Defense Federal Acquisition Regulation Supplement: Consolidation of DoD Government Property Clauses (DFARS Case 2020-D029), 25600-25606 [2023-08645]

Agencies

• Defense Acquisition Regulations System
• DEPARTMENT OF DEFENSE

[Federal Register Volume 88, Number 81 (Thursday, April 27, 2023)]
[Proposed Rules]
[Pages 25600-25606]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-08645]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 211, 212, 245, and 252

[Docket DARS-2023-0017]
RIN 0750-AL14


Defense Federal Acquisition Regulation Supplement: Consolidation 
of DoD Government Property Clauses (DFARS Case 2020-D029)

AGENCY: Defense Acquisition Regulations System, Department of Defense 
(DoD).

ACTION: Proposed rule.

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SUMMARY: DoD is proposing to amend the Defense Federal Acquisition 
Regulation Supplement (DFARS) to consolidate existing contract clauses 
for the management and reporting of Government property into a single 
contract clause, to replace references to legacy software applications 
used for reporting Government property within the DoD enterprise-wide 
eBusiness

[[Page 25601]]

platform, and to convert existing form-based processes into electronic 
processes within that platform.

DATES: Comments on the proposed rule should be submitted in writing to 
the address shown below on or before June 26, 2023, to be considered in 
the formation of a final rule.

ADDRESSES: Submit comments identified by DFARS Case 2020-D029, using 
any of the following methods:
    [cir] Federal eRulemaking Portal: https://www.regulations.gov. 
Search for ``DFARS Case 2020-D029.'' Select ``Comment'' and follow the 
instructions to submit a comment. Please include ``DFARS Case 2020-
D029'' on any attached documents.
    [cir] Email: [email protected]. Include DFARS Case 2020-D029 in 
the subject line of the message.
    Comments received generally will be posted without change to 
https://www.regulations.gov, including any personal information 
provided. To confirm receipt of your comment(s), please check https://www.regulations.gov, approximately two to three days after submission 
to verify posting.

FOR FURTHER INFORMATION CONTACT: Heather Kitchens, telephone 571-296-
7152.

SUPPLEMENTARY INFORMATION: 

I. Background

    DoD is proposing to amend the DFARS to consolidate contract clauses 
related to management and reporting of Government property, update 
references to certain forms that are being incorporated into electronic 
processes, and update references to applications used to report 
receipt, shipment, transfer, or loss of Government property, or excess 
Government property. DoD developed the Government-furnished property 
(GFP) module within the Procurement Integrated Enterprise Environment 
(PIEE) to house the GFP life-cycle reporting requirements to provide 
end-to-end accountability for all GFP transactions within a single, 
secure, integrated system, while employing enhancements in technology 
to reduce burden on the public and the Government.
    There are no changes to the Government property data that 
contractors are required to report; only the application used to submit 
the information is changing. The GFP module application is based upon 
newer technology that will provide contractors with a much more 
efficient process to submit data for their reports. For instance, 
contractors will not be required to enter the same data into multiple 
fields; the system will automatically populate data fields throughout 
the process. By creating a single tool for all reporting of Government 
property, data can be readily accessed across various processes, 
thereby reducing contractor input and errors while enabling 
traceability across the Government property life cycle.

