Federal Acquisition Regulation; Government Property, 18497-18504 [2011-7436]
Download as PDF
Federal Register / Vol. 76, No. 64 / Monday, April 4, 2011 / Proposed Rules
pursuant to paragraph (c)(5)(iii)(C)(2) of
this section within no more than one
week of the change. Providers may
satisfy this requirement by filing the
relevant portion of FCC Form 499–A in
accordance with the Instructions to such
form.
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[FR Doc. 2011–7798 Filed 4–1–11; 8:45 am]
BILLING CODE 6712–01–P
FEDERAL COMMUNICATIONS
COMMISSION
47 CFR Part 73
[MB Docket No. 11–54, RM–11624; DA 11–
499]
Television Broadcasting Services;
Augusta, GA
Federal Communications
Commission.
ACTION: Proposed rule.
AGENCY:
The Commission has before it
a petition for rulemaking filed by
Southern Media Holdings, Inc. (‘‘SMH’’),
the licensee of station WFXG, Augusta,
Georgia, requesting the substitution of
channel 51 for channel 31 at Augusta.
SMH seeks this channel substitution as
it cannot obtain the credit necessary to
construct the channel 31 facility and
states that the money required to
construct the channel 31 facility will
instead be used to serve other aspects of
the public interest.
DATES: Comments must be filed on or
before May 4, 2011, and reply comments
on or before May 19, 2011.
ADDRESSES: Federal Communications
Commission, Office of the Secretary,
445 12th Street, SW., Washington, DC
20554. In addition to filing comments
with the FCC, interested parties should
serve counsel for petitioner as follows:
Harry C. Martin, Esq., Fletcher, Heald &
Hildreth, PLC, 1300 N. 17th Street, 11th
Floor, Arlington, VA 22209.
FOR FURTHER INFORMATION CONTACT:
Joyce L. Bernstein,
joyce.bernstein@fcc.gov, Media Bureau,
(202) 418–1600.
SUPPLEMENTARY INFORMATION: This is a
synopsis of the Commission’s Notice of
Proposed Rule Making, MB Docket No.
11–54, adopted March 15, 2011, and
released March 16, 2011. The full text
of this document is available for public
inspection and copying during normal
business hours in the FCC’s Reference
Information Center at Portals II, CY–
A257, 445 12th Street, SW.,
Washington, DC 20554. This document
will also be available via ECFS (https://
www.fcc.gov/cgb/ecfs/). (Documents
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SUMMARY:
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will be available electronically in ASCII,
Word 97, and/or Adobe Acrobat.) This
document may be purchased from the
Commission’s duplicating contractor,
Best Copy and Printing, Inc., 445 12th
Street, SW., Room CY–B402,
Washington, DC 20554, telephone
1–800–478–3160 or via e-mail https://
www.BCPIWEB.com. To request this
document in accessible formats
(computer diskettes, large print, audio
recording, and Braille), send an e-mail
to fcc504@fcc.gov or call the
Commission’s Consumer and
Governmental Affairs Bureau at (202)
418–0530 (voice), (202) 418–0432
(TTY). This document does not contain
proposed information collection
requirements subject to the Paperwork
Reduction Act of 1995, Public Law
104–13. In addition, therefore, it does
not contain any proposed information
collection burden ‘‘for small business
concerns with fewer than 25
employees,’’ pursuant to the Small
Business Paperwork Relief Act of 2002,
Public Law 107–198, see 44 U.S.C.
3506(c)(4).
Provisions of the Regulatory
Flexibility Act of 1980 do not apply to
this proceeding. Members of the public
should note that from the time a Notice
of Proposed Rule Making is issued until
the matter is no longer subject to
Commission consideration or court
review, all ex parte contacts (other than
ex parte presentations exempt under 47
CFR 1.1204(a)) are prohibited in
Commission proceedings, such as this
one, which involve channel allotments.
See 47 CFR 1.1208 for rules governing
restricted proceedings.
For information regarding proper
filing procedures for comments, see 47
CFR 1.415 and 1.420.
List of Subjects in 47 CFR Part 73
Television.
Federal Communications Commission.
Barbara A. Kreisman,
Chief, Video Division, Media Bureau.
Proposed Rule
For the reasons discussed in the
preamble, the Federal Communications
Commission proposes to amend 47 CFR
part 73 as follows:
PART 73—RADIO BROADCAST
SERVICES
1. The authority citation for part 73
continues to read as follows:
Authority: 47 U.S.C. 154, 303, 334, 336,
and 339.
§ 73.622(i)
[Amended]
2. Section 73.622(i), the PostTransition Table of DTV Allotments
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18497
under Georgia, is amended by adding
channel 51 and removing channel 31 at
Augusta.
[FR Doc. 2011–7787 Filed 4–1–11; 8:45 am]
BILLING CODE 6712–01–P
DEPARTMENT OF DEFENSE
GENERAL SERVICES
ADMINISTRATION
NATIONAL AERONAUTICS AND
SPACE ADMINISTRATION
48 CFR Parts 2, 31, 32, 45, 49, 52, and
53
[FAR Case 2010–009; Docket 2010–0009;
Sequence 1]
RIN 9000–AL95
Federal Acquisition Regulation;
Government Property
Department of Defense (DoD),
General Services Administration (GSA),
and National Aeronautics and Space
Administration (NASA).
ACTION: Proposed rule.
AGENCIES:
DoD, GSA, and NASA are
proposing to amend the Federal
Acquisition Regulation (FAR) to clarify
reporting, reutilization, and disposal of
Government property and the contractor
requirements under the Government
property clause.
DATES: Interested parties should submit
written comments to the Regulatory
Secretariat at one of the addressees
shown below on or before June 3, 2011.
to be considered in the formation of the
final rule.
ADDRESSES: Submit comments in
response to FAR Case 2010–009 by any
of the following methods:
• Regulations.gov: https://
www.regulations.gov. Submit comments
via the Federal eRulemaking portal by
inputting ‘‘FAR Case 2010–009’’ under
the heading ‘‘Enter Keyword or ID’’ and
selecting ‘‘Search.’’ Select the link
‘‘Submit a Comment’’ that corresponds
with ‘‘FAR Case 2010–009.’’ Follow the
instructions provided at the ‘‘Submit a
Comment’’ screen. Please include your
name, company name (if any), and ‘‘FAR
Case 2010–009’’ on your attached
document.
• Fax: (202) 501–4067.
• Mail: General Services
Administration, Regulatory Secretariat
(MVCB), ATTN: Hada Flowers, 1275
First Street, NE., 7th Floor, Washington,
DC 20417.
Instructions: Please submit comments
only and cite FAR Case 2010–009, in all
correspondence related to this case. All
SUMMARY:
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comments received will be posted
without change to https://
www.regulations.gov, including any
personal and/or business confidential
information provided.
FOR FURTHER INFORMATION CONTACT: Ms.
Jeritta Parnell, Procurement Analyst, at
(202) 501–4082, for clarification of
content. For information pertaining to
status or publication schedules, contact
the Regulatory Secretariat at (202) 501–
4755. Please cite FAR Case 2010–009.
SUPPLEMENTARY INFORMATION:
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I. Background
DoD, GSA, and NASA are proposing
to amend the FAR to clarify current FAR
policy with respect to the proper
disposition of contractor inventory.
However, a number of other changes
were made, aimed at enhancing the
management of Government contract
property in the hands of contractors.
The changes are the result of questions
raised by contractors and Government
personnel, Government and industry
exchanges, and lessons learned. In
addition, some comments from the
previous FAR Case 2008–011, published
in the Federal Register at 75 FR 38675
on July 2, 2010), that were deemed to be
outside the scope of that case, are
addressed in this case.
The revisions include the following:
1. Clarify that FAR part 45 and FAR
52.245–1 does not apply to Government
property incidental to the place of
performance at a Government site or
installation. See FAR 45.000.
2. Add new definitions for ‘‘loss of
Government property’’ and ‘‘unit
acquisition cost’’ in FAR part 45 and
FAR 52.245–1, delete the definition of
‘‘acquisition cost,’’ and move the
definition of ‘‘surplus property’’ from
part 45 to part 2.
3. Update FAR subpart 45.6 to clarify
and align with the Federal Management
Regulation; and
4. Revise language based on
comments received in response to, but
outside the scope of, FAR Case 2008–
011.
II. Executive Order 12866
This is not a significant regulatory
action and, therefore, was not subject to
review under Section 6(b) of Executive
Order 12866, Regulatory Planning and
Review, dated September 30, 1993. This
rule is not a major rule under 5 U.S.C.
804.
III. Regulatory Flexibility Act
The proposed changes may have a
significant economic impact on a
substantial number of small entities
within the meaning of the Regulatory
Flexibility Act 5 U.S.C. 601, et seq.,
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because the rule affects the method of
managing some Government property in
the hands of contractors, particularly
scrap. However, as the rule reduces the
burden on all businesses by removing
the reporting of production scrap, it
should have a positive effect on small
businesses. An Initial Regulatory
Flexibility Act (IRFA) analysis has been
prepared and is summarized as follows.
This Initial Regulatory Flexibility Analysis
has been prepared consistent with Section
603, Title 5, of the United States Code.
1. Description of the reasons why action
by the agency is being considered.
DoD, GSA, and NASA are proposing to
revise FAR parts 45 and 52. The focus of this
effort is to clarify FAR subpart 45.6,
Reporting, Reutilization, and Disposal, and
the contractor requirements under the clause
at FAR 52.245–1.
The revisions include technical corrections
to align the FAR with the requirements of the
Federal Management Regulation (FMR). For
example, the new language is now consistent
with current property reutilization priorities,
abandonment and destruction
determinations, and surplus sales policy.
Moreover, the language has been edited for
clarity and placed in proper process
sequence. Also included is new and
expanded policy language on the disposal of
scrap.
Notwithstanding the proposed rule’s
overall focus on FAR subpart 45.6 and the
associated contractor requirements under
FAR 52.245–1, additional revisions include
new language at FAR 45.104 for contracting
officers on depositing monies received from
contractors for property that is lost, damaged,
destroyed or stolen.
In essence, the rule does not result in new
requirements on contractors; it clarifies
existing policies and procedures. The rule
will simplify compliance for contractors and
enable consistent Government oversight.
2. Succinct statement of the objectives of,
and legal basis, for, the proposed rule.
Title 40 U.S.C. 524, Public Buildings,
Property, and Works requires, in part, that
executive agencies account for Government
property, determine when such property is
excess, and dispose of excess Government
property promptly. This proposed rule
amends the FAR to revise the policies for the
disposition of contractor inventory. The
objective of this case is to substantially
revise, clarify, and improve current policy.
3. Description of, and, where feasible,
estimate of the number of small entities to
which the proposed rule will apply.
It is estimated that approximately 5000
contractors have Federal property in their
possession. DoD has approximately 3000
contractors with potential contract-property
reporting requirements. Approximately 60
percent of all DoD contractors are small
businesses. Given that property in the
possession of contractors is overwhelmingly
DoD property, it is estimated the DoD ratio
of small business to total businesses having
such property is a reasonable approx-imation
for all Government contractors. Therefore, it
is estimated that approximately 3000 small
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businesses have Government property in
their possession.
4. Description of projected reporting,
recordkeeping, and other compliance
requirements of the proposed rule, including
an estimate of the classes of small entities
which will be subject to the requirement and
the type of professional skills necessary for
preparation of the report of record.
