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Barry McVay's FEDERAL CONTRACTS DISPATCH

DATE: January 10, 2000

FROM: Barry McVay, CPCM

SUBJECT: Federal Acquisition Regulation (FAR); Rewrite of Part 45, Government Property

SOURCE: Federal Register, January 10, 2000, Vol. 65, No. 6, page 1437

AGENCIES: Department of Defense (DOD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA)

ACTION: Proposed Rule

SYNOPSIS: It is proposed that FAR Part 45, Government Property, and the related clauses in FAR 52.245, be rewritten to simplify procedures, reduce recordkeeping, and eliminate requirements related to the management and disposition of government property in the possession of contractors. In addition, this proposed rule would allow contractors to manage government property under a standard, process based system or under the same business practices they use to manage their own property. A contractor would be allowed to use either system at each location where it performs a contract, but the contractor would be required to use only one system at each site. A contractor that decides to use its property management practices to manage the government's property instead of the standard processes would have to accept increased liability for property losses.

DATES: Submit comments on or before March 10, 2000.

ADDRESS: Send comments to General Services Administration, FAR Secretariat (MVRS), 1800 F Street, NW, Room 4035, ATTN: Laurie Duarte, Washington, DC 20405, e-mail: farcase.1995-013@gsa.gov. Cite FAR case 1995-013 in all correspondence related to this proposed rule.

FOR FURTHER INFORMATION CONTACT: Ms. Angelena Moy, 703-695-1097/1098, e-mail: moyac@acq.osd.mil; or Ms. Linda Klein, 202-501-3775.

SUPPLEMENTAL INFORMATION: On June 2, 1997, a proposed rewrite of FAR Part 45 was published, and comments on the proposed FAR Part 45 were requested. A public meeting was conducted on February 17, 1998, to address the 1,000 comments received on that proposed rule, and an additional public meeting was conducted on May 18, 1999, to address proposed changes resulting from the February 17, 1998, meeting and additional commercial property management practices. Based on the comments received on the proposed rule and the two public meetings, the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council have decided to completely revise and restructure the proposed rule and to request additional comments on the changes.

FAR Part 45 would be reorganized as follows:

     FAR 45.000, Scope of Part.
     FAR 45.001, Definitions.

Subpart 45.1, General
     45.101, Property management procedures.
     45.102, Policy.

Subpart 45.2, Furnishing Government Property
     45.201, Furnishing property for performance of a Government contract.
         45.201-1, Criteria for furnishing Government property.
         45.201-2, Restrictions on furnishing Government property.
         45.201-3, Documentation and approval requirements.
     45.202, Competitive advantage.
     45.203, Solicitation and contract requirements.
     45.204, Postaward requests for Government property.
     45.205, Repair or replacement of Government-furnished property.
         45.205-1, Maintenance.
         45.205-2, Property losses.
     45.206, Government-furnished property to be returned to a Government activity.
     45.207, Solicitation provision and contract clauses.
         45.207-1, Solicitation provision.
         45.207-2, Contract clauses.

Subpart 45.3, Contractor-Acquired or Produced Property
     45.301, General.
     45.302, Fixed-price and labor-hour contracts.
     45.303, Cost-reimbursement and time-and-materials contracts.
     45.304, Contract clause.

Subpart 45.4, Liability for Property Losses
     45.400, General.
     45.401, Liability for property losses -- contracts that include the clause at 52.245-2, Government Property.
         45.401-1, Government liability.
         45.401-2, Contractor liability.
     45.402, Liability for property losses -- contracts that include the clause at 52.245-7, Government Property -- Alternate Procedures.
         45.402-1, Government liability.
         45.402-2, Contractor liability.
     45.403, Post delivery considerations.
     45.404, Contract clause.

Subpart 45.5, Government Property Management
     45.501, Preaward considerations.
     45.502, Standard and alternate property management systems.
         45.502-1, Property management under the clause at 52.245-5, Government Property Administration.
         45.502-2, Property management under the clause at 52.245-8, Government Property Administration -- Alternate Procedures.
     45.503, Government property records and reports.
     45.504, Property accountability.
         45.504-1, Accountability.
         45.504-2, Transferring accountability to other contracts.
     45.505, Reutilization, transfer, and donation of Government property.
         45.505-1, Contractor actions.
         45.505-2, Inventory disposal schedules.
         45.505-3, Reutilization priorities.
         45.505-4, Screening.
         45.505-5, Waiver of screening requirements.
         45.505-6, Interagency property transfer costs.
     45.506, Abandonment, destruction, or donation of excess agency property.
     45.507, Disposal of scrap.
         45.507-1, Production scrap.
         45.507-2, Other scrap.
     45.508, Disposal of surplus Government property.
         45.508-1, Abandonment, destruction, or donation of surplus property in lieu of sale.
         45.508-2, Sale of surplus property.
         45.508-3, Proceeds from sales.
     45.509, Inventory Disposal Reports.
     45.510, Contract clause.

Subpart 45.6, Authorizing the Use of Government Property for Commercial Purposes
     45.601, Policy.
     45.602, Contract clause.

All the clauses in FAR 52.245 would be removed and replaced with the following provision (FAR 52.245-1) and seven clauses:

     52.245-1, Government Property Availability and Information Required from Offerors.
     52.245-2, Government Property.
     52.245-3, Delivery -- Special Tooling and Special Test Equipment (Fixed-Price Contracts)
     52.245-4, Liability for Government Property (Demolition Services Contracts).
     52.245-5, Government Property Administration.
     52.245-6, Rental Charges for Commercial Use.
     52.245-7, Government Property -- Alternate Procedures.
     52.245-8, Government Property Administration -- Alternate Procedures.

While there are many changes in the proposed rule, the following are the most significant proposed changes:

Based upon comments received on this proposed rule and other information that might become available during the public comment period, the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council say that the final rule might contain (1) the standard government property and government property administration clauses and related material only; (2) the alternate government property and government property administration clauses and related material only; or (3) both. The two councils go on express particular interest in receiving public comments on which set of clauses to include in the final rule.

EDITOR'S NOTE: In the prefatory material to the proposed rule is the following statement: "It is estimated that this rule, when final, will reduce the public paperwork associated with government property management by approximately 3,147,000 hours per year."

FOR FURTHER INFORMATION CONTACT: Barry McVay at 703-451-5953 or by e-mail to BarryMcVay@FedGovContracts.com.

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