and the contract to 
    which accountability is transferred (the gaining contract). When a 
    Government-furnished property item's accountability is transferred, the 
    respective contracting officers must modify the list of Government-
    furnished property items contained in the losing and gaining contracts.
    
    
    45.505  Reutilization, transfer, and donation of Government property.
    
        This section is applicable to the reutilization, transfer, and 
    donation of Government property that is not required for continued 
    performance of a Government contract. It does not apply to scrap (see 
    45.507).
    
    
    45.505-1  Contractor actions.
    
        Contractors are required to--
        (a) 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; and
        (b) List property that could not be returned to a supplier or used 
    in the performance of other Government contracts on Standard Form 1428, 
    Inventory Disposal Schedule.
    
    
    45.505-2  Inventory disposal schedules.
    
        (a) Plant clearance officers should review and accept, or return 
    for correction, inventory disposal schedules or scrap lists within 10 
    days following receipt. Schedules or lists that are completed in 
    accordance with the instructions for Standard Form 1428 should be 
    accepted.
        (b) Plant clearance officers must--
        (1) Use Standard Form 1423 to verify accepted schedules within 20 
    days following acceptance.
        (2) Require a contractor to correct any discrepancies found during 
    verification or a contractor's failure to complete the actions 
    described in subsection 45.505-1.
        (3) Provide the contractor disposition instructions for property 
    identified on an acceptable inventory disposal schedule within 120 days 
    following receipt of the schedule. A failure to provide timely 
    disposition instructions might entitle the contractor to an equitable 
    adjustment.
        (c) Contractors must obtain the plant clearance officer's approval 
    to remove a Government property item from an inventory disposal 
    schedule. Removal should be approved when the contractor has found a 
    buyer for a contractor-acquired or produced item at full acquisition 
    cost, the Government has authorized the contractor to use the property 
    on another Government contract, or the contractor has justified 
    continued use of a Government-furnished property item. Plant clearance 
    officers must consult with appropriate program and technical personnel 
    to determine whether the contractor's rationale for retaining a 
    Government-furnished property item is valid. If the screening process 
    (see 45.505-4, 45.505-5, and 45.505-6) has not begun, the plant 
    clearance officer must adjust the schedule or return the schedule to 
    the contractor for correction. If screening has begun, the plant 
    clearance officer must promptly notify the activity performing the 
    screening and must identify the items that should be removed from the 
    screening process.
    
    
    45.505-3  Reutilization priorities.
    
        Plant clearance officers must 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 45.506 for circumstances under 
    which excess agency property may be abandoned, destroyed, or donated);
        (b) Transfer of educationally useful equipment to schools and 
    nonprofit organizations for educational and research activities 
    (provided no other Federal agency has expressed a need for the property 
    prior to screening by other Federal agencies) or report such property 
    to the General Services Administration (see Executive Order 12999);
        (c) Reuse within the Government; and
        (d) Donation to an eligible donee designated by the GSA.
    
    
    45.505-4  Screening.
    
        The screening periods begin upon the plant clearance officer's 
    acceptance of an inventory disposal schedule. The plant clearance 
    officer must determine whether standard or special screening is 
    appropriate and initiate screening actions.
        (a) Standard screening. The standard screening period is 56 days.
        (1) 1st through 20th day--screening by the contracting agency. The 
    contracting agency has 20 days to screen excess property for other use 
    within the agency. Plant clearance officers must delete from an 
    inventory disposal schedule any items for which other intra-agency use 
    is identified, prepare revised schedules, and, no later than the 21st 
    day, 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 101-43.4901-120-1, Instructions for Preparing SF 120). 
    Enter the date of the 42nd day as the automatic surplus release date 
    and the date of the 56th day as the screening completion date.
        (2) 21st through 41st day--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 must promptly transmit to the plant clearance 
    officer an approved transfer order that includes shipping instructions.
        (3) 42nd through 56th day--GSA screening for possible donation. 
    During this period, GSA must screen property that has not been 
    transferred to schools or nonprofit organizations or has not been 
    identified for Federal reutilization for possible donation to eligible 
    donees.
        (4) Screening period transfer request. If an agency receives an 
    intra-agency
    
    [[Page 1449]]
    
    transfer request during the screening periods described in paragraphs 
    (a)(2) or (a)(3) of this subsection, the plant clearance officer must 
    request GSA approval to withdraw the item from the inventory disposal 
    schedule.
        (b) Special screening requirements--(1) Special tooling. Agencies 
    must follow the procedures at 45.505-4(a). Special tooling owned by the 
    Department of Defense (DoD) or the National Aeronautics and Space 
    Administration (NASA) may be screened for reutilization within the 
    agency only.
        (2) Special test equipment. (i) Agencies must complete the 
    screening required by 45.505-4(a). 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 must 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 
    must 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 must 
    transfer the property's accountability to that contract. If the 
    contracting officer does not concur with the proposed use, the plant 
    clearance officer must deny the contractor's request and must resume 
    the screening process.
        (iii) If the contractor 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.
        (3) Printing equipment. Agencies must 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 must submit the 
    report to GSA for further use and donation screening.
        (4) Nonnuclear hazardous materials, hazardous wastes, and 
    classified items. These items must be screened in accordance with 
    agency procedures.
        (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 must 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, and any other 
    material that the NRC determines to be special nuclear material (but 
    not including source material); or any material artificially enriched 
    by any nuclear material.
    
    
    45.505-5  Waiver of screening requirements.
    
        Agency heads may waive agency screening requirements when it is 
    clearly in the Government's interests to do so. When circumstances 
    suggest a waiver of GSA screening requirements would be in the 
    Government's interests, the agency must submit the justification for 
    the waiver to the General Services Administration, Office of 
    Governmentwide Policy, Office of Transportation and Personal Property 
    (MT), 1800 F Street NW, Washington, DC 20405, at least 10 days prior to 
    implementing the waiver. The waiver will be effective unless GSA takes 
    exception within 10 days of receipt. The agency must notify the 
    contract administration office when implementing a waiver.
    
    
    45.505-6  Interagency property transfer costs.
    
        Agencies whose property is transferred to other agencies must not 
    be reimbursed for the property in any manner unless the circumstances 
    of 41 CFR 101-43.309-3 apply. The agency receiving the property must 
    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 must process 
    appropriate contract modifications. To accelerate plant clearance, the 
    receiving agency must promptly furnish funding data, and transfer or 
    shipping documents to the contract administration office.
    
    
    45.506  Abandonment, destruction, or donation of excess agency 
    property.
    
        (a) Agencies may abandon, destroy, or donate to public bodies 
    excess property that does not contain precious metals, hazardous 
    materials or wastes, is not sensitive or classified property, and does 
    not require demilitarization if the plant clearance officer determines 
    in writing that--
        (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.
        (b) Plant clearance officers must assure that the Government does 
    not bear any of the costs incident to a donation.
        (c) Property that contains hazardous materials or wastes, sensitive 
    property, and property that requires demilitarization may be abandoned 
    at a contractor's premises if the contractor consents.
    
    
    45.507  Disposal of scrap.
    
    
    45.507-1  Production scrap.
    
        Contractors may dispose of scrap left over from the normal 
    production process that has only remelting or reprocessing value (such 
    as textile and metal clippings, borings, and faulty castings or 
    forgings) without Government approval, provided the scrap does not 
    contain precious metals, hazardous materials or wastes, nuclear 
    materials, or classified materials; or does not require 
    demilitarization.
    
    
    45.507-2  Other scrap.
    
        (a) Except as provided in 45.507-2(b), contractors must list scrap 
    that is not production scrap on inventory disposal schedules and submit 
    the schedules to the plant clearance officer. The plant clearance 
    officer must process the schedules as described in 45.505-2.
        (b) Under contracts that contain the clause at 52.245-2, Government 
    Property, contractor's that have Government approved scrap procedures 
    may submit scrap lists in lieu of inventory disposal schedules.
        (1) The plant clearance officer must review scrap lists within 10 
    days following receipt. Generally, the plant clearance officer should 
    accept scrap lists that are consistent with a contractor's Government 
    approved scrap procedures, correctly identify the contracts under which 
    the property is accountable, and correctly identify the property's 
    quantity and condition. The plant clearance officers must provide 
    disposition instructions to the contractor within 60 days following 
    receipt of an acceptable scrap list. If disposition instructions are 
    not provided within that period, the clause
    
    [[Page 1450]]
    
    at 52.245-2 permits a contractor to dispose of scrap identified on a 
    scrap list without further Government approval.
        (2) The plant clearance officer must reject or require correction 
    of scrap lists that contain property that must be demilitarized prior 
    to disposal, classified items, scrap generated from classified items, 
    scrap that contains hazardous materials or hazardous wastes, precious 
    metals, or items that are dangerous to the public health, safety, or 
    welfare and require contractors to submit inventory disposal schedules 
    for such items.
        (c) Under contracts that contain the clause at 52.245-7, Government 
    Property--Alternate Procedures, the plant clearance officer should 
    consider favorably a contractor request to negotiate expedited 
    nonproduction scrap disposal procedures when the contractor's 
    experience under other Government contracts or the contractor's 
    business practices indicate that the contractor will adequately protect 
    the Government's interests.
    
    
    45.508  Disposal of surplus Government property.
    
        (a) Applicability. This section addresses the disposal of 
    Government property in the possession of contractors that, after 
    applicable screening, has not been reutilized or transferred (hereafter 
    referred to as surplus property). It does not apply to the abandonment, 
    destruction, or donation of excess agency property (see 45.506) or to 
    the disposal of production scrap (see 45.507-1).
        (b) Disposal priorities. Except as provided in paragraphs (c) and 
    (d) of this section, surplus property must be sold in accordance with 
    45.508-2 or abandoned, destroyed or donated to public bodies in 
    accordance with 45.508-1.
        (c) Disposal using agency procedures. The surplus property 
    identified in this paragraph must 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. 511-514).
        (d) Disposal of Nuclear materials. Nuclear materials (see 45.505-
    4(b)(5)) must be disposed of in accordance with NRC or applicable state 
    licenses, applicable Federal regulations, and agency regulations.
    
    
    45.508-1  Abandonment, destruction, or donation of surplus property in 
    lieu of sale.
    
        (a) Except as provided in paragraph (c) of this subsection, 
    agencies may abandon, destroy, or donate surplus property, if the plant 
    clearance officer determines in writing that the property does not 
    constitute a danger to public health, safety, 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.
        (b) All costs incident to a donation must be borne by the donee.
        (c) Property that contains hazardous materials or wastes, sensitive 
    property, or property that requires demilitarization, may be abandoned 
    at a contractor's premises if the contractor consents.
    
    
    45.508-2  Sale of surplus property.
    
        Policy for the sale of surplus property is contained in the Federal 
    Property Management Regulations, 41 CFR part 101-45. Agencies may 
    specify implementing procedures.
    
    
    45.508-3  Proceeds from sales.
    
        Except for contracts that authorize proceeds from sales to be 
    credited to the price or cost of the work (40 U.S.C. 485(a) and (e)), 
    all sale proceeds are to be credited to the Treasury of the United 
    States as miscellaneous receipts.
    
    
    45.509  Inventory Disposal Reports.
    
        Promptly following disposition of the property identified on an 
    inventory disposal schedule and the crediting of any related proceeds, 
    the plant clearance officer must prepare an SF 1424, Inventory Disposal 
    Report, to account for the property. The report must 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 
    must be addressed to the administrative contracting officer or, for 
    termination inventory, to the termination contracting officer, with a 
    copy to the property administrator.
    
    
    45.510  Contract clauses.
    
        (a) Insert the clause 52.245-5, Government Property Administration, 
    in solicitations and contracts that include the clause at 52.245-2, 
    Government Property. If required for agency financial management or 
    reporting purposes, agencies may modify paragraphs (f)(1)(vi) and 
    (f)(2)(i) of the clause at 52.245-5 to specify different dollar 
    thresholds.
        (b) Insert the clause at 52.245-5 with its Alternate I when the 
    Government will maintain the Government's official property records.
        (c) The clause at 52.245-5 and its Alternate I may be modified to 
    delete references to low-value property when contracting for services 
    to be performed entirely on property owned or leased by the Government 
    and the contracting officer determines in writing that it is in the 
    Government's interests to have a contractor inventory all property and 
    immediately notify the Government of a property loss regardless of the 
    property's value.
        (d) Insert the clause at 52.245-8, Government Property 
    Administration--Alternate Procedures, in solicitations and contracts 
    that include the clause at 52.245-7, Government Property--Alternate 
    Procedures.
        (e) Insert the clause at 52.245-8 with its Alternate I when the 
    Government will maintain the Government's official property records.
        (f) The clause at 52.245-8 and its Alternate I may be modified to 
    delete references to low-value property when contracting for services 
    to be performed entirely on property owned or leased by the Government 
    and the contracting officer determines in writing that it is in the 
    Government's interests to have a contractor inventory all property and 
    immediately notify the Government of a property loss regardless of the 
    property's value.
    
    Subpart 45.6--Authorizing the Use of Government Property for 
    Commercial Purposes
    
    
    45.601  Policy.
    
        (a) Unless prohibited by law, contracting officers may authorize 
    the contractor performing a contract under which Government property is 
    accountable to use that property for commercial purposes on a 
    noninterference basis if the Government receives an equitable rental 
    for such use.
        (b) An authorization for use for commercial purposes must be 
    reflected in a contract modification and must specify--
        (1) The property is available ``as is'' without any representation 
    as to suitability for intended use;
        (2) The rental time and rental period during which the property may 
    be used;
        (3) Any restrictions on, or conditions of, use; and
        (4) The rent or estimated rent the Government will receive.
        (c) Contracting officers must require contractors to assume the 
    liability for
    
    [[Page 1451]]
    
    property losses that occur while the property is being used for 
    commercial purposes and to indemnify the Government against claims for 
    injury to persons or damage to the contractor's or a third party's 
    property that arise from the contractor's use or possession of the 
    Government property for commercial purposes.
        (d) If damaged, lost, stolen, or destroyed property is required for 
    continued performance of a Government contract and cannot be repaired 
    or replaced by the contractor without affecting scheduled deliveries, 
    an equitable adjustment should be negotiated that includes schedule 
    adjustments at no cost to the Government. Negotiate an equitable 
    reduction in price or fee in lieu of repair or replacement when the 
    property is not required for continued performance of a Government 
    contract.
        (e) The contracting officer must not revoke an authorization to use 
    Government property for commercial purposes unless the contractor fails 
    to comply with the terms and conditions governing such use or the 
    Government has a compelling need that precludes continued availability 
    for commercial purposes.
    
    
    45.602  Contract clause.
    
        Insert the clause at 52.245-6, Rental Charges for Commercial Use, 
    in solicitations and contracts that include the clause at 52.245-2, 
    Government Property, or the clause at 52.245-7, Government Property--
    Alternate Procedures. The contracting officer must also insert the 
    clause at 52.245-6 when the clause at 52.245-2 or 52.245-7 is inserted 
    in a contract subsequent to contract award.
    
    PART 49--TERMINATION OF CONTRACTS
    
        35. Amend section 49.001 by revising the definition ``Termination 
    inventory'' to read as follows:
    
    
    49.001  Definitions.
    
    * * * * *
        Termination inventory includes parts, work in process, completed 
    work, supplies, other material produced or acquired for the work 
    terminated, completed or partially completed plans, drawings, or 
    information, property that would have been delivered to the Government 
    if the contract had been completed, and Government-furnished property.
    * * * * *
    
    
    49.105  [Amended]
    
        36. Amend section 49.105 in the introductory text of paragraph 
    (b)(4) by removing ``(see subpart 45.6)''.
        37. 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 paragraph 
    (g) of the clause at 52.245-2, Government Property; and
    * * * * *
        38. 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 45.504; and
    * * * * *
        (b) Section 45.504 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 45.504, 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.
    * * * * *
    
    
    49.202  [Amended]
    
        39. Amend section 49.202 in paragraph (b)(3)(iii) by removing 
    ``materials, facilities,'' and adding ``property'' in its place.
    
    
    49.204  [Amended]
    
        40. Amend section 49.204 in paragraph (a) by removing the words 
    ``materials sold that have'' and adding ``property sold that has'' in 
    its place.
        41. 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 SF 1428.
        42. 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 SF 1428.
    
    
    49.505  [Amended]
    
        43. Amend section 49.505 by removing paragraphs (a) and (c); and by 
    redesignating paragraphs ``(b)'', ``(d)'', and ``(e)'' as ``(a)'', 
    ``(b)'', and ``(c)'', respectively.
        44. 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, must be used to 
    support settlement proposals submitted on the forms specified in 
    49.602-1(a), (b), and (c).
    
    PART 51--USE OF GOVERNMENT SOURCES BY CONTRACTORS
    
        45. Revise section 51.106 to read as follows:
    
    
    51.106  Title.
    
        Title to all property acquired by the contractor under the 
    contracting officer's authorization shall vest in the parties as 
    provided in the contract.
        46. Revise section 51.107 to read as follows:
    
    
    51.107  Contract clause.
    
        Insert the clause at 52.251-1, Government Supply Sources, in 
    solicitations and contracts when the contracting officer may authorize 
    the contractor to acquire supplies or services from a Government supply 
    source.
    
