Part 45 - Government Property

45.000 Scope of part.

Subpart 45.1 - General

45.101 Definitions.

45.102 Policy.

45.103 General.

45.104 Responsibility and liability for Government property.

45.105 Contractors’ property management system compliance.

45.106 Transferring accountability.

45.107 Contract clauses.

Subpart 45.2 - Solicitation and Evaluation Procedures

45.201 Solicitation.

45.202 Evaluation procedures.

Subpart 45.3 - Authorizing the Use and Rental of Government Property

45.301 Use and rental.

45.302 Contracts with foreign governments or international organizations.

45.303 Use of Government property on independent research and development programs.

Subpart 45.4 - Title to Government Property

45.401 Title to Government-furnished property.

45.402 Title to contractor-acquired property.

Subpart 45.5 - Support Government Property Administration

45.501 Prime contractor alternate locations.

45.502 Subcontractor and alternate prime contractor locations.

45.503 Support property administrator findings.

Subpart 45.6 - Reporting, Reutilization, and Disposal

45.600 Scope of subpart.

45.601 [Reserved]
45.602 Reutilization of Government property.

45.602-1 Inventory disposal schedules.

45.602-2 Reutilization priorities.

45.602-3 Screening.

45.602-4 Interagency property transfer costs.

45.603 Abandonment or destruction of personal property.

45.604 Sale of surplus personal property.

45.604-1 Sales procedures.

45.604-2 Use of GSA sponsored sales centers.

45.604-3 Proceeds from sales of surplus property.

45.604-4 Sale of property pursuant to the exchange/sale authority.

45.605 Inventory disposal reports.

45.606 Contractor scrap procedures.

Parent topic: Federal Acquisition Regulation

45.000 Scope of part.

(a) This part prescribes policies and procedures for providing Government property to contractors;

contractors’ management and use of Government property; and reporting, redistributing, and

disposing of contractor inventory.

(b) It does not apply to-

(1) Government property provided under any statutory leasing authority, except as to nonGovernment use of property under 45.301(f);

(2) Property to which the Government has acquired a lien or title solely because of partial, advance,

progress, or performance based payments;

(3) Disposal of real property;

(4) Software and intellectual property; or

(5) 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. Items considered to

be incidental to the place of performance include, for example, office space, desks, chairs,

telephones, computers, and fax machines.
Subpart 45.1 - General

45.101 Definitions.

As used in this partCannibalize means to remove parts from Government property for use or for installation on other

Government property.

Contractor-acquired property means property acquired, fabricated, or otherwise provided by the

contractor for performing a contract and to which the Government has title.

Contractor inventory means-

(1) Any property acquired by and in the possession of a contractor or subcontractor under a contract

for which title is vested in the Government and which exceeds the amounts needed to complete full

performance under the entire contract;

(2) Any property that the Government is obligated or has the option to take over under any type of

contract, e.g., as a result either of any changes in the specifications or plans thereunder or of the

termination of the contract (or subcontract thereunder), before completion of the work, for the

convenience or at the option of the Government; and

(3) Government-furnished property that exceeds the amounts needed to complete full performance

under the entire contract.

Contractor’s managerial personnel means the contractor’s directors, officers, managers,

superintendents, or equivalent representatives who have supervision or direction of-

(1) All or substantially all of the contractor’s business;

(2) All or substantially all of the contractor’s operation at any one plant or separate location; or

(3) A separate and complete major industrial operation.

Demilitarization means rendering a product unusable for, and not restorable to, the purpose for

which it was designed or is customarily used.

Discrepancies incident to shipment means any differences (e.g., count or condition) between the

items documented to have been shipped and items actually received.

Equipment means a tangible item that is functionally complete for its intended purpose, durable,

nonexpendable, and needed for the performance of a contract. Equipment is not intended for sale,

and does not ordinarily lose its identity or become a component part of another article when put into

use. Equipment does not include material, real property, special test equipment or special tooling.

Government-furnished property means property in the possession of, or directly acquired by, the

Government and subsequently furnished to the contractor for performance of a contract.