FAR Case 2004–025 streamlined the
requirements concerning property
management in FAR part 45. FAR Case 2008–
011 continued that philosophy. This new
proposed rule seeks continuous improvement
to property management by streamlining and
clarifying the policies for the disposition of
contractor inventory. DoD, GSA, and NASA
believe the rule will have a positive effect on
small businesses in that it further streamlines
the process and reduces the paperwork
burden.
It should be noted that these recommended
changes are consistent with the Office of the
Under Secretary of Defense, Acquisition,
Technology and Logistics, recent statements
emphasizing the need to improve the
productivity of the defense industry and
remove Government impediments to
efficiency.
There are four reports currently required.
These reports are required to assure
appropriate use and disposition of contract
property. These reports are—
SF 1423, Inventory Verification Survey.
SF 1424, Inventory Disposal Report.
SF 1428, Inventory Disposal Schedule.
SF 1429, Inventory Disposal Schedule
Continuation Sheet.
All of these forms are available online and
may be submitted by the contractor using
electronic means. It should be noted that DoD
no longer requires the use of the SF 1428 and
1429 forms and instead DoD uses the webenabled Plant Clearance Automated
Reutilization and Reporting System
(PCARRS). NASA and other Federal agency
contractors use PCARRS when their contracts
are delegated to DCMA for plant clearance.
Use of PCARRS reduces burden on small
businesses as well other businesses by
providing an easily accessible web-based
reporting mechanism.
5. Identification, to the extent practicable,
of all relevant Federal rules that may
duplicate, overlap, or conflict with the
proposed rule.
The Federal Property Management
Regulation (FPMR) and the FMR published
by the General Services Administration
provide property management guidance to
Government personnel. Some of the
requirements of the FMR are implemented by
the FAR in regard to contracts awarded to
Federal contractors. The FPMR and FMR do
not duplicate, overlap, or conflict with the
proposed rule.
6. Description of any significant
alternatives to the proposed rule which
accomplish the stated objectives of
applicable statues and which minimize any
significant economic impact of the proposed
rule on small entities.
There are no known alternatives to this
proposed rule. However, the proposed rule
should not have a significant adverse
economic impact on a substantial number of
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small entities. In fact, the current impact to
both large and small contractors will be
reduced. For example, the current FAR
requires Government approval of contractor
scrap procedures prior to allowing the
contractor to dispose of ordinary production
scrap. In addition, the current practice of
requiring contractors (without approved
scrap procedures) to submit inventory
schedules or scrap lists for production scrap
assumes that such practice is economically or
otherwise justified in all cases. This practice
unnecessarily burdens small contractors that
generate only small amounts of scrap.
This proposed rule removes the
requirement for Government approvals of
contractor scrap procedures and submitting
inventory schedules and scrap lists, thus
easing the burden on large and small
contractors alike. It should be noted that
contractor procedures would still be required
and evaluated by the agency responsible for
contract administration, as a normal part of
contract property administration. The new
rule will also result in more consistent levels
of Government oversight, further easing the
burden on small entities.
The information required by the proposed
rule has been reduced to the minimum
necessary to assure compliance with the
Government’s statutory accountability
requirements.
The Regulatory Secretariat will be
submitting a copy of the IRFA to the
Chief Counsel for Advocacy of the Small
Business Administration. A copy of the
IRFA may be obtained from the
Regulatory Secretariat. DoD, GSA, and
NASA invite comments from small
business concerns and other interested
parties on the expected impact of this
rule on small entities.
DoD, GSA, and NASA will also
consider comments from small entities
concerning the existing regulations in
subparts affected by this rule in
accordance with 5 U.S.C. 610. Interested
parties must submit such comments
separately and should cite 5 U.S.C. 610
(FAR Case 2010–009) in
correspondence.
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IV. Paperwork Reduction Act
The Paperwork Reduction Act (44
U.S.C. chapter 35) applies because the
proposed rule contains information
collection requirements. Accordingly,
the Regulatory Secretariat will submit a
request for approval of a revised
information collection requirement
concerning Government Property to the
Office of Management and Budget.
Annual Reporting Burden:
Public reporting burden for this
collection of information is estimated to
average .32 hours per response,
including the time for reviewing
instructions, searching existing data
sources, gathering and maintaining the
data needed, and completing and
reviewing the collection of information.
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The annual reporting burden is
estimated as follows:
Respondents: 4,875.
Responses per respondent: 910.26.
Total annual responses: 4,437,518.
Preparation hours per response: .32.
Total response burden hours:
1,420,006.
V. Request for Comments Regarding
Paperwork Burden
Submit comments, including
suggestions for reducing this burden,
not later than June 3, 2011 to: FAR Desk
Officer, OMB, Room 10102, NEOB,
Washington, DC 20503, and a copy to
the General Services Administration,
Regulatory Secretariat (MVCB), ATTN:
Hada Flowers, 1275 First Street, NE.,
7th Floor, Washington, DC 20417.
Public comments are particularly
invited on: Whether this collection of
information is necessary for the proper
performance of functions of the FAR,
and will have practical utility; whether
our estimate of the public burden of this
collection of information is accurate,
and based on valid assumptions and
methodology; ways to enhance the
quality, utility, and clarity of the
information to be collected; and ways in
which we can minimize the burden of
the collection of information on those
who are to respond, through the use of
appropriate technological collection
techniques or other forms of information
technology.
Requesters may obtain a copy of the
supporting statement from the General
Services Administration, Regulatory
Secretariat (MVCB), 1275 First Street,
NE., 7th Floor, Washington, DC 20417.
Please cite OMB Control Number 9000–
00XX, Government Property, in
correspondence.
List of Subjects in 48 CFR Parts 2, 31,
32, 45, 49, 52, and 53
Government procurement.
Dated: March 24, 2011.
Millisa Gary,
Acting Director, Office of Governmentwide
Acquisition Policy.
Therefore, DoD, GSA, and NASA
propose amending 48 CFR parts 2, 31,
32, 45, 49, 52, and 53 as set forth below:
1. The authority citation for 48 CFR
parts 2, 31, 32, 45, 49, 52, and 53
continues to read as follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C.
chapter 137; and 42 U.S.C. 2473(c).
PART 2—DEFINITIONS OF WORDS
AND TERMS
2. Amend section 2.101 in paragraph
(b) by adding, in alphabetical order, the
definition ‘‘Surplus property’’ to read as
follows:
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2.101
18499
Definitions.
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(b) * * *
Surplus property means excess
personal property not required by any
Federal agency as determined by the
Administrator of the General Services
Administration (GSA). See 41 CFR 102–
36.40.
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PART 31—CONTRACT COST
PRINCIPLES AND PROCEDURES
3. Amend section 31.205–19 by
revising paragraphs (e)(2)(iv)
introductory text, (e)(2)(iv)(A), and
(e)(2)(iv)(C) to read as follows:
31.205–19
Insurance and indemnification.
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*
*
*
(e) * * *
(2) * * *
(iv) Costs of insurance for the risk of
loss of Government property are
allowable to the extent that—
(A) The contractor is liable for such
loss;
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(C) Such insurance does not cover
loss of Government property that results
from willful misconduct or lack of good
faith on the part of any of the
contractor’s managerial personnel (as
described in FAR 52.245–1(h)(1)(ii)).
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PART 32—CONTRACT FINANCING
4. Amend section 32.503–16 by
revising the first sentence of paragraph
(a) to read as follows:
32.503–16
Risk of loss.
(a) Under the Progress Payments
clause, and except for normal spoilage,
the contractor bears the risk of loss of
Government property for property
affected by the clause, even though title
is vested in the Government, unless the
Government has expressly assumed this
risk. * * *
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5. Amend section 32.1010 by revising
the first sentence of paragraph (a) to
read as follows:
32.1010
Risk of loss.
(a) Under the clause at 52.232–32,
Performance-Based Payments, and
except for normal spoilage, the
contractor bears the risk of loss of
Government property, even though title
is vested in the Government, unless the
Government has expressly assumed this
risk. * * *
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PART 45—GOVERNMENT PROPERTY
6. Revise section 45.000 to read as
follows:
45.000
Scope of part.
(a) This part prescribes policies and
procedures for providing Government
property to contractors; contractors’
management and use of Government
property; and reporting, redistributing,
and disposing of contractor inventory.
(b) It does not apply to—
(1) Government property provided
under any statutory leasing authority,
except as to non-Government use of
property under 45.301(f);
(2) Property to which the Government
has acquired a lien or title solely
because of partial, advance, progress, or
performance based payments;
(3) Disposal of real property;
(4) Software and intellectual property;
or
(5) Government property that is
incidental to the place of performance,
when the contract requires contractor
personnel to be located on a
Government site or installation, and
when the property used by the
contractor within the location remains
accountable to the Government. Items
considered to be incidental to the place
of performance include, for example,
office space, desks, chairs, telephones,
computers, and fax machines.
7. Amend section 45.101 by—
a. Removing the definition
‘‘Acquisition cost’’;
b. Adding in alphabetical order the
definitions ‘‘Loss of Government
property’’, and ‘‘Production scrap’’;
c. Removing the definition ‘‘Surplus
property’’ and
d. Adding in alphabetical order the
definition ‘‘Unit acquisition cost’’.
The added text reads as follows:
45.101
Definitions.
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Loss of Government property means
unintended, unforeseen or accidental
loss, damage, or destruction of
Government property that reduces the
Government’s expected economic
benefits of the property. Loss of
Government property does not include
purposeful destructive testing,
obsolescence, normal wear and tear, or
manufacturing defects. Loss of
Government property includes, but is
not limited to—
(1) Items that cannot be found after a
reasonable search;
(2) Theft;
(3) Damage resulting in unexpected
harm to property requiring repair to
restore the item to usable condition; or
(4) Destruction resulting from
incidents that render the item useless
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for its intended purpose or beyond
economical repair.
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Production scrap means material left
over from the normal production
process that has only remelting or
reprocessing value, e.g., textile and
metal clippings, borings, and faulty
castings and forgings.
*
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*
Unit acquisition cost means—
(1) For Government-furnished
property, the dollar value assigned by
the Government and identified in the
contract; and
(2) For contractor-acquired property,
the cost derived from the contractor’s
records that reflect consistently applied
generally accepted accounting
principles.
8. Amend section 45.102 by adding
paragraph (e) to read as follows:
45.102
Policy.
*
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*
*
*
(e) Government property, other than
foundations and similar improvements
necessary for installing special tooling,
special test equipment, or equipment,
shall not be installed or constructed on
contractor-owned real property in such
fashion as to become nonseverable,
unless the head of the contracting
activity determines that such
installation or construction is necessary
and in the Government’s interest.
9. Amend section 45.104 by—
a. Revising the introductory text of
paragraph (a);
b. Revising paragraph (b); and
c. Adding paragraphs (d) and (e).
The revised and added text reads as
follows:
45.104 Responsibility and liability for
Government property.
(a) Generally, contractors are not held
liable for loss of Government property
under the following types of contracts:
*
*
*
*
*
(b) The contracting officer may revoke
the Government’s assumption of risk
when the property administrator
determines that the contractor’s
property management practices are
noncompliant with contract
requirements.
*
*
*
*
*
(d) With respect to loss of
Government property, the contracting
officer, in consultation with the
property administrator, shall
determine—
(1) The extent, if any, of contractor
liability based upon the amount of
damages corresponding to the
associated lost property; and
(2) The appropriate form and method
of Government recovery (may include
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repair, replacement, or other
restitution).
(e) Any monies received as financial
restitution shall be credited to the
Treasury of the United States as
miscellaneous receipts, unless
otherwise authorized by statute (31
U.S.C. 3302(b)).