II. Discussion and Analysis

    This proposed rule would remove four DFARS clauses and consolidate 
their requirements into a single clause at DFARS 252.245-70XX, 
Management and Reporting of Government Property. The four clauses being 
removed, and related text for those clauses, are as follows:
    a. DFARS clause 252.211-7007, Reporting of Government-Furnished 
Property. Upon removal of this clause, the associated policy at DFARS 
211.274-4, Policy for reporting of Government-furnished property, is no 
longer applicable and is removed. The removal of 211.274-4 necessitates 
redesignating subsequent sections. Removal of the clause prescription 
at 211.274-6(b) results in the redesignation of the subsequent 
paragraph. DFARS clause 252.211-7007 is also removed from section 
212.301, Solicitation provisions and contract clauses for the 
acquisition of commercial products and commercial services.
    b. DFARS clause 252.245-7001, Tagging, Labeling, and Marking of 
Government-Furnished Property, is removed along with the associated 
clause prescription at 245.107(3).
    c. DFARS clause 252.245-7002, Reporting Loss of Government 
Property, is removed along with the associated clause prescription at 
245.107(4).
    d. DFARS clause 252.245-7004, Reporting, Reutilization, and 
Disposal, is removed along with the associated clause prescription at 
245.107(6).
    The new consolidated DFARS clause, 252.245-70XX, Management and 
Reporting of Government Property, instructs contractors to use the GFP 
module in the PIEE instead of legacy applications when reporting 
receipt, shipment, transfer, or loss of Government property, and for 
reporting excess property. A new prescription for this proposed clause 
is at DFARS 245.107(4). The clause is also added to DFARS 212.301 for 
use in DoD solicitations and contracts using FAR part 12 procedures for 
the acquisition of commercial products and commercial services.
    At DFARS 245.102, Policy, a reference in paragraph (2) is updated; 
and in paragraph (5) the paragraph heading is changed to ``Reporting 
Government property'', and guidance is added concerning the new clause 
252.245-70XX to replace the obsolete guidance for clause 252.245-7002, 
which is removed. At 245.103-72, Government-furnished property 
attachments to solicitations and awards, updated guidance is provided 
for using GFP attachments in acquisitions.
    DFARS 245.201-70, Definitions, provided a cross-reference to DFARS 
Procedures, Guidance, and Information (PGI) 245.201-70 that is no 
longer needed; therefore, the section is removed. As a result, section 
245.201-71 is redesignated as 245.201-70.
    DFARS 245.604-1, Sales procedures, for the sale of surplus personal 
property is updated. This DFARS section supplements Federal Acquisition 
Regulation (FAR) 45.604-1, which states that sales shall be in 
accordance with the policy for the sale of surplus property contained 
in the Federal Management Regulation (41 CFR part 102-38) and that 
agencies may specify implementing procedures. The implementing 
procedures at DFARS 245.604-1 are revised to align two sales procedures 
terms with 41 CFR 102-38 to reflect ``invitation for bid'' and 
``negotiated sales'' in lieu of ``informal bid procedures'' and 
``noncompetitive sales.'' Sales procedures for the contractor are 
addressed in DFARS clause 252.245-70XX.
    Subpart 245.70, Plant Clearance Forms, is no longer needed and is 
removed and reserved. DD Form 1149, Requisition and Invoice Shipping 
Document; DD Form 1348-1, DoD Single Line Item Release/Receipt 
Document; and DD Form 1640, Request for Plant Clearance, have been 
converted from form-based processes into electronic processes within 
the GFP module and are addressed in the new clause 252.245-70XX. 
Coverage for the SF-97, Certificate of Release of a Motor Vehicle 
(Agency Record Copy), and the DD form 1641, Disposal Determination 
Approval, is relocated to DFARS PGI 245.602-70. As a result of 
addressing these forms in DFARS PGI and in the new clause, DFARS 
subpart 245.70, Plant Clearance Forms, is no longer needed and is 
removed.

III. Applicability to Contracts at or Below the Simplified Acquisition 
Threshold (SAT) and for Commercial Services and Commercial Products, 
Including Commercially Available Off-the-Shelf (COTS) Items

    This proposed rule includes a new DFARS contract clause 252.245-
7XXX, Management and Reporting of

[[Page 25602]]

Government Property. The clause at DFARS 252.245-7XXX is prescribed at 
DFARS 245.107(4) for use in solicitations and contracts containing the 
clause at FAR 52.245-1, Government Property. The new clause 252.245-
7XXX is applicable to acquisitions at or below the SAT and to 
acquisitions of commercial products and commercial services when the 
contract contains the clause at FAR 52.245-1. For DoD, the FAR clause 
52.245-1 is required to be used in all purchase orders for repair, 
maintenance, overhaul, or modification of Government property 
regardless of the unit acquisition cost of the items to be repaired. 
These purchase orders are likely to fall under the SAT. Not applying 
this clause to contracts below the SAT and for the acquisition of 
commercial products, including COTS items, and commercial services 
would exclude contracts intended to be covered by this rule and 
undermine the overarching purpose of the rule. Consequently, DoD plans 
to apply the rule to contracts at or below the SAT and to those for the 
acquisition of commercial products, including COTS items, and 
commercial services.

IV. Expected Impact of the Rule

    The proposed rule consolidates the requirements for Government 
property reporting from multiple DFARS contract clauses into a single 
DFARS clause, reflecting the move of this activity into a single 
integrated eBusiness platform. This change will improve the ability of 
contractors and the Government to access and use the data across the 
Government property life cycle. The technical enhancements of the PIEE 
GFP Module allow for importing data, which will substantially reduce 
the reporting burden on DoD contractors while improving the accuracy of 
information. The PIEE GFP Module further enables DoD to consolidate and 
electronically share data about Government property in the possession 
of contractors, thereby improving accountability and auditability.

V. Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). E.O. 
13563 emphasizes the importance of quantifying both costs and benefits, 
of reducing costs, of harmonizing rules, and of promoting flexibility. 
This is not a significant regulatory action and, therefore, was not 
subject to review under section 6(b) of E.O. 12866, Regulatory Planning 
and Review, dated September 30, 1993.