    [[Page 1452]]
    
    51.200  [Amended]
    
        47. Amend section 51.200 at the end of the second sentence by 
    removing ``(see 45.304)''.
    
    PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
    
        48. Amend section 52.216-7 by revising the date of the clause; in 
    paragraph (b)(3) by removing ``paragraph (g)'' and ``paragraph (d)'' 
    and adding in their places ``paragraph (h)'' and ``paragraph (e)'', 
    respectively; by redesignating paragraphs (c) through (h) as (d) 
    through (i), respectively, and adding a new paragraph (c); and in newly 
    designated paragraph (i)(1) by revising ``paragraph (d)(4)'' to read 
    ``paragraph (e)(4)''. The new paragraph (c) reads as follows:
    
    
    52.216-7  Allowable Cost and Payment.
    
    * * * * *
    
    ALLOWABLE COST AND PAYMENT (DATE)
    
    * * * * *
        (c) Title--(1) Government title. Except as provided in paragraph 
    (c)(3) of this clause, title to all property acquired or produced by 
    the Contractor for performance of this contract, the costs of which 
    are allocable to this contract as direct costs, shall vest in the 
    Government when the cost of the property is or should have been 
    allocable or properly chargeable to this contract under sound and 
    generally accepted accounting principles and practices.
        (2) Relationship to Government-furnished property. Property to 
    which the Government has obtained title solely under this clause is 
    not ``Government-furnished property.''
        (3) Contractor title. The Contractor shall have title to special 
    test equipment items that do not contain general purpose test 
    equipment and special tooling items, provided such items--
        (i) Were acquired or produced for this contract;
        (ii) Have an acquisition cost less than $5,000 that was 
    allocated to this contract as direct cost; and
        (iii) Are not identified in the contract as deliverable items.
        (4) Lien. By execution of this contract, the Contractor grants 
    to the Government a security lien paramount to any other on the 
    property to which the Contractor has title under paragraph (c)(3) of 
    this clause. During performance of this contract, the Contractor 
    shall not offer or provide such property as collateral for any 
    purpose and shall not encumber in any manner title to that property.
    * * * * *
    
    
    52.216-11  [Amended]
    
        49. Amend section 52.216-11 in the first sentence of the 
    introductory paragraph by removing ``or a facilities contract''.
    
    
    52.216-12  [Amended]
    
        50. Amend section 52.216-12 in the first sentence of the 
    introductory paragraph by removing the parenthetical ``(other than a 
    facilities contract)''.
    
    
    52.216-13 and 52.216-14  [Removed and Reserved]
    
        51. Remove and reserve sections 52.216-13 and 52.216-14.
    
    
    52.222-17  Labor Standards for Construction Work--Government-Furnished 
    Real Property.
    
        52. Revise the section heading of 52.222-17 and the clause heading 
    to read as follows:
    * * * * *
    
    LABOR STANDARDS FOR CONSTRUCTION WORK--GOVERNMENT-FURNISHED REAL 
    PROPERTY (FEB 1988)
    
    * * * * *
        53. Amend section 52.232-16 by revising the date of the clause and 
    paragraphs (d), (e), and (h) of the clause to read as follows:
    
    
    52.232-16  Progress Payments.
    
    * * * * *
    
    PROGRESS PAYMENTS (DATE)
    
    * * * * *
        (d) Title. (1) Title to all property acquired or produced by the 
    Contractor for performance of this contract, the costs of which are 
    allocable to this contract, shall vest in the Government when the 
    property is or should have been allocable or properly chargeable to 
    this contract under sound and generally accepted accounting 
    principles and practices. Upon liquidation of all progress payments, 
    the Contractor shall have title to property acquired or produced for 
    this contract that is not required to be delivered to the 
    Government.
        (2) Property to which the Government has obtained title solely 
    under this clause is not ``Government-furnished property.''
        (3) The procedures for the disposal of Government-furnished 
    property that is scrap are contained in the Government Property 
    clause, 52.245-2, Government Property, of this contract. The 
    Contractor may sell all other scrap resulting from production or 
    testing under this contract without Government approval if the scrap 
    does not contain precious metals, hazardous materials or wastes, 
    nuclear materials, classified materials, or does not require 
    demilitarization. The proceeds shall be credited against the costs 
    of performance.
        (4) The Contractor shall not use property to which title is 
    vested in the Government under this clause to perform other 
    contracts, transfer the property to another contract or dispose of 
    the property unless authorized to do so by the Contracting Officer 
    or paragraph (d)(3) of this clause. When transfer or disposal is 
    authorized, the Contractor shall--
        (i) Exclude the allocable costs of the property from the costs 
    of contract performance; and
        (ii) Repay to the Government any amount of unliquidated progress 
    payments allocable to the property.
        (e) Liability. The Contractor is liable for loss, theft, or 
    destruction of, or damage to, property acquired or produced for 
    performance of this contract unless the Government has expressly 
    assumed such risks or accepted the property. The Contractor shall 
    repay the Government an amount equal to the unliquidated progress 
    payments that are based on costs allocable to property that is 
    damaged, lost, stolen, or destroyed.
    * * * * *
        (h) Special terms regarding default. If this contract is 
    terminated under the Default clause of this contract--
        (1) The Contractor shall, on demand, repay to the Government the 
    amount of unliquidated progress payments.
        (2) Upon full liquidation of progress payments, the Contractor 
    shall have title to all property acquired or produced for 
    performance of this contract, except such property required to be 
    delivered to the Government under the Default clause of this 
    contract or the clause at 52.245-3, Delivery--Special Tooling and 
    Special Test Equipment (Fixed-Price Contracts), if applicable and 
    included in the contract.
    * * * * *
    
    
    52.232-21  [Removed and Reserved]
    
        54. Remove and reserve section 52.232-21.
        55. Amend section 52.232-32 by revising the date of the clause and 
    paragraphs (f), (g), and (j) to read as follows:
    
    
    52.232-32  Performance-Based Payments.
    
    * * * * *
    
    PERFORMANCE-BASED PAYMENTS (DATE)
    
    * * * * *
        (f) Title. (1) Title to all property acquired or produced by the 
    Contractor for performance of this contract, the costs of which are 
    allocable to this contract, shall vest in the Government when the 
    property is or should have been allocable or properly chargeable to 
    this contract under sound and generally accepted accounting 
    principles and practices. Except as provided in the clause at 
    52.245-3, Delivery--Special Tooling and Special Test Equipment 
    (Fixed-Price Contracts), upon liquidation of all performance-based 
    payments, the Contractor shall have title to property acquired or 
    produced for this contract that is not required to be delivered to 
    the Government.
        (2) Property to which the Government has obtained title solely 
    under this clause is not ``Government-furnished property.''
        (3) The procedures for the disposal of Government-furnished 
    property that is scrap are contained in the clause 52.245-2, 
    Government Property, of this contract. The Contractor may sell all 
    other scrap resulting from production or testing under this contract 
    without Government approval provided that--
        (i) Any significant reduction in the value of the property to 
    which the Government has
    
    [[Page 1453]]
    
    title under this clause is reported to the Contracting Officer; and
        (ii) The scrap does not contain precious metals, hazardous 
    materials or wastes, nuclear materials, classified materials, or 
    does not require demilitarization. The proceeds shall be credited 
    against the costs of performance.
        (4) The Contractor shall not use property to which title is 
    vested in the Government under this clause to perform other 
    contacts, transfer the property to another contract, or dispose of 
    the property unless authorized to do so by the Contracting Officer 
    or paragraph (d)(3) of this clause.
        (g) Liability. The Contractor is liable for loss, theft, or 
    destruction of, or damage to, property acquired or produced for 
    performance of this contract unless the Government has expressly 
    assumed such risks or accepted the property.
    * * * * *
        (j) Special terms regarding default. If this contract is 
    terminated under the Default clause--
        (1) The Contractor shall, on demand, repay to the Government the 
    amount of unliquidated performance-based payments; and
        (2) Upon full liquidation of performance-based payments, the 
    Contractor shall have title to all property acquired or produced for 
    performance of this contract except such property required to be 
    delivered to the Government under the Default clause or the clause 
    at 52.245-3.
    * * * * *
    
    
    52.243-2  [Amended]
    
        56. Amend section 52.243-2 by removing Alternate IV and 
    redesignating ``Alternate V'' as ``Alternate IV'' of the clause.
        57. Amend section 52.243-4 by revising the date of the clause and 
    paragraph (a)(3) of the clause to read as follows:
    
    
    52.243-4  Changes.
    
    * * * * *
    
    CHANGES (DATE)
    
        (a) * * *
        (3) In the Government property or services furnished for 
    contract performance; or
    * * * * *
        58. Revise sections 52.245-1 through 52.245-8 to read as follows:
    
    
    52.245-1  Government Property Availability and Information required 
    from Offerors.
    
        As prescribed in 45.207-1(a), insert the following solicitation 
    provision:
    
    GOVERNMENT PROPERTY AVAILABILITY AND INFORMATION REQUIRED FROM OFFERORS 
    (DATE)
    
        (a) Definitions.
        Government-furnished property means Government property that a 
    Contracting Officer authorizes a Contractor to use for performance 
    of a Government contract.
        Government property means property the Government owns or 
    leases.
        Personal property means property of any kind or interest in it 
    except real property, battleships, cruisers, aircraft carriers, 
    destroyers, submarines, and records of the Federal Government.
        Property means real and personal property.
        Property administrator means a person appointed to perform 
    property administration for the Government.
        Real property means land and rights in land, ground 
    improvements, utility distribution systems, and buildings and other 
    structures. It does not include foundations and other work necessary 
    for installing special tooling, special test equipment, or 
    equipment.
        Special test equipment means--
        (1) Test equipment designed specifically to conduct testing 
    required by a Government contract provided such equipment cannot be 
    used for other purposes;
        (2) General purpose test equipment or modifications thereof that 
    are interconnected and interdependent to form a new functional 
    entity that can only be used to perform testing required by a 
    contract while so interconnected and interdependent; or
        (3) Any combination of specifically designed, general purpose, 
    or modified general purpose test equipment that is so interconnected 
    and interdependent to form a new functional entity that can only be 
    used to perform special purpose testing required by a contract while 
    so interconnected and interdependent.
        Special tooling means items such as jigs, dies, fixtures, molds, 
    patterns, taps, gauges, or other equipment and manufacturing aids, 
    that are of such a specialized nature that without substantial 
    modification or alteration their use is limited to the development, 
    production, repair, or maintenance of particular supplies or 
    components thereof, or to the performance of particular services.
        (b) Property available for contract performance. (1) The 
    property listed below, or in an attachment to this provision, is 
    available for performance of the contract contemplated by this 
    solicitation and is in a condition suitable for use.
        (2) The property listed below, or in an attachment to this 
    provision, is available for use on an ``as is'' basis.
        (i) Offerors are responsible for assuring that Government 
    property made available on an ``as is'' basis is suitable for the 
    offerors' purposes. Such property will be furnished f.o.b. at the 
    location specified in the solicitation or contract. Costs incurred 
    to transport, install, modify, or otherwise make such property 
    suitable for the successful offeror's intended use and any cost 
    incurred to return such property to the Government shall not 
    increase the price or fee of any Government contract. Amendments to 
    property furnished ``as is'' require the Contracting Officer's prior 
    written approval.
        (ii) The Government makes no warranty whatsoever with respect to 
    property furnished ``as is'' except that the property will be in the 
    same condition when placed at the specified f.o.b. location as when 
    inspected by the offeror or, if not inspected by the offeror, as of 
    the last date for inspection specified in the solicitation. The 
    offeror is responsible for verifying that the property's condition 
    has not changed during that period and shall notify the Contracting 
    Officer promptly identifying any changed condition that will 
    adversely affect the offeror. If the Contracting Officer concurs 
    that the property's condition has changed, the Contracting Officer 
    may restore the property, substitute other Government property, or 
    withdraw the property's availability. A substitution or withdrawal 
    shall be reflected in a modification to the solicitation. The 
    Government has no liability for changes in the property's condition 
    discovered after removal from the specified f.o.b. location.
        (iii) Special tooling or special test equipment will be 
    furnished ``as is'' if the successful offeror acquired or produced 
    the tooling and test equipment and the Government obtained title to 
    the tooling or test equipment under a Government contract.
        (c) Government title. The Government retains title to any 
    property furnished for performance of the contract contemplated by 
    this solicitation. Contractor repairs to or modifications of that 
    property do not affect the Government's title to the property.
        (d) Property administration considerations. The successful 
    offeror will be responsible for the care, maintenance, and 
    preservation of Government property accountable under a contract 
    resulting from this solicitation, including property the successful 
    offeror permits a subcontractor to use for performance of that 
    contract.
        (1) The clauses at 52.245-2, Government Property, and 52.245-5, 
    Government Property Administration, will be included in a contract 
    resulting from this solicitation unless a successful offeror elects 
    to use, by inserting the offeror's name on the line provided in 
    paragraph (d)(3) of this provision, the clauses at 52.245-7, 
    Government Property--Alternate Procedures, and 52.245-8, Government 
    Property Administration--Alternate Procedures. Generally, under the 
    Government Property clause at 52-245-2, the Government is liable for 
    loss, theft, or destruction of, or damage to, the Government 
    property accountable under the contract (hereinafter referred to as 
    property losses), and the Contractor must maintain a Government 
    property management system that includes the processes specified in 
    the Government Property Administration clause at 52.245-5. The 
    clause at 52.245-7 generally makes a successful offeror responsible 
    for property losses and the clause at 52.245-8 generally permits a 
    successful offeror(s) to manage Government property using the same 
    procedures that are used to manage the offeror's property.
        (2) An offeror should make the election in paragraph (d)(3) of 
    this provision only if the election is consistent with the offeror's 
    property management practices under other Government contracts 
    performed or to be performed at the location at which the contract 
    resulting from this solicitation will be performed.
        (3) Alternate Clause Election. The offeror, 
    ____________________, elects to have the clauses at 52.245-7, 
    Government Property--Alternate Procedures, and 52.245-8, Government 
    Property Administration--Alternate Procedures, included in a 
    contract
    
    [[Page 1454]]
    
    resulting from this solicitation in lieu of the corresponding 
    clauses at 52.245-2 and 52.245-5.
        (e) Information required from all offerors. Offers shall--
        (1) List or describe all Government property the offeror or its 
    potential subcontractors propose to use on a rent-free basis, 
    including--
        (i) Property offered for use in this solicitation; and
        (ii) Property already in possession of the offeror or its 
    prospective subcontractors under other contracts.
        (2) Identify the contracts or other instruments under which the 
    property listed or described in paragraph (d)(1) is accountable; and
        (3) Identify the estimated period during which the property will 
    be used, the estimated hours of use within that period, and the 
    offeror's estimated costs to acquire, produce, lease, or rent the 
    property if it is not furnished by the Government.
        (f) Additional information required from offerors that do not 
    make the election available in paragraph (d)(3) of this provision. 
    (1) The offeror shall state--
        (i) Whether the offeror has an approved property management 
    system;
        (ii) The date the system was last reviewed; and
        (iii) The name and address of the Property Administrator who 
    performed the last review.
        (2) Offers shall include a proposed Government property 
    management system if--
        (i) The offeror does not have a property system that has been 
    approved by a Property Administrator;
        (ii) The offeror's property system was last approved or 
    validated by a Property Administrator more than 2 years prior to the 
    date of this offer;
        (iii) A Property Administrator has requested corrections to the 
    offeror's system and such corrections have not been made; or
        (iv) Approval of the offeror's system has been withdrawn.
        (3) Offerors should propose and use an existing property 
    management system or a modification thereof when the existing or 
    modified system satisfies the requirements of the Government 
    Property and Government Property Administration clauses identified 
    in this solicitation.
        (4) A successful offeror whose property system has been approved 
    or validated by the Government no more than 2 years prior to the 
    date of its offer is required only to submit to the Property 
    Administrator, within 90 days following contract award, the changes 
    required to conform the system to the requirements of the successful 
    offeror's contract.
        (5) As provided in the clause at 52.245-5, Government Property 
    Administration, the Property Administrator might require a 
    successful offeror to make changes to a proposed or previously 
    approved system if deemed necessary for contract compliance.
        (g) Liability for loss, theft, damage, or destruction. (Not 
    applicable when the election in paragraph (d)(3) of this provision 
    is made.) Notwithstanding any other provision of this solicitation 
    regarding liability for loss, theft, or destruction of, or damage to 
    Government property, the successful offeror shall be liable for such 
    loss, theft, destruction, or damage until its Government property 
    system is approved by the Property Administrator.
        (h) Overseas contracts. In a contract to be performed outside 
    the United States, its territories, or possessions, the words 
    ``Government'' and ``Government-furnished'', as used in this 
    provision, mean ``United States Government'' and ``United States 
    Government-furnished,'' respectively.
    