10. Amend section 45.105, by revising
the first sentence of the introductory
text of paragraph (b), and by revising
paragraphs (b)(1) and (d) to read as
follows:
45.105 Contractors’ property management
system compliance.
*
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*
*
*
(b) The property administrator shall
notify the contractor in writing when
the contractor’s property management
system does not comply with
contractual requirements, shall request
prompt correction of deficiencies, and
shall request from the contractor a
corrective action plan, including a
schedule for correction of the
deficiencies. * * *
(1) Revocation of the Government’s
assumption of risk for loss of
Government property; and/or
*
*
*
*
*
(d) When the property administrator
determines that a reported case of loss
of Government property is a risk
assumed by the Government, the
property administrator shall notify the
contractor in writing that they are
granted relief of stewardship
responsibility and liability in
accordance with FAR clause 52.245–
1(f)(1)(vii). Where the property
administrator determines that the risk of
loss of Government property is not
assumed by the Government, the
property administrator shall request that
the contracting officer hold the
contractor responsible and liable.
11. Amend section 45.107 by—
a. Revising paragraph (a)(1)(i);
b. Removing from paragraph (b)
‘‘service contracts’’ and adding ‘‘fixedprice service contracts’’ in its place; and
c. Removing from paragraph (d)
‘‘acquisition cost’’ and adding ‘‘unit
acquisition cost’’ in its place.
The revised text reads as follows:
45.107
Contract clauses.
(a)(1) * * *
(i) All cost-reimbursement, time-andmaterial, and labor-hour type
solicitations and contracts; and, when
property is expected to be furnished for
the labor-hour contracts.
*
*
*
*
*
12. Amend section 45.201 by—
a. Removing from paragraph (a)(1)
‘‘tracking and/or’’ and adding ‘‘tracking
and management, and/or’’ in its place;
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b. Removing from paragraph (a)(4)
‘‘tracking); and’’ and adding ‘‘tracking
and management); and’’ in its place; and
c. Revising paragraph (c)(4).
The revised text reads as follows:
45.201
Solicitation.
*
*
*
*
*
(c) * * *
(4) A description of the offeror’s
property management system and any
customary commercial practices,
voluntary consensus standards, or
industry leading practices and standards
to be used by the offeror in managing
Government property.
*
*
*
*
*
45.202
[Amended]
13. Amend section 45.202 by
removing from the first sentence of
paragraph (a) ‘‘from the contractor’’ and
adding ‘‘from an offeror or contractor’’ in
its place.
14. Amend section 45.602–1 by—
a. Removing from paragraphs (b)(2)
and (b)(3) ‘‘Require a contractor’’ and
adding ‘‘Require the contractor’’ in its
place;
b. Removing from paragraph (b)(4)
‘‘might entitle’’ and adding ‘‘may entitle’’
in its place;
c. Revising the introductory text of
paragraph (c) and the introductory text
of paragraph (c)(1);
d. Removing from paragraph (c)(1)(i)
‘‘acquisition cost’’ and adding ‘‘unit
acquisition cost’’ in its place; and
e. Revising paragraph (c)(1)(iv).
The revised text reads as follows:
45.602–1
Inventory disposal schedules.
mstockstill on DSKH9S0YB1PROD with PROPOSALS
*
*
*
*
*
(c) The contractor may request the
plant clearance officer’s approval to
remove the Government property from
an inventory schedule.
(1) Plant clearance officers may
approve removal of Government
property from an inventory schedule
when—
*
*
*
*
*
(iv) The contractor has requested
continued use of the Government
property, and the contracting officer has
authorized its retention and further use.
*
*
*
*
*
15. Amend section 45.602–2 by—
a. Revising the introductory text and
paragraph (a);
b. Removing paragraph (b);
c. Redesignating paragraphs (c) and
(d) as paragraphs (b) and (c),
respectively;
d. Removing from newly redesignated
paragraph (b) ‘‘April 17, 1996),’’ and
adding ‘‘April 17, 1996, and 15 U.S.C.
3710(i);’’ in its place;
e. Revising newly redesignated
paragraph (c);
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f. Adding new paragraphs (d) and (e).
The revised and added text reads as
follows:
45.602–2
Reutilization priorities.
Plant clearance officers shall initiate
reutilization actions for all property not
meeting the abandonment or destruction
criteria of 45.603(b). Authorized
methods, listed in descending order
from highest to lowest priority, are—
(a) Reuse within the owning agency;
*
*
*
*
*
(c) Report to GSA for reuse within the
Federal Government or donation as
surplus property;
(d) Dispose of the following property
in accordance with agency procedures
without reporting to GSA:
(1) Property determined appropriate
for abandonment or destruction (see
FMR 102–36.305, 41 CFR 102–36.305).
(2) Property furnished to
nonappropriated fund activities
property (see FMR 102–36.165, 41 CFR
102–36.165).
(3) Foreign excess personal property
(see FMR 102–36.380, 41 CFR 102–
36.380).
(4) Scrap, except aircraft in scrap
condition.
(5) Perishables, defined for the
purposes of this section as any personal
property subject to spoilage or decay.
(6) Trading stamps and bonus goods.
(7) Hazardous waste or toxic and
hazardous materials.
(8) Controlled substances.
(9) Property dangerous to public
health and safety.
(10) Classified items or property
determined to be sensitive for reasons of
national security; and
(e) Dispose of nuclear materials (see
45.603–3(b)(5)) in accordance with the
Nuclear Regulatory Commission (NRC),
applicable state licenses, applicable
Federal regulations, and agency
regulations.
16. Revise section 45.603 to read as
follows:
45.603 Abandonment or destruction of
personal property.
(a) When contractor inventory is
processed through the reutilization
screening process prescribed in 45.602–
2 without success, and provided the
property has no commercial value, does
not require demilitarization, and does
not constitute a danger to public health
or welfare, plant clearance officers or
other authorized officials may without
further approval—
(1) Direct the contractor to destroy the
property;
(2) Abandon non-sensitive property at
the contractor’s or sub-contractor’s
premises; or
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18501
(3) Abandon sensitive property at the
contractor’s or sub-contractor’s
premises, with contractor consent.
(b) Provided a Government reviewing
official at least one level higher than the
plant clearance officer or other agency
authorized official approves, plant
clearance officers or other agency
authorized officials may authorize the
abandonment, or order the destruction
of other contractor inventory at the
contractor’s or sub-contractor’s
premises, in accordance with FMR 102–
36–305 through 325 and consistent with
the following:
(1) The property is not considered
sensitive, does not require
demilitarization, has no commercial
value or reutilization, transfer or
donation potential, and does not
constitute a danger to public health or
welfare.
(2) The estimated cost of continued
care and handling of the property
(including advertising, storage and other
costs associated with making the sale),
exceed the estimated proceeds from its
sale.
(c) In lieu of abandonment or its
authorized destruction, the plant
clearance officer or authorized official
may authorize the donation of property
including unsold surplus property to
public bodies, provided that the
property is not sensitive property, does
not require demilitarization, and it does
not constitute a danger to public health
or welfare. The Government will not
bear any of the costs incident to such
donations.
(d) Unless the property qualifies for
one of the exceptions under FMR 102–
36.330 (41 CFR 102–36.330), the plant
clearance officer or requesting official
will ensure prior public notice of such
actions of abandonment or destruction
consistent with FMR 102–36.325 (41
CFR 102–36.325).
17. Revise the section heading of
45.604 to read as follows:
45.604
Sale of surplus personal property.
*
*
*
*
*
18. Revise section 45.604–1 to read as
follows:
45.604–1
Sales procedures.
Surplus personal property that has
completed screening in accordance with
45.602–3(a) shall be sold in accordance
with the policy for the sale of surplus
personal property contained in the
Federal Management Regulation, at Part
102–38 (41 CFR part 102–38). Agencies
may specify implementing procedures.
45.604–2
[Removed]
19. Remove section 45.604–2.
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45.604–3 and 45.604–4 [Redesignated as
45.604–2 and 45.604–3]
20A. Redesignate sections 45.604–3
and 45.604–4 as sections 45.604–2 and
45.604–3, respectively.
20B. Revise the newly redesignated
section 45.604–2 to read as follows:
45.604–2
centers.
Use of GSA sponsored sales
Agencies may use sales center
services. Use of such centers for sale of
surplus property is authorized when in
the best interest of the Government,
consistent with contract terms and
conditions.
21. Add section 45.604–4 to read as
follows:
45.604–4 Sale of property pursuant to the
exchange/sale authority.
Agencies should consider the sale of
property pursuant to the exchange/sale
authority in FMR 102–39 (41 CFR part
102–39) when agencies are acquiring or
plan to acquire similar products and
other requirements of the authority are
satisfied.
22. Revise section 45.605 to read as
follows:
45.605
Inventory disposal reports.
The plant clearance officer shall
promptly prepare an SF 1424, Inventory
Disposal Report, following disposition
of the property identified on an
inventory disposal schedule and the
crediting of any related proceeds. The
report shall identify any lost or
otherwise unaccounted for property and
any changes in quantity or value of the
property made by the contractor after
submission of the initial inventory
disposal schedule. The report shall be
provided to the administrative
contracting officer or, for termination
inventory, to the termination
contracting officer, with a copy to the
property administrator.
23. Revise section 45.606–1 to read as
follows:
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45.606–1
Contractor scrap procedures.
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45.606–2 and 45.606–3
[Removed]
24. Remove sections 45.606–2 and
45.606–3.
PART 49—TERMINATION OF
CONTRACTS
49.204
[Amended]
25. Amend section 49.204 by
removing from paragraph (b) ‘‘destroyed,
lost, stolen, or’’ and adding ‘‘lost or’’ in
its place.
PART 52—SOLICITATION PROVISIONS
AND CONTRACT CLAUSES
26. Amend section 52.232–16 by
revising the date of the clause, and the
last sentence of paragraph (e) to read as
follows:
52.232–16
Progress Payments.
*
*
*
*
*
Progress Payments (Date)
*
*
*
*
*
(e) * * * The Contractor shall repay the
Government an amount equal to the
unliquidated progress payments that are
based on costs allocable to property that is
lost (see 45.101).
*
(a) The property administrator should
ensure that contractor scrap disposal
processes, methods and practices allow
for effective, efficient and proper
disposition, and are properly
documented in the contractor’s property
management procedures.
(b) The property administrator should
determine the extent to which separate
disposal processing or physical
segregation for different scrap types is or
may be required as early as possible,
preferably during the solicitation phase.
Such scrap may require physical
segregation, unique disposal processing
or separate plant clearance reporting.
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For example, the scope of work may
create scrap—
(1) Consisting of sensitive items;
(2) Containing hazardous materials or
wastes;
(3) Contaminated with hazardous
materials or wastes;
(4) That is classified or otherwise
controlled;
(5) Containing precious or strategic
metals; or
(6) That is dangerous to public health
or safety.
(c) Absent contract terms and
conditions to the contrary, the
Government may abandon parts
removed and replaced from property as
a result of normal maintenance actions,
or removed from property as a result of
the repair, maintenance, overhaul, or
modification process.
*
*
*
*
27. Amend section 52.232–32 by
revising the date of the clause, and the
last sentence of paragraph (g) to read as
follows:
52.232–32
Performance-Based Payments.
*
*
*
*
*
Performance-Based Payments (Date)
*
*
*
*
*
(g) * * * If any property is lost (see
45.101), the basis of payment (the events or
performance criteria) to which the property
is related shall be deemed to be not in
compliance with the terms of the contract
and not payable (if the property is part of or
needed for performance), and the Contractor
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shall refund the related performance-based
payments in accordance with paragraph (d)
of this clause.