VI. Regulatory Flexibility Act

    DoD does not expect this proposed rule to have a significant 
economic impact on a substantial number of small entities within the 
meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., 
because the rule is not creating any new requirements for contractors. 
However, an initial regulatory flexibility analysis has been performed 
and is summarized as follows:
    DoD is proposing to amend the Defense Federal Acquisition 
Regulation Supplement (DFARS) to consolidate existing contract clauses 
for the management and reporting of Government property into a single 
DFARS clause, eliminate some form-based reporting by providing an 
electronic equivalent, and replace references to legacy software 
applications used for the reporting of Government property with updated 
language directing the Government and contractors to utilize the 
Procurement Integrated Enterprise Environment (PIEE) Government-
furnished property (GFP) Module within the DoD enterprise-wide 
eBusiness platform. DoD developed the GFP module within the PIEE to 
house the GFP life-cycle reporting requirements, thus providing end-to-
end accountability for all GFP transactions within a single, secure, 
integrated system. Use of the PIEE GFP Module capitalizes on 
technological enhancements and reduces burden on the public and the 
Government.
    The objective of the rule is to create more efficient instructions 
for reporting Government property by consolidating reporting 
requirements for Government property. The proposed rule transitions 
instructions for property reporting from multiple stand-alone, legacy 
software applications to the PIEE GFP Module, a fully integrated, DoD 
enterprise-wide eBusiness platform. Use of the new system functionality 
will enable DoD to address numerous audit findings and security 
concerns. The legal basis for the rule is 41 U.S.C. 1303.
    This proposed rule will likely affect some small business concerns 
that are provided Government-furnished property in the performance of 
their contracts. Data generated from the Federal Procurement Data 
System for fiscal years 2019 through 2021 indicates that, on average, 
2,022 unique small entities per year received awards with Government 
property that would be subject to this proposed rule.
    The proposed rule does not impose any new reporting, recordkeeping, 
or compliance requirements. The replacement application used for 
reporting is intended to maintain the status quo regarding the 
information to be reported and to reduce compliance requirements due to 
the technological advances in the PIEE GFP Module.
    This proposed rule does not duplicate, overlap, or conflict with 
any other Federal rules. There are no practical alternatives available 
to meet the objectives of the rule.
    DoD invites comments from small business concerns and other 
interested parties on the expected impact of this rule on small 
entities.
    DoD 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 (DFARS Case 2020-D029), in 
correspondence.

VII. Paperwork Reduction Act

    The Paperwork Reduction Act (44 U.S.C. chapter 35) applies. The 
proposed rule contains information collection requirements under the 
new consolidated DFARS clause 252.245-70XX, Management and Reporting of 
Government Property. Accordingly, DoD has submitted a request for 
approval of a revised information collection requirement for 0704-0246, 
DFARS part 245, Government Property, to the Office of Management and 
Budget (OMB).
    As a result of the consolidation of Government-furnished property 
reporting requirements under a single contract clause, 252.245-70XX, 
two associated OMB Control Numbers will be discontinued, as the 
reporting requirements are included in the revised request for OMB 
Control Number 0704-0246. The OMB Control Numbers to be discontinued 
are 0704-0398, DFARS Part 211, Describing Agency Needs and related 
clause at 252.211; and 0704-0557, DFARS Part 245, Use of the Government 
Property Clause for Repair of Government-furnished Property. Upon 
approval of the revisions to OMB Control Number 0704-0246 and 
publication of the final rule for this case, OMB Control Numbers 0704-
0398 and 0704-0557 will be discontinued.
    The following sets forth the revised information collection request 
for OMB Control Number 0704-0246:

A. Estimate of Public Burden

    Public reporting burden for this collection of information is 
estimated to average 0.1 hour per response, including the time for 
reviewing instructions,

[[Page 25603]]

searching existing data sources, gathering and maintaining the data 
needed, and completing and reviewing the collection of information.
    The annual reporting burden estimated as follows:
    Respondents: 3,513.
    Total annual responses: 454,184.
    Total response burden hours: 47,659.

B. Request for Comments Regarding Paperwork Burden

    Written comments and recommendations on the proposed information 
collection, including suggestions for reducing this burden, should be 
submitted within 60 days to https://www.regulations.gov. Public 
comments are particularly invited on: whether this collection of 
information is necessary for the proper performance of functions of the 
DFARS, and will have practical utility; whether DoD's 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 to 
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.
    To obtain a copy of the supporting statement and associated 
collection instruments, please email [email protected]. Include DFARS 
Case 2020-D029 in the subject line of the message.

List of Subjects in 48 CFR Parts 211, 212, 245, and 252

    Government procurement.