Government-furnished property includes, but is not limited to, spares and property furnished for

repair, maintenance, overhaul, or modification. Government-furnished property also includes

contractor-acquired property if the contractor-acquired property is a deliverable under a cost
contract when accepted by the Government for continued use under the contract.

Government property means all property owned or leased by the Government. Government property

includes both Government-furnished property and contractor-acquired property. Government

property includes material, equipment, special tooling, special test equipment, and real property.

Government property does not include intellectual property and software.

Loss of Government property means unintended, unforeseen or accidental loss, damage, or

destruction of Government property that reduces the Government’s expected economic benefits of

the property. Loss of Government property does not include occurrences such as purposeful

destructive testing, obsolescence, normal wear and tear, or manufacturing defects. 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 requiring repair to restore the item to usable

condition; or

(4) Destruction resulting from incidents that render the item useless for its intended purpose or

beyond economical repair.

Material means property that may be consumed or expended during the performance of a contract,

component parts of a higher assembly, or items that lose their individual identity through

incorporation into an end-item. Material does not include equipment, special tooling, special test

equipment or real property.

Nonseverable means property that cannot be removed after construction or installation without

substantial loss of value or damage to the installed property or to the premises where installed.

Precious metals means silver, gold, platinum, palladium, iridium, osmium, rhodium, and ruthenium.

Production scrap means unusable material resulting from production, engineering, operations and

maintenance, repair, and research and development contract activities. Production scrap may have

value when re-melted or reprocessed, e.g., textile and metal clippings, borings, and faulty castings

and forgings.

Property means all tangible property, both real and personal.

Property Administrator means an authorized representative of the contracting officer appointed in

accordance with agency procedures, responsible for administering the contract requirements and

obligations relating to Government property in the possession of a contractor.

Property records means the records created and maintained by the contractor in support of its

stewardship responsibilities for the management of Government property.

Provide means to furnish, as in Government-furnished property, or to acquire, as in contractoracquired property.

Real property See Federal Management Regulation 102-71.20 (41 CFR 102-71.20).

Sensitive property means property potentially dangerous to the public safety or security if stolen,
lost, or misplaced, or that shall be subject to exceptional physical security, protection, control, and

accountability. Examples include weapons, ammunition, explosives, controlled substances,

radioactive materials, hazardous materials or wastes, or precious metals.

Unit acquisition cost means-

(1) For Government-furnished property, the dollar value assigned by the Government and identified

in the contract; and

(2) For contractor-acquired property, the cost derived from the contractor’s records that reflect

consistently applied generally accepted accounting principles.

45.102 Policy.

(a) Contractors are ordinarily required to furnish all property necessary to perform Government

contracts.

(b) Contracting officers shall provide property to contractors only when it is clearly demonstrated-

(1) To be in the Government’s best interest;

(2) That the overall benefit to the acquisition significantly outweighs the increased cost of

administration, including ultimate property disposal;

(3) That providing the property does not substantially increase the Government’s assumption of risk;

and

(4) That Government requirements cannot otherwise be met.

(c) The contractor’s inability or unwillingness to supply its own resources is not sufficient reason for

the furnishing or acquisition of property.

(d) "Exception". Property provided under contracts for repair, maintenance, overhaul, or

modification is not subject to the requirements of paragraph (b) of this section.

(e) Government property, other than foundations and similar improvements necessary for installing

special tooling, special test equipment, or equipment, shall not be installed or constructed on

contractor-owned real property in such fashion as to become nonseverable, unless the head of the

contracting activity determines that such installation or construction is necessary and in the

Government’s interest.

45.103 General.

(a) Agencies shall-

(1) Allow and encourage contractors to use voluntary consensus standards (see FAR 11.101(b)) and

industry-leading practices and standards to manage Government property in their possession;

(2) Eliminate to the maximum practical extent any competitive advantage a prospective contractor

may have by using Government property;
(3) Ensure maximum practical reutilization of contractor inventory for government purposes;

(4) Require contractors to use Government property already in their possession to the maximum

extent practical in performing Government contracts;

(5) Charge appropriate rentals when the property is authorized for use on other than a rent-free

basis; and

(6) Require contractors to justify retaining Government property not needed for contract

performance and to declare property as excess when no longer needed for contract performance.