*
*
*
*
*
28. Amend section 52.245–1 by—
a. Revising the date of the clause;
b. Removing the definition
‘‘Acquisition cost’’ from paragraph (a);
c. Adding, in alphabetical order, the
definitions, ‘‘Loss of Government
property’’, and ‘‘Production scrap’’ to
paragraph (a);
d. Removing the definition ‘‘Surplus
property’’ from paragraph (a);
e. Adding, in alphabetical order, the
definition ‘‘Unit acquisition cost’’ to
paragraph (a);
f. Revising paragraph (b)(1);
g. Removing from paragraph (b)(2) ‘‘,
stolen, damaged, or destroyed’’;
h. Adding paragraph (b)(4);
i. Removing from paragraph (f)(1)(ii)
‘‘property (document the receipt)’’ and
adding ‘‘property and document the
receipt’’ in its place;
j. Revising paragraphs (f)(1)(iii)(A)(1),
(f)(1)(iii)(A)(10), (f)(1)(v)(A), (f)(1)(vi),
and (f)(1)(vii);
k. Removing from paragraph (f)(1)(x)
‘‘loss, theft, damage, or destruction’’ and
adding ‘‘loss of Government property’’ in
its place;
l. Removing from paragraph (f)(2)
‘‘acquisitions’’ and adding ‘‘acquisitions,
loss of Government property,’’ in its
place;
m. Removing paragraph (f)(3);
n. Removing from paragraph (h)(1)
introductory text ‘‘loss, theft, damage or
destruction to the’’ and adding ‘‘loss of’’
in its place;
o. Revising paragraph (h)(1)(ii),
(h)(1)(iii), (h)(2), and (h)(3);
p. Redesignating paragraph (h)(4) as
paragraph (h)(5);
q. Adding new paragraph (h)(4);
r. Adding the words ‘‘or authorizing
official’’ before the period at the end of
the introductory text of paragraph (j);
s. Removing paragraph (j)(1);
t. Redesignating paragraphs (j)(2)
through (j)(10) as paragraphs (j)(1)
through (j)(9), respectively;
u. Revising newly redesignated
paragraphs (j)(1)(i), (j)(1)(ii), the
introductory text of paragraph (j)(2)(i),
(j)(2)(i)(A), (j)(2)(ii), and (j)(2)(iii),
(j)(2)(iv)(C), and (j)(3);
v. Removing from the first sentence of
the newly redesignated paragraph
(j)(6)(ii) the word ‘‘Government’’;
w. Removing the newly redesignated
paragraph (j)(7)(i);
x. Further redesignating newly
redesignated paragraphs (j)(7)(ii) and
(j)(7)(iii) as (j)(7)(i) and (j)(7)(ii),
respectively;
y. Removing from the newly
redesignated paragraph (j)(9) ‘‘paragraph
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(j)(4)’’ and adding ‘‘paragraph (j)(3)’’ in
its place;
z. Removing from paragraphs (k)(1)
and (k)(2) ‘‘Government property’’,
respectively, and adding ‘‘property’’ in
its place;
aa. Redesignating paragraph (k)(3) as
paragraph (k)(4); and adding a new
paragraph (k)(3);
bb. Removing from Alternate I ‘‘(Aug
2010)’’ and adding ‘‘(Date)’’ in its place;
and removing from paragraph (h)(1) of
Alternate I ‘‘loss, theft, damage, or
destruction,’’ and adding ‘‘loss’’ in its
place; and
cc. Removing from Alternate II ‘‘(June
2007)’’ and adding ‘‘(Date)’’ in its place;
and removing from the first and second
sentences of paragraph (e)(3) of
Alternate II ‘‘having an’’ and adding
‘‘having a unit’’ in its place (two times).
The added and revised text reads as
follows:
52.245–1
*
*
Government Property.
*
*
*
Government Property (Date)
(a) * * *
Loss of Government property means
unintended, unforeseen or accidental loss,
damage or destruction to Government
property that reduces the Government’s
expected economic benefits of the property.
Loss of Government property does not
include purposeful destructive testing,
obsolescence, normal wear and tear or
manufacturing defects. Loss of Government
property includes, but is not limited to—
(1) Items that cannot be found after a
reasonable search;
(2) Theft;
(3) Damage resulting in unexpected harm
to property requiring repair to restore the
item to usable condition; or
(4) Destruction resulting from incidents
that render the item useless for its intended
purpose or beyond economical repair.
*
*
*
*
*
Production scrap means material left over
from the normal production process that has
only remelting or reprocessing value, e.g.,
textile and metal clippings, borings, and
faulty castings and forgings.
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*
*
*
*
*
Unit acquisition cost means—(1) For
Government-furnished property, the dollar
value assigned by the Government and
identified in the contract; and
(2) For contractor-acquired property, the
cost derived from the contractor’s records
that reflect consistently applied generally
accepted accounting principles.
*
*
*
*
*
(b) * * *
(1) The Contractor shall have a system to
manage (control, use, preserve, protect, repair
and maintain) Government property in its
possession. The system shall be adequate to
satisfy the requirements of this clause. In
doing so, the Contractor shall initiate and
maintain the processes, systems, procedures,
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(v) * * *
(A) The Contractor shall award
subcontracts that clearly identify items to be
provided or for fabricated items, the extent of
any restrictions or limitations. The
Contractor shall ensure appropriate flow
down of contract terms and conditions (e.g.,
extent of liability for loss of Government
property.
Government. Such reports shall, at a
minimum, contain the following information:
(1) Date of incident (if known).
(2) The data elements required under
paragraph (f)(1)(iii)(A) of this clause.
(3) Quantity.
(4) Accountable contract number.
(5) A statement indicating current or future
need.
(6) Unit acquisition cost, or if applicable,
estimated sales proceeds, estimated repair or
replacement costs.
(7) All known interests in commingled
material of which includes Government
material.
(8) Cause and corrective action taken or to
be taken to prevent recurrence.
(9) A statement that the Government will
receive any reimbursement covering the loss
of Government property, in the event the
Contractor was or will be reimbursed or
compensated.
(10) Copies of all supporting
documentation.
(11) Last known location.
(12) A statement that the property did or
did not contain sensitive, hazardous or toxic
material, and if so, that the appropriate
agencies were notified.
(C) Unless the contract provides otherwise,
the Contractor shall be relieved of
stewardship responsibility and liability for
property when–
(1) Such property is consumed or
expended, reasonably and properly, or
otherwise accounted for, in the performance
of the contract, including reasonable
inventory adjustments of material as
determined by the Property Administrator;
(2) Property Administrator grants relief of
responsibility and liability for loss of
Government property;
(3) Property is delivered or shipped from
the Contractor’s plant, under Government
instructions, except when shipment is to a
subcontractor or other location of the
Contractor; or
(4) Property is disposed of in accordance
with paragraphs (j) and (k) of this clause.
*
*
records, and methodologies necessary for
effective control of Government property.
Prior to implementation, the Contractor shall
disclose to the Property Administrator any
significant changes to their property
management system. The Contractor may
employ customary commercial practices,
voluntary consensus standards and/or
industry-leading practices and standards that
provide effective Government property
management that are necessary and
appropriate for the performance of this
contract (except where inconsistent with law
or regulation).
*
*
*
*
*
(4) The Contractor shall establish and
maintain procedures necessary to assess its
property management system effectiveness,
and shall perform periodic internal reviews
and audits. Significant findings and/or
results of such reviews and audits pertaining
to Government property shall be made
available to the Property Administrator.
*
*
*
*
*
(f) * * *
(1) * * *
(iii) * * *
(A) * * *
(1) The name, part number and
description, National Stock Number (if
needed for additional item identification
tracking and/or disposition), and other data
elements as required in accordance with the
terms and conditions of the contract.
*
*
*
*
*
(10) Date placed in service (if required in
accordance with the terms and conditions of
the contract).
*
*
*
*
*
*
*
*
*
(vi) Reports. The Contractor shall have a
process to create and provide reports of
discrepancies, loss of Government property,
physical inventory results, audits and selfassessments, corrective actions, and other
property related reports as directed by the
Contracting Officer.
(vii) Relief of stewardship responsibility
and liability. The contractor shall have a
process to enable the prompt recognition,
investigation, disclosure and reporting of loss
of Government property, including losses
that occur at subcontractor or alternate site
locations.
(A) This process shall include the
corrective actions necessary to prevent
recurrence.
(B) Unless otherwise directed by the
Property Administrator, the Contractor shall
report, upon recognition of loss of
Government property, all such incidents of
property loss, investigate and promptly
furnish to the property administrator a
written narrative of all incidents of such
property loss as soon as the facts become
known or when requested by the
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*
*
*
*
(h) * * *
(1) * * *
(ii) Loss of Government property that is the
result of willful misconduct or lack of good
faith on the part of the Contractor’s
managerial personnel.
(iii) The Contracting Officer has, in writing,
revoked the Government’s assumption of risk
for loss of Government property due to a
determination under paragraph (g) of this
clause that the Contractor’s property
management practices are inadequate, and/or
present an undue risk to the Government,
and the Contractor failed to take timely
corrective action. If the Contractor can
establish by clear and convincing evidence
that the loss of Government property
occurred while the Contractor had adequate
property management practices or the loss
did not result from the Contractor’s failure to
maintain adequate property management
practices, the Contractor shall not be held
liable.
(2) The Contractor shall take all reasonable
actions necessary to protect the property
from further loss. The Contractor shall
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separate the damaged and undamaged
property, place all the affected property in
the best possible order, and take such other
action as the Property Administrator directs.
(3) The Contractor shall do nothing to
prejudice the Government’s rights to recover
against third parties for any loss of
Government property.
(4) The Contractor shall reimburse the
Government for loss of Government property,
to the extent that the Contractor is financially
liable for such loss, as directed by the
Contracting Officer.
*
*
*
*
*
(j) * * *
(1) * * *
(i) If the Contractor determines that the
property has the potential to fulfill
requirements under other contracts, the
Contractor, in consultation with the Property
Administrator, shall request that the
Contracting Officer transfer the property to
the contract in question, or provide
authorization for use, as appropriate. In lieu
of transferring the property, the Contracting
Officer may authorize the Contractor to credit
the costs of Contractor-acquired property
(material only) to the losing contract, and
debit the gaining contract with the
corresponding cost, when such material is
needed for use on another contract. Property
no longer needed shall be considered
contractor inventory.
(ii) For any remaining Contractor-acquired
property, the Contractor may purchase the
property at the unit acquisition cost if
desired or 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.)
(2) Inventory disposal schedules. (i)
Provided the property was not reutilized,
transferred, or otherwise disposed of under
paragraph (j)(1) of this clause the Contractor,
as directed by the Plant Clearance Officer
shall use Standard Form 1428, Inventory
Disposal Schedule or electronic equivalent,
to identify and report—
(A) Government-furnished property that is
no longer required for performance of this
contract;
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*
*
*
*
*
(ii) The Contractor may annotate inventory
disposal schedules to identify property the
Contractor wishes to purchase from the
Government, in the event that the property is
offered for sale.
(iii) Separate inventory disposal schedules
are required for aircraft in any condition,
flight safety critical aircraft parts, and other
items as directed by the Plant Clearance
Officer.
(iv) * * *
(C) For precious metals in raw or bulk
form, the type of metal and estimated weight.