Jennifer D. Johnson,
Editor/Publisher, Defense Acquisition Regulations System.

    Therefore, 48 CFR parts 211, 212, 245, and 252 are proposed to be 
amended as follows:

0
1. The authority citation for 48 CFR parts 211, 212, 245, and 252 
continues to read as follows:

    Authority: 41 U.S.C. 1303 and 48 CFR chapter 1.

PART 211--DESCRIBING AGENCY NEEDS


211.274-4  [Removed]

0
2. Remove section 211.274-4.


211.274-5 and 211.274-6  [Redesignated as 211.274-4 and 211.274-5]

0
3. Redesignate sections 211.274-5 and 211.274-6 as sections 211.274-4 
and 211.274-5, respectively.


211.274-5  [Amended]

0
4. Amend the newly redesignated section 211.274-5 by--
0
a. Redesignating paragraphs (a)(1), (2), and (3) as paragraphs (a) 
introductory text and (a)(1) and (2), respectively;
0
b. Removing paragraph (b); and
0
c. Redesignating paragraph (c) as paragraph (b).

PART 212--ACQUISITION OF COMMERCIAL PRODUCTS AND COMMERCIAL 
SERVICES

0
5. Amend section 212.301--
0
a. In paragraph (f)(iv)(A) by removing ``211.274-6(a)(1)'' and adding 
``211.274-5(a)'' in its place;
0
b. By removing paragraph (f)(iv)(B);
0
c. By redesignating paragraph (f)(iv)(C) as paragraph (f)(iv)(B);
0
d. In the newly redesignated paragraph (f)(iv)(B) by removing 
``211.274-6(c)'' and adding ``211.274-5(b)'' in its place;
0
e. Redesignating paragraphs (f)(xviii) and (xix) as paragraphs (f)(xix) 
and (xx), respectively; and
0
f. Adding a new paragraph (f)(xviii).
    The addition reads as follows:


212.301  Solicitation provisions and contract clauses for the 
acquisition of commercial products and commercial services.

* * * * *
    (f) * * *
    (xviii) Part 245--Government Property. Use the clause at 252.245-
70XX, Management and Reporting of Government Property, as prescribed in 
245.107(4).
* * * * *

PART 245--GOVERNMENT PROPERTY

0
6. Amend section 245.102:
0
a. By revising paragraph (2);
0
b. In the paragraph (4) heading and paragraphs (4)(i) and (4)(ii)(A) by 
removing ``Government-furnished property'' and adding ``GFP'' in their 
places, respectively; and
0
c. By revising paragraph (5).
    The revisions read as follows:


245.102  Policy.

* * * * *
    (2) Government supply sources. When a contractor will be 
responsible for preparing requisitioning documentation to acquire 
Government-furnished property (GFP) from Government supply sources, 
include in the contract the requirement to prepare the documentation in 
accordance with Volume 2 of the Defense Logistics Manual (DLM) 4000.25, 
Military Standard Transaction Reporting and Accounting Procedures 
(MILSTRAP). Copies are available from the address cited at PGI 251.102.
* * * * *
    (5) Reporting Government property. It is DoD policy that all 
Government property be reported in the GFP module or Wide Area WorkFlow 
module of the Procurement Integrated Enterprise Environment (PIEE) as 
required by the clause at 252.245-70XX, Management and Reporting of 
Government Property.
0
7. Revise section 245.103-72 to read as follows:


245.103-72  Government-furnished property attachments to solicitations 
and awards.

    When performance will require the use of GFP, contracting officers 
shall include the GFP attachment to solicitations and awards. See PGI 
245.103-72 for links to the formats and procedures for preparing the 
GFP attachment.
0
8. Amend section 245.107 by--
0
a. Removing paragraphs (3), (4), and (6);
0
b. Redesignating paragraph (5) as paragraph (3); and
0
c. Adding a new paragraph (4).
    The addition reads as follows:


245.107  Contract clauses.

* * * * *
    (4) Use the clause at 252.245-70XX, Management and Reporting of 
Government Property, in solicitations and contracts, including 
solicitations and contracts using FAR part 12 procedures for the 
acquisition of commercial products and commercial services, that 
contain the clause at FAR 52.245-1, Government Property.


245.201-70  [Removed]

0
9. Remove section 245.201-70.


245.201-71  [Redesignated as 245.201-70]

0
10. Redesignate section 245.201-71 as 245.201-70 and revise it to read 
as follows:


245.201-70  Security classification.

