52.245-1 Government Property.

As prescribed in 45.107(a), insert the following clause:

Government Property (Sep 2021)

(a) Definitions. As used in this clauseCannibalizemeans 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 representativeswho 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 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 to Government property that reduces the Government’s expected economic benefits of

the property. Loss of Government property does not include 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.

(b) Property management.

(1) The Contractor shall have a system of internal controls to manage (control, use, preserve,

protect, repair, and maintain) Government property in its possession. The system shall be adequate

to satisfy the requirements of this clause. In doing so, the Contractor shall initiate and maintain the

processes, systems, procedures, records, and methodologies necessary for effective and efficient

control of Government property. The Contractor shall disclose any significant changes to its property

management system to the Property Administrator prior to implementation of the changes. The

Contractor may employ customary commercial practices, voluntary consensus standards, or

industry-leading practices and standards that provide effective and efficient Government property

management that are necessary and appropriate for the performance of this contract (except where

inconsistent with law or regulation).

(2) The Contractor’s responsibility extends from the initial acquisition and receipt of property,

through stewardship, custody, and use until formally relieved of responsibility by authorized means,

including delivery, consumption, expending, sale (as surplus property), or other disposition, or via a

completed investigation, evaluation, and final determination for lost property. This requirement

applies to all Government property under the Contractor’s accountability, stewardship, possession or

control, including its vendors or subcontractors (see paragraph (f)(1)(v) of this clause).

(3) The Contractor shall include the requirements of this clause in all subcontracts under which

Government property is acquired or furnished for subcontract performance.

(4) The Contractor shall establish and maintain procedures necessary to assess its property

management system effectiveness and shall perform periodic internal reviews, surveillances, self

assessments, or audits. Significant findings or results of such reviews and audits pertaining to

Government property shall be made available to the Property Administrator.

(c) Use of Government property.

(1) The Contractor shall use Government property, either furnished or acquired under this contract,

only for performing this contract, unless otherwise provided for in this contract or approved by the

Contracting Officer.

(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 or its terms and

conditions;
(ii) Required for normal maintenance; or

(iii) Otherwise authorized by the Contracting Officer.

(3) The Contractor shall not cannibalize Government property unless otherwise provided for in this

contract or approved by the Contracting Officer.

(d) Government-furnished property.

(1) The Government shall deliver to the Contractor the Government-furnished property described in

this contract. The Government shall furnish related data and information needed for the intended

use of the property. 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 and subsequently transferred to another contract with this Contractor.

(2) The delivery and/or performance dates specified in this contract are based upon the expectation

that the Government-furnished property will be suitable for contract performance and will be

delivered to the Contractor by the dates stated in the contract.

(i) If the property is not delivered to the Contractor by the dates stated in the contract, the

Contracting Officer shall, upon the Contractor’s timely written request, consider an equitable

adjustment to the contract.

(ii) In the event property is received by the Contractor, or for Government-furnished property after

receipt and installation, in a condition not suitable for its intended use, the Contracting Officer shall,

upon the Contractor’s timely written request, advise the Contractor on a course of action to remedy

the problem. Such action may include repairing, replacing, modifying, returning, or otherwise

disposing of the property at the Government’s expense. Upon completion of the required action(s),

the Contracting Officer shall consider an equitable adjustment to the contract (see also paragraph

(f)(1)(ii)(A) of this clause).

(iii) The Government may, at its option, furnish property in an "as-is" condition. The Contractor will

be given the opportunity to inspect such property prior to the property being provided. In such

cases, the Government makes no warranty with respect to the serviceability and/or suitability of the

property for contract performance. Any repairs, replacement, and/or refurbishment shall be at the

Contractor’s expense.

(3)

(i) The Contracting Officer may by written notice, at any time-

(A) Increase or decrease the amount of Government-furnished property under this contract;

(B) Substitute other Government-furnished property for the property previously furnished, to be

furnished, or to be acquired by the Contractor for the Government under this contract; or

(C) Withdraw authority to use property.

(ii) Upon completion of any action(s) under paragraph (d)(3)(i) of this clause, and the Contractor’s

timely written request, the Contracting Officer shall consider an equitable adjustment to the

contract.
(e) Title to Government property.

