Transcription
The Basics – What Does theGovernment Property Clause Sayand Mean?1
Government Property What is it? Who is it important to? Why is it important to them? HOW is it important to them? What does it say? Thirteen paragraphs Groupings2
Government PropertyWhat is it? Words, sentences, paragraphs discussing aparticular function A selection from the “Book of FAR” A description of a requirement A requirement when included in a contract An agreement among parties A “performance work statement”3
Government PropertyWho is it important to? The “Contractor” (Steward/holder) Program/Project manager Stockholders The “Government” (Provider) Property owner (accountable property owner) Requiring activity/Program/Project manager Taxpayers4
Government PropertyWhy/how is it important to them? It is, an enabler Acquisition Strategy (Recognize PGI 245.103-70Furnishing Government property to contractors?) Competition Economy Standardization Security Expedite production Scarcity Maintain the industrial base Contract type5
Government PropertyWhy/how is it important to them? A form of protection(cont) For the Contractor/steward Warranty provisions “LOSS” For the Government/provider Risk Mitigation Education tool Provides ground rules Establishes boundaries & freedoms6
FAR 52.245-1What does it say?The Government Property clause is divided into the individual paragraphs listed below in the order they appear inthe clause(a) Definitions(b) Property Management(c) Use of GovernmentProperty(d) Government-FurnishedProperty(e) Title to GovernmentProperty(f) Contractor Plans andSystems(g) System Analysis(h) Contractor Liability forGP(i) Equitable Adjustment(j) Contractor InventoryDisposal(k) Abandonment of GP(l) Communication(m) Overseas Contracts7
Government PropertyWhat does it say? (simpler version!!) (a) Term meanings (The) (e) Title – who owns it & when (h) Liability – who’s liable for loss, etc (b),(f), (j) System requirements & freedoms (c) & (i) What the STEWARD may/may not do (d),(g),(i), (k) What the OWNER (Gov) may/maynot do (l) & (m) Other8
TERM MEANINGS (a) I consider it the “key” to understandingGovernment Contract Property a “Rosetta Stone” in essence Might this individual agree?S.I. Hayakawa was a linguist, psychologist,semanticist, teacher and writer. He was anEnglish professor, served as president of SanFrancisco State University and a United StatesSenator from California from 1977 to 19839
TERM MEANINGS (a) Let’s look at quote and work from there You guys are both saying the samething. the only reason you're arguing isbecause you're using differentwords.S. I. Hayakawa Here’s another thought You guys are saying different things. the only reason you're agreeing is because each of youdefine the same word you use differently!!10
TERM MEANINGS (a) Example: the word “PROVIDE” “Provide” means to furnish, as in Government-furnishedproperty, or to acquire, as in contractor-acquiredproperty. Importance? Complying with FAR 45.102 policy(b) Contracting officers shall provide property tocontractors only when it is clearly demonstrated— Bottom line whenever Government property is “provided” under acontract it must be justified under FAR 45.102(b) which includes GFP, transferred GFP, costreimbursement CLIN CAP items retained for use ANDany time a cost-type contract is written (IT’S ALL CAP!!)11
TERM MEANINGS (a) Earlier I likened the definitions to theRosetta Stone” for Government ContractProperty Let’s visually demonstrate this!1.2.Here’s what 52.245-1 looks like with definedterms highlightedHere’s what 52.245-1 looks like when definedterms are “redacted”So!! Terms and their definitionhelp us to first read, then sharecommon understanding!a12
TITLE (e)Possession is nine-tenths of the law An expression meaning that ownership is easier tomaintain if one has possession of something, ordifficult to enforce if one does not In a property dispute (whether real or personal),in the absence of clear and compellingtestimony or documentation to the contrary, theperson in actual, custodial possession of theproperty is presumed to be the rightful owner.The rightful owner shall have their possessionreturned to them; if taken or used.(wikipedia)
TITLE (e) Paragraph (e) then, serves to provide that clearand compelling documentation so the rightfulowner can have possession returned to themwhen used 14
TITLE (e) What & WHEN the Government has/takes title to1. All GFP – no matter what 2. What we finance or as specified in the contract Progress/Performance-based payments under FPcontracts DD 250 stuff3. All property purchased by the contractor for whichthe contractor is entitled to be reimbursed as aI said,direct item of cost “Subject to RAA”e Upon vendor’s deliverynot(BUT!! - Subject to RAA!!) “Subject of RA!” All other reimbursable property upon issuance, processcommencement or GOV reimbursement (whichever 1st)15
