Intermediate Government Furnished Property for …

1 Intermediate Government Furnished Property for Contracting Carol Vigna, OSD AT&L DPAP. Professionals David Guinasso, supporting OSD AT&L DPAP. Presented by: Defense Procurement and Acquisition Policy (DPAP). 7 JAN 2016 1. Topics The areas covered in this training are recurring areas of concern for audit, accountability and ensuring that contracts protect the governments assets and public's interests. -Contractor Acquired Property -Bailment -Exchange or Sale -Performance Based Logistics 2. Definitions Government Furnished Property (GFP) is defined as Property in the possession of or acquired by the Government and subsequently Furnished to the Contractor for performance of a contract. It includes items like spares and Property Furnished for repair, maintenance, overhaul, or modification. It can be items taken or requisitioned from Government inventory or purchased by the Government specifically to be provided on a contract.

2 GFP also includes contractor-acquired Property if the contractor- acquired Property is a deliverable under a cost contract that has been accepted by the Government for continued use under that contract or a future contract. Contractor Acquired Property (CAP) - is Property purchased or fabricated by a contractor for use on a contract to which the Government has title. 3. Not considered GFP. 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 . Located on a Government site or installation Used within the location Remains accountable to the Government 4. Contractor Acquired Property 5. Cost Contract Title Provision in GP Clause FAR Government Property Title under Cost-Reimbursement or Time-and-Material Contracts or Cost- Reimbursable contract line items under Fixed-Price contracts.

3 (i) Title to all Property purchased by the Contractor for which the Contractor is entitled to be reimbursed as a direct item of cost under this contract shall pass to and vest in the Government upon the vendor's delivery of such Property . (ii) Title to all other Property , the cost of which is reimbursable to the Contractor, shall pass to and vest in the Government upon . (A) Issuance of the Property for use in contract performance;. (B) Commencement of processing of the Property for use in contract performance; or (C) Reimbursement of the cost of the Property by the Government , whichever occurs first. Must be in all Cost Reimbursable and T&M contracts 6. An Illustration CAP. Deliverable 7. Important Things to Remember Title is not changed by incorporation of Government Property into Property owned by the contractor. Title to cost reimbursable line items on Fixed Price contracts is the same as title under a cost contract.

4 CAP can not be used on a different contract unless it is: Delivered and accepted and provided as GFP. Repurchased or credited by the contractor*. *Subject to the requirements of the Materials Management and Accounting System (MMAS). 8. What Happens to CAP. May be consumed in production of the deliverable May be delivered May be credited to the contract and charged to a different contract if needed on the succeeding contract (Reasonable, Allocable, and Allowable test). May be repurchased by the contractor - At full cost; or, - Returned to suppliers less reasonable restock costs If not consumed, repurchased or delivered, must be reported to the Government for plant clearance whenever no longer required for performance Either during or at the completion of the contract May be provided to succeeding contracts as GFP after inspection and acceptance and delivery 9. How CAP is Delivered PGI Delivery of contractor-acquired Property .

5 (1)(i) When delivery of contractor-acquired Property is required, the contracting officer shall direct that the delivery be accomplished by contract line item, except as described in paragraph (1)(ii) of this section. (2) Each contract line item of contractor-acquired Property shall include the following information: Contractor-Acquired Property Delivery Contract Line Item Serial Date Placed in Item Description/ Type Unit of Number Original Unit Service by the CLIN Nomenclature Designation NSN PIN Quantity Measure (UII)* Acquisition Cost Contractor x x As required x x x x If known x x *Contractor-acquired Property items shall be marked as required by DFARS clause 10. Delivery of CAP. Once Contract Line Items are created, CAP will be delivered as any other deliverable line item, using WAWF iRAPT in accordance with: DFARS (b) Except as provided in paragraph (c) of this clause, the Contractor shall submit payment requests and receiving reports using WAWF, in one of the following electronic formats that WAWF accepts: Electronic Data Interchange, Secure File Transfer Protocol, or World Wide Web input.