    (End of provision)
    
        Alternate I (Date). As prescribed in 45.207-1(b), replace 
    paragraphs (b) through (g) of the basic clause with the following 
    paragraphs (b) through (d) and renumber paragraph (h) of the basic 
    clause as paragraph (e).
        (b) Property administration considerations. The successful 
    offeror will be responsible for the care, maintenance, and 
    preservation of Government property accountable under a contract 
    resulting from this solicitation, including property the successful 
    offeror permits a subcontractor to use for performance of that 
    contract.
        (1) The clauses at 52.245-2, Government Property, and 52.245-5, 
    Government Property Administration, will be included in a contract 
    resulting from this solicitation unless a successful offeror elects 
    to use, by inserting the offeror's name on the line provided in 
    paragraph (b)(3) of this provision, the clauses at 52.245-7, 
    Government Property--Alternate Procedures, and 52.245-8, Government 
    Property Administration--Alternate Procedures. Generally, under the 
    Government Property clause at 52-245-2, the Government is liable for 
    loss, theft, or destruction of, or damage to, the Government 
    property accountable under the contract (hereinafter referred to as 
    property losses), and the Contractor must maintain a Government 
    property management system that includes the processes specified in 
    the Government Property Administration clause at 52.245-5. The 
    clause at 52.245-7 generally makes a successful offeror responsible 
    for property losses and the clause at 52.245-8 generally permits a 
    successful offeror to manage Government property using the same 
    procedures that are used to manage the offeror's property.
        (2) An offeror should make the election in paragraph (b)(3) of 
    this provision only if the election is consistent with the offeror's 
    property management practices under other Government contracts 
    performed or to be performed at the location at which the contract 
    resulting from this solicitation will be performed.
        (3) Alternate Clause Election The offeror, ____________________, 
    elects to have the clauses at 52.245-7, Government Property--
    Alternate Procedures and 52.245-8, Government Property 
    Administration-- Alternate Procedures, included in a contract 
    resulting from this solicitation in lieu of the corresponding 
    clauses at 52.245-2 and 52.245-5.
        (c) Information required from offerors that do not make the 
    election available in paragraph (b)(3) of this provision. (1) The 
    offeror shall state whether the offeror has an approved property 
    management system, the date the system was last reviewed, and the 
    name and address of the Property Administrator who performed the 
    last review.
        (2) Offers shall include a proposed Government property 
    management system if--
        (i) The offeror does not have a property system that has been 
    approved by a Property Administrator;
        (ii) The offeror's property system was last approved or 
    validated by a Property Administrator more than 2 years prior to the 
    date of this offer;
        (iii) A Property Administrator has requested corrections to the 
    offeror's system and such corrections have not been made; or
        (iv) Approval of the offeror's system has been withdrawn.
        (3) Offerors should propose and use an existing property 
    management system or a modification thereof when the existing or 
    modified system satisfies the requirements of the Government 
    Property and Government Property Administration clauses identified 
    in this solicitation.
        (4) A successful offeror whose property system has been approved 
    or validated by the Government no more than 2 years prior to the 
    date of its offer is required only to submit to the Property 
    Administrator, within 90 days following contract award, the changes 
    required to conform the system to the requirements of the successful 
    offeror's contract.
        (5) As provided in the clause at 52.245-5, Government Property 
    Administration, the Property Administrator might require a 
    successful offeror to make changes to a proposed or previously 
    approved system if deemed necessary for contract compliance.
        (d) Liability for loss, theft, damage, or destruction. (Not 
    applicable when the election in paragraph (b)(3) of this provision 
    is made.) Notwithstanding any other provision of this solicitation 
    regarding liability for loss, theft, or destruction of, or damage to 
    Government property, the successful offeror shall be liable for such 
    loss, theft, destruction, or damage until its Government property 
    system is approved by the Property Administrator.
    
    
    52.245-2  Government Property.
    
        As prescribed in 45.207-2, insert the following clause:
    
    GOVERNMENT PROPERTY (DATE)
    
        (a) Definitions. As used in this clause--
        Commercial purpose means any purpose other than performance of a 
    U.S. Government contract or subcontract thereunder.
        Contractor's managerial personnel means the Contractor's 
    directors, officers, and any of the Contractor's managers, 
    superintendents, or equivalent representatives who have supervision 
    or direction of all or substantially all of the Contractor's 
    business or the Contractor's operations at a site connected with 
    performance of a Government contract.
        Demilitarization means rendering a product unusable for, and not 
    restorable to, the purpose for which it was designed or is 
    customarily used.
    
    [[Page 1455]]
    
        Equipment means nonexpendable, tangible personal property. The 
    term does not include property that satisfies the definition in this 
    clause of material, unique Federal property, special tooling, or 
    special test equipment.
        Expendable property means property that is customarily consumed 
    during design, manufacture, or testing of a product or performance 
    of a service.
        General purpose equipment means equipment items that can be 
    used, or with only minor modification could be used, to develop, 
    produce, test, or maintain more than one type of item or perform 
    more than one type of service.
        Government-furnished property means Government property that a 
    Contracting Officer authorizes a Contractor to use for performance 
    of a Government contract.
        Government property means property the Government owns or 
    leases.
        Low value property means equipment, special tooling, or special 
    test equipment that has an acquisition cost less than $5,000 and is 
    not sensitive property.
        Material means expendable property and property incorporated 
    into or attached to an end item.
        Natural disaster means a sudden and unusual natural occurrence 
    causing catastrophic damage, including floods, hurricanes, 
    tornadoes, cyclones, atmospheric electrical storms, tidal waves, 
    avalanches, mudslides, landslides, volcanic eruptions, earthquakes, 
    and other similar perils. The term does not include fire or 
    explosion, unless directly or indirectly caused by a covered peril.
        Nonprofit organization means a business entity organized and 
    operated exclusively for charitable, scientific, or educational 
    purposes, the net earnings of which do not inure to the benefit of 
    any private shareholder or individual, that is exempt from Federal 
    income taxation under section 501 of the Internal Revenue Code and 
    does not conduct a substantial portion of its activities carrying on 
    propaganda or otherwise attempting to influence legislation or 
    participating in any political campaign on behalf of any candidate 
    for public office.
        Personal property means property of any kind or interest in it 
    except real property, battleships, cruisers, aircraft carriers, 
    destroyers, submarines, and records of the Government.
        Plant clearance officer means a person appointed to disposition 
    property accountable under Government contracts.
        Precious metals means silver, gold, platinum, palladium, 
    iridium, osmium, rhodium, and ruthenium.
        Property means real and personal property.
        Property administrator means a person appointed to perform 
    property administration for the Government.
        Real property means land and rights in land, ground 
    improvements, utility distribution systems, and buildings and other 
    structures. It does not include foundations and other work necessary 
    for installing special tooling, special test equipment, or 
    equipment.
        Rental period means the calendar period during which Government 
    property is made available for commercial purposes.
        Rental time means the number of hours, to the nearest whole 
    hour, rented property is actually used for commercial purposes. It 
    includes time to set up the property for such purposes, perform 
    required maintenance, and restore the property to its condition 
    prior to rental (less normal wear and tear).
        Scrap means personal property that has no value except its basic 
    metallic, mineral, or organic content.
        Sensitive property means property potentially dangerous to the 
    public safety or security if stolen, lost, or misplaced, or that 
    must 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.
        Special test equipment means--
        (1) Test equipment designed specifically to conduct testing 
    required by a Government contract, provided such equipment cannot be 
    used for other purposes;
        (2) General purpose test equipment, or modifications thereof, 
    that are interconnected and interdependent to form a new functional 
    entity that can only be used to perform testing required by a 
    contract while so interconnected and interdependent; or
        (3) Any combination of specifically designed, general purpose, 
    or modified general purpose test equipment that is so interconnected 
    and interdependent to form a new functional entity that can only be 
    used to perform special purpose testing required by a contract while 
    so interconnected and interdependent.
        Special tooling means items such as jigs, dies, fixtures, molds, 
    patterns, taps, gauges, or other equipment and manufacturing aids, 
    that are of such a specialized nature that without substantial 
    modification or alteration their use is limited to the development, 
    production, repair, or maintenance of particular supplies or 
    components thereof, or to the performance of particular services.
        Unique Federal property means Government-owned personal 
    property, or components thereof, that is specially designed to 
    perform or support the mission of one or more Federal agencies and 
    is not available to the public. The term does not include property 
    that is incorporated into or attached to an item deliverable under a 
    contract.
        Work in process means bench stock materials, complete or 
    incomplete fabricated parts, subassemblies, assemblies, and similar 
    items that are created during production of deliverable end items, 
    or are required to construct special tooling or special test 
    equipment needed to produce deliverable end items, or are otherwise 
    needed for design or testing required by a contract.
        (b) General. (1) This clause is applicable to Government-
    furnished property; Government property stored by the Contractor at 
    the Government's direction; items accepted by the Government at 
    origin that are in the Contractor's possession; and under cost-
    reimbursement or time-and-materials contracts, property acquired or 
    produced by a Contractor to which the Government has title under the 
    Allowable Cost and Payment clause of this contract. For purposes of 
    this clause, such property and items are collectively referred to as 
    ``Government property.'' The clause does not apply to property to 
    which the Government has obtained title, a lien, or other security 
    interest solely as a result of financing arrangements under fixed-
    price contracts.
        (2) Except as provided in paragraph (c) of this clause, the 
    Contractor shall use its own property to perform this contract.
        (3) The Contractor is responsible for the maintenance, 
    protection, and preservation of Government property accountable 
    under this contract, including property in the possession of a 
    subcontractor, and shall account for such property as required by 
    this contract.
        (4) The Contractor shall not--
        (i) Use Government property for commercial purposes without the 
    Contracting Officer's prior approval. Unless otherwise permitted by 
    law, commercial use shall be on a rental basis. The terms and 
    conditions of the Rental Charges for Commercial Use clause of this 
    contract shall apply to each rental; or
        (ii) Permit a subcontractor or supplier to use property 
    furnished for the performance of this contract unless the Contractor 
    has verified that the subcontractor or supplier has a property 
    management system that has been approved by the cognizant Property 
    Administrator.
        (5) If this contract is a cost-reimbursement or time-and-
    materials contract, the Contractor shall not acquire general purpose 
    equipment to which the Government will have title under the clause 
    at 52.216-7, Allowable Cost and Payment, or real property for 
    performance of this contract unless the general purpose equipment or 
    real property is specified as a deliverable end item.
        (6) If this contract is a fixed-price or labor-hour contract, 
    property acquired or produced by the Contractor for performance of 
    the contract is not Government-furnished property. Property 
    identified as a deliverable item becomes Government property upon 
    acceptance by the Government.
        (c) Government-furnished property. The property identified in 
    this contract as Government-furnished property is furnished to the 
    Contractor on a rent-free basis for performance of this contract.
        (1) Title. The Government retains title to Government-furnished 
    property, including Government-furnished property that is 
    incorporated into or attached to any property owned by the 
    Contractor. Government-furnished property does not become a fixture 
    or lose its identity as personal property by being attached to real 
    property.
        (2) Suitability for intended use. (i) Government-furnished 
    property, other than property furnished ``as is'', shall be in a 
    condition suitable for the property's intended use at the time the 
    property is furnished to the Contractor. The Government shall, when 
    requested by the Contractor, provide information reasonably required 
    for the intended use of such property to the extent the Government 
    has the right to release or disclose the information.
        (ii) The contract delivery or performance dates are based upon 
    the expectation that Government-furnished property, except
    
    [[Page 1456]]
    
    property furnished ``as is'', will be suitable for its intended use 
    and delivered to the Contractor at the times stated in the contract. 
    If a time is not stated, the property shall be furnished in 
    sufficient time to enable the Contractor to meet the contract's 
    delivery or performance dates.
        (iii) If Government-furnished property is received in a 
    condition not suitable for its intended use, the Contractor shall 
    notify the Contracting Officer as soon as the unsuitability is known 
    and shall take corrective action or dispose of the property as 
    directed by the Contracting Officer. The contract shall be equitably 
    adjusted in accordance with paragraph (c)(7) of this clause.
        (iv) The Contractor may request an equitable adjustment when 
    Government-furnished property is not delivered to the Contractor by 
    the required time and such untimely delivery has affected contract 
    performance.
        (v) If the Contractor commingles Contractor-acquired or produced 
    material with Government-furnished material, the provisions of this 
    clause regarding suitability for intended use shall not apply to the 
    commingled Government-furnished material. Notwithstanding any other 
    provision of this contract, the Contractor shall be responsible for 
    any failure to comply with contract requirements attributable to 
    material that was commingled.
        (3) Authorized use. The Contractor may request, in writing, the 
    Contracting Officer to authorize use of the property furnished for 
    performance of this contract to perform other Government contracts 
    at the same location. Rent-free use is authorized if the Contracting 
    Officer does not object to such use, either in whole or in part, 
    within 30 days following confirmed receipt of the Contractor's 
    request. Costs incurred by the Contractor to relocate, modify, or 
    adapt the property for performance of other Government contracts or 
    to restore the property to a condition suitable for intended use 
    under this contract shall not increase the price or fee of any 
    Government contract.
        (4) Real property restrictions. The Contractor shall not improve 
    or make structural alterations to real property furnished for 
    performance of this contract unless the contract specifically 
    identifies the alterations or improvements as work to be performed 
    under the contract or unless expressly authorized to do so in 
    writing by the Contracting Officer. Title to improvements or 
    alterations to Government-furnished real property shall vest in the 
    Government.
        (5) Property furnished ``as is''. (i) The Contractor is 
    responsible for assuring that Government property furnished on an 
    ``as is'' basis is suitable for the Contractor's purposes. Such 
    property is furnished f.o.b. at the location specified in the 
    solicitation or contract. Costs incurred by the Contractor to 
    transport, install, modify, or otherwise make such property suitable 
    for the Contractor's intended use and any cost incurred to return 
    such property to the Government shall not increase the price or fee 
    of any Government contract. Modifications to property furnished ``as 
    is'' require the Contracting Officer's prior written approval.
        (ii) Special tooling or special test equipment is furnished ``as 
    is'' for performance of this contract if the Contractor-acquired or 
    produced, and the Government obtained title to, such tooling or test 
    equipment under this or another Government contract.
        (iii) The Government makes no warranty whatsoever with respect 
    to property furnished ``as is'' except that the property will be in 
    the same condition when placed at the specified f.o.b. location as 
    when inspected by the Contractor or, if not inspected by the 
    Contractor, as of the last date identified in the solicitation or 
    contract for Contractor inspection. The Contractor is responsible 
    for verifying that the property's condition has not changed during 
    that period. If the Contractor determines the property's condition 
    has changed and such change will adversely affect the Contractor, 
    the Contractor shall notify the Contracting Officer promptly and 
    identify the changed condition. If the Contracting Officer concurs 
    that the property's condition has changed, the Contracting Officer 
    may restore the property or substitute other Government property at 
    no change in the contract's price or fee; permit the Contractor to 
    restore the property subject to an equitable adjustment; or decline 
    to provide the property subject to an equitable adjustment. The 
    foregoing provisions for adjustment are the exclusive remedies 
    available to the Contractor. The Government has no liability for 
    changes in the property's condition discovered after removal from 
    the specified f.o.b. location.
        (iv) Repairs to or modifications of property furnished ``as is'' 
    do not affect the Government's title to such property.
        (6) Changes in Government-furnished property. (i) The 
    Contracting Officer may increase, decrease, or substitute other 
    Government property for the property furnished or to be furnished 
    for performance of this contract or require use of Government-
    furnished property in lieu of Contractor property.
        (ii) Any increase in the amount of property furnished for 
    performance of this contract shall result in an equitable reduction 
    in contract price or fee and appropriate adjustment of the contract 
    delivery or performance dates.
        (iii) The Contractor may request an equitable adjustment for a 
    decrease in or substitution for the property identified in the 
    contract or withdrawal of authority to use property accountable 
    under another contract in performance of this contract provided such 
    decrease, substitution, or withdrawal increases contract costs or 
    schedule.
        (iv) If the Contracting Officer directs the Contractor to use 
    Government-furnished property in lieu of Contractor property in 
    performance of this contract, any adjustment to the contract shall 
    be made in accordance with paragraph (c)(7) of this clause.
        (7) Equitable adjustments. Equitable adjustments shall be the 
    Contractor's exclusive remedy for Government actions under this 
    clause and shall be made in accordance with the procedures of the 
    Changes clause of this contract.
        (i) Equitable adjustments may include an amount for the 
    restoration and rehabilitation of the Contractor's premises caused 
    by Government-furnished property that is not in a condition suitable 
    for intended use, the withdrawal or substitution of Government-
    furnished property, or the Government's abandonment of hazardous 
    property (see paragraph (h)(1) of this clause).
        (ii) The Government shall not be liable for breach of contract 
    for--
        (A) Any delay in delivery of Government-furnished property;
        (B) Delivery of Government-furnished property in a condition not 
    suitable for its intended use;
        (C) An increase or decrease in, or substitution of, Government-
    furnished property; or
        (D) Failure to repair or replace Government-furnished property.
        (8) Return of Government-furnished property. If this contract 
    requires Government-furnished property to be returned directly to a 
    Government activity--
        (i) The property, including property furnished ``as is'', shall 
    be returned to the Government in the same condition, less normal 
    wear and tear, or better condition than when furnished to the 
    Contractor except--
        (A) Lost, stolen, or destroyed property that the Government has 
    determined will not be replaced; and
        (B) Damaged property that the Government has elected not to have 
    repaired or replaced.
        (ii) The Contractor shall notify the contract administration 
    office of its intent to return Government-furnished property at 
    least 10 working days prior to return. Notices shall identify the 
    contracts under which the items are accountable and shall provide 
    each item's name, description, national stock number (if known), and 
    part number or identification number.
        (d) Property loss liability. As used in this clause, the terms 
    loss and losses include, either individually or in any combination, 
    the physical misplacement of, the theft of, the destruction of, or 
    damage to, Government property accountable under this contract.
        (1) Limited liability. (i) The Contractor is not liable for 
    property losses that occur while the Contractor is maintaining a 
    property management system that satisfies the requirements of this 
    contract, except losses for which the Contractor expressly is liable 
    under the terms of this contract.
        (ii) The Contractor's liability for a loss that results from a 
    risk expressly required to be insured under this contract is limited 
    to the extent of the insurance required to be purchased and 
    maintained, or to the extent of the insurance actually purchased and 
    maintained, whichever is greater.
        (2) Full liability. The Contractor is liable for all property 
    losses that--
        (i) Occur at a time when the Contractor has not established a 
    property management system that satisfies the requirements of this 
    contract;
        (ii) Occur on or after the date of a written or electronic 
    notice from the Property Administrator that the Government has 
    withdrawn approval of the Contractor's property management system, 
    unless the Contractor can establish by clear and convincing evidence 
    that a loss did not result
    