(b) Agencies will not generally require contractors to establish property management systems that

are separate from a contractor’s established procedures, practices, and systems used to account for

and manage contractor-owned property.

45.104 Responsibility and liability for Government property.

(a) Generally, contractors are not held liable for loss of Government property under the following

types of contracts:

(1) Cost-reimbursement contracts.

(2) Time-and-material contracts.

(3) Labor-hour contracts.

(4) Fixed-price contracts awarded on the basis of submission of certified cost or pricing data.

(b) The contracting officer may revoke the Government’s assumption of risk when the property

administrator determines that the contractor’s property management practices are noncompliant

with contract requirements.

(c) A prime contractor that provides Government property to a subcontractor shall not be relieved of

any responsibility to the Government that the prime contractor may have under the terms of the

prime contract.

(d) With respect to loss of Government property, the contracting officer, in consultation with the

property administrator, shall determine-

(1) The extent, if any, of contractor liability based upon the amount of damages corresponding to the

associated property loss; and

(2) The appropriate form and method of Government recovery (may include repair, replacement, or

other restitution).

(e) Any monies received as financial restitution shall be credited to the Treasury of the United States

as miscellaneous receipts, unless otherwise authorized by statute ( 31 U.S.C. 3302(b)).

45.105 Contractors’ property management system compliance.
(a) The agency responsible for contract administration shall conduct an analysis of the contractor’s

property management policies, procedures, practices, and systems. This analysis shall be

accomplished as frequently as conditions warrant, in accordance with agency procedures.

(b) The property administrator shall notify the contractor in writing when the contractor's property

management system does not comply with contractual requirements, shall request prompt

correction of deficiencies, and shall request from the contractor a corrective action plan, including a

schedule for correction of the deficiencies. If the contractor does not correct the deficiencies in

accordance with the schedule, the contracting officer shall notify the contractor, in writing, that

failure to take the required corrective action(s) may result in-

(1) Revocation of the Government’s assumption of risk for loss of Government property; and/or

(2) The exercise of other rights or remedies available to the contracting officer.

(c) If the contractor fails to take the required corrective action(s) in response to the notification

provided by the contracting officer in accordance with paragraph (b) of this section, the contracting

officer shall notify the contractor in writing of any Government decision to apply the remedies

described in paragraphs (b)(1) and (b)(2) of this section.

(d) When the property administrator determines that a reported case of loss of Government property

is a risk assumed by the Government, the property administrator shall notify the contractor in

writing that it is granted relief of stewardship responsibility and liability in accordance with

52.245-1(f)(1)(vii). Where the property administrator determines that the risk of loss of Government

property is not assumed by the Government, the property administrator shall request that the

contracting officer hold the contractor responsible and liable.

45.106 Transferring accountability.

Government property shall be transferred from one contract to another only when firm requirements

exist under the gaining contract (see 45.102). Such transfers shall be documented by modifications

to both gaining and losing contracts. Once transferred, all property shall be considered Governmentfurnished property to the gaining contract. The warranties of suitability of use and timely delivery of

Government-furnished property do not apply to property acquired or fabricated by the contractor as

contractor-acquired property that is subsequently transferred to another contract with the same

contractor.

45.107 Contract clauses.

(a)

(1) Except as provided in paragraph (d) of this section, the contracting officer shall insert the clause

at 52.245-1, Government Property, in-

(i) All cost-reimbursement and time-and-material type solicitations and contracts, and labor-hour

solicitations when property is expected to be furnished for the labor-hour contracts.

(ii) Fixed-price solicitations and contracts when the Government will provide Government property.
(iii) Contracts or modifications awarded under FAR part 12 procedures where Government property

that exceeds the simplified acquisition threshold, as defined in FAR 2.101, is furnished or where the

contractor is directed to acquire property for use under the contract that is titled in the Government.

(2) The contracting officer shall use the clause with its Alternate I in contracts other than those

identified in FAR 45.104(a), Responsibility and Liability for Government Property.

(3) The contracting officer shall use the clause with its Alternate II when a contract for the conduct

of basic or applied research at nonprofit institutions of higher education or at nonprofit

organizations whose primary purpose is the conduct of scientific research (see 35.014) is

contemplated.