(1) All Government-furnished property and all property acquired by the Contractor, title to which

vests in the Government under this paragraph (collectively referred to as "Government property"), is

subject to the provisions of this clause. The Government shall retain title to all Governmentfurnished property. Title to Government property shall not be affected by its incorporation into or

attachment to any property not owned by the Government, nor shall Government property become a

fixture or lose its identity as personal property by being attached to any real property.

(2) 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.

(3) Title under Cost-Reimbursement or Time-and-Material Contracts or Cost-Reimbursable line items

under Fixed-Price contracts.

(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.

(f) Contractor plans and systems.

(1) Contractors shall establish and implement property management plans, systems, and procedures

at the contract, program, site or entity level to enable the following outcomes:

(i) Acquisition of Property. The Contractor shall document that all property was acquired consistent

with its engineering, production planning, and property control operations.

(ii) Receipt of Government Property. The Contractor shall receive Government property and

document the receipt, record the information necessary to meet the record requirements of

paragraph (f)(1)(iii)(A)(1) through (5) of this clause, identify as Government owned in a manner

appropriate to the type of property (e.g., stamp, tag, mark, or other identification), and manage any

discrepancies incident to shipment.

(A) Government-furnished property. The Contractor shall furnish a written statement to the Property

Administrator containing all relevant facts, such as cause or condition and a recommended course(s)

of action, if overages, shortages, or damages and/or other discrepancies are discovered upon receipt
of Government-furnished property.

(B) Contractor-acquired property. The Contractor shall take all actions necessary to adjust for

overages, shortages, damage and/or other discrepancies discovered upon receipt, in shipment of

Contractor-acquired property from a vendor or supplier, so as to ensure the proper allocability and

allowability of associated costs.

(iii) Records of Government property. The Contractor shall create and maintain records of all

Government property accountable to the contract, including Government-furnished and Contractoracquired property.

(A) Property records shall enable a complete, current, auditable record of all transactions and shall,

unless otherwise approved by the Property Administrator, contain the following:

(1) The name, part number and description, National Stock Number (if needed for additional item

identification tracking and/or disposition), and other data elements as necessary and required in

accordance with the terms and conditions of the contract.

(2) Quantity received (or fabricated), issued, and balance-on-hand.

(3) Unit acquisition cost.

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

(5) Unit of measure.

(6) Accountable contract number or equivalent code designation.

(7) Location.

(8) Disposition.

(9) Posting reference and date of transaction.

(10) Date placed in service (if required in accordance with the terms and conditions of the contract).

(B) Use of a Receipt and Issue System for Government Material. When approved by the Property

Administrator, the Contractor may maintain, in lieu of formal property records, a file of

appropriately cross-referenced documents evidencing receipt, issue, and use of material that is

issued for immediate consumption.

(iv) Physical inventory. The Contractor shall periodically perform, record, and disclose physical

inventory results. A final physical inventory shall be performed upon contract completion or

termination. The Property Administrator may waive this final inventory requirement, depending on

the circumstances (e.g., overall reliability of the Contractor’s system or the property is to be

transferred to a follow-on contract).

(v) Subcontractor control.

(A) The Contractor shall award subcontracts that clearly identify items to be provided and the extent

of any restrictions or limitations on their use. The Contractor shall ensure appropriate flow down of

contract terms and conditions (e.g., extent of liability for loss of Government property.
(B) The Contractor shall assure its subcontracts are properly administered and reviews are

periodically performed to determine the adequacy of the subcontractor’s property management

system.

(vi) Reports. The Contractor shall have a process to create and provide reports of discrepancies, loss

of Government property, physical inventory results, audits and self-assessments, corrective actions,

and other property-related reports as directed by the Contracting Officer.

(vii) Relief of stewardship responsibility and liability. The Contractor shall have a process to enable

the prompt recognition, investigation, disclosure and reporting of loss of Government property,

including losses that occur at subcontractor or alternate site locations.

(A) This process shall include the corrective actions necessary to prevent recurrence.

(B) Unless otherwise directed by the Property Administrator, the Contractor shall investigate and

report to the Government all incidents of property loss as soon as the facts become known. Such

reports shall, at a minimum, contain the following information:

(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 or replacement

costs.

(7) All known interests in commingled material of which includes Government material.

(8) Cause and corrective action taken or to be taken to prevent recurrence.

(9) A statement that the Government will receive compensation covering the loss of Government

property, 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, hazardous, or

toxic material, and that the appropriate agencies and authorities were notified.