*
*
*
*
*
(3) Submission requirements. (i) The
Contractor shall submit inventory disposal
schedules to the Plant Clearance Officer no
later than—
(A) 30 days following the Contractor’s
determination that a property item is no
longer required for performance of this
contract;
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(B) 60 days, or such longer period as may
be approved by the Plant Clearance Officer,
following completion of contract deliveries
or performance; or
(C) 120 days, or such longer period as may
be approved by the Termination Contracting
Officer, following contract termination in
whole or in part.
(ii) Unless the Plant Clearance Officer
determines otherwise, the Contractor need
not identify or report production scrap on
inventory disposal schedules, and may
process and dispose of production scrap in
accordance with its own internal scrap
procedures. The processing and disposal of
other types of Government-owned scrap will
be conducted in accordance with the terms
and conditions of the contract or Plant
Clearance Officer direction, as appropriate.
*
*
*
*
*
(k) * * *
(3) Absent contract terms and conditions to
the contrary, the Government may abandon
parts removed and replaced from property as
a result of normal maintenance actions, or
removed from property as a result of the
repair, maintenance, overhaul, or
modification process.
*
*
*
*
*
29. Amend section 52.245–2 by
revising the date of the clause, and
paragraph (b) to read as follows:
52.245–2 Government Property Installation
Operation Services.
*
*
*
*
*
Government Property Installation
Operation Services (Date)
*
*
*
*
*
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)
*
*
*
*
*
(h) Except for normal spoilage, and except
to the extent that the Government expressly
assumed the risk of loss, the Contracting
Officer shall exclude from the amounts
payable to the Contractor under paragraph (g)
of this clause, the fair value, as determined
by the Contracting Officer, for the loss of the
Government property.
*
*
*
*
*
32. Revise section 52.251–1 to read as
follows:
52.251–1
Government Supply Sources.
As prescribed in 51.107, insert the
following clause:
Government Supply Sources (Date)
The Contracting Officer may issue the
Contractor an authorization to use
Government supply sources in the
performance of this contract. Title to all
property acquired by the Contractor under
such an authorization shall vest in the
Government. The provisions of the clause
entitled ‘‘Government Property,’’ at 52.245–1,
shall apply to all property acquired under
such authorization.
(End of clause)
PART 53—FORMS
(b) The Government bears no responsibility
for repair or replacement of any lost
Government property. If any or all of the
Government property is lost, or becomes no
longer usable, the Contractor shall be
responsible for replacement of the property at
Contractor expense. The Contractor shall
have title to all replacement property and
shall continue to be responsible for contract
performance.
*
*
*
*
*
30. Amend section 52.249–2 by
revising the date of the clause, and
paragraph (h) to read as follows:
33. Amend section 53.245 by revising
paragraph (c) to read as follows:
53.245
Government property.
*
*
*
*
*
(c) SF 1423 (Rev. 5/2004), Inventory
Verification Survey. (See 45.602–
1(b)(1).)
*
*
*
*
*
[FR Doc. 2011–7436 Filed 4–1–11; 8:45 am]
BILLING CODE 6820–EP–P
52.249–2 Termination for Convenience of
the Government (Fixed-Price).
DEPARTMENT OF COMMERCE
*
National Oceanic and Atmospheric
Administration
*
*
*
*
Termination for Convenience of the
Government (Fixed-Price) (Date)
*
*
*
*
*
(h) Except for normal spoilage, and except
to the extent that the Government expressly
assumed the risk of loss, the Contracting
Officer shall exclude from the amounts
payable to the Contractor under paragraph (g)
of this clause, the fair value, as determined
by the Contracting Officer, for the loss of the
Government property.
*
*
*
*
*
31. Amend section 52.249–3 by
revising the date of the clause, and
paragraph (h) to read as follows:
PO 00000
Frm 00086
Fmt 4702
Sfmt 4702
50 CFR Part 635
RIN 0648–BA65
Atlantic Highly Migratory Species;
Atlantic Bluefin Tuna Quotas and
Atlantic Tuna Fisheries Management
Measures
National Marine Fisheries
Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA),
Commerce.
ACTION: Notification of public hearing.
AGENCY:
E:\FR\FM\04APP1.SGM
04APP1
Agencies
[Federal Register Volume 76, Number 64 (Monday, April 4, 2011)]
[Proposed Rules]
[Pages 18497-18504]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-7436]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 2, 31, 32, 45, 49, 52, and 53
[FAR Case 2010-009; Docket 2010-0009; Sequence 1]
RIN 9000-AL95
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: DoD, GSA, and NASA are proposing to amend the Federal
Acquisition Regulation (FAR) to clarify reporting, reutilization, and
disposal of Government property and the contractor requirements under
the Government property clause.
DATES: Interested parties should submit written comments to the
Regulatory Secretariat at one of the addressees shown below on or
before June 3, 2011. to be considered in the formation of the final
rule.
ADDRESSES: Submit comments in response to FAR Case 2010-009 by any of
the following methods:
Regulations.gov: https://www.regulations.gov. Submit
comments via the Federal eRulemaking portal by inputting ``FAR Case
2010-009'' under the heading ``Enter Keyword or ID'' and selecting
``Search.'' Select the link ``Submit a Comment'' that corresponds with
``FAR Case 2010-009.'' Follow the instructions provided at the ``Submit
a Comment'' screen. Please include your name, company name (if any),
and ``FAR Case 2010-009'' on your attached document.
Fax: (202) 501-4067.
Mail: General Services Administration, Regulatory
Secretariat (MVCB), ATTN: Hada Flowers, 1275 First Street, NE., 7th
Floor, Washington, DC 20417.
Instructions: Please submit comments only and cite FAR Case 2010-
009, in all correspondence related to this case. All
[[Page 18498]]
comments received will be posted without change to https://www.regulations.gov, including any personal and/or business
confidential information provided.
FOR FURTHER INFORMATION CONTACT: Ms. Jeritta Parnell, Procurement
Analyst, at (202) 501-4082, for clarification of content. For
information pertaining to status or publication schedules, contact the
Regulatory Secretariat at (202) 501-4755. Please cite FAR Case 2010-
009.
SUPPLEMENTARY INFORMATION:
I. Background
DoD, GSA, and NASA are proposing to amend the FAR to clarify
current FAR policy with respect to the proper disposition of contractor
inventory. However, a number of other changes were made, aimed at
enhancing the management of Government contract property in the hands
of contractors. The changes are the result of questions raised by
contractors and Government personnel, Government and industry
exchanges, and lessons learned. In addition, some comments from the
previous FAR Case 2008-011, published in the Federal Register at 75 FR
38675 on July 2, 2010), that were deemed to be outside the scope of
that case, are addressed in this case.
The revisions include the following:
1. Clarify that FAR part 45 and FAR 52.245-1 does not apply to
Government property incidental to the place of performance at a
Government site or installation. See FAR 45.000.
2. Add new definitions for ``loss of Government property'' and
``unit acquisition cost'' in FAR part 45 and FAR 52.245-1, delete the
definition of ``acquisition cost,'' and move the definition of
``surplus property'' from part 45 to part 2.
3. Update FAR subpart 45.6 to clarify and align with the Federal
Management Regulation; and
4. Revise language based on comments received in response to, but
outside the scope of, FAR Case 2008-011.
II. Executive Order 12866
This is not a significant regulatory action and, therefore, was not
subject to review under Section 6(b) of Executive Order 12866,
Regulatory Planning and Review, dated September 30, 1993. This rule is
not a major rule under 5 U.S.C. 804.
III. Regulatory Flexibility Act
The proposed changes may have a significant economic impact on a
substantial number of small entities within the meaning of the
Regulatory Flexibility Act 5 U.S.C. 601, et seq., because the rule
affects the method of managing some Government property in the hands of
contractors, particularly scrap. However, as the rule reduces the
burden on all businesses by removing the reporting of production scrap,
it should have a positive effect on small businesses. An Initial
Regulatory Flexibility Act (IRFA) analysis has been prepared and is
summarized as follows.
This Initial Regulatory Flexibility Analysis has been prepared
consistent with Section 603, Title 5, of the United States Code.
1. Description of the reasons why action by the agency is being
considered.
DoD, GSA, and NASA are proposing to revise FAR parts 45 and 52.
The focus of this effort is to clarify FAR subpart 45.6, Reporting,
Reutilization, and Disposal, and the contractor requirements under
the clause at FAR 52.245-1.
The revisions include technical corrections to align the FAR
with the requirements of the Federal Management Regulation (FMR).
For example, the new language is now consistent with current
property reutilization priorities, abandonment and destruction
determinations, and surplus sales policy. Moreover, the language has
been edited for clarity and placed in proper process sequence. Also
included is new and expanded policy language on the disposal of
scrap.
Notwithstanding the proposed rule's overall focus on FAR subpart
45.6 and the associated contractor requirements under FAR 52.245-1,
additional revisions include new language at FAR 45.104 for
contracting officers on depositing monies received from contractors
for property that is lost, damaged, destroyed or stolen.
In essence, the rule does not result in new requirements on
contractors; it clarifies existing policies and procedures. The rule
will simplify compliance for contractors and enable consistent
Government oversight.
2. Succinct statement of the objectives of, and legal basis,
for, the proposed rule.
Title 40 U.S.C. 524, Public Buildings, Property, and Works
requires, in part, that executive agencies account for Government
property, determine when such property is excess, and dispose of
excess Government property promptly. This proposed rule amends the
FAR to revise the policies for the disposition of contractor
inventory. The objective of this case is to substantially revise,
clarify, and improve current policy.
3. Description of, and, where feasible, estimate of the number
of small entities to which the proposed rule will apply.
It is estimated that approximately 5000 contractors have Federal
property in their possession. DoD has approximately 3000 contractors
with potential contract-property reporting requirements.
Approximately 60 percent of all DoD contractors are small
businesses. Given that property in the possession of contractors is
overwhelmingly DoD property, it is estimated the DoD ratio of small
business to total businesses having such property is a reasonable
approx-imation for all Government contractors. Therefore, it is
estimated that approximately 3000 small businesses have Government
property in their possession.
4. Description of projected reporting, recordkeeping, and other
compliance requirements of the proposed rule, including an estimate
of the classes of small entities which will be subject to the
requirement and the type of professional skills necessary for
preparation of the report of record.
FAR Case 2004-025 streamlined the requirements concerning
property management in FAR part 45. FAR Case 2008-011 continued that
philosophy. This new proposed rule seeks continuous improvement to
property management by streamlining and clarifying the policies for
the disposition of contractor inventory. DoD, GSA, and NASA believe
the rule will have a positive effect on small businesses in that it
further streamlines the process and reduces the paperwork burden.
It should be noted that these recommended changes are consistent
with the Office of the Under Secretary of Defense, Acquisition,
Technology and Logistics, recent statements emphasizing the need to
improve the productivity of the defense industry and remove
Government impediments to efficiency.
There are four reports currently required. These reports are
required to assure appropriate use and disposition of contract
property. These reports are--
SF 1423, Inventory Verification Survey.
SF 1424, Inventory Disposal Report.
SF 1428, Inventory Disposal Schedule.
SF 1429, Inventory Disposal Schedule Continuation Sheet.
All of these forms are available online and may be submitted by
the contractor using electronic means. It should be noted that DoD
no longer requires the use of the SF 1428 and 1429 forms and instead
DoD uses the web-enabled Plant Clearance Automated Reutilization and
Reporting System (PCARRS). NASA and other Federal agency contractors
use PCARRS when their contracts are delegated to DCMA for plant
clearance. Use of PCARRS reduces burden on small businesses as well
other businesses by providing an easily accessible web-based
reporting mechanism.
5. Identification, to the extent practicable, of all relevant
Federal rules that may duplicate, overlap, or conflict with the
proposed rule.