(b) The contracting officer shall also insert the clause at 52.245-2, Government Property (Installation

Operation Services), in fixed-price service contracts to be performed on a Government installation

when Government-furnished property will be provided for initial provisioning only and the

Government is not responsible for repair or replacement.

(c) The contracting officer shall insert the clause at 52.245-9, Use and Charges, in solicitations and

contracts when the clause at 52.245-1 is included.

(d) Purchase orders for property repair need not include a Government property clause when the

unit acquisition cost of Government property to be repaired does not exceed the simplified

acquisition threshold, unless other Government property (not for repair) is provided.

Subpart 45.2 - Solicitation and Evaluation Procedures

45.201 Solicitation.

(a) The contracting officer shall insert a listing of the Government property to be offered in all

solicitations where Government-furnished property is anticipated (see 45.102). The listing shall

include at a minimum-

(1) The name, part number and description, manufacturer, model number, and National Stock

Number (if needed for additional item identification tracking and management, and disposition);

(2) Quantity/unit of measure;

(3) Unit acquisition cost;

(4) Unique-item identifier or equivalent (if available and necessary for individual item tracking and

management); and

(5) A statement as to whether the property is to be furnished in an "as-is" condition and instructions

for physical inspection.

(b) When Government property is offered for use in a competitive acquisition, solicitations should

specify that the contractor is responsible for all costs related to making the property available for

use, such as payment of all transportation, installation or rehabilitation costs.

(c) The solicitation shall describe the evaluation procedures to be followed, including rental charges
or equivalents and other costs or savings to be evaluated, and shall require all offerors to submit the

following information with their offers-

(1) A list or description of all Government property that the offeror or its subcontractors propose to

use on a rent-free basis. The list shall identify the accountable contract under which the property is

held and the authorization for its use (from the contracting officer having cognizance of the

property);

(2) The dates during which the property will be available for use (including the first, last, and all

intervening months) and, for any property that will be used concurrently in performing two or more

contracts, the amounts of the respective uses in sufficient detail to support prorating the rent;

(3) The amount of rent that would otherwise be charged in accordance with FAR 52.245-9, Use and

Charges; and

(4) A description of the offeror's property management system, plan, and any customary commercial

practices, voluntary consensus standards, or industry-leading practices and standards to be used by

the offeror in managing Government property.

(d) Any additional instructions to the contractor regarding property management, accountability,

and use, not addressed in FAR clause 52.245-1, Government Property, should be specifically

addressed in the statement of work on the contract providing property or in a special provision.

45.202 Evaluation procedures.

(a) The contracting officer shall consider any potentially unfair competitive advantage that may

result from an offeror or contractor possessing Government property. This shall be done by

adjusting the offers by applying, for evaluation purposes only, a rental equivalent evaluation factor

as specified in FAR 52.245-9.

(b) The contracting officer shall ensure the offeror’s property management plans, methods,

practices, or procedures for accounting for property are consistent with the requirements of the

solicitation.

Subpart 45.3 - Authorizing the Use and Rental of

Government Property

45.301 Use and rental.

This subpart prescribes policies and procedures for contractor use and rental of Government

property.

(a) Government property shall normally be provided on a rent-free basis in performance of the

contract under which it is accountable or otherwise authorized.
(b) Rental charges, to the extent authorized do not apply to Government property that is left in place

or installed on contractor-owned property for mobilization or future Government production

purposes; however, rental charges shall apply to that portion of property or its capacity used for

non-government commercial purposes or otherwise authorized for use.

(c) The contracting officer cognizant of the Government property may authorize the rent-free use of

property in the possession of nonprofit organizations when used for research, development, or

educational work and-

(1) The use of the property is in the national interest;

(2) The property will not be used for the direct benefit of a profit-making organization; and

(3) The Government receives some direct benefit, such as rights to use the results of the work

without charge, from its use.

(d) In exchange for consideration as determined by the cognizant contracting officer(s), the

contractor may use Government property under fixed-price contracts other than the contract to

which it is accountable. When, after contract award, a contractor requests the use of Government

property, the contracting officer shall obtain a fair rental or other adequate consideration if use is

authorized.