    [[Page 1457]]
    
    from the Contractor's failure to maintain an approved system;
        (iii) Occur on or after the first calendar day following the 
    Contractor's failure to correct a property system deficiency by the 
    date specified by the Property Administrator for such correction or 
    such other mutually agreed upon date for correction;
        (iv) Result from the Contractor's failure to take reasonable and 
    prudent steps to avoid losses resulting from acts of war, civil 
    insurrection, or natural disasters; or (v) Result from the willful 
    misconduct or lack of good faith on the part of the Contractor's 
    managerial personnel.
        (3) Property in the possession of subcontractors or suppliers. 
    The Contractor's transfer of Government property to a subcontractor 
    or supplier does not affect the Contractor's liability for property 
    losses.
        (4) Contractor required actions following a property loss. The 
    Contractor shall--
        (i) Take all reasonable action to protect damaged Government 
    property from further damage and to physically separate such 
    property from all other property;
        (ii) Notify the Contracting Officer as required by the 
    Government Property Administration clause of this contract (52.245-
    5(f)(4));
        (iii) Not repair, replace, or substitute other property, for the 
    property suffering a loss unless authorized to do so by the 
    Contracting Officer; and
        (iv) Do nothing to prejudice the Government's rights to recover 
    against third parties for any property loss. When requested by the 
    Contracting Officer, furnish to the Government at Government expense 
    all reasonable assistance and cooperation (including the prosecution 
    of suit and the execution of instruments of assignment in favor of 
    the Government) in obtaining recovery.
        (5) Insurance charges or reserves. The Contractor shall not 
    include in the contract price or fee, or any adjustment thereof, any 
    charge or reserve for insurance (including any self-insurance fund 
    or reserve) covering Government property losses, except to the 
    extent this contract expressly requires the Contractor to carry such 
    insurance.
        (e) Property loss remedies. (1) Following receipt of a property 
    loss notification from the Contractor, the Contracting Officer may--
        (i) Replace or substitute other property for the Government 
    property suffering a loss;
        (ii) Authorize the Contractor to repair, or replace the property 
    or take other appropriate action; or
        (iii) Negotiate an equitable adjustment in lieu of repair or 
    replacement when the Government is liable for the property loss.
        (2) The Contracting Officer's authorization to remedy a loss for 
    which the Contractor is liable under this clause shall not increase 
    the contract price or fee.
        (3) The Contractor may request an equitable adjustment to remedy 
    a loss for which the Government is liable under this clause.
        (4) The extent of the Government's liability for a property loss 
    shall be reduced by the amount of any reimbursement the Contractor 
    receives for that loss from a source other than the Government. The 
    Contractor shall use any reimbursement for a property loss from a 
    source other than the Government to repair, rehabilitate, or replace 
    the property that suffered a loss, or equitably reimburse the 
    Government, as directed by the Contracting Officer.
        (f) Government property maintenance. The contract price or fee 
    includes an amount for performance of the maintenance actions 
    required by paragraphs (f)(1) and (f)(2) of this clause. If 
    maintenance of stored items is required, the Contractor might be 
    entitled to an equitable adjustment.
        (1) Government-furnished property. The Contractor shall maintain 
    Government-furnished property in a condition suitable for its 
    intended use. The Contractor shall--
        (i) Maintain real property, special tooling, and special test 
    equipment in accordance with the specific maintenance instructions 
    contained in this contract. If maintenance instructions are not 
    specified, the Contractor shall use sound business practices to 
    maintain that property.
        (ii) Maintain unique Federal property as specified in this 
    contract, or if not specified, agency instructions for the 
    maintenance of such property.
        (iii) Preserve, protect, and care for material and general 
    purpose equipment in accordance with the property manufacturer's 
    standards of care for such items, or when the manufacturer has not 
    released standards of care, the Contractor's standard business 
    practices for comparable Contractor-owned material and equipment.
        (iv) Promptly notify the contract administration office when the 
    maintenance actions required by paragraphs (f)(1)(i) through 
    (f)(1)(iii) are not sufficient to sustain a Government-furnished 
    property item's suitability for its intended use and request 
    direction regarding repair, rehabilitation, or replacement. The 
    Contractor shall not repair, rehabilitate, or replace such items 
    unless authorized to do so by the Contracting Officer.
        (2) Property to which the Government obtains title under a cost-
    reimbursement or time-and-materials contract. The Contractor shall 
    maintain property to which the Government obtains title under a 
    cost-reimbursement or time-and-materials contract in a condition 
    suitable for the property's intended use until the Contractor 
    determines the property is no longer needed for continued 
    performance of this contract. Promptly following that determination, 
    the Contractor shall enter the items into the property disposal 
    process.
        (3) Additional maintenance actions. When the Contractor's 
    diligent performance of the maintenance actions required by 
    paragraphs (f)(1) and (f)(2) of this clause is not sufficient to 
    sustain a Government-furnished property item's suitability for its 
    intended use, the Contracting Officer may--
        (i) Replace or substitute other property for such property;
        (ii) Direct the Contractor to repair, rehabilitate, or replace 
    the property;
        (iii) Direct the Contractor to take other appropriate action; or
        (iv) Negotiate an equitable adjustment in lieu of repair, 
    replacement, or other action.
        (4) Equitable adjustment. The Contractor may request an 
    equitable adjustment for performance of a property repair, 
    rehabilitation, or replacement directed by the Contracting Officer 
    pursuant to paragraph (f)(3) of this clause.
        (5) Stored Government property. The Contractor shall store 
    Government property only if specifically directed to do so by the 
    Contracting Officer. Stored property shall be maintained in 
    accordance with instructions provided by the Contracting Officer. 
    Except as provided in the clause 52.245-3, Delivery--Special Tooling 
    and Special Test Equipment, of this contract, and paragraph (g)(7) 
    of this clause, the price or fee of the contract does not include an 
    amount for such maintenance.
        (g) Government property disposal. Except as provided in 
    paragraphs (c)(8), (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.
        (1) Scrap--(i) Production Scrap. Contractors may dispose of 
    scrap resulting from production or testing under this contract 
    without Government approval if the scrap does not require 
    demilitarization or does not contain precious metals, hazardous 
    materials or wastes, nuclear materials or classified materials.
        (ii) Scrap lists. Contractors that have Government-approved 
    scrap procedures may prepare scrap lists in lieu of inventory 
    disposal schedules (provided such lists are consistent with the 
    approved scrap procedures) except for scrap that--
        (A) Requires demilitarization;
        (B) Is a classified item;
        (C) Is generated from classified items;
        (D) Contains hazardous materials or hazardous wastes;
        (E) Contains precious metals; or
        (F) Is dangerous to the public health, safety, or welfare.
        (iii) Other scrap. The Contractor shall use an inventory 
    disposal schedule to identify scrap that is not production scrap or 
    is not reportable on a scrap list.
    
    [[Page 1458]]
    
        (2) Pre-disposal requirements. When the Contractor determines 
    that a property item acquired or produced by the Contractor is no 
    longer needed for performance of this contract, the Contractor 
    shall--
        (i) 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) and credit the price or estimated cost of this 
    contract with the proceeds of such returns; and
        (ii) List property that could not be returned to a supplier or 
    used in the performance of other Government contracts on Standard 
    Form 1428, Inventory Disposal Schedule.
        (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 a cost-reimbursement or 
    time-and-materials contract, 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 general purpose components;
        (B) Special test equipment that does not contain general purpose 
    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. Special 
    test equipment shall be described in sufficient detail to permit an 
    understanding of the special test equipment's intended use.
        (4) Submission requirements. Inventory disposal schedules shall 
    be submitted 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 receipt of an acceptable 
    inventory disposal schedule, might entitle the Contractor to an 
    equitable adjustment for costs incurred to store such property on or 
    after the 121st day following receipt of an acceptable schedule.
        (ii) The Contractor must 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 60 days 
    following receipt of an acceptable scrap list, the Contractor may 
    dispose of the listed scrap in accordance with the Contractor's 
    Government-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 (c)(7) of this clause.
        (9) Disposal proceeds. The Contractor shall credit the net 
    proceeds from the disposal of Government property in accordance with 
    instructions received from the Plant Clearance 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 
    (g)(4) of this clause.
        (h) Abandonment of Government property at a Contractor-owned 
    location. (1) The Government shall not abandon at a Contractor-owned 
    location Government property that is or contains a hazardous 
    material without the Contractor's written concurrence. The 
    Contractor may request an equitable adjustment incident to such 
    agreement.
        (2) The Government, upon notice to the Contractor, may abandon 
    any nonhazardous Government-furnished property in place at which 
    time all obligations of the Government regarding such abandoned 
    property shall cease. Except as provided in paragraph (c)(7)(i) of 
    this clause, the Government has no obligation to restore or 
    rehabilitate the Contractor's premises under any circumstances.
        (i) Overseas contracts. In a contract performed outside the 
    United States, its territories, or possessions, the words 
    ``Government'' and ``Government-furnished'' (wherever they appear in 
    this clause) shall be construed as ``United States Government'' and 
    ``United States Government-furnished,'' respectively.
    
    (End of clause)
    
        Alternate I (Date). As prescribed in 45.207-2(b), replace 
    paragraph (d)(1) of the basic clause with the following paragraph 
    (d)(1), remove paragraph (d)(2), renumber paragraphs (d)(3), (d)(4), 
    and (d)(5) as (d)(2), (d)(3), and (d)(4), respectively, and modify 
    the references to ``Government property'' in the renumbered 
    paragraphs (d)(2), (d)(3), and (d)(4) to read ``Government-furnished 
    property'':
        (d)(1) The Contractor is liable for Government-furnished 
    property losses, except losses resulting from acts of war, civil 
    insurrection, or natural disasters, provided the Contractor has 
    taken reasonable and prudent steps to avoid or mitigate such losses.
        Alternate II (Date). As prescribed in 45.207-2(c), replace 
    paragraph (b) of the basic clause with the following paragraph (b) 
    and add the following paragraph (j) to the basic clause:
        (b) General. (1) Except as provided in paragraph (c) of this 
    clause, the Contractor shall use its own property to perform this 
    contract.
        (2) The Contractor is responsible for the maintenance, 
    protection, and preservation of Government property accountable 
    under this contract that is in the Contractor's or its 
    subcontractors' possession and shall account for such property as 
    required by this contract.
        (3) Property acquired or produced by the Contractor for 
    performance of this contract that the Government obtains title to 
    under the clause at 52.216-7, Allowable Cost and Payment, is 
    Government property accountable under this contract.
        (j) Title to Contractor-acquired or produced property, nonprofit 
    organizations or nonprofit institutions. (1) Notwithstanding any 
    other provision of this contract regarding title to property 
    acquired or produced by a Contractor, the Contractor shall have 
    title to equipment and other tangible property purchased with 
    Government funds provided for the conduct of basic or applied 
    research under this contract, if--
    
    [[Page 1459]]
    
        (i) The Contracting officer has agreed, prior to the 
    Contractor's purchase of such property, that the Contractor shall 
    have title to that property; and
        (ii) The Contractor has agreed that depreciation or amortization 
    costs for such property shall not be allocated to any existing or 
    future Government contract and that such property may be used by the 
    Government or its subcontractors without charge in performance of 
    any Government contract or subcontract thereunder.
        (2) As a condition for obtaining title to property under this 
    clause, the Contractor, by signing this contract, agrees that no 
    person in the United States shall, on the ground of race, color, or 
    national origin, be excluded from participation in, be denied the 
    benefits of, or be otherwise subjected to discrimination under this 
    contemplated financial assistance (title to equipment or other 
    tangible personal property) (41 U.S.C. 2000d).
    
    
    52.245-3  Delivery--Special Tooling and Special Test Equipment (Fixed-
    Price Contracts)
    
        As prescribed in 45.305, insert the following clause:
    
    DELIVERY--SPECIAL TOOLING AND SPECIAL TEST EQUIPMENT (FIXED-PRICE 
    CONTRACTS) (DATE)
    
        (a) Definitions. When a term defined in the clause at 52.245-2, 
    Government Property, is used in this clause, the term has the same 
    meaning as when used in 52.245-2.
        (b) Contractor notice. (1) The Contractor shall notify the 
    Contracting Officer of special tooling or special test equipment 
    acquired or produced by the Contractor for performance of this 
    contract that is not scheduled for delivery under the contract, as 
    soon as practicable during contract performance but not later than 
    the earlier of--
        (i) One hundred twenty days prior to completion of scheduled 
    deliveries (other than technical data) under this contract; or
        (ii) Thirty days following the Contractor's determination that 
    such special tooling or special test equipment is no longer required 
    for contract performance.
        (2) For each special tooling or special test equipment item, or 
    groups of identical items, the Contractor's notice shall identify 
    the item's or group's--
        (i) Nomenclature;
        (ii) Quantity;
        (iii) Acquisition cost (by item);
        (iv) Part number(s) with which the special tooling or special 
    test equipment is used; and
        (v) Identification number.
        (c) Storage. The Contractor shall store the special tooling or 
    special test equipment identified in the Contractor's notice at no 
    change in contract price (or target price and ceiling amount) until 
    expiration of the Government notice period or until the Government 
    notifies the Contractor that delivery of a special tooling or test 
    equipment item or items is required, whichever occurs first. Items 
    shall be stored in a manner sufficient to preserve capability and 
    provide protection from damage. If the Government requires items to 
    be stored subsequent to the Government's delivery notice, the 
    Contractor might be entitled to an equitable adjustment as provided 
    in paragraph (f) of this clause.
        (d) Government notice. (1) The Government must notify the 
    Contractor in writing within 120 days, or such other period mutually 
    agreed upon, following receipt of the notice required by paragraph 
    (b) of this clause that delivery of a special tooling or special 
    test equipment item or items is required.
        (2) The Government's notice shall identify the special tooling 
    or special test equipment item(s), and shall--
        (i) Provide packing, packaging, marking, and shipping 
    instructions;
        (ii) Direct the Contractor to prepare the property for storage 
    at the Contractor's facility or a Government facility; or
        (iii) Provide instructions when accountability is to be 
    transferred to another contract.
        (3) The Contractor's storage obligations are not diminished if 
    the Government notice period, or any extension thereof, extends 
    beyond the date contract deliveries are completed.
        (e) Repair or rehabilitation. The Contracting Officer may 
    require the Contractor to repair or rehabilitate the special tooling 
    or special test equipment identified in the Government's notice to 
    the extent necessary to return an item to a condition suitable for 
    its intended use at no change in price.
        (f) Equitable adjustment. The contract may be equitably adjusted 
    for costs incurred by the Contractor to prepare the tooling or test 
    equipment for storage or shipment. Equitable adjustments shall be 
    made in accordance with the procedures of the Changes clause of this 
    contract and only to the extent the Contracting Officer's actions 
    under paragraph (d) of this clause required the Contractor to incur 
    costs that it would not have incurred under customary commercial 
    practices.
        (g) Liability. The Contractor is liable for any loss, theft, or 
    destruction of, or damage to, special tooling or special test 
    equipment delivered to the Government under this clause during the 
    period commencing upon the Government's acceptance of the items and 
    ending upon placement aboard a carrier's conveyance (f.o.b. origin) 
    or delivery at the specified f.o.b. destination point.
        (h) Flow down. The Contractor shall insert this or a 
    substantially similar clause in all contracts and similar 
    instruments with its first-tier subcontractors or suppliers, other 
    than subcontractors or suppliers of commercial items, that will 
    fabricate or acquire special tooling or special test equipment for 
    performance of this contract.
    