    Follow the procedures at PGI 245.201-70 for security 
classification.
0
11. Amend section 245.604-1--
0
a. In paragraph (1) by removing ``(formal or informal sales)'';
0
b. By revising the paragraph (2) heading;
0
c. In paragraph (3)(ii) by removing ``252.245-7004, Reporting, 
Reutilization, and Disposal'' and adding ``252.245-70XX, Management and 
Reporting of Government Property'' in its place;
0
d. In the paragraph (4) heading and paragraphs (4)(i) introductory text 
and (4)(ii) by removing ``Noncompetitive'' and adding ``Negotiated'' in 
its place

[[Page 25604]]

wherever it appears and in paragraph (4)(iii) introductory text by 
removing ``noncompetitive'' and adding ``negotiated'' in its place; and
0
e. In paragraph (5) by removing ``Implementation of Trade Security 
Controls'' and adding ``Implementation of Trade Security Controls 
(TSCs) for Transfers of DoD Personal Property to Parties Outside DoD 
Control'' in its place.
    The revision reads as follows:


245.604-1  Sales procedures.

* * * * *
    (2) Invitation for bid procedures. * * *
* * * * *

Subpart 245.70 [Removed and Reserved]

0
12. Remove and reserve subpart 245.70 consisting of sections 245.7001 
and 245.7001-1 through 245.7001-6.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES


252.211-7003  [Amended]

0
13. Amend section 252.211-7003 introductory text by removing ``211.274-
6(a)(1)'' and adding ``211.274-5(a)'' in its place.


252.211-7007  [Removed and Reserved]

0
14. Remove and reserve section 252.211-7007.


252.211-7008  [Amended]

0
15. Amend section 252.211-7008 introductory text by removing ``211.274-
6(c)'' and adding ``211.274-5(b)'' in its place.


252.245-7001  [Removed and Reserved]

0
16. Remove and reserve section 252.245-7001.


252.245-7002  [Removed and Reserved]

0
17. Remove and reserve section 252.245-7002.


252.245-7003  [Amended]

0
18. Amend section 252.245-7003 introductory text by removing 
``245.107(5)'' and adding ``245.107(3)'' in its place.


252.245-7004  [Removed and Reserved]

0
19. Remove and reserve section 252.245-7004.
0
20. Add section 252.245-70XX to read as follows:


252.245-70XX  Management and Reporting of Government Property.

    As prescribed in 245.107(4), use the following clause:

Management and Reporting of Government Property (Date)