(e) The cognizant contracting officer(s) may authorize the use of Government property on a rent-free

basis on a cost type Government contract other than the contract to which it is accountable.

(f) In exchange for consideration as determined by the cognizant contracting officer, the contractor

may use Government property for commercial use. Prior approval of the Head of the Contracting

Activity is required where non-Government use is expected to exceed 25 percent of the total use of

Government and commercial work performed.

45.302 Contracts with foreign governments or international organizations.

Requests by, or for the benefit of, foreign Governments or international organizations to use

Government property shall be processed in accordance with agency procedures.

45.303 Use of Government property on independent research and

development programs.

The contracting officer may authorize a contractor to use the property on an independent research

and development (IR&D) program, if-

(a) Such use will not conflict with the primary use of the property or enable the contractor to retain

property that could otherwise be released;

(b) The contractor agrees not to claim reimbursement against any Government contract for the

rental value of the property; and

(c) A rental charge for the portion of the contractor’s IR&D program cost allocated to commercial

work is deducted from the claim for reimbursement of any agreed-upon Government share of the

contractor’s IR&D costs.
Subpart 45.4 - Title to Government Property

45.401 Title to Government-furnished property.

The Government retains title to all Government-furnished property until properly disposed of, as

authorized by law or regulation. Property that is leased by the Government and subsequently

furnished to the contractor for use shall be considered Government-furnished property under the

clause 52.245-1, Government Property.

45.402 Title to contractor-acquired property.

(a) Title vests in the Government for all property acquired or fabricated by the contractor in

accordance with the financing provisions or other specific requirements for passage of title in the

contract. Under fixed-price type contracts, in the absence of financing provisions or other specific

requirements for passage of title in the contract, the contractor retains title to all property acquired

by the contractor for use on the contract, except for property identified as a deliverable end item. If

a deliverable item is to be retained by the contractor for use after inspection and acceptance by the

Government, it shall be made accountable to the contract through a contract modification listing the

item as Government-furnished property.

(b) Under cost type and time-and-material contracts, the Government acquires title to all property to

which the contractor is entitled to reimbursement, in accordance with paragraph (e)(3) of clause

52.245-1.

Subpart 45.5 - Support Government Property Administration

45.501 Prime contractor alternate locations.

The property administrator assigned to the prime contract may request support property

administration from another contract administration office, for purposes of evaluating prime

contractor management of property located at subcontractors and alternate locations.

45.502 Subcontractor and alternate prime contractor locations.

(a) To ensure subcontractor compliance with Government property administration requirements, and

with prime contractor consent, the property administrator assigned to the prime contract may

request support property administration from another contract administration office. If the prime

contractor does not provide consent to support property administration at subcontractor locations,

the property administrator shall refer the matter to the contracting officer for resolution.

(b) The prime property administrator shall accept the findings of the delegated support property

administrator and advise the prime contractor of the results of property management reviews,

including deficiencies found with the subcontractor’s property management system.
(c) Prime contractor consent is not required for support delegations involving prime contractor

alternate locations.

45.503 Support property administrator findings.

In instances where the prime contractor does not concur with the findings of the support Property

Administrator, the prime property administrator shall immediately refer the matter to the

contracting officer.

Subpart 45.6 - Reporting, Reutilization, and Disposal

45.600 Scope of subpart.

This subpart establishes policies and procedures for the reporting, reutilization, and disposal of

contractor inventory excess to contracts and of property that forms the basis of a claim against the

Government (e.g., termination inventory under fixed-price contracts). This subpart does not apply to

the disposal of real property or to property for which the Government has a lien or title solely as a

result of advance, progress, or performance-based payments that have been liquidated.

45.601 [Reserved]

45.602 Reutilization of Government property.

This section is applicable to the reutilization, including transfer and donation, of Government

property that is not required for continued performance of a Government contract. Except for

45.602-1, this section does not apply to scrap other than scrap aircraft parts.

45.602-1 Inventory disposal schedules.

