252.245-7005 Management and Reporting of

Government Property.

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

MANAGEMENT AND REPORTING OF GOVERNMENT PROPERTY (JAN 2024)

(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,” “Governmentfurnished 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 receipt of GFP; (ii) Report the transfer of GFP to another DoD contract;

(iii) 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;

(iv) Report when serially-managed items of GFP are incorporated into a higher-level component,

assembly, or end item;

(v) Report the loss of Government property in accordance with paragraph (f)(1)(vii) of the FAR

52.245-1 clause of this contract;

(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 for access to
the GFP module and obtain training on the PIEE home page at https://piee.eb.mil.

(3) In complying with paragraphs (b)(1)(i) through (iv) 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)(1)(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 the

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). For information on

Federal supply condition codes, see DLM 4000.25, Defense Logistics Management Standards

(DLMS), Volume 2, Supply Standards and Procedures, Appendix 2.5 at

https://www.dla.mil/HQ/InformationOperations/DLMS/elibrary/manuals/v2/.

(d) Marking, reporting, and UII registration of GFP requirements. The Contractor—

(1) Shall assign the UII and mark the reparable 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 in the IUID Registry.

(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 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.

(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:

“The following items [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 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)

Parent topic: 252.245 RESERVED