(C) Unless the contract provides otherwise, the Contractor shall be relieved of stewardship

responsibility and liability for property when-

(1) Such property is consumed or expended, reasonably and properly, or otherwise accounted for, in

the performance of the contract, including reasonable inventory adjustments of material as

determined by the Property Administrator;

(2) Property Administrator grants relief of responsibility and liability for loss of Government

property;
(3) Property is delivered or shipped from the Contractor's plant, under Government instructions,

except when shipment is to a subcontractor or other location of the Contractor; or

(4) Property is disposed of in accordance with paragraphs (j) and (k) of this clause.

(viii) Utilizing Government property.

(A) The Contractor shall utilize, consume, move, and store Government Property only as authorized

under this contract. The Contractor shall promptly disclose and report Government property in its

possession that is excess to contract performance.

(B) Unless otherwise authorized in this contract or by the Property Administrator the Contractor

shall not commingle Government material with material not owned by the Government.

(ix) Maintenance. The Contractor shall properly maintain Government property. The Contractor’s

maintenance program shall enable the identification, disclosure, and performance of normal and

routine preventative maintenance and repair. The Contractor shall disclose and report to the

Property Administrator the need for replacement and/or capital rehabilitation.

(x) Property closeout. The Contractor shall promptly perform and report to the Property

Administrator contract property closeout, to include reporting, investigating and securing closure of

all loss of Government property cases; physically inventorying all property upon termination or

completion of this contract; and disposing of items at the time they are determined to be excess to

contractual needs.

(2) The Contractor shall establish and maintain Government accounting source data, as may be

required by this contract, particularly in the areas of recognition of acquisitions, loss of Government

property, and disposition of material and equipment.

(g) Systems analysis.

(1) The Government shall have access to the Contractor’s premises and all Government property, at

reasonable times, for the purposes of reviewing, inspecting and evaluating the Contractor’s property

management plan(s), systems, procedures, records, and supporting documentation that pertains to

Government property. This access includes all site locations and, with the Contractor’s consent, all

subcontractor premises.

(2) Records of Government property shall be readily available to authorized Government personnel

and shall be appropriately safeguarded.

(3) Should it be determined by the Government that the Contractor’s (or subcontractor’s) property

management practices are inadequate or not acceptable for the effective management and control of

Government property under this contract, or present an undue risk to the Government, the

Contractor shall prepare a corrective action plan when requested by the Property Administrator and

take all necessary corrective actions as specified by the schedule within the corrective action plan.

(h) Contractor Liability for Government Property.

(1) Unless otherwise provided for in the contract, the Contractor shall not be liable for loss of

Government property furnished or acquired under this contract, except when any one of the
following applies-

(i) The risk is covered by insurance or the Contractor is otherwise reimbursed (to the extent of such

insurance or reimbursement). The allowability of insurance costs shall be determined in accordance

with 31.205-19.

(ii) Loss of Government property that is the result of willful misconduct or lack of good faith on the

part of the Contractor’s managerial personnel.

(iii) The Contracting Officer has, in writing, revoked the Government’s assumption of risk for loss of

Government property due to a determination under paragraph (g) of this clause that the

Contractor’s property management practices are inadequate, and/or present an undue risk to the

Government, and the Contractor failed to take timely corrective action. If the Contractor can

establish by clear and convincing evidence that the loss of Government property occurred while the

Contractor had adequate property management practices or the loss did not result from the

Contractor’s failure to maintain adequate property management practices, the Contractor shall not

be held liable.

(2) The Contractor shall take all reasonable actions necessary to protect the property from further

loss. The Contractor shall separate the damaged and undamaged property, place all the affected

property in the best possible order, and take such other action as the Property Administrator directs.

(3) The Contractor shall do nothing to prejudice the Government’s rights to recover against third

parties for any loss of Government property.

(4) The Contractor shall reimburse the Government for loss of Government property, to the extent

that the Contractor is financially liable for such loss, as directed by the Contracting Officer.

(5) Upon the request of the Contracting Officer, the Contractor shall, at the Government’s expense,

furnish to the Government all reasonable assistance and cooperation, including the prosecution of

suit and the execution of instruments of assignment in favor of the Government in obtaining

recovery.