6 Information regarding WAWF is available on the Internet at DFARS "(b) Contractor submission of the material inspection and receiving information required by Appendix F of the Defense FAR Supplement by using the Wide Area WorkFlow (WAWF) electronic form (see paragraph (b) of the clause at 7003 < > ) fulfills the requirement for a material inspection and receiving report (DD Form 250).. DFARS Appendix F (b) The use of the DD Form 250 is on an exception basis (see DFARS < > (a)). because use of the WAWF RR is now required by most DoD contracts 11. Bailment 12. Bailment What is a Bailment ? DFARS PGI 217_75 defines bailment as: The process whereby a part is loaned to a recipient with the agreement that the part will be returned at an appointed time. The Government retains legal title to such material even though the borrowing agency has possession during the stated period.. Items remain accountable to the DoD activity that loans them (Loaning Activity) and will be recorded in accountable Property system of record as required by DoDI When do you use it?

7 Under PGI 217_75. used to loan parts to a contractor that DoD believes qualified to become a second source for items which are only available sole source (Spare Parts Breakout Program). To provide military unique items for contractors to use in IR&D and B&P. Should Not be used to provide Property for use in performing a contract If there is a contract, the Property should be provided as GFP. Bailment agreements and loans are not governed by FAR Part 45 and associated DFARS. clauses 13. Bailment Agreements Loaning Activity must work with counsel to prepare a bailment or loan agreement Bailment/Loan agreement should: Specify the allowed use for the item (and disallow any other use). Set the term of the loan (beginning and ending dates). Specify transportation arrangements and costs Reserve the right for the Government to inspect the item at reasonable times Require regular confirmation of the existence of the item (physical inventory).

8 Allow for Government to require return of the Property at any time, without compensation to the contractor Discuss responsibility for liability associated with the use or loss of the Property Require reporting of any loss of Government Property Specify any export restrictions or intellectual Property considerations 14. Exchange or Sale 15. Exchange or Sale Exchange most commonly thought of as a trade in . Sell disposal sales as part of the federal disposal process - Plant Clearance under FAR and Federal Management Regulations (FMR) 102-38. - FMR Disposal Process under FMR 102-38. 16. Exchange or Sale Legal Authority - 40 USC. 503. Exchange or sale of similar items (a) Authority of Executive Agencies. In acquiring personal Property , an executive agency may exchange or sell similar items and may apply the exchange allowance or proceeds of sale in whole or in part payment for the Property acquired. (b) APPLICABLE REGULATION AND LAW.

9 (1) REGULATIONS PRESCRIBED BY ADMINISTRATOR OF GENERAL. SERVICES. A transaction under subsection (a) must be carried out in accordance with regulations the Administrator of General Services prescribes, subject to regulations prescribed by the Administrator for Federal Procurement Policy under division B (except sections 1704 and 2303) of subtitle I of title 41. (2) IN WRITING A transaction under subsection (a) must be evidenced in writing. (3) SECTION 6101(b) to (d) OF TITLE 41 Section 6101(b) to (d) of title 41 applies to a sale of Property under subsection (a), except that fixed price sales may be conducted in the same manner and subject to the same conditions as are applicable to the sale of Property under section 545(d) of this title. 17. Personal Property [Exchange or Sale]. FMR Personal Property means any Property , except real Property . For purposes of this part, the term excludes records of the Federal Government , and naval vessels of the following categories: battleships, cruisers, aircraft carriers, destroyers, and submarines.

10 FAR Personal Property means Property of any kind or interest in it except real Property , records of the Federal Government , and naval vessels of the following categories: (1) Battleships;. (2) Cruisers;. (3) Aircraft carriers;. (4) Destroyers; and (5) Submarines. 18. Similar Items [Exchange or Sale]. Defined in FMR Similar means the acquired item(s) and replaced item(s): (1) Are identical; or (2) Fall within a single Federal Supply Classification (FSC) Group of Property (includes any and all forms of Property within a single FSC Group); or (3) Are parts or containers for similar end items; or (4) Are designed or constructed for the same purpose (includes any and all forms of Property regardless of the FSC Group to which they are assigned). 19. When You Can Do An Exchange Replacement of Property that is still required, but is no longer functional due to wear or obsolescence May be accomplished as part of the acquisition of new Property May be used to acquire Property under a service contract provided the Property is similar to that being exchanged or sold 20.