(a) Plant clearance officers should review and accept, or return for correction, inventory disposal

schedules within 10 days following receipt from a contractor. Schedules that are completed in

accordance with the instructions for Standard Form 1428 should be accepted.

(b) Plant clearance officers shall-

(1) Use Standard Form 1423 to verify, in accordance with agency procedures, accepted schedules

within 20 days following acceptance;

(2) Require the contractor to correct any discrepancies found during verification;

(3) Require the contractor to correct any failure to complete predisposal requirements of the

contract; and

(4) Provide the contractor disposition instructions for property identified on an acceptable inventory
disposal schedule within 120 days. A failure to provide timely disposition instructions may entitle the

contractor to an equitable adjustment.

(c) The contractor may request the plant clearance officer’s approval to remove the Government

property from an inventory schedule.

(1) Plant clearance officers should approve removal of Government property from an inventory

schedule when-

(i) The contractor wishes to purchase a contractor-acquired or contractor-produced item at unit

acquisition cost and credit the contract;

(ii) The contractor is able to return unused property to the supplier at fair market value and credit

the contract (less, if applicable, a reasonable restocking fee that is consistent with the supplier’s

customary practices);

(iii) The Government has authorized the contractor to use the property on another Government

contract; or

(iv) The contractor has requested continued use of the Government property, and the contracting

officer has authorized its retention and further use.

(2) If the screening process (see 45.602-3) has not begun, the plant clearance officer shall adjust the

schedule or return the schedule to the contractor for correction. If screening has begun, the plant

clearance officer shall promptly notify the activity performing the screening that the items should be

removed from the screening process.

45.602-2 Reutilization priorities.

Plant clearance officers shall initiate reutilization actions for all property not meeting the

abandonment or destruction criteria of 45.603(b). Authorized methods, listed in descending order

from highest to lowest priority, are-

(a) Reuse within the owning agency;

(b) Transfer of educationally useful equipment to schools and nonprofit organizations (see Executive

Order 12999, Educational Technology: Ensuring Opportunity For All Children In The Next Century,

April 17, 1996, and 15 U.S.C.3710(i));

(c) Report to GSA for reuse within the Federal Government or donation as surplus property;

(d) Dispose of the following property in accordance with agency procedures without reporting to

GSA:

(1) Property determined appropriate for abandonment or destruction (see Federal Management

Regulation (FMR) 102-36.305, 41 CFR 102-36.305).

(2) Property furnished to nonappropriated fund activities (see FMR 102-36.165, 41 CFR 102-36.165).

(3) Foreign excess personal property (see FMR 102-36.380, 41 CFR 102-36.380).

(4) Scrap, except aircraft in scrap condition.
(5) Perishables, defined for the purposes of this section as any personal property subject to spoilage

or decay.

(6) Trading stamps and bonus goods.

(7) Hazardous waste or toxic and hazardous materials.

(8) Controlled substances.

(9) Property dangerous to public health and safety.

(10) Classified items or property determined to be sensitive for reasons of national security; and

(e) Dispose of nuclear materials (see 45.603-3(b)(5)) in accordance with the Nuclear Regulatory

Commission, applicable state licenses, applicable Federal regulations, and agency regulations.

45.602-3 Screening.

The screening period begins upon the plant clearance officer’s acceptance of an inventory disposal

schedule. The plant clearance officer shall determine whether standard or special screening is

appropriate and initiate screening actions.

(a) Standard screening. The standard screening period is 46 days.

(1) First through twentieth day-Screening by the contracting agency. The contracting agency has 20

days to screen property reported on the inventory disposal schedule for: other use within the

agency; transfer of educationally useful equipment to other Federal agencies that have expressed a

need for the property; and transfer of educationally useful equipment to schools and nonprofit

organizations if a Federal agency has not expressed a need for the property. Excess personal

property, meeting the conditions of 45.603, may be abandoned, destroyed, or donated to public

bodies. No later than the 21st day, the plant clearance officer shall submit four copies of the revised

schedules and Standard Form (SF) 120, Report of Excess Personal Property, or an electronic

equivalent to GSA (see 41 CFR 102-36.215).