TITLE (e)Perhaps “possession is nine-tenths of the law,”but the FAR clause at 52.245-1(e) clarifies both thewhat & the when regarding title16
LIABILITY (h)(h) Liability –OR – who pays ifbad thingshappen Well, it depends!!!17
LIABILITY (h) Paragraph (h) is both a WARNING SIGNFIXER& a RISK To ALL PARTIES – The Government will self-insure unlesswe say differently (Full Risk of Loss, -1(h)(1), ALT I) Property Owner – “Things happen & it could be BAD” Requiring activity – You might be MORE RESPONSIBLEthan you ever envisioned Contracting Officer – Equitable adjustment! Contractor/steward – You are responsible, accountable andMAY be held liable depending upon: Limited Risk of Loss provision -1(h)(1)h The sins of “Managerial Personnel” The failure of your Property Management System Full Risk of Loss provision -1(h)(1), ALT I (The Contractor/Steward18is liable for all LOSS – except wear/tear)
LIABILITY (h) -1(h)(1) Paragraph ground rules IF there’s any insurance money paid, we’d like it! Protect property from further loss Steward won’t prejudice 3rd party actions & WILLHELP as needed If liable you PROMISE to PAY!19
SYSTEM REQUIREMENTS &FREEDOMS (b),(f), (j) Paragraph (b) – Broad system requirements withsome freedoms An adequate Property Management System Government “expectations” & “freedom” Processes, systems, procedures, records, & methodologies Notification of changes Use Customary Commercial Practices, Voluntary ConsensusStandards and/or Industry Leading Practices and Standardsb Assumption, span & breadth of stewardshipresponsibilities , including subcontracts Self-policing, self-improvement & “sharing” with thePA!20
SYSTEM REQUIREMENTS &FREEDOMS (b),(f), (j) Paragraph (f) & (j) – Specific system requirementswith some freedoms (f) Contractor plans and systems Plans and systems at the contract, program, site or entitylevel that reflect their efforts to obtain best value (freedom) Addresses 14 outcomes/processes (j) Contractor Inventory Disposal Addresses 1 outcome/process (restrictive)21
(f) & (j) Processes and Outcomes Acquisition of Property Receipt of GovernmentProperty Identification Records of GovernmentProperty Physical Inventory Subcontractor Control Reports Relief of StewardshipResponsibility Utilizing GovernmentProperty Consumption Movement Storage Maintenance Disposal Property Closeoutfj
SYSTEM REQUIREMENTS &FREEDOMS (b),(f), (j) It seems to make good sense to groupparagraphs (b) (f) & (j), addressing the range ofBROAD to SPECIFIC PMS requirements With the exception of paragraph (j) which ismore directive in nature (driven by the FMR, inturn driven by law), PMS requirements areseemingly “performance-based” here are OUR requirements, now show us howYOU will meet them “Any color - so long as it's black” philosophy nolonger applies to cars or PMS23
What the STEWARD may/may not do(c) & (i) Paragraph (c) - Use of Government property Use it for “this” not for “that” (Unless ) Don’t you dare change it! (Unless ) Thou shalt not create junk (Unless ) Paragraph (i) - Equitable adjustment Seek a contract adjustmentci24
What the OWNER (Gov) may/may notdo (d),(g),(i), (k) Paragraph (d) - Government-furnished property Deliver the property, data & info “Stuff” under warranty -- Neither LATE norDEFECTIVE “Stuff” not under warranty – “as-is” Add, subtract, or substitute d25
What the OWNER (Gov) may/may notdo (d),(g),(i), (k) Paragraph (g) - System Analysis Physical location ACCESS – to Steward & Substeward locations! Records ACCESS Require “corrective action”g26
What the OWNER (Gov) may/may notdo (d),(g),(i), (k) Paragraph (i) - Equitable adjustment Seek or provide a contract adjustment Paragraph (k) - Abandonment of Governmentproperty May NOT abandon SENSITIVE “stuff” without OK MAY ABANDON non-sensitive “stuff” – no OKneeded!! Other “stuff” abandonable No obligation to restore or rehabilitate i k27
Other (l) & (m) Paragraph (l) - Communications in writing Paragraph (m) – OCONUS contractsl&m28
Summary Definitions are KEY to understanding GovernmentContract Property – not just the -1 clause! Balance of -1 clause can be focused on 5 areas: Title – who owns it & when (e)Liability – who’s liable for loss, etc (h)System requirements & freedoms (b),(f), (j)What the STEWARD may/may not do (c) & (i)What the OWNER (Gov) may/may not do (d),(g),(i), (k) A REMINDER!! The -1 clause does not “sail alone”and serves as the keystone for all of the following 29
Other Contract Government PropertyClausesCONTRACT GP RELATED FAR/DFARS CLAUSES– 52.245-2 Government Property(Installation Operations for Services)252.211-7003 ItemIdentification and Valuation– 52.245-9 Use and Charges– 252.211-7003 Item Identification and Valuation– 252.211-7007 Reporting of Government-Furnished Property– 252.245-7001 Tagging, Labeling, and Marking of GovernmentFurnished Property– 252.245-7002 Reporting Loss of Government Property– 252.245-7003 Contractor Property Management SystemAdministration– 252.245-7004 Reporting, Reutilization, and Disposal