    (a) Definitions. As used in this clause--
    As is means that the Government makes no warranty with respect 
to the serviceability and/or suitability of the Government property 
for contract performance and that the Government will not pay for 
any repairs, replacement, and/or refurbishment of the property.
    Commercial and Government Entity (CAGE) code means--
    (1) An identifier assigned to entities located in the United 
States or its outlying areas by the Defense Logistics Agency (DLA) 
Commercial and Government Entity (CAGE) Branch to identify a 
commercial or government entity by unique location; or
    (2) An identifier assigned by a member of the North Atlantic 
Treaty Organization (NATO) or by the NATO Support and Procurement 
Agency (NSPA) to entities located outside the United States and its 
outlying areas that the DLA Commercial and Government Entity (CAGE) 
Branch records and maintains in the CAGE master file. This type of 
code is known as a NATO CAGE (NCAGE) code.
    Contractor-acquired property, contractor inventory, Government 
property, Government-furnished property, and loss of Government 
property have the meanings given in the Federal Acquisition 
Regulation (FAR) 52.245-1, Government Property, clause of this 
contract.
    Demilitarization means the act of eliminating the functional 
capabilities and inherent military design features from DoD personal 
property. Methods and degree range from removal and destruction of 
critical features to total destruction by cutting, tearing, 
crushing, mangling, shredding, melting, burning, etc.
    Export-controlled items has the meaning given in the Defense 
Federal Acquisition Regulation Supplement (DFARS) 252.225-7048, 
Export-Controlled Items, clause of this contract.
    Ineligible transferee means an individual, an entity, or a 
country--
    (1) Excluded from Federal programs by the General Services 
Administration as identified in the System for Award Management 
Exclusions located at https://sam.gov;
    (2) Delinquent on obligations to the U.S. Government under 
surplus sales contracts;
    (3) Designated by the Department of Defense as ineligible, 
debarred, or suspended from defense contracts; or
    (4) Subject to denial, debarment, or other sanctions under 
export control laws and related laws and regulations, and orders 
administered by the Department of State, the Department of Commerce, 
the Department of Homeland Security, or the Department of the 
Treasury.
    Item unique identification means a system of assigning, 
reporting, and marking DoD property with unique item identifiers 
that have machine-readable data elements to distinguish an item from 
all other like and unlike items.
    National stock number means a 13-digit stock number used to 
identify items of supply. It consists of a four-digit Federal Supply 
Code and a nine-digit National Item Identification Number.
    Reparable item means an item, typically in unserviceable 
condition, furnished to the contractor for maintenance, repair, 
modification, or overhaul.
    Scrap means property that has no value except for its basic 
material content. For purposes of demilitarization, scrap is defined 
as recyclable waste and discarded materials derived from items that 
have been rendered useless beyond repair, rehabilitation, or 
restoration such that the item's original identity, utility, form, 
fit, and function have been destroyed. Items can be classified as 
scrap if processed by cutting, tearing, crushing, mangling, 
shredding, or melting. Intact or recognizable components and parts 
are not ``scrap.''
    Serially-managed item means an item designated by DoD to be 
uniquely tracked, controlled, or managed in maintenance, repair, 
and/or supply systems by means of its serial number or unique item 
identifier.
    Serviceable or usable property means property with potential for 
reutilization or sale as is or with minor repairs or alterations.
    Supply condition code means a classification of materiel in 
terms of readiness for issue and use or to identify action underway 
to change the status of materiel.
    Unique item identifier (UII) means a set of data elements marked 
on an item that is globally unique and unambiguous. The term 
includes a concatenated UII or a DoD recognized unique 
identification equivalent.
    (b) Reporting Government property. (1) The Contractor shall use 
the Government Furnished Property (GFP) module of the Procurement 
Integrated Enterprise Environment (PIEE) to--
    (i) Report physical receipt of GFP;
    (ii) Report the loss of Government property, in accordance with 
paragraph (f)(1)(vii) of the FAR 52.245-1 clause of this contract. 
Unless otherwise provided for in this contract, this requirement 
applies to a loss of GFP that results from damage that occurs during 
work in process (e.g., workmanship errors);
    (iii) Report the transfer of GFP to another DoD contract;
    (iv) Report the shipment of GFP to the Government or to a 
contractor. The GFP module generates the electronic equivalent of 
the DD Form 1149, DD Form 1348-1, or other required shipping 
documents;
    (v) Report when serially-managed items of GFP are incorporated 
into a higher-level component, assembly, or end item;
    (vi) Complete the plant clearance inventory schedule in 
accordance with paragraph (j)(2) of the FAR 52.245-1 clause of this 
contract, unless disposition instructions are otherwise included in 
this contract. The GFP module generates the electronic equivalent of 
the Standard Form (SF) 1428, Inventory Disposal Schedule; and
    (vii) Submit a request to buy back or to convert to GFP items of 
Contractor-acquired property.
    (2) Information regarding the GFP module is available in the GFP 
Module Vendor Guide at https://dodprocurementtoolbox.com/site-pages/gfp-resources. Users may also register

[[Page 25605]]