(2) Twenty-first through forty-sixth day (21 days concurrent screening plus 5 days donation

processing).-

(i) Screening by other Federal agencies. GSA will normally honor requests for transfers of property

on a first-come-first-served basis through the 41st day. When a request is honored, the GSA regional

office shall promptly transmit to the plant clearance officer an approved transfer order that includes

shipping instructions.

(ii) Screening for possible donation. Screening for donation is also completed during days 21

through 41. Property is not available for allocation to donees until after the completion of screening.

Days 42 through 46 are reserved for GSA to make such allocation.

(3) Screening period transfer request. If an agency receives an intra-agency transfer request during

the screening periods described in paragraph (a)(2) of this section, the plant clearance officer shall

request GSA approval to withdraw the item from the inventory disposal schedule.
(b) Special screening requirements.-

(1) Special tooling and special test equipment without commercial components. Agencies shall follow

the procedures in paragraph (a) of this section. This property owned by the Department of Defense

(DoD) or the National Aeronautics and Space Administration (NASA) may be screened for

reutilization only within these agencies.

(2) Special test equipment with commercial components.-

(i) Agencies shall complete the screening required by paragraph (a) of this section. If an agency has

no further need for the property and the contractor has not expressed an interest in using or

acquiring the property by annotating the inventory disposal schedule, the plant clearance officer

shall forward the inventory disposal schedule to the GSA regional office that serves the region in

which the property is located.

(ii) If the contractor has expressed an interest in using the property on another Government

contract, the plant clearance officer shall contact the contracting officer for that contract. If the

contracting officer concurs with the proposed use, the contracting officer for the contract under

which the property is accountable shall transfer the property’s accountability to that contract. If the

contracting officer does not concur with the proposed use, the plant clearance officer shall deny the

contractor’s request and shall continue the screening process.

(iii) If the property is contractor-acquired or produced, and the contractor or subcontractor has

expressed an interest in acquiring the property, and no other party expresses an interest during

agency or GSA screening, the property may be sold to the contractor or subcontractor at acquisition

cost.

(3) Printing equipment. Agencies shall report all excess printing equipment to the Public Printer,

Government Publishing Office, 732 North Capitol Street, NW, Washington, DC 20401, after

screening within the agency (see 44 U.S.C. 312). If the Public Printer does not express a need for the

equipment within 21 days, the agency shall submit the report to GSA for further use and donation

screening as described in paragraph (a) of this section.

(4) Non-nuclear hazardous materials, hazardous wastes, and classified items. These items shall be

screened in accordance with agency procedures. Report non-nuclear hazardous materials to GSA if

the agency has no requirement for them.

(5) Nuclear materials. The possession, use, and transfer of certain nuclear materials are subject to

the regulatory controls of the Nuclear Regulatory Commission (NRC). Contracting activities shall

screen excess nuclear materials in the following categories:

(i) By-product material. Any radioactive material (except special nuclear material) yielded in or made

radioactive by exposure to the radiation incident to producing or using special nuclear material.

(ii) Source material. Uranium or thorium, or any combination thereof, in any physical or chemical

form; or ores that contain by weight one-twentieth of 1 percent (0.05 percent) or more of uranium,

thorium, or any combination thereof. Source material does not include special nuclear material.

(iii) Special nuclear material. Plutonium, Uranium 233, Uranium enriched in the isotope 233 or in

the isotope 235, any other material that the NRC determines to be special nuclear material (but not

including source material); or any material artificially enriched by any nuclear material.
45.602-4 Interagency property transfer costs.

Agencies whose property is transferred to other agencies shall not be reimbursed for the property in

any manner unless the circumstances of FMR 102-36.285 (41 CFR102-36.285) apply. The agency

receiving the property shall pay any transportation costs that are not the contractor’s responsibility

and any costs to pack, crate, or otherwise prepare the property for shipment. The contract

administration office shall process appropriate contract modifications. To accelerate plant clearance,

the receiving agency shall promptly furnish funding data, and transfer or shipping documents to the

contract administration office.