The Federal Property Management Regulation (FPMR) and the FMR
published by the General Services Administration provide property
management guidance to Government personnel. Some of the
requirements of the FMR are implemented by the FAR in regard to
contracts awarded to Federal contractors. The FPMR and FMR do not
duplicate, overlap, or conflict with the proposed rule.
6. Description of any significant alternatives to the proposed
rule which accomplish the stated objectives of applicable statues
and which minimize any significant economic impact of the proposed
rule on small entities.
There are no known alternatives to this proposed rule. However,
the proposed rule should not have a significant adverse economic
impact on a substantial number of
[[Page 18499]]
small entities. In fact, the current impact to both large and small
contractors will be reduced. For example, the current FAR requires
Government approval of contractor scrap procedures prior to allowing
the contractor to dispose of ordinary production scrap. In addition,
the current practice of requiring contractors (without approved
scrap procedures) to submit inventory schedules or scrap lists for
production scrap assumes that such practice is economically or
otherwise justified in all cases. This practice unnecessarily
burdens small contractors that generate only small amounts of scrap.
This proposed rule removes the requirement for Government
approvals of contractor scrap procedures and submitting inventory
schedules and scrap lists, thus easing the burden on large and small
contractors alike. It should be noted that contractor procedures
would still be required and evaluated by the agency responsible for
contract administration, as a normal part of contract property
administration. The new rule will also result in more consistent
levels of Government oversight, further easing the burden on small
entities.
The information required by the proposed rule has been reduced
to the minimum necessary to assure compliance with the Government's
statutory accountability requirements.
The Regulatory Secretariat will be submitting a copy of the IRFA to
the Chief Counsel for Advocacy of the Small Business Administration. A
copy of the IRFA may be obtained from the Regulatory Secretariat. DoD,
GSA, and NASA invite comments from small business concerns and other
interested parties on the expected impact of this rule on small
entities.
DoD, GSA, and NASA will also consider comments from small entities
concerning the existing regulations in subparts affected by this rule
in accordance with 5 U.S.C. 610. Interested parties must submit such
comments separately and should cite 5 U.S.C. 610 (FAR Case 2010-009) in
correspondence.
IV. Paperwork Reduction Act
The Paperwork Reduction Act (44 U.S.C. chapter 35) applies because
the proposed rule contains information collection requirements.
Accordingly, the Regulatory Secretariat will submit a request for
approval of a revised information collection requirement concerning
Government Property to the Office of Management and Budget.
Annual Reporting Burden:
Public reporting burden for this collection of information is
estimated to average .32 hours per response, including the time for
reviewing instructions, searching existing data sources, gathering and
maintaining the data needed, and completing and reviewing the
collection of information.
The annual reporting burden is estimated as follows:
Respondents: 4,875.
Responses per respondent: 910.26.
Total annual responses: 4,437,518.
Preparation hours per response: .32.
Total response burden hours: 1,420,006.
V. Request for Comments Regarding Paperwork Burden
Submit comments, including suggestions for reducing this burden,
not later than June 3, 2011 to: FAR Desk Officer, OMB, Room 10102,
NEOB, Washington, DC 20503, and a copy to the General Services
Administration, Regulatory Secretariat (MVCB), ATTN: Hada Flowers, 1275
First Street, NE., 7th Floor, Washington, DC 20417.
Public comments are particularly invited on: Whether this
collection of information is necessary for the proper performance of
functions of the FAR, and will have practical utility; whether our
estimate of the public burden of this collection of information is
accurate, and based on valid assumptions and methodology; ways to
enhance the quality, utility, and clarity of the information to be
collected; and ways in which we can minimize the burden of the
collection of information on those who are to respond, through the use
of appropriate technological collection techniques or other forms of
information technology.
Requesters may obtain a copy of the supporting statement from the
General Services Administration, Regulatory Secretariat (MVCB), 1275
First Street, NE., 7th Floor, Washington, DC 20417. Please cite OMB
Control Number 9000-00XX, Government Property, in correspondence.
List of Subjects in 48 CFR Parts 2, 31, 32, 45, 49, 52, and 53
Government procurement.
Dated: March 24, 2011.
Millisa Gary,
Acting Director, Office of Governmentwide Acquisition Policy.
Therefore, DoD, GSA, and NASA propose amending 48 CFR parts 2, 31,
32, 45, 49, 52, and 53 as set forth below:
1. The authority citation for 48 CFR parts 2, 31, 32, 45, 49, 52,
and 53 continues to read as follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
PART 2--DEFINITIONS OF WORDS AND TERMS
2. Amend section 2.101 in paragraph (b) by adding, in alphabetical
order, the definition ``Surplus property'' to read as follows:
2.101 Definitions.
* * * * *
(b) * * *
Surplus property means excess personal property not required by any
Federal agency as determined by the Administrator of the General
Services Administration (GSA). See 41 CFR 102-36.40.
* * * * *
PART 31--CONTRACT COST PRINCIPLES AND PROCEDURES
3. Amend section 31.205-19 by revising paragraphs (e)(2)(iv)
introductory text, (e)(2)(iv)(A), and (e)(2)(iv)(C) to read as follows:
31.205-19 Insurance and indemnification.
* * * * *
(e) * * *
(2) * * *
(iv) Costs of insurance for the risk of loss of Government property
are allowable to the extent that--
(A) The contractor is liable for such loss;
* * * * *
(C) Such insurance does not cover loss of Government property that
results from willful misconduct or lack of good faith on the part of
any of the contractor's managerial personnel (as described in FAR
52.245-1(h)(1)(ii)).
* * * * *
PART 32--CONTRACT FINANCING
4. Amend section 32.503-16 by revising the first sentence of
paragraph (a) to read as follows:
32.503-16 Risk of loss.
(a) Under the Progress Payments clause, and except for normal
spoilage, the contractor bears the risk of loss of Government property
for property affected by the clause, even though title is vested in the
Government, unless the Government has expressly assumed this risk. * *
*
* * * * *
5. Amend section 32.1010 by revising the first sentence of
paragraph (a) to read as follows:
32.1010 Risk of loss.
(a) Under the clause at 52.232-32, Performance-Based Payments, and
except for normal spoilage, the contractor bears the risk of loss of
Government property, even though title is vested in the Government,
unless the Government has expressly assumed this risk. * * *
* * * * *
[[Page 18500]]
PART 45--GOVERNMENT PROPERTY
6. Revise section 45.000 to read as follows:
45.000 Scope of part.
(a) This part prescribes policies and procedures for providing
Government property to contractors; contractors' management and use of
Government property; and reporting, redistributing, and disposing of
contractor inventory.
(b) It does not apply to--
(1) Government property provided under any statutory leasing
authority, except as to non-Government use of property under 45.301(f);
(2) Property to which the Government has acquired a lien or title
solely because of partial, advance, progress, or performance based
payments;
(3) Disposal of real property;
(4) Software and intellectual property; or
(5) Government property that is incidental to the place of
performance, when the contract requires contractor personnel to be
located on a Government site or installation, and when the property
used by the contractor within the location remains accountable to the
Government. Items considered to be incidental to the place of
performance include, for example, office space, desks, chairs,
telephones, computers, and fax machines.
7. Amend section 45.101 by--
a. Removing the definition ``Acquisition cost'';
b. Adding in alphabetical order the definitions ``Loss of
Government property'', and ``Production scrap'';
c. Removing the definition ``Surplus property'' and
d. Adding in alphabetical order the definition ``Unit acquisition
cost''.
The added text reads as follows:
45.101 Definitions.
* * * * *
Loss of Government property means unintended, unforeseen or
accidental loss, damage, or destruction of Government property that
reduces the Government's expected economic benefits of the property.
Loss of Government property does not include purposeful destructive
testing, obsolescence, normal wear and tear, or manufacturing defects.
Loss of Government property includes, but is not limited to--
(1) Items that cannot be found after a reasonable search;
(2) Theft;
(3) Damage resulting in unexpected harm to property requiring
repair to restore the item to usable condition; or
(4) Destruction resulting from incidents that render the item
useless for its intended purpose or beyond economical repair.
* * * * *
Production scrap means material left over from the normal
production process that has only remelting or reprocessing value, e.g.,
textile and metal clippings, borings, and faulty castings and forgings.
* * * * *
Unit acquisition cost means--
(1) For Government-furnished property, the dollar value assigned by
the Government and identified in the contract; and
(2) For contractor-acquired property, the cost derived from the
contractor's records that reflect consistently applied generally
accepted accounting principles.
8. Amend section 45.102 by adding paragraph (e) to read as follows:
45.102 Policy.
* * * * *
(e) Government property, other than foundations and similar
improvements necessary for installing special tooling, special test
equipment, or equipment, shall not be installed or constructed on
contractor-owned real property in such fashion as to become
nonseverable, unless the head of the contracting activity determines
that such installation or construction is necessary and in the
Government's interest.
9. Amend section 45.104 by--
a. Revising the introductory text of paragraph (a);
b. Revising paragraph (b); and
c. Adding paragraphs (d) and (e).
The revised and added text reads as follows:
45.104 Responsibility and liability for Government property.
(a) Generally, contractors are not held liable for loss of
Government property under the following types of contracts:
* * * * *
(b) The contracting officer may revoke the Government's assumption
of risk when the property administrator determines that the
contractor's property management practices are noncompliant with
contract requirements.
* * * * *
(d) With respect to loss of Government property, the contracting
officer, in consultation with the property administrator, shall
determine--
(1) The extent, if any, of contractor liability based upon the
amount of damages corresponding to the associated lost property; and
(2) The appropriate form and method of Government recovery (may
include repair, replacement, or other restitution).
(e) Any monies received as financial restitution shall be credited
to the Treasury of the United States as miscellaneous receipts, unless
otherwise authorized by statute (31 U.S.C. 3302(b)).
10. Amend section 45.105, by revising the first sentence of the
introductory text of paragraph (b), and by revising paragraphs (b)(1)
and (d) to read as follows:
45.105 Contractors' property management system compliance.
* * * * *
(b) The property administrator shall notify the contractor in
writing when the contractor's property management system does not
comply with contractual requirements, shall request prompt correction
of deficiencies, and shall request from the contractor a corrective
action plan, including a schedule for correction of the deficiencies. *
* *
(1) Revocation of the Government's assumption of risk for loss of
Government property; and/or
* * * * *
(d) When the property administrator determines that a reported case
of loss of Government property is a risk assumed by the Government, the
property administrator shall notify the contractor in writing that they
are granted relief of stewardship responsibility and liability in
accordance with FAR clause 52.245-1(f)(1)(vii). Where the property
administrator determines that the risk of loss of Government property
is not assumed by the Government, the property administrator shall
request that the contracting officer hold the contractor responsible
and liable.
11. Amend section 45.107 by--
a. Revising paragraph (a)(1)(i);
b. Removing from paragraph (b) ``service contracts'' and adding
``fixed-price service contracts'' in its place; and
c. Removing from paragraph (d) ``acquisition cost'' and adding
``unit acquisition cost'' in its place.
The revised text reads as follows:
45.107 Contract clauses.
(a)(1) * * *
(i) All cost-reimbursement, time-and-material, and labor-hour type
solicitations and contracts; and, when property is expected to be
furnished for the labor-hour contracts.
* * * * *
12. Amend section 45.201 by--
a. Removing from paragraph (a)(1) ``tracking and/or'' and adding
``tracking and management, and/or'' in its place;
[[Page 18501]]
b. Removing from paragraph (a)(4) ``tracking); and'' and adding
``tracking and management); and'' in its place; and
c. Revising paragraph (c)(4).