    (End of clause)
    
    
    Sec. 52.245-4  Liability for Government Property (Demolition Services 
    Contracts).
    
        As prescribed in 45.403, insert the following clause:
    
    LIABILITY FOR GOVERNMENT PROPERTY (DEMOLITION SERVICES CONTRACTS) 
    (DATE)
    
        Except for reasonable wear and tear incident to the removal and 
    delivery of property to the Government, the Contractor is liable for 
    any loss or destruction of or damage to property--
        (a) Required to be delivered to the Government; and
        (b) Title to which is vested in the Contractor but that under 
    the termination clauses of this contract reverts to the Government 
    upon notice of termination.
    
    (End of clause)
    
    
    Sec. 52.245-5  Government Property Administration.
    
        As prescribed in 45.510(a), insert the following clause:
    
    GOVERNMENT PROPERTY ADMINISTRATION (DATE)
    
        (a) Definitions. When a term defined in the clause at 52.245-2, 
    Government Property, is used in this clause, the term has the same 
    meaning as when used in 52.245-2.
        (b) General. (1) This clause is applicable to Government-
    furnished property; Government property stored by the Contractor at 
    the Government's direction; and, under cost-reimbursement or time-
    and-materials contracts, property acquired or produced by a 
    Contractor to which the Government has title under the Allowable 
    Cost and Payment clause of this contract.
        (2) If the Contractor does not have a property management system 
    that has been approved by the Property Administrator, the Contractor 
    shall submit a proposed system to the Property Administrator within 
    90 days following contract award (or such other mutually agreed to 
    period).
        Notwithstanding any other provision of this contract regarding 
    liability for Government property losses, the Contractor shall be 
    liable for such losses until its property management system is 
    approved by the Property Administrator. The system shall be 
    maintained during the period Government property is accountable 
    under this contract.
        (3) The Contractor should use an existing property management 
    system or a modification thereof when the existing or modified 
    system satisfies the requirements of this contract.
        (c) Property system requirements. The property management system 
    shall include written processes to assure compliance with contract 
    requirements and to provide for system assessment. At a minimum, the 
    system shall contain processes for--
        (1) Assessing the system's efficiency and effectiveness, 
    recommending corrective action or general improvements, and 
    implementing appropriate changes;
        (2) Inspecting property acquired by the Contractor or furnished 
    by the Government for performance of this contract upon receipt;
        (3) Promptly entering all Government property into the property 
    management system;
        (4) Assuring Government property is used only as authorized by 
    the Contracting Officer;
        (5) Controlling the distribution and return of pilferable 
    property;
        (6) Scheduling and monitoring Government property maintenance to 
    assure timely performance and recording of all maintenance actions;
        (7) Accurately recording by type and quantity Government 
    material consumed during contract performance;
        (8) Performing, reporting, and recording all inventories 
    required by this contract;
    
    [[Page 1460]]
    
        (9) Assuring subcontractors have adequate procedures for the 
    control and protection of Government property;
        (10) Justifying the continued need for Government property to 
    perform this contract;
        (11) Moving and storing Government property in a manner 
    commensurate with the property's handling and storage requirements; 
    and
        (12) Disposing of Government property in accordance with the 
    requirements of this contract.
        (d) Property Management system review and approval. (1) A 
    Contractor whose property management system has been approved or 
    validated by the Government no more than 2 years prior to the date 
    of its offer is required only to submit to the Property 
    Administrator, within 90 days following contract award, the changes 
    required to conform the system to requirements in this contract. The 
    submission date may be extended by the Property Administrator if an 
    extension is in the Government's interests.
        (2) The Property Administrator shall review the Contractor's 
    proposed or modified system within 90 days following receipt and may 
    approve or require corrections to the system. The Contractor shall 
    accomplish the required corrections at no change in price or fee.
        (3) The Property Administrator may review the Contractor's 
    system at any time during contract performance to assure compliance 
    with contract requirements. The Property Administrator may validate 
    approval of, require corrections to, or, with the Administrative 
    Contracting Officer's concurrence, withdraw approval of the 
    Contractor's system. The Contractor shall implement corrections 
    required by the Property Administrator by the date specified by the 
    Property Administrator, or such other date agreed upon, at no change 
    in price or fee. The Contractor's failure to implement corrections 
    in a timely manner might result in the Contractor's assumption of 
    liability for property losses for which the Government might 
    otherwise be liable.
        (4) The Contractor shall make available to the Property 
    Administrator all records and related information reasonably 
    required to verify that the Contractor's Government property 
    management system conforms to contract requirements. Any 
    disagreement as to the amount or type of information required for 
    such verification shall be referred to the Administrative 
    Contracting Officer for resolution.
        (e) Records and supporting information--(1) Property records. 
    (i) Except as provided in paragraph (e)(1)(ii) of this clause, the 
    Contractor shall establish or maintain and keep current a property 
    record for each Government property item accountable under this 
    contract. Identical items may be consolidated in a single property 
    record if the consolidated record provides the information required 
    by this clause. The Contractor shall identify useable components 
    permanently removed from Government property as Government property 
    items and establish and maintain appropriate property records. 
    Property records created by a subcontractor that has a property 
    management system that has been approved by a Property Administrator 
    may be used in lieu of creating new records.
        (ii) Property records are not required for work in process or 
    for property specifically acquired or constructed for tests that 
    will destroy the property.
        (iii) Contractors that use a material requirements planning 
    system, manufacturing resource planning system, material management 
    accounting system, or an enterprise resource planning system, may 
    use the records generated by those systems as the records for 
    material items provided such records otherwise satisfy the 
    requirements in paragraph (e)(2) of this clause.
        (iv) The Contractor shall close a Government property item's 
    record when the item is replaced and create a new property record 
    for the replacement item if that item is Government property.
        (v) The Contractor shall enter the property's acquisition cost 
    into the record for each Government property item that was acquired 
    or produced by the Contractor during performance of this contract. 
    For each item having an acquisition cost of ______________ (insert 
    the agency capitalization threshold amount) or more, the Contractor 
    also shall enter the date the item was acquired or produced.
        (vi) The Contractor shall notify the Contracting Officer 
    promptly if the contract does not identify a Government-furnished 
    property item's nomenclature or acquisition cost.
        (vii) Property records shall legibly and conspicuously identify 
    sensitive property.
        (viii) The property records for items requiring maintenance 
    shall identify the dates maintenance actions (including calibration 
    if required) were performed and any deficiencies discovered. The 
    maintenance information may be kept separately if the Contractor has 
    a direct link between the information and the affected property 
    records.
        (2) Standard information. Except as provided in paragraphs 
    (e)(4) and (e)(5) of this clause, each property control record shall 
    contain the following information:
        (i) The item's name, description, and national stock number. If 
    the item does not have a national stock number and the item's 
    acquisition cost is ____________________ (insert the agency 
    capitalization threshold amount) or more, enter the four digit 
    federal supply classification code.
        (ii) Contract number or equivalent code designation.
        (iii) Quantity received or fabricated, issued, and on hand.
        (iv) The date of the most recent physical inventory or other 
    posting reference.
        (v) Acquisition cost and, for items having an acquisition cost 
    of ______________ (insert the agency capitalization threshold 
    amount) or more, the date the items were acquired or produced.
        (vi) Current location (for low value property, identify the 
    initial location only).
        (vii) The property's classification. Use only one of the 
    following for each property item--land, buildings, other real 
    property, equipment, special test equipment, special tooling, unique 
    Federal property, or material.
        (3) Additional information. In addition to the information 
    required by paragraph (e)(2) of this clause, the property records 
    for--
        (i) Special tooling and special test equipment shall identify 
    each part number with which a special tool or special test equipment 
    item is used;
        (ii) Special test equipment that includes general purpose 
    equipment shall include the information required by paragraph (e)(2) 
    of this clause for each removable or reusable general purpose 
    component if removal and reuse is economically feasible;
        (iii) Equipment shall include the manufacturer's name, serial 
    number, and model or part number; and
        (iv) Scrap shall identify the material content, contract from 
    which the scrap was derived, and the scrap's disposition and 
    disposition date(s).
        (4) Real property. (i) Real property records must contain a 
    description of the property, its location, original acquisition 
    cost, a description of property alterations made or construction 
    work performed by the Contractor, including an identification of the 
    construction sites supporting such alterations or construction, and 
    must separately identify the cost of such alterations or 
    construction. Supporting documentation shall include maps, drawings, 
    plans, specifications, and, if necessary, supplementary data needed 
    to completely describe and value the property.
        (ii) Costs incurred by the Government or the Contractor, to 
    acquire, construct, alter, or improve Government-owned or leased 
    real property, including additions, expansions, extensions, or 
    conversions thereof, shall be added to the property's acquisition 
    cost if they increase the value, life, utility, capability, or 
    serviceability of the property.
        (iii) A real property record shall be annotated with a statement 
    of the pertinent facts when the property is sold, transferred, 
    donated, destroyed, abandoned by the Government, or condemned.
        (5) Property returned under warranty. The Contractor shall 
    establish a property record for each item returned for correction 
    under a warranty and maintain the records on a contract-by-contract 
    basis. The records shall identify the date received, and the date 
    the item is returned to the Government. Once a property record has 
    been established, identical items received for corrective action 
    shall be added to the established record and the information 
    required by this paragraph maintained for each item.
        (f) Reports and notices--(1) Annual Government property report. 
    The Contractor shall report all Government property accountable 
    under this contract that is in its or its subcontractors' possession 
    as of September 30 of each calendar year or upon completion of all 
    property disposal actions under this contract, whichever is sooner. 
    Unless otherwise stated in this contract, the report shall be 
    prepared using Standard Form 1450, U.S. Government Property in the 
    Possession of Contractors, and submitted to the Property 
    Administrator no later than October 31 of each calendar year.
        (2) Misdirected Government property. The Contractor shall notify 
    the Property Administrator in writing immediately following receipt 
    of Government property
    
    [[Page 1461]]
    
    intended for another person or Government property not required for 
    performance of a Government contract with the Contractor and shall 
    request disposition instructions. To the extent practical, the 
    Contractor shall identify the shipment's content, intended 
    recipient, carrier that made delivery, the Government activity from 
    which the shipment originated, and the shipment's current location.
        (3) Late Government-furnished property. The Contractor shall 
    notify promptly the Contracting Officer of a failure to receive 
    Government-furnished property at the time stated in the contract or, 
    when a time is not stated, in sufficient time to enable the 
    Contractor to meet the contract's delivery or performance dates. 
    Each notice shall forward the Contractor's estimate of the extent to 
    which such failure has affected or might affect contract 
    performance.
        (4) Property losses. Except as provided in paragraph (f)(5) of 
    this clause, the Contractor shall notify the Property Administrator 
    in writing promptly upon learning that a Government property loss 
    has occurred. The notice shall identify the property by item and 
    include--
        (i) The item's description, contract number, national stock 
    number (if known), and either part number or identification number;
        (ii) The date a physical loss or theft was discovered or damage 
    or destruction occurred and, if known, the circumstances;
        (iii) The item's acquisition cost;
        (iv) The contracts affected;
        (v) All known interests in commingled property of which the 
    Government property is a part; and
        (vi) The insurance, if any, covering any part of or interest in 
    the property.
        (5) Low value property losses. The Contractor is not required to 
    provide a property loss notice for low value property until contract 
    completion or termination, except low value property that the 
    Contractor needs for continued performance of this contract or low 
    value Government-furnished property that the Government is 
    contractually obligated to provide to the Contractor for performance 
    of another contract. Notice of such loss shall be provided in 
    accordance with paragraph (f)(4) of this clause.
        (g) Inventories. The Contractor shall assure that the location 
    of each Government property item is accurately established and the 
    records and reports required by this clause are complete and 
    accurate.
        (1) Contract termination inventories. The Contractor shall 
    inventory all property accountable under this contract immediately 
    following a notice of termination or partial termination of the 
    contract. Electronic, optical, electro-magnetic, or similar systems 
    may be used.
        (2) Contract completion inventory. Promptly following completion 
    of deliveries or performance under the contract, the Contractor 
    shall inventory all Government property accountable under this 
    contract that the Government is not contractually obligated to 
    furnish to the Contractor for performance of another Government 
    contract.
        (h) Markings--(1) Contractor-acquired or produced property 
    (other than material). As soon as practicable following the 
    assumption of title to property acquired or produced for performance 
    of a cost-reimbursement or time-and-materials contract, the 
    Contractor shall legibly and conspicuously mark such property with 
    the phrase ``U.S. Government Property'' (or a similar phrase that 
    conveys Government ownership) and a control number that links the 
    property to the property records maintained by the Contractor.
        (2) Government-furnished property (other than material). 
    Promptly following receipt of Government-furnished property, the 
    Contractor shall determine whether the property bears a Government 
    ownership marking, mark unmarked property with the markings 
    identified in paragraph (g)(1) of this clause, and replace any 
    control numbers affixed by other Contractors with the Contractor's 
    control number.
        (3) Exceptions. (i) The Contractor is not required to mark 
    Government-furnished or Contractor-acquired or produced material.
        (ii) In lieu of the requirements in paragraph (h)(1) or (h)(2) 
    of this clause, the Contractor shall contact promptly the Property 
    Administrator for alternate instructions when marking would damage a 
    property item or the Contractor considers a physical marking to be 
    impractical.
        (i) Overseas contracts. In a contract performed outside the 
    United States, its territories, or possessions, the words 
    ``Government'' and ``Government-furnished'', as used in this clause, 
    mean ``United States Government'' and ``United States Government-
    furnished,'' respectively.
    
    (End of clause)
    
        Alternate I (Date) As prescribed in 45.510(b), substitute the 
    following paragraphs (e) and (f) for paragraphs (e) and (f) of the 
    basic clause:
        (e) Property records. The Contractor shall establish a property 
    record for each Government property item returned for correction 
    under a warranty and shall maintain the records on a contract-by-
    contract basis. The records shall identify the item's name, 
    description, property classification, national stock number, the 
    date received and the date the item is returned to the Government. 
    For items having an acquisition cost greater than __ (insert the 
    agency capitalization threshold), the Contractor shall enter the 
    item's four-digit federal supply classification code. Once a 
    property record has been established, identical items received for 
    corrective action shall be added to the established record and the 
    information required by this paragraph maintained for each item.
        (f) Notices--(1) Misdirected Government property. The Contractor 
    shall notify the Property Administrator, promptly following receipt 
    of Government property intended for another person or Government 
    property not required for performance of a Government contract, and 
    shall request disposition instructions. To the extent practical, the 
    Contractor shall identify the shipment's content, intended 
    recipient, carrier that made delivery, the Government activity from 
    which the shipment originated, and the shipment's current location.
        (2) Late Government-furnished property. The Contractor shall 
    notify promptly the Contracting Officer of a failure to receive 
    Government-furnished property at the time stated in the contract or, 
    when a time is not stated, in sufficient time to enable the 
    Contractor to meet the contract's delivery or performance dates. 
    Each notice shall forward the Contractor's estimate of the extent to 
    which such failure has affected or might affect contract 
    performance.
        (3) Property losses. Except as provided in paragraph (f)(4) of 
    this clause, the Contractor shall notify the Property Administrator 
    in writing promptly upon learning that a Government property loss 
    has occurred. The notice shall identify the property by item and 
    include--
        (i) The item's description, contract number, national stock 
    number (if known), and either part number or identification number;
        (ii) The date a physical loss or theft was discovered or damage 
    or destruction occurred and, if known, the circumstances;
        (iii) The item's acquisition cost;
        (iv) The contracts affected;
        (v) All known interests in commingled property of which the 
    Government property is a part; and
        (vi) The insurance, if any, covering any part of or interest in 
    the property.
        (4) Low value property losses. The Contractor is not required to 
    provide a property loss notice for low value property until contract 
    completion or termination, except low value property that the 
    Contractor needs for continued performance of this contract or low 
    value Government-furnished property that the Government is 
    contractually obligated to provide to the Contractor for performance 
    of another contract. The notice shall contain the information 
    required by paragraph (f)(3) of this clause.
    
    
    52.245-6  Rental Charges for Commercial Use.
    