45.603 Abandonment or destruction of personal property.

(a) When contractor inventory is processed through the reutilization screening process prescribed in

45.602-2 without success, and provided the property has no commercial value, does not require

demilitarization, and does not constitute a danger to public health or welfare, plant clearance

officers or other authorized officials may without further approval-

(1) Direct the contractor to destroy the property;

(2) Abandon non-sensitive property at the contractor’s or subcontractor’s premises; or

(3) Abandon sensitive property at the contractor’s or subcontractor’s premises, with contractor

consent.

(b) Provided a Government reviewing official at least one level higher than the plant clearance

officer or other agency authorized official approves, plant clearance officers or other agency

authorized officials may authorize the abandonment, or order the destruction of other contractor

inventory at the contractor’s or subcontractor’s premises, in accordance with FMR 102-36.305

through 325 (41 CFR 102-36.305-325) and consistent with the following:

(1) The property is not considered sensitive, does not require demilitarization, has no commercial

value or reutilization, transfer or donation potential, and does not constitute a danger to public

health or welfare.

(2) The estimated cost of continued care and handling of the property (including advertising, storage

and other costs associated with making the sale), exceed the estimated proceeds from its sale.

(c) In lieu of abandonment or its authorized destruction, the plant clearance officer or authorized

official may authorize the donation of property including unsold surplus property to public bodies,

provided that the property is not sensitive property, does not require demilitarization, and it does

not constitute a danger to public health or welfare. The Government will not bear any of the costs

incident to such donations.

(d) Unless the property qualifies for one of the exceptions under FMR 102-36.330 (41 CFR

102-36.330), the plant clearance officer or requesting official will ensure prior public notice of such

actions of abandonment or destruction consistent with FMR 102-36.325 (41 CFR 102-36.325).

45.604 Sale of surplus personal property.
45.604-1 Sales procedures.

Surplus personal property that has completed screening in accordance with 45.602-3(a) shall be sold

in accordance with the policy for the sale of surplus personal property contained in the Federal

Management Regulation, at part 102-38 (41 CFR part 102-38). Agencies may specify implementing

procedures.

45.604-2 Use of GSA sponsored sales centers.

Agencies may use sales center services. Use of such centers for sale of surplus property is

authorized when in the best interest of the Government, consistent with contract terms and

conditions.

45.604-3 Proceeds from sales of surplus property.

Proceeds of any sale are to be credited to the Treasury of the United States as miscellaneous

receipts, unless otherwise authorized by statute or the contract or any subcontract thereunder

authorizes the proceeds to be credited to the price or cost of the work (40 U.S.C.571 and 5 74).

45.604-4 Sale of property pursuant to the exchange/sale authority.

Agencies should consider the sale of property pursuant to the exchange/sale authority in FMR

102-39 (41 CFRpart102-39) when agencies are acquiring or plan to acquire similar products and

other requirements of the authority are satisfied.

45.605 Inventory disposal reports.

The plant clearance officer shall promptly prepare an SF1424, Inventory Disposal Report, following

disposition of the property identified on an inventory disposal schedule and the crediting of any

related proceeds. The report shall identify any lost or otherwise unaccounted for property and any

changes in quantity or value of the property made by the contractor after submission of the initial

inventory disposal schedule. The report shall be provided to the administrative contracting officer

or, for termination inventory, to the termination contracting officer, with a copy to the property

administrator.

45.606 Contractor scrap procedures.

(a) The property administrator should, in coordination with the plant clearance officer, ensure that

contractor scrap disposal processes, methods, and practices allow for effective, efficient, and proper

disposition and are properly documented in the contractor’s property management procedures.

(b) The property administrator should determine the extent to which separate disposal processing or

physical segregation for different scrap types is or may be required. Such scrap may require

physical segregation, unique disposal processing, or separate plant clearance reporting. For
example, the scope of work may create scrap-

(1) Consisting of sensitive items;

(2) Containing hazardous materials or wastes;

(3) Contaminated with hazardous materials or wastes;

(4) That is classified or otherwise controlled;

(5) Containing precious or strategic metals; or

(6) That is dangerous to public health or safety.

(c) Absent contract terms and conditions to the contrary, the Government may abandon parts

removed and replaced from property as a result of normal maintenance actions or removed from

property as a result of the repair, maintenance, overhaul, or modification process.