(i) Equitable adjustment. Equitable adjustments under this clause shall be made in accordance with

the procedures of the Changes clause. However, the Government shall not be liable for breach of

contract for the following:

(1) Any delay in delivery of Government-furnished property.

(2) Delivery of Government-furnished property in a condition not suitable for its intended use.

(3) An increase, decrease, or substitution of Government-furnished property.

(4) Failure to repair or replace Government property for which the Government is responsible.

(j) Contractor inventory disposal. Except as otherwise provided for in this contract, the Contractor

shall not dispose of Contractor inventory until authorized to do so by the Plant Clearance Officer or

authorizing official.

(1) Predisposal requirements.

(i) If the Contractor determines that the property has the potential to fulfill requirements under
other contracts, the Contractor, in consultation with the Property Administrator, shall request that

the Contracting Officer transfer the property to the contract in question, or provide authorization for

use, as appropriate. In lieu of transferring the property, the Contracting Officer may authorize the

Contractor to credit the costs of Contractor-acquired property (material only) to the losing contract,

and debit the gaining contract with the corresponding cost, when such material is needed for use on

another contract. Property no longer needed shall be considered contractor inventory.

(ii) For any remaining Contractor-acquired property, the Contractor may purchase the property at

the unit acquisition cost if desired or make reasonable efforts to return unused property to the

appropriate supplier at fair market value (less, if applicable, a reasonable restocking fee that is

consistent with the supplier’s customary practices.)

(2) Inventory disposal schedules.

(i) Absent separate contract terms and conditions for property disposition, and provided the property

was not reutilized, transferred, or otherwise disposed of, the Contractor, as directed by the Plant

Clearance Officer or authorizing official, shall use Standard Form 1428, Inventory Disposal Schedule

or electronic equivalent, to identify and report-

(A) Government-furnished property that is no longer required for performance of this contract;

(B) Contractor-acquired property, to which the Government has obtained title under paragraph (e) of

this clause, which is no longer required for performance of that contract; and

(C) Termination inventory.

(ii) The Contractor may annotate inventory disposal schedules to identify property the Contractor

wishes to purchase from the Government, in the event that the property is offered for sale.

(iii) Separate inventory disposal schedules are required for aircraft in any condition, flight safety

critical aircraft parts, and other items as directed by the Plant Clearance Officer.

(iv) The Contractor shall provide the information required by FAR 52.245-1(f)(1)(iii) along with the

following:

(A) Any additional information that may facilitate understanding of the property’s intended use.

(B) For work-in-progress, the estimated percentage of completion.

(C) For precious metals in raw or bulk form, the type of metal and estimated weight.

(D) For hazardous material or property contaminated with hazardous material, the type of hazardous

material.

(E) For metals in mill product form, the form, shape, treatment, hardness, temper, specification

(commercial or Government) and dimensions (thickness, width and length).

(v) Property with the same description, condition code, and reporting location may be grouped in a

single line item.

(vi) Scrap should be reported by "lot" along with metal content, estimated weight and estimated
value.

(3) Submission requirements.

(i) The Contractor shall submit inventory disposal schedules to the Plant Clearance Officer no later

than-

(A) 30 days following the Contractor’s determination that a property item is no longer required for

performance of this contract;

(B) 60 days, or such longer period as may be approved by the Plant Clearance Officer, following

completion of contract deliveries or performance; or

(C) 120 days, or such longer period as may be approved by the Termination Contracting Officer,

following contract termination in whole or in part.

(ii) Unless the Plant Clearance Officer determines otherwise, the Contractor need not identify or

report production scrap on inventory disposal schedules, and may process and dispose of production

scrap in accordance with its own internal scrap procedures. The processing and disposal of other

types of Government-owned scrap will be conducted in accordance with the terms and conditions of

the contract or Plant Clearance Officer direction, as appropriate.

(4) Corrections. The Plant Clearance Officer may-

(i) Reject a schedule for cause (e.g., contains errors, determined to be inaccurate); and

(ii) Require the Contractor to correct an inventory disposal schedule.

(5) Postsubmission adjustments. The Contractor shall notify the Plant Clearance Officer at least 10

working days in advance of its intent to remove an item from an approved inventory disposal

schedule. Upon approval of the Plant Clearance Officer, or upon expiration of the notice period, the

Contractor may make the necessary adjustments to the inventory schedule.