The revised text reads as follows:
45.201 Solicitation.
* * * * *
(c) * * *
(4) A description of the offeror's property management system and
any customary commercial practices, voluntary consensus standards, or
industry leading practices and standards to be used by the offeror in
managing Government property.
* * * * *
45.202 [Amended]
13. Amend section 45.202 by removing from the first sentence of
paragraph (a) ``from the contractor'' and adding ``from an offeror or
contractor'' in its place.
14. Amend section 45.602-1 by--
a. Removing from paragraphs (b)(2) and (b)(3) ``Require a
contractor'' and adding ``Require the contractor'' in its place;
b. Removing from paragraph (b)(4) ``might entitle'' and adding
``may entitle'' in its place;
c. Revising the introductory text of paragraph (c) and the
introductory text of paragraph (c)(1);
d. Removing from paragraph (c)(1)(i) ``acquisition cost'' and
adding ``unit acquisition cost'' in its place; and
e. Revising paragraph (c)(1)(iv).
The revised text reads as follows:
45.602-1 Inventory disposal schedules.
* * * * *
(c) The contractor may request the plant clearance officer's
approval to remove the Government property from an inventory schedule.
(1) Plant clearance officers may approve removal of Government
property from an inventory schedule when--
* * * * *
(iv) The contractor has requested continued use of the Government
property, and the contracting officer has authorized its retention and
further use.
* * * * *
15. Amend section 45.602-2 by--
a. Revising the introductory text and paragraph (a);
b. Removing paragraph (b);
c. Redesignating paragraphs (c) and (d) as paragraphs (b) and (c),
respectively;
d. Removing from newly redesignated paragraph (b) ``April 17,
1996),'' and adding ``April 17, 1996, and 15 U.S.C. 3710(i);'' in its
place;
e. Revising newly redesignated paragraph (c);
f. Adding new paragraphs (d) and (e).
The revised and added text reads as follows:
45.602-2 Reutilization priorities.
Plant clearance officers shall initiate reutilization actions for
all property not meeting the abandonment or destruction criteria of
45.603(b). Authorized methods, listed in descending order from highest
to lowest priority, are--
(a) Reuse within the owning agency;
* * * * *
(c) Report to GSA for reuse within the Federal Government or
donation as surplus property;
(d) Dispose of the following property in accordance with agency
procedures without reporting to GSA:
(1) Property determined appropriate for abandonment or destruction
(see FMR 102-36.305, 41 CFR 102-36.305).
(2) Property furnished to nonappropriated fund activities property
(see FMR 102-36.165, 41 CFR 102-36.165).
(3) Foreign excess personal property (see FMR 102-36.380, 41 CFR
102-36.380).
(4) Scrap, except aircraft in scrap condition.
(5) Perishables, defined for the purposes of this section as any
personal property subject to spoilage or decay.
(6) Trading stamps and bonus goods.
(7) Hazardous waste or toxic and hazardous materials.
(8) Controlled substances.
(9) Property dangerous to public health and safety.
(10) Classified items or property determined to be sensitive for
reasons of national security; and
(e) Dispose of nuclear materials (see 45.603-3(b)(5)) in accordance
with the Nuclear Regulatory Commission (NRC), applicable state
licenses, applicable Federal regulations, and agency regulations.
16. Revise section 45.603 to read as follows:
45.603 Abandonment or destruction of personal property.
(a) When contractor inventory is processed through the
reutilization screening process prescribed in 45.602-2 without success,
and provided the property has no commercial value, does not require
demilitarization, and does not constitute a danger to public health or
welfare, plant clearance officers or other authorized officials may
without further approval--
(1) Direct the contractor to destroy the property;
(2) Abandon non-sensitive property at the contractor's or sub-
contractor's premises; or
(3) Abandon sensitive property at the contractor's or sub-
contractor's premises, with contractor consent.
(b) Provided a Government reviewing official at least one level
higher than the plant clearance officer or other agency authorized
official approves, plant clearance officers or other agency authorized
officials may authorize the abandonment, or order the destruction of
other contractor inventory at the contractor's or sub-contractor's
premises, in accordance with FMR 102-36-305 through 325 and consistent
with the following:
(1) The property is not considered sensitive, does not require
demilitarization, has no commercial value or reutilization, transfer or
donation potential, and does not constitute a danger to public health
or welfare.
(2) The estimated cost of continued care and handling of the
property (including advertising, storage and other costs associated
with making the sale), exceed the estimated proceeds from its sale.
(c) In lieu of abandonment or its authorized destruction, the plant
clearance officer or authorized official may authorize the donation of
property including unsold surplus property to public bodies, provided
that the property is not sensitive property, does not require
demilitarization, and it does not constitute a danger to public health
or welfare. The Government will not bear any of the costs incident to
such donations.
(d) Unless the property qualifies for one of the exceptions under
FMR 102-36.330 (41 CFR 102-36.330), the plant clearance officer or
requesting official will ensure prior public notice of such actions of
abandonment or destruction consistent with FMR 102-36.325 (41 CFR 102-
36.325).
17. Revise the section heading of 45.604 to read as follows:
45.604 Sale of surplus personal property.
* * * * *
18. Revise section 45.604-1 to read as follows:
45.604-1 Sales procedures.
Surplus personal property that has completed screening in
accordance with 45.602-3(a) shall be sold in accordance with the policy
for the sale of surplus personal property contained in the Federal
Management Regulation, at Part 102-38 (41 CFR part 102-38). Agencies
may specify implementing procedures.
45.604-2 [Removed]
19. Remove section 45.604-2.
[[Page 18502]]
45.604-3 and 45.604-4 [Redesignated as 45.604-2 and 45.604-3]
20A. Redesignate sections 45.604-3 and 45.604-4 as sections 45.604-
2 and 45.604-3, respectively.
20B. Revise the newly redesignated section 45.604-2 to read as
follows:
45.604-2 Use of GSA sponsored sales centers.
Agencies may use sales center services. Use of such centers for
sale of surplus property is authorized when in the best interest of the
Government, consistent with contract terms and conditions.
21. Add section 45.604-4 to read as follows:
45.604-4 Sale of property pursuant to the exchange/sale authority.
Agencies should consider the sale of property pursuant to the
exchange/sale authority in FMR 102-39 (41 CFR part 102-39) when
agencies are acquiring or plan to acquire similar products and other
requirements of the authority are satisfied.
22. Revise section 45.605 to read as follows:
45.605 Inventory disposal reports.
The plant clearance officer shall promptly prepare an SF 1424,
Inventory Disposal Report, following disposition of the property
identified on an inventory disposal schedule and the crediting of any
related proceeds. The report shall identify any lost or otherwise
unaccounted for property and any changes in quantity or value of the
property made by the contractor after submission of the initial
inventory disposal schedule. The report shall be provided to the
administrative contracting officer or, for termination inventory, to
the termination contracting officer, with a copy to the property
administrator.
23. Revise section 45.606-1 to read as follows:
45.606-1 Contractor scrap procedures.
(a) The property administrator should ensure that contractor scrap
disposal processes, methods and practices allow for effective,
efficient and proper disposition, and are properly documented in the
contractor's property management procedures.
(b) The property administrator should determine the extent to which
separate disposal processing or physical segregation for different
scrap types is or may be required as early as possible, preferably
during the solicitation phase. Such scrap may require physical
segregation, unique disposal processing or separate plant clearance
reporting. For example, the scope of work may create scrap--
(1) Consisting of sensitive items;
(2) Containing hazardous materials or wastes;
(3) Contaminated with hazardous materials or wastes;
(4) That is classified or otherwise controlled;
(5) Containing precious or strategic metals; or
(6) That is dangerous to public health or safety.
(c) Absent contract terms and conditions to the contrary, the
Government may abandon parts removed and replaced from property as a
result of normal maintenance actions, or removed from property as a
result of the repair, maintenance, overhaul, or modification process.
45.606-2 and 45.606-3 [Removed]
24. Remove sections 45.606-2 and 45.606-3.
PART 49--TERMINATION OF CONTRACTS
49.204 [Amended]
25. Amend section 49.204 by removing from paragraph (b)
``destroyed, lost, stolen, or'' and adding ``lost or'' in its place.
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
26. Amend section 52.232-16 by revising the date of the clause, and
the last sentence of paragraph (e) to read as follows:
52.232-16 Progress Payments.
* * * * *
Progress Payments (Date)
* * * * *
(e) * * * The Contractor shall repay the Government an amount
equal to the unliquidated progress payments that are based on costs
allocable to property that is lost (see 45.101).
* * * * *
27. Amend section 52.232-32 by revising the date of the clause, and
the last sentence of paragraph (g) to read as follows:
52.232-32 Performance-Based Payments.
* * * * *
Performance-Based Payments (Date)
* * * * *
(g) * * * If any property is lost (see 45.101), the basis of
payment (the events or performance criteria) to which the property
is related shall be deemed to be not in compliance with the terms of
the contract and not payable (if the property is part of or needed
for performance), and the Contractor shall refund the related
performance-based payments in accordance with paragraph (d) of this
clause.
* * * * *
28. Amend section 52.245-1 by--
a. Revising the date of the clause;
b. Removing the definition ``Acquisition cost'' from paragraph (a);
c. Adding, in alphabetical order, the definitions, ``Loss of
Government property'', and ``Production scrap'' to paragraph (a);
d. Removing the definition ``Surplus property'' from paragraph (a);
e. Adding, in alphabetical order, the definition ``Unit acquisition
cost'' to paragraph (a);
f. Revising paragraph (b)(1);
g. Removing from paragraph (b)(2) ``, stolen, damaged, or
destroyed'';
h. Adding paragraph (b)(4);
i. Removing from paragraph (f)(1)(ii) ``property (document the
receipt)'' and adding ``property and document the receipt'' in its
place;
j. Revising paragraphs (f)(1)(iii)(A)(1), (f)(1)(iii)(A)(10),
(f)(1)(v)(A), (f)(1)(vi), and (f)(1)(vii);
k. Removing from paragraph (f)(1)(x) ``loss, theft, damage, or
destruction'' and adding ``loss of Government property'' in its place;
l. Removing from paragraph (f)(2) ``acquisitions'' and adding
``acquisitions, loss of Government property,'' in its place;
m. Removing paragraph (f)(3);
n. Removing from paragraph (h)(1) introductory text ``loss, theft,
damage or destruction to the'' and adding ``loss of'' in its place;
o. Revising paragraph (h)(1)(ii), (h)(1)(iii), (h)(2), and (h)(3);
p. Redesignating paragraph (h)(4) as paragraph (h)(5);
q. Adding new paragraph (h)(4);
r. Adding the words ``or authorizing official'' before the period
at the end of the introductory text of paragraph (j);
s. Removing paragraph (j)(1);
t. Redesignating paragraphs (j)(2) through (j)(10) as paragraphs
(j)(1) through (j)(9), respectively;
u. Revising newly redesignated paragraphs (j)(1)(i), (j)(1)(ii),
the introductory text of paragraph (j)(2)(i), (j)(2)(i)(A), (j)(2)(ii),
and (j)(2)(iii), (j)(2)(iv)(C), and (j)(3);
v. Removing from the first sentence of the newly redesignated
paragraph (j)(6)(ii) the word ``Government'';
w. Removing the newly redesignated paragraph (j)(7)(i);
x. Further redesignating newly redesignated paragraphs (j)(7)(ii)
and (j)(7)(iii) as (j)(7)(i) and (j)(7)(ii), respectively;
y. Removing from the newly redesignated paragraph (j)(9)
``paragraph
[[Page 18503]]
(j)(4)'' and adding ``paragraph (j)(3)'' in its place;
z. Removing from paragraphs (k)(1) and (k)(2) ``Government
property'', respectively, and adding ``property'' in its place;
aa. Redesignating paragraph (k)(3) as paragraph (k)(4); and adding
a new paragraph (k)(3);
bb. Removing from Alternate I ``(Aug 2010)'' and adding ``(Date)''
in its place; and removing from paragraph (h)(1) of Alternate I ``loss,
theft, damage, or destruction,'' and adding ``loss'' in its place; and
cc. Removing from Alternate II ``(June 2007)'' and adding
``(Date)'' in its place; and removing from the first and second
sentences of paragraph (e)(3) of Alternate II ``having an'' and adding
``having a unit'' in its place (two times).