        As prescribed in 45.602 insert the following clause:
    
    RENTAL CHARGES FOR COMMERCIAL USE (DATE)
    
        (a) Definitions. (1) When a term defined in the clause at 
    52.245-2, Government Property, is used in this clause, the term has 
    the same meaning as when used in 52.245-2.
        (2) As used in this clause--
        Base cost means the acquisition cost recorded in the 
    Contractor's property control system or, in the absence of such 
    record, the value attributed by the Government to a Government 
    property item for purposes of determining a reasonable rental 
    charge.
        (b) General. (1) Rental requests must be submitted to the 
    Administrative Contracting Officer, identify the property for which 
    rental is requested, propose a rental period, and calculate an 
    estimated rental charge by using the Contractor's best estimate of 
    rental time in the formulae described in paragraph (c) of this 
    clause.
        (2) The Contractor shall not use Government property for 
    commercial purposes, including independent research and development, 
    until a rental charge for real property, or estimated rental charge 
    for other property, is agreed upon. Rented property shall be used 
    only on a noninterference basis.
    
    [[Page 1462]]
    
        (c) Rental charge--(1) Real property and associated fixtures. 
    (i) The Contractor shall obtain, at no cost to the Government, a 
    property appraisal from an independent, licensed, accredited or 
    certified appraiser that computes a monthly, daily, or hourly rental 
    rate for comparable commercial property. The appraisal may be used 
    to compute rentals under this clause throughout its effective period 
    or, if an effective period is not stated in the appraisal, for 1 
    year following the date the appraisal was performed. The Contractor 
    shall submit the appraisal to the Administrative Contracting Officer 
    at least 30 days prior to the date the property is needed for 
    commercial use. Except as provided in paragraph (c)(1)(iii) of this 
    clause, the Administrative Contracting Officer shall use the 
    appraisal rental rate to determine a reasonable rental charge.
        (ii) Rental charges shall be determined by multiplying the 
    rental time by the appraisal rental rate expressed as a rate per 
    hour. Monthly or daily appraisal rental rates shall be divided by 
    720 or 24, respectively, to determine an hourly rental rate.
        (iii) When the Administrative Contracting Officer has reason to 
    believe the appraisal rental rate is not reasonable, the 
    Administrative Contracting Officer shall promptly notify the 
    Contractor and provide the rationale. The parties may agree on an 
    alternate means for computing a reasonable rental charge.
        (2) Other Government property. The Contractor may elect to 
    calculate the final rental charge using the appraisal method 
    described in paragraph (c)(1) of this clause subject to the 
    constraints therein or the following formula in which rental time 
    shall be expressed in increments of not less than 1 hour with 
    portions of hours rounded to the next higher hour:
        Rental charge = (Rental time in hours) (.02 per month) (Base 
    cost) 720 hours per month
        (3) Alternate methodology. The Contractor may request 
    consideration of an alternate basis for computing the rental charge 
    if it considers the monthly rental rate or a time based rental 
    unreasonable or impractical.
        (d) Rental payments. (1) Rent is due at the time and place 
    specified by the Contracting Officer. If a time is not specified, 
    the rental is due 60 days following completion of the rental period. 
    The Contractor shall calculate the rental due and furnish records or 
    other supporting data in sufficient detail to permit the 
    Administrative Contracting Officer to verify the rental time and 
    computation. Unless otherwise permitted by law, payment shall be 
    made by check payable to the Treasurer of the United States and sent 
    to an office designated by the Administrative Contracting Officer to 
    receive rental payments or by electronic funds transfer to that 
    office.
        (2) Interest will be charged if payment is not made by the 
    specified payment date or, in the absence of a specified date, the 
    61st day following completion of the rental period. Interest will 
    accrue at the Renegotiation Board Interest Rate (published in the 
    Federal Register semiannually on or about January 1st and July 1st) 
    for the period in which the rent is due.
        (3) The Government's acceptance of any rental payment under this 
    clause, in whole or in part, shall not be construed as a waiver or 
    relinquishment of any rights it may have against the Contractor 
    stemming from the Contractor's unauthorized use of Government 
    property or any other failure to perform this contract according to 
    its terms.
        (e) Liability for loss, theft, damage, or destruction. When 
    Government property is used for commercial purposes, the Contractor 
    shall be liable for, and shall reimburse the Government for, any 
    damage to or loss, theft, or destruction of such property except 
    damage resulting from wear and tear reasonable for the period during 
    which use for commercial purposes was authorized. The Contractor 
    shall indemnify the Government against claims for injury to persons 
    or damage to the Contractor's or a third party's property arising 
    from the Contractor's use or possession of the Government property 
    for commercial purposes.
        (f) Use revocation. (1) At any time during the rental period, 
    the Government may revoke commercial use authorization. When 
    practical, the Government may provide the reason of revocation in a 
    reasonable period of time prior to such revocation.
        (2) Promptly following a use revocation, the Contractor shall 
    restore the property to its pre-rental condition (less normal wear 
    and tear) and return the property to the Government. Such return and 
    restoration shall be accomplished at no cost to the Government.
        (g) Unauthorized use. The unauthorized use of Government 
    property can subject a person to fines, imprisonment, or both, under 
    18 U.S.C. 641.
    
    (End of clause)
    
    
    52.245-7  Government Property--Alternate Procedures.
    
        As prescribed in 45.207-2(d), insert the following clause:
    
    GOVERNMENT PROPERTY--ALTERNATE PROCEDURES (DATE)
    
        (a) Definitions. As used in this clause--
        Commercial purpose means any purpose other than performance of a 
    U.S. Government contract or subcontract thereunder.
        Contractor's managerial personnel means the Contractor's 
    directors, officers, and any of the Contractor's managers, 
    superintendents, or equivalent representatives who have supervision 
    or direction of all or substantially all of the Contractor's 
    business or the Contractor's operations at a site connected with 
    performance of a Government contract.
        Demilitarization means rendering a product unusable for, and not 
    restorable to, the purpose for which it was designed or is 
    customarily used.
        Equipment means nonexpendable, tangible personal property. The 
    term does not include property that satisfies the definition in this 
    clause of material, unique Federal property, special tooling, or 
    special test equipment.
        Expendable property means property that is customarily consumed 
    during design, manufacture, or testing of a product or performance 
    of a service.
        General purpose equipment means equipment items that can be 
    used, or with only minor modification could be used, to develop, 
    produce, test, or maintain more than one type of item or perform 
    more than one type of service.
        Government-furnished property means Government property that a 
    Contracting Officer authorizes a Contractor to use for performance 
    of a Government contract.
        Government property means property the Government owns or 
    leases.
        Low value property means equipment, special tooling, or special 
    test equipment that has an acquisition cost less than $5,000 and is 
    not sensitive property.
        Material means expendable property and property incorporated 
    into or attached to an end item.
        Natural disaster means a sudden and unusual natural occurrence 
    causing catastrophic damage, including floods, hurricanes, 
    tornadoes, cyclones, atmospheric electrical storms, tidal waves, 
    avalanches, mudslides, landslides, volcanic eruptions, earthquakes, 
    and other similar perils. The term does not include fire or 
    explosion, unless directly or indirectly caused by a covered peril.
        Nonprofit organization means a business entity organized and 
    operated exclusively for charitable, scientific, or educational 
    purposes, the net earnings of which do not inure to the benefit of 
    any private shareholder or individual, that is exempt from Federal 
    income taxation under section 501 of the Internal Revenue Code and 
    does not conduct a substantial portion of its activities carrying on 
    propaganda or otherwise attempting to influence legislation or 
    participating in any political campaign on behalf of any candidate 
    for public office.
        Personal property means property of any kind or interest in it 
    except real property, battleships, cruisers, aircraft carriers, 
    destroyers, submarines, and records of the Government.
        Plant clearance officer means a person appointed to disposition 
    property accountable under Government contracts.
        Precious metals means silver, gold, platinum, palladium, 
    iridium, osmium, rhodium, and ruthenium.
        Property means real and personal property.
        Property administrator means a person appointed to perform 
    property administration for the Government.
        Real property means land and rights in land, ground 
    improvements, utility distribution systems, and buildings and other 
    structures. It does not include foundations and other work necessary 
    for installing special tooling, special test equipment, or 
    equipment.
        Rental period means the calendar period during which Government 
    property is made available for commercial purposes.
        Rental time means the number of hours, to the nearest whole 
    hour, rented property is actually used for commercial purposes. It 
    includes time to set up the property for such purposes, perform 
    required maintenance, and restore the property to its condition 
    prior to rental (less normal wear and tear).
        Scrap means personal property that has no value except its basic 
    metallic, mineral, or organic content.
        Sensitive property means property potentially dangerous to the 
    public safety or
    
    [[Page 1463]]
    
    security if stolen, lost, or misplaced, or that must 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.
        Special test equipment means--
        (1) Test equipment designed specifically to conduct testing 
    required by a Government contract, provided such equipment cannot be 
    used for other purposes;
        (2) General purpose test equipment or modifications thereof that 
    are interconnected and interdependent to form a new functional 
    entity that can only be used to perform testing required by a 
    contract while so interconnected and interdependent; or
        (3) Any combination of specifically designed, general purpose, 
    or modified general purpose test equipment that is so interconnected 
    and interdependent to form a new functional entity that can only be 
    used to perform special purpose testing required by a contract while 
    so interconnected and interdependent.
        Special tooling means items such as jigs, dies, fixtures, molds, 
    patterns, taps, gauges, or other equipment and manufacturing aids, 
    that are of such a specialized nature that without substantial 
    modification or alteration their use is limited to the development, 
    production, repair, or maintenance of particular supplies or 
    components thereof, or to the performance of particular services.
        Unique Federal property means Government-owned personal 
    property, or components thereof, that is specially designed to 
    perform or support the mission of one or more Federal agencies and 
    is not available to the public. The term does not include property 
    that is incorporated into or attached to an item deliverable under a 
    contract.
        Work in process means bench stock materials, complete or 
    incomplete fabricated parts, subassemblies, assemblies, and similar 
    items that are created during production of deliverable end items, 
    or are required to construct special tooling or special test 
    equipment needed to produce deliverable end items, or are otherwise 
    needed for design or testing required by a contract.
        (b) General. (1) This clause is applicable to Government-
    furnished property; Government property stored by the Contractor at 
    the Government's direction; items accepted by the Government at 
    origin that are in the Contractor's possession; and under cost-
    reimbursement or time-and-materials contracts, property acquired or 
    produced by a Contractor to which the Government has title under the 
    clause 52.216-7, Allowable Cost and Payment, of this contract. For 
    purposes of this clause, such property and items are collectively 
    referred to as ``Government property.'' The clause does not apply to 
    property to which the Government has obtained title, a lien, or 
    other security interest solely as a result of financing arrangements 
    under fixed-price contracts.
        (2) Except as provided in paragraph (c) of this clause, the 
    Contractor shall use its own property to perform this contract.
        (3) The Contractor is responsible for the maintenance, 
    protection, and preservation of Government property accountable 
    under this contract, including property in the possession of a 
    subcontractor, and shall account for such property as required by 
    this contract.
        (4) The Contractor shall not use Government property for 
    commercial purposes without the Contracting Officer's prior 
    approval. Unless otherwise permitted by law, commercial use shall be 
    on a rental basis. The terms and conditions of the Rental Charges 
    for Commercial Use clause of this contract shall apply to each 
    rental.
        (5) If this contract is a cost-reimbursement or time-and-
    materials contract, the Contractor shall not acquire general purpose 
    equipment to which the Government will have title under the clause 
    at 52.216-7, Allowable Cost and Payment, or real property for 
    performance of this contract, unless the general purpose equipment 
    or real property is specified as a deliverable end item.
        (6) If this contract is a fixed-price or labor-hour contract, 
    property acquired or produced by the Contractor for performance of 
    the contract is not Government property. Property identified as a 
    deliverable item becomes Government property upon acceptance by the 
    Government.
        (c) Government-furnished property. The property identified in 
    this contract as Government-furnished property is furnished to the 
    Contractor on a rent-free basis for performance of this contract. 
    The Contractor shall use sound business practices to protect, 
    maintain, and account for the property and shall repair, replace, 
    and dispose of the property in accordance with this clause.
        (1) Title. The Government retains title to Government-furnished 
    property including Government-furnished property that is 
    incorporated into or attached to any property owned by the 
    Contractor. Government-furnished property does not become a fixture 
    or lose its identity as personal property by being attached to real 
    property.
        (2) Suitability for intended use. (i) Government-furnished 
    property, other than property furnished ``as is'', shall be in a 
    condition suitable for the property's intended use at the time the 
    property is furnished to the Contractor. The Government shall, when 
    requested by the Contractor, provide information reasonably required 
    for the intended use of such property to the extent the Government 
    has the right to release or disclose the information.
        (ii) The contract delivery or performance dates are based upon 
    the expectation that Government-furnished property, except property 
    furnished ``as is'', will be suitable for its intended use and 
    delivered to the Contractor at the times stated in the contract. If 
    a time is not stated, the property shall be furnished in sufficient 
    time to enable the Contractor to meet the contract's delivery or 
    performance dates.
        (iii) If Government-furnished property is received in a 
    condition not suitable for its intended use, the Contractor shall 
    notify the Contracting Officer as soon as the unsuitability is known 
    and shall take corrective action or dispose of the property as 
    directed by the Contracting Officer. The contract shall be equitably 
    adjusted in accordance with paragraph (c)(7) of this clause.
        (iv) The Contractor may request an equitable adjustment when 
    Government-furnished property is not delivered to the Contractor by 
    the required time and such untimely delivery has affected contract 
    performance.
        (v) If the Contractor commingles Contractor acquired or produced 
    material with Government-furnished material, the provisions of this 
    clause regarding suitability for intended use shall not apply to the 
    commingled Government-furnished material. Notwithstanding any other 
    provision of this contract, the Contractor shall be responsible for 
    any failure to comply with contract requirements attributable to 
    material that was commingled.
        (3) Authorized use. The Contractor may request, in writing, the 
    Contracting Officer to authorize use of the property furnished for 
    performance of this contract to perform other Government contracts 
    at the same location. Rent-free use is authorized if the Contracting 
    Officer does not object to such use, either in whole or in part, 
    within 30 days following confirmed receipt of the Contractor's 
    request. Costs incurred by the Contractor to relocate, modify, or 
    adapt the property for performance of other Government contracts or 
    to restore the property to a condition suitable for intended use 
    under this contract shall not increase the price or fee of any 
    Government contract.
        (4) Real Property restrictions. The Contractor shall not improve 
    or make structural alterations to real property furnished for 
    performance of this contract, unless the contract specifically 
    identifies the alterations or improvements as work to be performed 
    under the contract or unless expressly authorized to do so in 
    writing by the Contracting Officer. Title to improvements or 
    alterations to Government-furnished real property shall vest in the 
    Government.
        (5) Property furnished ``as is''. (i) The Contractor is 
    responsible for assuring that Government property furnished on an 
    ``as is'' basis is suitable for the Contractor's purposes. Such 
    property is furnished f.o.b. at the location specified in the 
    solicitation or contract. Costs incurred by the Contractor to 
    transport, install, modify, or otherwise make such property suitable 
    for the Contractor's intended use and any cost incurred to return 
    such property to the Government shall not increase the price or fee 
    of any Government contract. Modifications to property furnished ``as 
    is'' require the Contracting Officer's prior written approval.
        (ii) Special tooling or special test equipment is furnished ``as 
    is'' for performance of this contract if the Contractor acquired or 
    produced, and the Government obtained title to, such tooling or test 
    equipment under this or another Government contract.
        (iii) The Government makes no warranty whatsoever with respect 
    to property furnished ``as is'', except that the property will be in 
    the same condition when placed at the specified f.o.b. location as 
    when inspected by the Contractor or, if not inspected by the 
    Contractor, as of the last date identified in the solicitation or 
    contract for Contractor inspection. The Contractor is
    