for access to the GFP module and obtain training on the PIEE home 
page at https://wawf.eb.mil/piee-landing.
    (3) In complying with paragraphs (b)(1)(i) through (v) of this 
clause, the Contractor shall report the updated status of the 
property to the GFP module within 7 business days of the date the 
change in status occurs, unless otherwise specified in the contract.
    (4) The Contractor shall use Wide Area WorkFlow in accordance 
with DFARS Appendix F, Material Inspection and Receiving Report, to 
report the shipment of reparable items after completion of repair, 
maintenance, modification, or overhaul.
    (5) When Government property is in the possession of 
subcontractors, the Contractor shall ensure that reporting is 
accomplished using the data elements required in paragraph (c) of 
this clause.
    (c) Records of Government property. To facilitate reporting of 
Government property to the GFP module, the Contractor's property 
records, in addition to the requirements of paragraph (f)(iii) of 
the FAR 52.245-1 clause of this contract, shall enable recording of 
the following data elements:
    (1) National stock number (NSN). If an NSN is not available, use 
either the combination of manufacturer's CAGE code and part number, 
or model number.
    (2) CAGE code on the accountable Government contract.
    (3) Received/sent (shipped) date.
    (4) Accountable Government contract number.
    (5) Serial number (for serially-managed items that do not have a 
UII); and
    (6) Supply condition code (only required for reporting of 
reparable items). See Appendix 2.5 of Volume 2 of the Defense 
Logistics Manual (DLM) 4000.25, Military Standard Transaction 
Reporting and Accounting Procedures (MILSTRAP), at https://www.dla.mil/HQ/InformationOperations/DLMS/elibrary/manuals/v2/ for 
information on Federal supply condition codes.
    (d) Marking, reporting, and UII registration of GFP 
requirements. The Contractor--
    (1) Shall assign the UII and mark the GFP items identified as 
serially managed in the GFP attachment to this contract with an item 
unique identification (IUID) data matrix, when the technical drawing 
for the item is accessible to the Contractor and includes IUID data 
matrix location and marking method;
    (2) Shall report the UII either before or during shipment of the 
repaired item;
    (3) Is not required to mark items that were previously marked 
with an IUID data matrix and registered in accordance with DFARS 
252.211-7003, Item Unique Identification and Valuation; and
    (4) Shall assign a new UII, then mark and register the item, 
when the conditions of paragraph (d)(1) are met, if an item is found 
to be marked but not registered.
    (e) Disposing of Government property. (1) The Contractor shall 
complete the plant clearance inventory schedule using the plant 
clearance capability of the GFP module of the PIEE to generate an 
electronic equivalent of the SF 1428, Inventory Disposal Schedule. 
The plant clearance inventory schedule requires the following:
    (i) If known, the applicable Federal supply code (FSC) for all 
items, except items in scrap condition.
    (ii) If known, the manufacturer name for all aircraft components 
under Federal supply group (FSG) 16 or 17 and FSCs 2620, 2810, 2915, 
2925, 2935, 2945, 2995, 4920, 5821, 5826, 5841, 6340, and 6615.
    (iii) The manufacturer name, make, model number, model year, and 
serial number for all aircraft under FSCs 1510 and 1520.
    (iv) The appropriate Federal condition codes. See Appendix 2.5 
of Volume 2 of DLM 4000.25-2, Supply Standards and Procedures, 
edition in effect as of the date of this contract, at https://www.dla.mil/Portals/104/Documents/DLMS/manuals/dlm/v2/Volume2Change13Files.pdf.
    (2) If the schedules are acceptable, the plant clearance officer 
will confirm acceptance in the GFP module plant clearance 
capability, which will transmit a notification to the Contractor. 
The electronic acceptance is equivalent to the DD Form 1637, Notice 
of Acceptance of Inventory.
    (f) Demilitarization, mutilation, and destruction. If 
demilitarization, mutilation, or destruction of contractor inventory 
is required, the Contractor shall demilitarize, mutilate, or destroy 
contractor inventory, in accordance with the terms and conditions of 
the contract and consistent with Defense Demilitarization Manual, 
DoD Manual (DoDM) 4160.28-M, edition in effect as of the date of 
this contract. If the property is available for purchase, the plant 
clearance officer may authorize the purchaser to demilitarize, 
mutilate, or destroy as a condition of sale provided the property is 
not inherently dangerous to public health and safety.
    (g) Classified Contractor inventory. The Contractor shall 
dispose of classified contractor inventory in accordance with 
applicable security guides and regulations or as directed by the 
Contracting Officer.
    (h) Inherently dangerous Contractor inventory. Contractor 
inventory that is dangerous to public health or safety shall not be 
disposed of unless rendered innocuous or until adequate safeguards 
are provided.
    (i) Contractor inventory located in foreign countries. 
Consistent with contract terms and conditions, property disposition 
shall be in accordance with foreign and U.S. laws and regulations, 
including laws and regulations involving export controls, host 
nation requirements, final governing standards, and government-to-
government agreements. The Contractor's responsibility to comply 
with all applicable laws and regulations regarding export-controlled 
items exists independent of, and is not established or limited by, 
the information provided by this clause.
    (j) Disposal of scrap--(1) Contractor scrap procedures. (i) The 
Contractor shall include, within its property management procedure, 
a process for the accountability and management of Government-owned 
scrap. The process shall, at a minimum, provide for the effective 
and efficient disposition of scrap, including sales to scrap 
dealers, so as to minimize costs, maximize sales proceeds, and 
contain the necessary internal controls for mitigating the improper 
release of non-scrap property.
    (ii) The Contractor may commingle Government and contractor-
owned scrap and provide routine disposal of scrap, with plant 
clearance officer concurrence, when determined to be effective and 
efficient.
    (2) Scrap warranty. The plant clearance officer may require the 
Contractor to secure from scrap buyers a DD Form 1639, Scrap 
Warranty.
    (k) Sale of surplus Contractor inventory--(1) Sales procedures. 
(i) The Contractor shall conduct sales of contractor inventory (both 
useable property and scrap) in accordance with the requirements of 
this contract and plant clearance officer direction. The Contractor 
shall include in its invitation for bids the sales terms and 
conditions provided by the plant clearance officer.
    (ii) The Contractor may conduct internet-based sales, to include 
use of a third party.
    (iii) If the Contractor wishes to bid on the sale, the 
Contractor or its employees shall submit bids to the plant clearance 
officer prior to soliciting bids from other prospective bidders.
    (iv) The Contractor shall solicit bids to obtain adequate 
competition. Negotiated sales are subject to obtaining such 
competition as is feasible under the circumstances of the negotiated 
sale.
    (v) The Contractor shall solicit bids at least 15 calendar days 
before bid opening to allow adequate opportunity to inspect the 
property and prepare bids.
    (vi) For large sales, the Contractor may use summary lists of 
items offered as bid sheets with detailed descriptions attached.
    (vii) In addition to providing notice of the proposed sale to 
prospective bidders, the Contractor may, when the results are 
expected to justify the additional expense, display a notice of the 
proposed sale in appropriate public places, e.g., publish a sales 
notice on the internet, in appropriate trade journals or magazines, 
and in local newspapers.
    (viii) The plant clearance officer or designated Government 
representative will witness the bid opening. The Contractor shall 
submit the bid abstract in electronic format to the plant clearance 
officer within 2 days of bid opening. If the Contractor is unable to 
submit the bid abstract electronically, the Contractor may submit 2 
copies of the abstract manually within 2 days of bid opening. The 
plant clearance officer will not approve award to any bidder who is 
an ineligible transferee.
    (2) Required terms and conditions for sales contracts. The 
Contractor shall include the following terms and conditions in sales 
contracts:
    (i) For sales contracts or other documents transferring title:
    ``The Purchaser certifies that the property covered by this 
contract will be used in [Insert name of country]. In the event of 
resale or export by the Purchaser of any of the property, the 
Purchaser agrees to obtain the appropriate U.S. and foreign export 
or re-export license approval.''
    (ii) For sales contracts that require demilitarization, 
mutilation, or destruction of property:

[[Page 25606]]

    ``The following item(s) [Insert list provided by plant clearance 
officer] require demilitarization, mutilation, or destruction by the 
Purchaser. Additional instructions are provided in accordance with 
Defense Demilitarization Manual, DoDM 4160.28-M, edition in effect 
as of the date of this sales contract. A Government representative 
will certify and verify demilitarization of items. Prepare 
demilitarization certificates in accordance with DoDM 4160.28, 
Volume 2, section 4.5, DEMIL Certificate (see figure 2, Example 
DEMIL Certificate).''
    (iii) Removal and title transfer:
    ``Property requiring demilitarization shall not be removed, and 
title shall not pass to the Purchaser, until demilitarization has 
been accomplished and verified by a Government representative.''
    (iv) Assumption of cost incident to demilitarization:
    ``The Purchaser agrees to assume all costs incident to the 
demilitarization and to restore the working area to its present 
condition after removing the demilitarized property.''
    (v) Failure to demilitarize:
    ``If the Purchaser fails to demilitarize, mutilate, or destroy 
the property as specified in the sales contract, the Contractor may, 
upon giving 10 days written notice from to the Purchaser--
    (A) Repossess, demilitarize, and return the property to the 
Purchaser, in which case the Purchaser hereby agrees to pay to the 
Contractor, prior to the return of the property, all costs incurred 
by the Contractor in repossessing, demilitarizing, and returning the 
property;
    (B) Repossess, demilitarize, and resell the property, and charge 
the defaulting Purchaser with all costs incurred by the Contractor. 
The Contractor shall deduct these costs from the purchase price and 
refund the balance of the purchase price, if any, to the Purchaser. 
In the event the costs exceed the purchase price, the defaulting 
Purchaser hereby agrees to pay these costs to the Contractor; or
    (C) Repossess and resell the property under similar terms and 
conditions, and charge the defaulting Purchaser with all costs 
incurred by the Contractor. The Contractor shall deduct these costs 
from the original purchase price and refund the balance of the 
purchase price, if any, to the defaulting Purchaser. Should the 
excess costs to the Contractor exceed the purchase price, the 
defaulting Purchaser hereby agrees to pay these costs to the 
Contractor.''
    (l) Restrictions on purchase or retention of Contractor 
inventory. The Contractor may not knowingly sell the inventory to 
any person or that person's agent, employee, or household member if 
that person--
    (1) Is a civilian employee of DoD or the U.S. Coast Guard;
    (2) Is a member of the armed forces of the United States, 
including the U.S. Coast Guard; or
    (3) Has any functional or supervisory responsibilities for or 
within DoD's property disposal, disposition, or plant clearance 
programs or for the disposal of contractor inventory.
    (m) Proceeds from sales of surplus property. Unless otherwise 
provided in the contract, the proceeds of any sale, purchase, or 
retention shall be--
    (1) Forwarded to the Contracting Officer;
    (2) Credited to the Government as part of the settlement 
agreement pursuant to the termination of the contract;
    (3) Credited to the price or cost of the contract; or
    (4) Applied as otherwise directed by the Contracting Officer.

    (End of clause)

[FR Doc. 2023-08645 Filed 4-26-23; 8:45 am]
BILLING CODE 5001-06-P