The added and revised text reads as follows:
52.245-1 Government Property.
* * * * *
Government Property (Date)
(a) * * *
Loss of Government property means unintended, unforeseen or
accidental loss, damage or destruction to Government property that
reduces the Government's expected economic benefits of the property.
Loss of Government property does not include purposeful destructive
testing, obsolescence, normal wear and tear or manufacturing
defects. Loss of Government property includes, but is not limited
to--
(1) Items that cannot be found after a reasonable search;
(2) Theft;
(3) Damage resulting in unexpected harm to property requiring
repair to restore the item to usable condition; or
(4) Destruction resulting from incidents that render the item
useless for its intended purpose or beyond economical repair.
* * * * *
Production scrap means material left over from the normal
production process that has only remelting or reprocessing value,
e.g., textile and metal clippings, borings, and faulty castings and
forgings.
* * * * *
Unit acquisition cost means--(1) For Government-furnished
property, the dollar value assigned by the Government and identified
in the contract; and
(2) For contractor-acquired property, the cost derived from the
contractor's records that reflect consistently applied generally
accepted accounting principles.
* * * * *
(b) * * *
(1) The Contractor shall have a system to manage (control, use,
preserve, protect, repair and maintain) Government property in its
possession. The system shall be adequate to satisfy the requirements
of this clause. In doing so, the Contractor shall initiate and
maintain the processes, systems, procedures, records, and
methodologies necessary for effective control of Government
property. Prior to implementation, the Contractor shall disclose to
the Property Administrator any significant changes to their property
management system. The Contractor may employ customary commercial
practices, voluntary consensus standards and/or industry-leading
practices and standards that provide effective Government property
management that are necessary and appropriate for the performance of
this contract (except where inconsistent with law or regulation).
* * * * *
(4) The Contractor shall establish and maintain procedures
necessary to assess its property management system effectiveness,
and shall perform periodic internal reviews and audits. Significant
findings and/or results of such reviews and audits pertaining to
Government property shall be made available to the Property
Administrator.
* * * * *
(f) * * *
(1) * * *
(iii) * * *
(A) * * *
(1) The name, part number and description, National Stock Number
(if needed for additional item identification tracking and/or
disposition), and other data elements as required in accordance with
the terms and conditions of the contract.
* * * * *
(10) Date placed in service (if required in accordance with the
terms and conditions of the contract).
* * * * *
(v) * * *
(A) The Contractor shall award subcontracts that clearly
identify items to be provided or for fabricated items, the extent of
any restrictions or limitations. The Contractor shall ensure
appropriate flow down of contract terms and conditions (e.g., extent
of liability for loss of Government property.
* * * * *
(vi) Reports. The Contractor shall have a process to create and
provide reports of discrepancies, loss of Government property,
physical inventory results, audits and self-assessments, corrective
actions, and other property related reports as directed by the
Contracting Officer.
(vii) Relief of stewardship responsibility and liability. The
contractor shall have a process to enable the prompt recognition,
investigation, disclosure and reporting of loss of Government
property, including losses that occur at subcontractor or alternate
site locations.
(A) This process shall include the corrective actions necessary
to prevent recurrence.
(B) Unless otherwise directed by the Property Administrator, the
Contractor shall report, upon recognition of loss of Government
property, all such incidents of property loss, investigate and
promptly furnish to the property administrator a written narrative
of all incidents of such property loss as soon as the facts become
known or when requested by the Government. Such reports shall, at a
minimum, contain the following information:
(1) Date of incident (if known).
(2) The data elements required under paragraph (f)(1)(iii)(A) of
this clause.
(3) Quantity.
(4) Accountable contract number.
(5) A statement indicating current or future need.
(6) Unit acquisition cost, or if applicable, estimated sales
proceeds, estimated repair or replacement costs.
(7) All known interests in commingled material of which includes
Government material.
(8) Cause and corrective action taken or to be taken to prevent
recurrence.
(9) A statement that the Government will receive any
reimbursement covering the loss of Government property, in the event
the Contractor was or will be reimbursed or compensated.
(10) Copies of all supporting documentation.
(11) Last known location.
(12) A statement that the property did or did not contain
sensitive, hazardous or toxic material, and if so, that the
appropriate agencies were notified.
(C) Unless the contract provides otherwise, the Contractor shall
be relieved of stewardship responsibility and liability for property
when-
(1) Such property is consumed or expended, reasonably and
properly, or otherwise accounted for, in the performance of the
contract, including reasonable inventory adjustments of material as
determined by the Property Administrator;
(2) Property Administrator grants relief of responsibility and
liability for loss of Government property;
(3) Property is delivered or shipped from the Contractor's
plant, under Government instructions, except when shipment is to a
subcontractor or other location of the Contractor; or
(4) Property is disposed of in accordance with paragraphs (j)
and (k) of this clause.
* * * * *
(h) * * *
(1) * * *
(ii) Loss of Government property that is the result of willful
misconduct or lack of good faith on the part of the Contractor's
managerial personnel.
(iii) The Contracting Officer has, in writing, revoked the
Government's assumption of risk for loss of Government property due
to a determination under paragraph (g) of this clause that the
Contractor's property management practices are inadequate, and/or
present an undue risk to the Government, and the Contractor failed
to take timely corrective action. If the Contractor can establish by
clear and convincing evidence that the loss of Government property
occurred while the Contractor had adequate property management
practices or the loss did not result from the Contractor's failure
to maintain adequate property management practices, the Contractor
shall not be held liable.
(2) The Contractor shall take all reasonable actions necessary
to protect the property from further loss. The Contractor shall
[[Page 18504]]
separate the damaged and undamaged property, place all the affected
property in the best possible order, and take such other action as
the Property Administrator directs.
(3) The Contractor shall do nothing to prejudice the
Government's rights to recover against third parties for any loss of
Government property.
(4) The Contractor shall reimburse the Government for loss of
Government property, to the extent that the Contractor is
financially liable for such loss, as directed by the Contracting
Officer.
* * * * *
(j) * * *
(1) * * *
(i) If the Contractor determines that the property has the
potential to fulfill requirements under other contracts, the
Contractor, in consultation with the Property Administrator, shall
request that the Contracting Officer transfer the property to the
contract in question, or provide authorization for use, as
appropriate. In lieu of transferring the property, the Contracting
Officer may authorize the Contractor to credit the costs of
Contractor-acquired property (material only) to the losing contract,
and debit the gaining contract with the corresponding cost, when
such material is needed for use on another contract. Property no
longer needed shall be considered contractor inventory.
(ii) For any remaining Contractor-acquired property, the
Contractor may purchase the property at the unit acquisition cost if
desired or 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.)
(2) Inventory disposal schedules. (i) Provided the property was
not reutilized, transferred, or otherwise disposed of under
paragraph (j)(1) of this clause the Contractor, as directed by the
Plant Clearance Officer shall use Standard Form 1428, Inventory
Disposal Schedule or electronic equivalent, to identify and report--
(A) Government-furnished property that is no longer required for
performance of this contract;
* * * * *
(ii) The Contractor may annotate inventory disposal schedules to
identify property the Contractor wishes to purchase from the
Government, in the event that the property is offered for sale.
(iii) Separate inventory disposal schedules are required for
aircraft in any condition, flight safety critical aircraft parts,
and other items as directed by the Plant Clearance Officer.
(iv) * * *
(C) For precious metals in raw or bulk form, the type of metal
and estimated weight.
* * * * *
(3) Submission requirements. (i) The Contractor shall submit
inventory disposal schedules to the Plant Clearance Officer no later
than--
(A) 30 days following the Contractor's determination that a
property item is no longer required for performance of this
contract;
(B) 60 days, or such longer period as may be approved by the
Plant Clearance Officer, following completion of contract deliveries
or performance; or
(C) 120 days, or such longer period as may be approved by the
Termination Contracting Officer, following contract termination in
whole or in part.
(ii) Unless the Plant Clearance Officer determines otherwise,
the Contractor need not identify or report production scrap on
inventory disposal schedules, and may process and dispose of
production scrap in accordance with its own internal scrap
procedures. The processing and disposal of other types of
Government-owned scrap will be conducted in accordance with the
terms and conditions of the contract or Plant Clearance Officer
direction, as appropriate.
* * * * *
(k) * * *
(3) Absent contract terms and conditions to the contrary, the
Government may abandon parts removed and replaced from property as a
result of normal maintenance actions, or removed from property as a
result of the repair, maintenance, overhaul, or modification
process.
* * * * *
29. Amend section 52.245-2 by revising the date of the clause, and
paragraph (b) to read as follows:
52.245-2 Government Property Installation Operation Services.
* * * * *
Government Property Installation Operation Services (Date)
* * * * *
(b) The Government bears no responsibility for repair or
replacement of any lost Government property. If any or all of the
Government property is lost, or becomes no longer usable, the
Contractor shall be responsible for replacement of the property at
Contractor expense. The Contractor shall have title to all
replacement property and shall continue to be responsible for
contract performance.
* * * * *
30. Amend section 52.249-2 by revising the date of the clause, and
paragraph (h) to read as follows:
52.249-2 Termination for Convenience of the Government (Fixed-Price).
* * * * *
Termination for Convenience of the Government (Fixed-Price) (Date)
* * * * *
(h) Except for normal spoilage, and except to the extent that
the Government expressly assumed the risk of loss, the Contracting
Officer shall exclude from the amounts payable to the Contractor
under paragraph (g) of this clause, the fair value, as determined by
the Contracting Officer, for the loss of the Government property.
* * * * *
31. Amend section 52.249-3 by revising the date of the clause, and
paragraph (h) to read 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)
* * * * *
(h) Except for normal spoilage, and except to the extent that
the Government expressly assumed the risk of loss, the Contracting
Officer shall exclude from the amounts payable to the Contractor
under paragraph (g) of this clause, the fair value, as determined by
the Contracting Officer, for the loss of the Government property.
* * * * *
32. Revise section 52.251-1 to read as follows:
52.251-1 Government Supply Sources.
As prescribed in 51.107, insert the following clause:
Government Supply Sources (Date)
The Contracting Officer may issue the Contractor an
authorization to use Government supply sources in the performance of
this contract. Title to all property acquired by the Contractor
under such an authorization shall vest in the Government. The
provisions of the clause entitled ``Government Property,'' at
52.245-1, shall apply to all property acquired under such
authorization.
(End of clause)
PART 53--FORMS
33. Amend section 53.245 by revising paragraph (c) to read as
follows:
53.245 Government property.
* * * * *
(c) SF 1423 (Rev. 5/2004), Inventory Verification Survey. (See
45.602-1(b)(1).)
* * * * *
[FR Doc. 2011-7436 Filed 4-1-11; 8:45 am]
BILLING CODE 6820-EP-P