BACK-UP SLIDES32
FAR 52.245-1(a)(a) Definitions:The following definitions are applicable the Contractor’s PropertyManagement System and are found in FAR 52.245-1. Contractor Acquired Property: (CAP)Contractor Inventory: GFP and CAP where the Gov’t has titleContractor’s Managerial Personnel: Contractor’s directors, officers, etc.Demilitarization:Equipment:Government Furnished Property: (GFP)Government Property:33
FAR 52.245-1(a)Definitions: Material:Precious Metals:Property: all tangible property, both real and personalProperty Records:Provide: to furnish, as in GFP, or to acquire, as in CAPReal Property: (see FMR 102-71.20 for full definition)Sensitive Property:34
FAR 52.245-1(a)Definitions: “Loss of Government property” (April 2012) means unintended,unforeseen or accidental loss, damage or destruction to Governmentproperty that reduces the Government’s expected economic benefitsof the property. Loss of Government property does not includepurposeful destructive testing, obsolescence, normal wear and tearor manufacturing defects.35
FAR 52.245-1(a)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 requiringrepair to restore the item to usable condition; or(4) Destruction resulting from incidents that render the itemuseless for its intended purpose or beyond economical repair.36
FAR 52.245-1(a)Definitions “Production scrap” means unusable material resulting fromproduction, engineering, operations and maintenance, repair, andresearch and development contract activities. Production scrap mayhave value when re-melted or reprocessed e.g., textile and metalclippings, borings, and faulty castings and forgings. “Unit acquisition cost” means—(1) For Government-furnished property, the dollar valueassigned by the Government and identified in the contract; and(2) For contractor-acquired property, the cost derived from thecontractor’s records that reflect consistently applied generally acceptedaccounting principles.37
FAR 52.245-1(b)(b) Property management(1) The Contractor shall have a system of internal controls to manage(control, use, preserve, protect, repair and maintain) Governmentproperty in its possession. The system shall be adequate to satisfythe requirements of this clause.38
FAR 52.245-1(b)(b) Property managementThe Contractor shall initiate and maintain the processes, systems,procedures, records, and methodologies necessary for effective andefficient control of Government property. Prior to implementation, theContractor shall disclose to the PA any significant changes to theirProperty Management System.The Contractor may employ the following:– Customary Commercial Practices– Voluntary Consensus Standards– Industry Leading Practices and StandardsAs long as they provide effective and efficient management of Government Property39
FAR 52.245-1(b)(b) Property management(2) The Contractor's responsibility extends from the initial acquisitionand receipt of property, through stewardship, custody, and use untilformally relieved of responsibility by authorized means, includingdelivery, consumption, expending, sale (as surplus property), or otherdisposition, or via a completed investigation, evaluation, and finaldetermination for lost, stolen, damaged, or destroyed property.40
FAR 52.245-1(b)(b) Property management(3) The contractor shall include the requirements of this clause in allsubcontracts where GP is furnished or acquired for subcontractorperformance.Prime ContractorSub Contractor41
FAR 52.245-1(b)(b) Property management(4) The Contractor shall establish and maintain procedures necessary toassess its property management system effectiveness, and shallperform periodic internal reviews surveillances, self assessments, oraudits. Significant findings or results of such reviews and auditspertaining to Government property shall be made available to theProperty Administrator.42
FAR 52.245-1(c)(c) Use of Government property.(1) The Contractor shall use Government property, either furnished oracquired under this contract, only for performing this contract, unlessotherwise provided for in this contract or approved by the ContractingOfficer.43
FAR 52.245-1(c)(c) Use of Government property (continued).(2) Modifications or alterations of Government property are prohibited,unless they are—– (i) Reasonable and necessary due to the scope of work under this contract orits terms and conditions;– (ii) Required for normal maintenance; or– (iii) Otherwise authorized bythe Contracting Officer.44
FAR 52.245-1(c)(c) Use of Government property (continued).(3) The Contractor shall not cannibalize Government property unlessotherwise provided for in this contract or approved by the ContractingOfficer.45
FAR 52.245-1(d)(d) Government-furnished property(1) The Government shall deliver to the Contractor the GFP describedin this contract. The Government shall furnish related data &information needed for the intended use of the property(2) The 2 standard warranties do not apply to property acquired orfabricated by the Contractor & then transferred to another contractwith this ContractorWarranty46