    [[Page 1464]]
    
    responsible for verifying that the property's condition has not 
    changed during that period. If the Contractor determines the 
    property's condition has changed and such change will adversely 
    affect the Contractor, the Contractor shall notify the Contracting 
    Officer promptly and identify the changed condition. If the 
    Contracting Officer concurs that the property's condition has 
    changed, the Contracting Officer may restore the property or 
    substitute other Government property at no change in the contract's 
    price or fee; permit the Contractor to restore the property subject 
    to an equitable adjustment; or decline to provide the property 
    subject to an equitable adjustment. The foregoing provisions for 
    adjustment are the exclusive remedies available to the Contractor. 
    The Government has no liability for changes in the property's 
    condition discovered after removal from the specified f.o.b. 
    location.
        (iv) Repairs to or modifications of property furnished ``as is'' 
    do not affect the Government's title to such property.
        (6) Changes in Government-furnished property. (i) The 
    Contracting Officer may increase, decrease, or substitute other 
    Government property for the property furnished or to be furnished 
    for performance of this contract or require use of Government-
    furnished property in lieu of Contractor property.
        (ii) Any increase in the amount of property furnished for 
    performance of this contract shall result in an equitable reduction 
    in contract price or fee and appropriate adjustment of the contract 
    delivery or performance dates.
        (iii) The Contractor may request an equitable adjustment for a 
    decrease in or substitution for the property identified in the 
    contract or withdrawal of authority to use property accountable 
    under another contract in performance of this contract provided such 
    decrease, substitution, or withdrawal increases contract costs or 
    schedule.
        (iv) If the Contracting Officer directs the Contractor to use 
    Government-furnished property in lieu of Contractor property in 
    performance of this contract, any adjustment to the contract shall 
    be made in accordance with paragraph (c)(7) of this clause.
        (7) Equitable adjustments. Equitable adjustments shall be the 
    Contractor's exclusive remedy for Government actions under this 
    clause and shall be made in accordance with the procedures of the 
    Changes clause of this contract.
        (i) Equitable adjustments may include an amount for the 
    restoration and rehabilitation of the Contractor's premises caused 
    by Government-furnished property that is not in a condition suitable 
    for intended use, the withdrawal or substitution of Government-
    furnished property, or the Government's abandonment of hazardous 
    property (see paragraph (h)(1) of this clause).
        (ii) The Government shall not be liable for breach of contract 
    for--
        (A) Any delay in delivery of Government-furnished property;
        (B) Delivery of Government-furnished property in a condition not 
    suitable for its intended use;
        (C) An increase or decrease in, or substitution of, Government-
    furnished property; or
        (D) Failure to repair or replace Government-furnished property.
        (8) Return of Government-furnished property. If this contract 
    requires Government-furnished property to be returned directly to a 
    Government activity--
        (i) The property, including property furnished ``as is'', shall 
    be returned to the Government in the same condition, less normal 
    wear and tear, or better condition than when furnished to the 
    Contractor except--
        (A) Lost, stolen, or destroyed property that the Government has 
    determined will not be replaced; and
        (B) Damaged property that the Government has elected not to have 
    repaired or replaced.
        (ii) The Contractor shall notify the contract administration 
    office of its intent to return Government-furnished property at 
    least 10 working days prior to return. Notices shall identify the 
    contracts under which the items are accountable and shall provide 
    each item's name, description, national stock number (if known), and 
    part number or identification number.
        (d) Property loss liability. As used in this clause, the terms 
    loss and losses include, either individually or in any combination, 
    physical misplacement of, theft of, destruction of, or damage to, 
    Government property accountable under this contract.
        (1) Contractor liability. The Contractor is liable for property 
    losses, except losses for which the Government is liable under 
    paragraph (d)(2) of this clause.
        (2) Government liability. The Government is liable for losses--
        (i) Caused by acts of war, civil insurrection, or natural 
    disasters, regardless of property value, except a loss or portion 
    thereof caused by or attributable to the Contractor's or a 
    subcontractor's failure to take reasonable and prudent steps to 
    avoid or reduce such losses; and
        (ii) To Government property items that have an acquisition cost 
    greater than $1,000,000 per item, except a loss or portion thereof 
    caused by willful misconduct or lack of good faith on the part of 
    the Contractor's or a subcontractor's managerial personnel.
        (3) Reduced Government liability. The Government's liability for 
    a property loss shall be reduced by the amount of any reimbursement 
    the Contractor receives from a third party for the loss.
        (4) Property in the possession of a subcontractor. The 
    Contractor's transfer of Government property to the possession and 
    control of a subcontractor does not affect the Contractor's 
    liability for property losses.
        (5) Contractor required actions following a property loss. The 
    Contractor shall--
        (i) Take all reasonable action to protect damaged Government 
    property from further damage and to physically separate such 
    property from all other property;
        (ii) Notify the Contracting Officer as required by the 
    Government Property Administration--Alternate Procedures clause of 
    this contract (52.245-8(e)(4));
        (iii) Not repair, replace, or otherwise remedy a loss for which 
    the Government is liable under paragraph (d)(2) of this clause, 
    unless authorized to do so by the Contracting Officer; and
        (iv) Do nothing to prejudice the Government's rights to recover 
    against third parties for any Government property loss. When 
    requested by the Contracting Officer, the Contractor shall, at 
    Government expense, furnish to the Government all reasonable 
    assistance and cooperation (including the prosecution of suit and 
    the execution of instruments of assignment in favor of the 
    Government) in obtaining recovery.
        (6) Insurance charges or reserves. Unless expressly required by 
    this contract, the Contractor shall not include in the contract 
    price, fee, or any adjustment thereof, any charge or reserve for 
    insurance (including any self-insurance fund or reserve) covering 
    losses for which the Government is liable under paragraph (d)(2) of 
    this clause.
        (e) Property loss remedies. Following notification that a 
    property loss has occurred--
        (1) If the Government is liable for the loss, the Contracting 
    Officer may--
        (i) Elect to repair, replace, substitute other property for such 
    property, or negotiate an equitable adjustment in lieu of repair, 
    replacement, or substitution; or
        (ii) Authorize the Contractor to repair or replace the property 
    or take other appropriate action. If authorized, the Contractor may 
    request an equitable adjustment.
        (2) If the Contractor is liable for the loss, the Contracting 
    Officer may--
        (i) Authorize the Contractor to repair or replace the property 
    or take other appropriate action at no change in price or fee; or
        (ii) Elect to receive an equitable reduction in contract price 
    or fee in lieu of requiring the Contractor to remedy the loss.
        (3) The Contractor shall use any reimbursement for a property 
    loss from a source other than the Government to repair, or replace 
    the property that suffered a loss, or equitably reimburse the 
    Government, as directed by the Contracting Officer.
        (f) Government property maintenance. The contract price or fee 
    includes an amount for performance of the maintenance actions 
    required by paragraphs (f)(1) and (f)(2) of this clause.
        (1) Government-furnished property. The Contractor shall maintain 
    Government-furnished property in a condition suitable for its 
    intended use. The Contractor shall--
        (i) Use sound business practices to maintain real property, 
    special tooling, and special test equipment;
        (ii) Maintain unique Federal property as specified in this 
    contract, or if not specified, agency instructions for the 
    maintenance of such property;
        (iii) Preserve, protect, and care for material and general 
    purpose equipment in accordance with the property manufacturer's 
    standards of care for such items, or when the manufacturer has not 
    released standards of care, the Contractor's standard business 
    practices for comparable Contractor-owned material and equipment; 
    and
        (iv) Promptly notify the contract administration office when the 
    maintenance actions required by paragraphs (e)(1)(i) through 
    (e)(1)(iii) are not sufficient to sustain a Government-furnished 
    property item's suitability for its intended use and request 
    direction regarding repair, rehabilitation, or
    
    [[Page 1465]]
    
    replacement. The Contractor shall not repair, rehabilitate, or 
    replace such items unless authorized to do so by the Contracting 
    Officer.
        (2) Property to which the Government obtains title under a cost-
    reimbursement or time-and-materials contract. The Contractor shall 
    maintain property to which the Government obtains title under a 
    cost-reimbursement or time-and-materials contract in a condition 
    suitable for the property's intended use until the Contractor 
    determines the property is no longer needed for continued 
    performance of this contract. Promptly following that determination, 
    the Contractor shall enter the items into the property disposal 
    process.
        (3) Additional maintenance actions. When the Contractor's 
    diligent performance of the maintenance actions required by 
    paragraph (f)(1) and (f)(2) of this clause is not sufficient to 
    sustain a Government-furnished property item's suitability for its 
    intended use, the Contracting Officer may--
        (i) Repair, rehabilitate, replace, or substitute other property 
    for the property requiring additional maintenance; or
        (ii) Authorize the Contractor to repair, rehabilitate, or 
    replace, the property.
        (4) Equitable adjustment. The Contractor may request an 
    equitable adjustment for property repair, rehabilitation, or 
    replacement authorized by the Contracting Officer.
        (5) Stored Government property. The Contractor shall store 
    Government property only if specifically directed to do so by the 
    Contracting Officer. Stored property shall be maintained in 
    accordance with instructions provided by the Contracting Officer. 
    Except as provided in the clause 52.245-3, Delivery--Special Tooling 
    and Special Test Equipment, of this contract and paragraph (g)(7) of 
    this clause, the price or fee of the contract does not include an 
    amount for such maintenance.
        (g) Government property disposal. Except as provided in 
    paragraphs (c)(8), (g)(1), and (g)(2) of this clause, the Contractor 
    shall not dispose of Government property until authorized to do so 
    by the Plant Clearance Officer.
        (1) Scrap. (i) Contractors may dispose of scrap that results 
    from production or testing under this contract without Government 
    approval if the scrap does not contain precious metals, hazardous 
    materials or wastes, nuclear materials, classified materials, or 
    does not require demilitarization. All other scrap must be disposed 
    of in accordance with paragraphs (g)(3) through (g)(8) of this 
    clause.
        (ii) The Contractor and the Plant Clearance Officer may agree to 
    expedited scrap procedures for nonproduction scrap without 
    consideration by either party.
        (2) Predisposal requirements. When the Contractor determines 
    that a property item acquired or produced by the Contractor is no 
    longer needed for performance of this contract, the Contractor 
    shall--
        (i) Make reasonable efforts to return unused property to the 
    appropriate supplier at acquisition cost (less, if applicable, a 
    reasonable restocking fee that is consistent with the supplier's 
    customary practices) and credit the price or estimated cost of this 
    contract with the proceeds of such returns; and
        (ii) List property that could not be returned to a supplier or 
    used in the performance of other Government contracts on Standard 
    Form 1428, Inventory Disposal Schedule.
        (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 cost-reimbursement or time-
    and-materials contracts, 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 general purpose components;
        (B) Special test equipment that does not contain general purpose 
    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. Special 
    test equipment shall be described in sufficient detail to permit an 
    understanding of the special test equipment's intended use.
        (4) Submission requirements. Inventory disposal schedules shall 
    be submitted 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 receipt of an acceptable 
    inventory disposal schedule, might entitle the Contractor to an 
    equitable adjustment for costs incurred to store such property on or 
    after the 121st day following receipt of an acceptable schedule.
        (ii) The Contractor must 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) 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.
        (ii) 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 (c)(7) of this clause.
        (9) Disposal proceeds. The Contractor shall credit the net 
    proceeds from a disposal of Government property in accordance with 
    instructions received from the Plant Clearance 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 
    (g)(4) of this clause.
        (h) Abandonment of Government property at a Contractor-owned 
    location. (1) The Government shall not abandon at a Contractor-owned 
    location Government property that is or contains a hazardous 
    material without the Contractor's written concurrence. The 
    Contractor may request an equitable adjustment incident to such 
    agreement.
        (2) The Government, upon notice to the Contractor, may abandon 
    any nonhazardous Government-furnished property in place at which 
    time all obligations of the Government regarding such abandoned 
    property shall cease. Except as provided in paragraph
    
    [[Page 1466]]
    
    (c)(7)(i) of this clause, the Government has no obligation to 
    restore or rehabilitate the Contractor's premises under any 
    circumstances.
        (i) Overseas contracts. In a contract performed outside the 
    United States, its territories, or possessions, the words 
    ``Government'' and ``Government-furnished'' (wherever they appear in 
    this clause) shall be construed as ``United States Government'' and 
    ``United States Government-furnished,'' respectively.
    
    (End of clause)
        Alternate I (Date). As prescribed in 45.207-2(d)(1), replace 
    paragraph (d)(1) of the basic clause with the following paragraph 
    (d)(1) and modify the references to ``Government property'' in 
    paragraphs (d)(2), (d)(3), and (d)(4) to read ``Government-furnished 
    property'':
        (d)(1) Contractor liability. Except as provided in paragraph 
    (d)(2) of this clause, the Contractor is liable for losses to 
    Government-furnished property during the times the property is in 
    the Contractor's possession.
        Alternate II (Date). As prescribed in 45.207-2(d)(2), replace 
    paragraph (b) of the basic clause with the following paragraph (b) 
    and add the following paragraph (j) to the basic clause:
        (b) General. (1) Except as provided in paragraph (c) of this 
    clause, the Contractor shall use its own property to perform this 
    contract.
        (2) The Contractor is responsible for the maintenance, 
    protection, and preservation of Government property accountable 
    under this contract that is in the Contractor's or its 
    subcontractors' possession and shall account for such property as 
    required by this contract.
        (3) Property acquired or produced by the Contractor for 
    performance of this contract that the Government obtains title to 
    under the clause at 52.216-7, Allowable Cost and Payment, is 
    Government property accountable under this contract.
        (j) Title to Contractor-acquired or produced property, nonprofit 
    organizations or nonprofit institutions. (1) Notwithstanding any 
    other provision of this contract regarding title to property 
    acquired or produced by a Contractor, the Contractor shall have 
    title to equipment and other tangible property purchased with 
    Government funds provided for the conduct of basic or applied 
    research under this contract, if--
        (i) The Contracting officer has agreed, prior to the 
    Contractor's purchase of such property, that the Contractor shall 
    have title to that property; and
        (ii) The Contractor has agreed that depreciation or amortization 
    costs for such property shall not be allocated to any existing or 
    future Government contract and that such property may be used by the 
    Government or its subcontractors without charge in performance of 
    any Government contract or subcontract thereunder.
        (2) As a condition for obtaining title to property under this 
    clause, the Contractor, by signing this contract, agrees that no 
    person in the United States shall on the ground of race, color, or 
    national origin, be excluded from participation in, be denied the 
    benefits of, or be otherwise subjected to discrimination under this 
    contemplated financial assistance (title to equipment or other 
    tangible personal property) (41 U.S.C. 2000d).
    
    
    52.245-8  Government Property Administration--Alternate Procedures.
    
        As prescribed in 45.510(d), insert the following clause:
    
    GOVERNMENT PROPERTY ADMINISTRATION--ALTERNATE PROCEDURES (DATE)
    
        (a) Definitions. When a term defined in the clause at 52.245-7, 
    Government Property--Alternate Procedures, is used in this clause, 
    the term has the same meaning as when used in 52.245-7.
        (b) Applicability. This clause is applicable to Government-
    furnished property; Government property stored by the Contractor at 
    the Government's direction; and under cost-reimbursement or time-
    and-materials contracts, property acquired or produced by a 
    Contractor to which the Government has title under the Allowable 
    Cost and Payment clause of this contract.
        (c) Access. The Government shall have access, at all reasonable 
    times, to all premises at which Government property accountable 
    under this contract is located and to applicable property records 
    and supporting information.
        (d) Records and supporting information--(1) Property records. 
    (i) Except as provided in paragraph (d)(1)(ii) of this clause, the 
    Contractor shall establish or maintain and keep current a property 
    record for each Government property item accountable under this 
    contract that is in the Contractor's or its subcontractors' 
    possession. Identical items may be consolidated in a single property 
    record if the consolidated record provides the information required 
    by this clause. The Contractor shall identify useable components 
    permanently removed from Government property as Government property 
    items and establish and maintain appropriate property records. 
    Property records created by a subcontractor that uses sound business 
    practices to control, maintain, and account for property may be used 
    in lieu of creating new records.
        (ii) Property records are not required for work in process or 
    for property specifically acquired or constructed for tests that 
    will destroy the property.
        (iii) Contractors that use a material requirements planning 
    system, manufacturing resource planning system, material management 
    accounting system, or an enterprise resource planning system, may 
    use the records generated by those systems as the records for 
    material items provided such records otherwise satisfy the 
    requirements in paragraph (d)(2) of this clause.
        (iv) The Contractor shall close a Government property item's 
    record when the item is replaced and create a new property record 
    for the replacement item if that item is Government property.
        (v) The Contractor shall enter the property's acquisition cost 
    into the record for each Government property item that was acquired 
    or produced by the Contractor during performance of this contract. 
    For each item having an acquisition cost of ______ (insert the 
    agency capitalization threshold amount) or more, the Contractor also 
    shall enter the date the item was acquired or produced.
        (vi) The Contractor shall notify the Contracting Officer 
    promptly if the contract does not identify a Government-furnished 
    property item's nomenclature or acquisition cost.
        (vii) Property records shall legibly and conspicuously identify 
    sensitive property.
        (viii) The property records for items requiring maintenance 
    shall identify the dates maintenance actions (including calibration 
    if required) were performed and any deficiencies discovered. The 
    maintenance information may be kept separately if the Contractor has 
    a direct link between the information and the affected property 
    records.
        (2) Standard information. Except as provided in paragraphs 
    (d)(4) and (d)(5) of this clause, each property control record shall 
    contain the following information--
        (i) The item's name, description, and national stock number. If 
    the item does not have a national stock number and the item's 
    acquisition cost is ______ (insert the agency capitalization 
    threshold amount) or more, enter the four digit federal supply 
    classification code;
        (ii) Contract number or equivalent code designation;
        (iii) Quantity received or fabricated, issued, and on hand;
        (iv) The date of the most recent physical inventory or other 
    posting reference;
        (v) Acquisition cost and, for items having an acquisition cost 
    of ______ (insert the agency capitalization threshold amount) or 
    more, the date the items were acquired or produced;
        (vi) Current location (for low value property, identify the 
    initial location only); and
        (vii) The property's classification. Use only one of the 
    following for each property item: Land, buildings, other real 
    property, equipment, special test equipment, special tooling, unique 
    Federal property, or material.
        (3) Additional information. In addition to the information 
    required by paragraph (d)(2) of this clause, the property records 
    for--
        (i) Special tooling and special test equipment shall identify 
    each part number with which a special tool or special test equipment 
    item is used;
        (ii) Special test equipment that includes general purpose 
    equipment shall include the information required by paragraph (f)(2) 
    of this clause for each removable or reusable general purpose 
    component if removal and reuse is economically feasible;
        (iii) Equipment shall include the manufacturer's name, serial 
    number, and model or part number; and
        (iv) Scrap shall identify the material content, contract from 
    which the scrap was derived, and the scrap's disposition and 
    disposition date(s).
        (4) Real property. (i) Real property records must contain a 
    description of the property, its location, original acquisition 
    cost, a description of property alterations made or construction 
    work performed by the Contractor including an identification of the
    