(6) Storage.

(i) The Contractor shall store the property identified on an inventory disposal schedule pending

receipt of disposal instructions. The Government’s failure to furnish disposal instructions within 120

days following acceptance of an inventory disposal schedule may entitle the Contractor to an

equitable adjustment for costs incurred to store such property on or after the 121 st day.

(ii) The Contractor shall obtain the Plant Clearance Officer’s approval to remove property from the

premises where the property is currently located prior to receipt of final disposition instructions. If

approval is granted, any costs incurred by the Contractor to transport or store the property shall not

increase the price or fee of any Government contract. The storage area shall be appropriate for

assuring the property’s physical safety and suitability for use. Approval does not relieve the

Contractor of any liability for such property under this contract.

(7) Disposition instructions.

(i) The Contractor shall prepare for shipment, deliver f.o.b. origin, or dispose of Contractor inventory

as directed by the Plant Clearance Officer. Unless otherwise directed by the Contracting Officer or
by the Plant Clearance Officer, the Contractor shall remove and destroy any markings identifying the

property as U.S. Government-owned property prior to its disposal.

(ii) The Contracting Officer may require the Contractor to demilitarize the property prior to

shipment or disposal. In such cases, the Contractor may be entitled to an equitable adjustment

under paragraph (i) of this clause.

(8) Disposal proceeds. As directed by the Contracting Officer, the Contractor shall credit the net

proceeds from the disposal of Contractor inventory to the contract, or to the Treasury of the United

States as miscellaneous receipts.

(9) Subcontractor inventory disposal schedules. The Contractor shall require its Subcontractors to

submit inventory disposal schedules to the Contractor in accordance with the requirements of

paragraph (j)(3) of this clause.

(k) Abandonment of Government property.

(1) The Government shall not abandon sensitive property or termination inventory without the

Contractor’s written consent.

(2) The Government, upon notice to the Contractor, may abandon any nonsensitive property in place,

at which time all obligations of the Government regarding such property shall cease.

(3) 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.

(4) The Government has no obligation to restore or rehabilitate the Contractor’s premises under any

circumstances; however, if Government-furnished property is withdrawn or is unsuitable for the

intended use, or if other Government property is substituted, then the equitable adjustment under

paragraph (i) of this clause may properly include restoration or rehabilitation costs.

(l) Communication. All communications under this clause shall be in writing.

(m) Contracts outside the United States. If this contract is to be performed outside of the United

States and its outlying areas, the words "Government" and "Government-furnished" (wherever they

appear in this clause) shall be construed as "United States Government" and "United States

Government-furnished," respectively.

(End of clause)

Alternate I (Apr 2012). As prescribed in 45.107 (a)(2), substitute the following for paragraph (h)(1)

of the basic clause:

(h)(1) The Contractor assumes the risk of, and shall be responsible for, any loss of Government

property upon its delivery to the Contractor as Government-furnished property. However, the

Contractor is not responsible for reasonable wear and tear to Government property or for

Government property properly consumed in performing this contract.

Alternate II (Apr 2012). As prescribed in 45.107 (a)(3), substitute the following for paragraph (e)(3)

of the basic clause:
(e)(3) Title to property (and other tangible personal property) purchased with funds available for

research and having a unit acquisition cost of less than $5,000 shall vest in the Contractor upon

acquisition or as soon thereafter as feasible; provided that the Contractor obtained the Contracting

Officer’s approval before each acquisition. Title to property purchased with funds available for

research and having a unit acquisition cost of $5,000 or more shall vest as set forth in this contract.

If title to property vests in the Contractor under this paragraph, the Contractor agrees that no costs

shall be allowed for any depreciation, amortization, or use under any existing or future Government

contract or subcontract thereunder. The Contractor shall furnish the Contracting Officer a list of all

property to which title is vested in the Contractor under this paragraph within 10 days following the

end of the calendar quarter during which it was received. Vesting title under this paragraph is

subject to civil rights legislation, 42 U.S.C. 2000d. Before title is vested and by signing this contract,

the Contractor accepts and agrees that-

"No person in the United States or its outlying areas shall, on the ground of race, color, or national

origin, be excluded from participation in, be denied the benefits of, or be otherwise subjected to

discrimination under this contemplated financial assistance (title to property)."

Parent topic: 52.245 [Reserved]