FAR 52.245-1(d)(2)The delivery and/or performance dates specified in this contractare based upon the expectation that the Government-furnished propertywill be: Suitable for contract performance Will be delivered to the Contractor by the dates stated in thecontract.(i) If the property is not delivered to the Contractor by the datesstated in the contract, the Contracting Officer shall, upon theContractor's timely written request, consider an equitableadjustment to the contract.47
FAR 52.245-1(d)(ii)In the event property is received by the Contractor (or forGovernment-furnished property after receipt and installation) in acondition not suitable for its intended use, the Contracting Officer shall,upon the Contractor's timely written request, advise the Contractor on acourse of action to remedy the problem. Such action may includerepairing, replacing, modifying, returning, or otherwise disposing of theproperty at the Government's expense.– Upon completion of the required action(s) the Contracting Officer shall consideran equitable adjustment to the contract (see also paragraph (f)(1)(ii)(A) of thisclause).48
FAR 52.245-1(d)(iii) The Government may, at its option, furnish property in an “as-is”condition. The Government provides no warranty and any repairs,replacement, and/or refurbishment shall be at Contractor’s expense.49
FAR 52.245-1(d)(3)(i) The CO may by written notice, at any time:(A) Increase or decrease the amount of GFP under this contract.(B) Substitute other GFP for the property previously furnished (C) Withdraw authority to use property.CO shall consider an equitable adjustment to contract.50
FAR 52.245-1(e)(e) Title to Government Property(1) The Government shall retain title to all GFP.Title to GP shall not be affected by its incorporation into orattachment to any property not owned by the Government, norshall GP become a fixture or lose its identity as personalproperty by being attached to RP.51
FAR 52.245-1(e)(2) Title vests in the Government for all property acquired orfabricated by the Contractor IAW the financing provisions orother specific requirements for passage of title in the contract.Under FP contracts (without financing arrangements) theContractor retains title to all acquired property except fordeliverable end items.52
FAR 52.245-1(e)(3) Title under CR or T&M or CR/CLINs in FP contracts:(i) Title to all property purchased by the contractor for which thecontractor is entitled to be reimbursed as a direct item of cost underthis contract shall pass to & vest in the Government upon vendor’sdelivery of such property(ii) Title to all other property (with reimbursable costs to Contractor)vests in the Government upon:(a) Issuance of the property for use in contract performance(b) Commencement of processing(c) Reimbursement of cost by the Government whicheveroccurs first53
FAR 52.245-1(f)(f) Contractor plans and systemsContractors shall develop property management plans and systemsat the contract, program, site or entity level that reflect their efforts toobtain best value. Such plans and systems shall enable the followingoutcomes or processes:54
FAR 52.245-1(f)OUTCOMES OR PROCESSES FOR PROPERTY MANAGEMENT:(Property Management*) ( see next slide )Acquisition of PropertyReceipt of GP (including Identify)Life CycleRecords of GPPhysical InventorySubcontract ControlReportsRelief of Stewardship ResponsibilityUtilizing GP (including Consume, Move, Store)MaintenanceProperty Closeout (Disposal of Property)55
FAR 52.245-1(f)* Property Management -This is the process whereby the Contractormaintains property management plans, systems, and proceduresthat conform to requirements.(i) Acquisition of Property-The Contractor shall document that allproperty was acquired consistent with its engineering, productionplanning, and property control operations.(ii) Receipt of GP (including Identify) -The Contractor shall receiveGovernment property and document the receipt IAW the Outcomefor Records (A)(1 to 5); identify; & manage shipping discrepancies.(iii) Records of GP-The Contractor shall create & maintain records of allGov’t Property accountable to the contract including GFP & CAP.(A) They shall enable a complete, current, auditable record of alltransactions and shall contain the following info (unless P.A.approves otherwise):56
FAR 52.245-1(f)(iii) Records of Government Property shall include:– 1. Name, part no. & description, NSN (if needed), & other data elements asnecessary & required IAW contract terms & conditions.– 2. Quantity received (or fabricated), issued, & balance-on-hand– 3. Unit acquisition cost– 4. Unique-item identifier or equivalent (if available & necessary for individualitem tracking– 5. Unit of measure– 6. Accountable contract number or equivalent code designation– 7. Location– 8. Disposition– 9. Posting reference & date of transaction– 10. Date Placed in service (if required IAW contracts terms & conditions)57