    [[Page 1467]]
    
    construction sites supporting such alterations or construction, and 
    must separately identify the cost of such alterations or 
    construction. Supporting documentation shall include maps, drawings, 
    plans, specifications, and, if necessary, supplementary data needed 
    to completely describe and value the property.
        (ii) Costs incurred by the Government or the Contractor, to 
    acquire, construct, alter, or improve Government-owned or leased 
    real property, including additions, expansions, extensions, or 
    conversions thereof, shall be added to the property's acquisition 
    cost if they increase the value, life, utility, capability, or 
    serviceability of the property.
        (iii) A real property record shall be annotated with a statement 
    of the pertinent facts when the property is sold, transferred, 
    donated, destroyed, abandoned by the Government, or condemned.
        (5) Property returned under warranty. The Contractor shall 
    establish a property record for each item returned for correction 
    under a warranty and maintain the records on a contract-by-contract 
    basis. The records shall identify the date received, and the date 
    the item is returned to the Government. Once a property record has 
    been established, identical items received for corrective action 
    shall be added to the established record and the information 
    required by this paragraph maintained for each item.
        (e) Reports and notices--(1) Annual Government property report. 
    The Contractor shall report all Government property accountable 
    under this contract that is in its or its subcontractors' possession 
    as of September 30 of each calendar year or upon completion of all 
    property disposal actions under this contract, whichever is sooner. 
    Unless otherwise stated in this contract, the report shall be 
    prepared using Standard Form 1450, U.S. Government Property in the 
    Possession of Contractors, and submitted to the Property 
    Administrator no later than October 31 of each calendar year.
        (2) Misdirected Government property. The Contractor shall notify 
    the Property Administrator in writing immediately following receipt 
    of Government property intended for another person or Government 
    property not required for performance of a Government contract with 
    the Contractor and shall request disposition instructions. To the 
    extent practical, the Contractor shall identify the shipment's 
    content, intended recipient, carrier that made delivery, the 
    Government activity from which the shipment originated, and the 
    shipment's current location.
        (3) Late Government-furnished property. The Contractor shall 
    notify promptly the Contracting Officer of a failure to receive 
    Government-furnished property at the time stated in the contract or, 
    when a time is not stated, in sufficient time to enable the 
    Contractor to meet the contract's delivery or performance dates. 
    Each notice shall forward the Contractor's estimate of the extent to 
    which such failure has affected or might affect contract 
    performance.
        (4) Property losses. Except as provided in paragraph (e)(5) of 
    this clause, the Contractor shall notify the Property Administrator 
    in writing promptly upon learning that a Government-furnished 
    property loss has occurred. The notice shall identify the property 
    by item and include--
        (i) The item's description, contract number, national stock 
    number (if known), and either part number or identification number;
        (ii) The date the physical loss or theft was discovered or 
    damage or destruction occurred and, if known, the circumstances;
        (iii) The item's acquisition cost;
        (iv) The contracts affected;
        (v) All known interests in commingled property of which the 
    Government property is a part; and
        (vi) The insurance, if any, covering any part of or interest in 
    the property.
        (5) Low value Government-furnished property losses. The 
    Contractor is not required to provide a property loss notice for low 
    value Government-furnished property until contract completion or 
    termination, except low value Government-furnished property that the 
    Contractor needs for continued performance of this contract or low 
    value Government-furnished property that the Government is 
    contractually obligated to provide to the Contractor for performance 
    of another contract. The notice shall contain the information 
    required by paragraph (e)(4) of this clause.
        (f) Inventories. The Contractor shall assure that the location 
    of each Government property item is accurately established and the 
    records and reports required by this clause are complete and 
    accurate.
        (1) Contract termination inventories. The Contractor shall 
    inventory all property accountable under this contract immediately 
    following a notice of termination or partial termination of the 
    contract. Electronic, optical, electro-magnetic, or similar systems 
    may be used.
        (2) Contract completion inventory. Promptly following completion 
    of deliveries or performance under the contract, the Contractor 
    shall inventory all Government property accountable under this 
    contract that the Government is not contractually obligated to 
    furnish to the Contractor for performance of another Government 
    contract.
        (g) Markings--(1) Contractor-acquired or produced property 
    (other than material). As soon as practicable following the 
    Government's assumption of title to property acquired or produced 
    for performance of a cost-reimbursement or time-and-materials 
    contract, the Contractor shall legibly and conspicuously mark such 
    property with the phrase ``U.S. Government Property'' (or a similar 
    phrase that conveys Government ownership) and a control number that 
    links the property to the property records maintained by the 
    Contractor.
        (2) Government-furnished property (other than material). 
    Promptly following receipt of Government-furnished property, the 
    Contractor shall determine whether the property bears a Government 
    ownership marking, mark unmarked property with the markings 
    identified in paragraph (g)(1) of this clause, and replace any 
    control numbers affixed by other Contractors with the Contractor's 
    control number.
        (3) Exceptions. (i) The Contractor is not required to mark 
    Government-furnished or Contractor-acquired or produced material.
        (ii) In lieu of the requirements in paragraph (g)(1) or (g)(2) 
    of this clause, the Contractor shall contact promptly the Property 
    Administrator for alternate instructions when marking would damage a 
    property item or the Contractor considers a physical marking to be 
    impractical.
        (h) Overseas contracts. In a contract performed outside the 
    United States, its territories, or possessions, the words 
    ``Government'' and ``Government-furnished'', as used in this clause, 
    mean ``United States Government'' and ``United States Government-
    furnished,'' respectively.
    
    (End of clause)
    
        Alternate I (Date) As prescribed in 45.510(b), substitute the 
    following paragraphs (d) and (e) for paragraphs (d) and (e) of the 
    basic clause:
        (d) Property records. The Contractor shall establish a property 
    record for each Government property item returned for correction 
    under a warranty and shall maintain the records on a contract-by-
    contract basis. The records shall identify the item's name, 
    description, property classification, national stock number, the 
    date received, the contract number under which the item was 
    returned, the corrective action performed, and the date the item is 
    returned to the Government. For items having an acquisition cost 
    greater than____________________ (insert the agency capitalization 
    threshold), the Contractor shall enter the item's four-digit federal 
    supply classification code. Once a property record has been 
    established, identical items received for corrective action shall be 
    added to the established record and the information required by this 
    paragraph maintained for each item.
        (e) Notices--(1) Misdirected Government property. The Contractor 
    shall notify the Property Administrator, promptly following receipt 
    of Government property intended for another person or Government 
    property not required for performance of a Government contract, and 
    shall request disposition instructions. To the extent practical, the 
    Contractor shall identify the shipment's content, intended 
    recipient, carrier that made delivery, the Government activity from 
    which the shipment originated, and the shipment's current location.
        (2) Late Government-furnished property. The Contractor shall 
    notify promptly the Contracting Officer of a failure to receive 
    Government-furnished property at the time stated in the contract or, 
    when a time is not stated, in sufficient time to enable the 
    Contractor to meet the contract's delivery or performance dates. 
    Each notice shall forward the Contractor's estimate of the extent to 
    which such failure has affected or might affect contract 
    performance.
        (3) Government-furnished property losses. Except as provided in 
    paragraph (e)(4) of this clause, the Contractor shall notify the 
    Property Administrator in writing promptly upon learning that a 
    Government-furnished property loss has occurred. The notice shall 
    identify the property by item and include--
        (i) The item's description, contract number, national stock 
    number, if known, and either part number or identification number;
        (ii) The date the physical loss or theft was discovered or 
    damage or destruction occurred and, if known, the circumstances;
        (iii) The item's acquisition cost;
    
    [[Page 1468]]
    
        (iv) The contracts affected;
        (v) All known interests in commingled property of which the 
    Government-furnished property is a part; and
        (vi) The insurance, if any, covering any part of or interest in 
    such commingled property.
        (4) Low value Government-furnished property losses. The 
    Contractor is not required to provide a property loss notice for low 
    value Government-furnished property until contract completion or 
    termination, except low value Government-furnished property that the 
    Contractor needs for continued performance of this contract or low 
    value Government-furnished property that the Government is 
    contractually obligated to furnish to the Contractor for performance 
    of another Government contract. The notice shall contain the 
    information required by paragraph (e)(3) of this clause.
    
    
    52.245-9 through 52.245-19  [Removed]
    
        59. Remove sections 52.245-9 through 52.245-19.
    
    
    52.246-18  [Amended]
    
        60. Amend section 52.246-18 by revising the date of the clause; and 
    in the first sentence of paragraph (b)(3) by removing the word 
    ``facilities'' and adding ``Government property'' in its place.
        61. Amend section 52.249-2 by revising the date of the clause and 
    paragraph (b)(2); by removing paragraph (d); and by redesignating 
    paragraphs ``(e)'' through ``(n)'' as ``(d)'' through ``(m)'', 
    respectively. The revised text reads as follows:
    
    
    52.249-2  Termination for Convenience of the Government (Fixed-Price).
    
    * * * * *
    
    Termination for Convenience of the Government (Fixed-Price) (Date)
    
    * * * * *
        (b) * * *
        (2) Place no further subcontracts or orders (referred to as 
    subcontracts in this clause), except as necessary to complete the 
    continued portion of the contract.
    * * * * *
        62. Amend section 52.249-3 by revising the date of the clause and 
    paragraph (b)(2); by removing paragraph (d); and by redesignating 
    paragraphs ``(e)'' through ``(n)'' as ``(d)'' through ``(m)'', 
    respectively. The revised text reads as follows:
    
    
    52.249-3  Termination for Convenience of the Government (Dismantling, 
    Demolition, or Removal of Improvements).
    
    * * * * *
    
    Termination for Convenience of the Government (Dismantling, Demolition, 
    or Removal of Improvements) (Date)
    
    * * * * *
        (b) * * *
        (2) Place no further subcontracts or orders (referred to as 
    subcontracts in this clause), except as necessary to complete the 
    continued portion of the contract.
    * * * * *
    
    
    52.249-6  [Amended]
    
        63. Amend section 52.249-6 by revising the date of the clause; by 
    removing paragraph (e); and by redesignating paragraphs ``(f)'' through 
    ``(n)'' as ``(e)'' through ``(m)'', respectively.
    
    
    52.249-11  [Removed and Reserved]
    
        64. Remove and reserve section 52.249-11.
    
    
    52.249-13  [Removed and Reserved]
    
        65. Remove and reserve section 52.249-13.
        66. Amend section 52.249-14 by revising the second and fourth 
    sentences of the introductory paragraph to read as follows:
    
    
    52.249-14  Excusable Delays.
    
        * * * Also insert the clause in time-and-materials contracts and 
    labor-hour contracts. * * * When used in construction contracts, 
    substitute the words ``completion time'' for ``delivery schedule'' in 
    the last sentence of the clause.
    * * * * *
        67. Amend section 52.251-1 by revising the clause to read as 
    follows:
    
    
    52.251-1  Government Supply Sources.
    
    * * * * *
    
    Government Supply Sources (Date)
    
        (a) The Contracting Officer may authorize the Contractor to use 
    Government supply sources in the performance of this contract. Such 
    property is not ``Government-furnished property.''
        (b) Title to property acquired by the Contractor under paragraph 
    (a) of this clause shall vest for--
        (1) Fixed-price contracts, as provided in the contract financing 
    provisions and the Delivery--Special Tooling and Special Test 
    Equipment (Fixed-Price Contracts) clause of this contract.
        (2) Cost-type contracts, as provided in the Allowable Cost and 
    Payment clause of this contract.
    
    (End of clause)
    
    PART 53--FORMS
    
        68. 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, redistribution, 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 
    45.504-5(a) and 41 CFR 101-43.)
        (b) SF 126 (GSA), Report of Personal Property for Sale, and SF 126-
    A (GSA), Report of Personal Property for Sale (Continuation Sheet).
        (c) SF 1423 (Rev. DATE), Inventory Verification Survey. (See 
    45.304-3(b).)
        (d) SF 1424 (Rev. 7/89), Inventory Disposal Report. SF 1424 is 
    authorized for local reproduction and a copy is furnished for this 
    purpose in part 53 of the looseleaf edition of the FAR.
        (e) SF 1428 (Rev. DATE), Inventory Disposal Schedule, and SF 1429 
    (Rev. DATE), Inventory Disposal Schedule-Continuation Sheet. (See 
    52.245-2(g)(2) and 52.245-7(g)(2).) SF 1428 and SF 1429 are authorized 
    for local reproduction and copies are furnished for this purpose in 
    part 53 of the looseleaf edition of the FAR.
        (f) SF 1450 (DATE), U.S. Government Property in the Possession of 
    Contractors. (See 52.245-6(g)(1).) SF 1450 is authorized for local 
    reproduction and a copy is furnished for this purpose in part 53 of the 
    looseleaf edition of the FAR.
        69. Amend section 53.249 by revising paragraph (b) to read as 
    follows:
    
    
    53.249  Termination of contracts.
    
    * * * * *
        (b) Standard Form 1428 (Rev. DATE), Inventory Disposal Schedule, 
    and Standard Form 1429 (Rev. DATE), Inventory Disposal Schedule--
    Continuation Sheet, must 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 1469]]
    
        70. Revise section 53.301-1423 to read as follows:
    
    
    53.301-1423  Inventory Verification Survey.
    [GRAPHIC] [TIFF OMITTED] TP10JA00.000
    
    
    [[Page 1470]]
    
    
        71. Revise section 53.301-1424 to read as follows:
    
    
    Sec. 43.301-1424  Inventory Disposal Report.
    [GRAPHIC] [TIFF OMITTED] TP10JA00.001
    
    
    [[Page 1471]]
    
    
        72. Revise section 53.301-1428 to read as follows:
    
    
    53.301-1428  Inventory Disposal Schedule.
    [GRAPHIC] [TIFF OMITTED] TP10JA00.002
    
    
    [[Page 1472]]
    
    [GRAPHIC] [TIFF OMITTED] TP10JA00.003
    
    
    
    [[Page 1473]]
    
        73. Revise section 53.301-1429 to read as follows:
    
    
    53.301-1429  Inventory Disposal Schedule--Continuation Sheet.
    [GRAPHIC] [TIFF OMITTED] TP10JA00.004
    
    
    [[Page 1474]]
    
    
        74. Revise section 53.301-1436 to read as follows:
    
    
    53.301-1436  Settlement Proposal (Total Cost Basis).
    [GRAPHIC] [TIFF OMITTED] TP10JA00.005
    
    
    [[Page 1475]]
    
    [GRAPHIC] [TIFF OMITTED] TP10JA00.006
    
    
    
    [[Page 1476]]
    
    [GRAPHIC] [TIFF OMITTED] TP10JA00.007
    
    
    
    [[Page 1477]]
    
    [GRAPHIC] [TIFF OMITTED] TP10JA00.008
    
    
    
    [[Page 1478]]
    
        75. Revise section 53.301-1438 to read as follows:
    
    
    53.301-1438  Settlement Proposal (Short Form).
    [GRAPHIC] [TIFF OMITTED] TP10JA00.009
    
    
    [[Page 1479]]
    
    [GRAPHIC] [TIFF OMITTED] TP10JA00.010
    
    
    
    [[Page 1480]]
    
        76. Add section 53.301-1450 to read as follows:
    
    
    53.301-1450  U.S. Government Property in the Possesssion of 
    Contractors.
    [GRAPHIC] [TIFF OMITTED] TP10JA00.011
    
    
    [[Page 1481]]
    
    [GRAPHIC] [TIFF OMITTED] TP10JA00.012
    
    
    
    [FR Doc. 00-115 Filed 1-7-00; 8:45 am]
    BILLING CODE 6820-EP-C
    
    
    

Document Information

Published:
01/10/2000
Department:
National Aeronautics and Space Administration
Entry Type:
Proposed Rule
Action:
Proposed rule.
Document Number:
00-115
Dates:
Interested parties should submit comments in writing on or before March 10, 2000 to be considered in the formulation of a final rule.
Pages:
1438-1481 (44 pages)
Docket Numbers:
FAR Case 1995-013
RINs:
9000-AH60: FAR Case 95-013, Government Property
RIN Links:
https://www.federalregister.gov/regulations/9000-AH60/far-case-95-013-government-property
PDF File:
00-115.pdf
CFR: (69)
48 CFR 45.507)
48 CFR 45.205-1(a)
48 CFR 31.202
48 CFR 37.304
48 CFR 45.000
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