FAR 52.245-1(f)(iii) Records of Government Property(B) Use of a Receipt and Issue System for Government Material.When approved by the PA, the Contractor may maintain, in lieuof formal property records, a file of appropriately crossreferenced documents evidencing receipt, issue, and use ofmaterial that is issued for immediate consumption.58
FAR 52.245-1(f)(iv) Physical Inventory-The Contractor shall periodically perform,record, and disclose physical inventory results. A final physicalinventory shall be performed upon contract completion ortermination. The PA may waive this final inventory requirement,depending on the circumstances (e.g., overall reliability of theContractor's system or the property is to be transferred to a followon contract).59
FAR 52.245-1(f)(v) Subcontract Control (A) The Contractor shall award subcontracts that clearly identify items tobe provided and the extent of any restrictions or limitations for fabricateditems. The Contractor shall ensure appropriate flow down of contractterms and conditions (e.g., extent of liability for loss of Governmentproperty).For example: The Prime Contractor must flow down the full risk of lossto the subcontractor when FAR 52.245-1 (Alt I) is in the contract.(B) The Contractor shall assure its subcontracts are properlyadministered and reviews are periodically performed to determine theadequacy of the subcontractor's property management system.60
FAR 52.245-1(f)(vi) Reports - The Contractor shall have a process to create and providereports of discrepancies loss of Government property, physical inventoryresults, audits and self-assessments, corrective actions; and otherproperty related reports as directed by the Contracting Officer.61
FAR 52.245-1(f)(vii) Relief of Stewardship Responsibility and liability- The contractor shallhave a process to enable the prompt recognition, investigation, disclosureand reporting of loss of Government property, including losses that occurat subcontractor or alternate site locations.(A) This process shall include the corrective actions necessary to preventrecurrence.(B) Unless otherwise directed by the Property Administrator, theContractor shall investigate and report to the Government all incidents ofproperty loss as soon as the facts become known. Such reports shall, ata minimum, contain the following information (next slide):62
FAR 52.245-1(f)(1) Date of incident (if known).(2) The data elements required under (f)(1)(iii)(A).(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 orreplacement costs.(7) All known interests in commingled material of which includes Government material.(8) Cause and corrective action taken and preventive actions to be taken.(9) A statement that the Government will receive compensation covering the loss of Governmentproperty, 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, export controlled, hazardousor toxic material, and that the appropriate agencies and authorities were notified.63
FAR 52.245-1(f)(C) Unless the contract provides otherwise, the Contractor shall berelieved of stewardship responsibility and liability for property when–– (1) Such property is consumed or expended, reasonably and properly, orotherwise accounted for, in the performance of the contract, includingreasonable inventory adjustments of material as determined by the PropertyAdministrator;– (2) Property Administrator grants relief of responsibility and liability for loss ofGovernment property;– (3) Property is delivered or shipped from the Contractor’s plant, underGovernment instructions, except when shipment is to a subcontractor or otherlocation of the Contractor; or– (4) Property is disposed of in accordance with paragraphs (j) and (k) of thisclause.64
FAR 52.245-1(f)(viii) Utilizing GP (including Consume, Move, Store)-The Contractor shallutilize, consume, move, and store Government Property only asauthorized under this contract. The Contractor shall promptly discloseand report Government property in its possession that is excess tocontract performance.(B) Unless otherwise authorized in this contract or by the PropertyAdministrator the Contractor shall not commingle Governmentmaterial with material not owned by the Government.(ix) Maintenance-The Contractor shall properly maintain Governmentproperty. The Contractor's maintenance program shall enable theidentification, disclosure, and performance of normal and routinepreventative maintenance and repair. The Contractor shall disclose andreport to the Property Administrator the need for replacement and/orcapital rehabilitation.65
FAR 52.245-1(f)(x) Property Closeout (Disposal of Property)-The Contractor shallpromptly perform and report to the Property Administrator contractproperty closeout, to include reporting, investigating and securingclosure of all loss of Government property cases; physically inventoryingall property upon termination or completion of this contract; anddisposing of items at the time they are determined to be excess tocontractual needs.66
FAR 52.245-1(g)(g) System Analysis(1) The Government shall have access to the Contractor’s premises andall GP, at reasonable times, for the purpose of reviewing, inspecting,& evaluating the Contractor’s PM plans, systems, procedures,records, etc. This access includes all site locations and, with theContractor’s consent, all subcontractor premises.The Contractor shall ensure Government access to subcontractorpremises, and all Government property located at subcontractorpremises, for the purposes of reviewing, inspecting and evaluating thesubcontractor’s property management plan, systems, procedures,records, & supporting documentation that pertains to Governmentproperty.(2) Records of Government property shall be readily available to authorizedGovernment personnel and shall be appropriately safeguarded.67
FAR 52.245-1(g)(g) System Analysis(3) Should it be determined by the Government that the Contractor's (orsubcontractor’s) property management practices are inadequate or notacceptable for the effective management and control of Government propertyunder this contract, or present an undue risk to the Government, theContractor shall prepare a corrective action plan when requested by theProperty Administrator and take all necessary corrective actions as specifiedby the schedule within the corrective action plan.(4) The Contractor shall ensure Government access to subcontractorpremises, and all Government property located at subcontractor premises, forthe purposes of reviewing, inspecting and evaluating the subcontractor'sproperty management plan, systems, procedures, records, and supportingdocumentation that pertains to Government property.68
FAR 52.245-1(h)(h) Contractor liability for Government Property(1) Unless otherwise provided for in the contract, the contractor shallnot be liable for loss of Government property furnished or acquiredunder the contract, except where the following applies:(i)(ii)(iii)The risk is covered by insurance or when the Contractor is to be reimbursed(to the extent of such insurance or reimbursement).The loss of Government property that is the result of willful misconduct orlack of good faith on the part of the contractor’s managerial personnel.The CO has, in writing, revoked the Government’s assumption of risk forloss of Government property due to a determination in paragraph (g) of thisclause that the Contractor’s property management practices are inadequate,&/or present an undue risk to the Government & the Contractor failed to taketimely corrective action.69
FAR 52.245-1(h)(2) The contractor shall take all reasonable actions necessary to protectthe property from further loss. The contractor shall separatedamaged & undamaged property & take other such action asdirected by the PA.(3) The contractor shall do nothing to prejudice the Government’s rightsto recover against 3rd parties for any loss of of GP.(4) The Contractor shall reimburse the Government for loss ofGovernment property, to the extent that the Contractor is financiallyliable for such loss, as determined by the CO.(5) Upon request by the CO, the contractor shall, at Government’sexpense, furnish to the Government all reasonable assistance &cooperation, including the prosecution of suit 70
FAR 52.245-1(ALT I, (h))*Alternate I: (h)(1) of basic clause“The contractor assumes the risk of, and shall be responsible for, anyloss, theft, damage, or destruction of GP upon its delivery to thecontractor as GFP. However, the contractor is not responsible forreasonable wear & tear or for GP properly consumed in performingthis contract.The CO may revoke the Government’s assumption of risk when the PAdetermines that the contractor’s property management practices arenoncompliant with the contract requirements.*Please Note: Per FAR 45.104 (Oct 2010) Generally, Contractors are not heldliable for LOSS of GP under the following types of contracts: CR, T & M,Labor-hour, & FP contracts awarded on the basis of submission of certifiedcost or pricing data.71
FAR 52.245-1(i)(i) Equitable adjustment.Equitable adjustments under this clause shall be made in accordancewith the procedures of the Changes clause. However, theGovernment shall not be liable for breach of contract for thefollowing:– (1) Any delay in delivery of Government-furnished property.– (2) Delivery of Government-furnished property in a condition not suitable for its
252.211-7007 Reporting of Government-Furnished Property - 252.245-7001 Tagging, Labeling, and Marking of Government-Furnished Property - 252.245-7002 Reporting Loss of Government Property - 252.245-7003 Contractor Property Management System Administration - 252.245-7004 Reporting, Reutilization, and Disposal
