PGI 245.1 - GENERAL

Parent topic: PGI Part 245 - GOVERNMENT PROPERTY

PGI 245.102 RESERVED

PGI 245.102-70 Policy.

(1) A basic principle of the Federal Acquisition Regulations System is that, upon contract award,

contractors bring all the necessary organization, experience, accounting and operational controls,

property, and technical skills, or the ability to obtain them (reference FAR 9.104-1 (e), (f), and (g) of

General Standards). Therefore, upon contract award, responsible contractors should have the means

to provide effective and efficient stewardship of Government property.

(2) Government property, as defined at FAR 45.101, must be contractually accountable to a single

contract and only one contract at a time. This requirement applies to both Government-furnished

property and contractor-acquired property. Although accountable to only one contract at a time,

contract terms and conditions may allow Government property to be used on other contracts (see

FAR 52.245-9, Use and Charges).

PGI 245.103 General.

PGI 245.103-70 Furnishing Government property to contractors.

(1) The requiring activity (project or program manager, or purchase request generator), as part of

its responsibility for acquisition planning (FAR part 7, Acquisition Planning), is the decision point as

to whether or not to furnish property to contractors. The basis for any decision to provide

Government property shall be documented by the requiring activity and provided to the contracting

officer. Such documentation is not required when contractors are furnished property for repair,

modification, or overhaul under a contract.

(2) Prior to furnishing Government property to the contractor, the contracting officer shall ensure

that each of the requirements of FAR 45.102 are addressed as follows, and documented in the

contracting file—

(i) Element 1: In the Government’s best interest. Discussion should be specific, factual, and where

necessary, address actual or projected dollars and percentages. Merely selecting one or two

objectives supported by a general, perfunctory discussion does not address this element

satisfactorily. Discussion should address the following factors:

(A) Economy – Furnishing Government property is the lowest cost or price alternative.

(B) Standardization – There is a critical need for precise replication.

(C) Security – Government property is needed due to national security issues/concerns.

(D) Expedite production – Government property is crucial to achieving timely or accelerated delivery
of a supply item or service.

(E) Scarcity – The Government can obtain scarce items, or is the only source of property necessary

for successful execution of a contract.

(F) Maintain the industrial base – Government property is needed to ensure future capability to

obtain a particular supply item or service.

(G) Contract type – Government property will enable the Government to obtain a more favorable

contract type.

(ii) Element 2: Overall benefit.Demonstrate that the overall benefit to the acquisition significantly

outweighs the increased cost of administration, including property disposal.

(A) Property in the hands of contractors drives program costs. Therefore, in order to make the case

that providing Government property to the contractor is worthwhile, the associated costs must be

considered and the business decision justified. The costs of Government property removal and

disposal, including demilitarization and disposal of environmentally-regulated property, must be

included.

(B) Costs must be either less than what the contractor might otherwise incur, or the demonstrated

benefit to the Government must outweigh these additional contract costs.

(iii) Element 3: Government assumption of risk. Demonstrate that providing the property does not

substantially increase the Government’s risk.

(A) Risk must be discussed and documented. A risk analysis is warranted to demonstrate that the

Government is not substantially increasing its risk. For example, when furnishing Government

property, the Government is ordinarily responsible for suitability of use, timely delivery, and

replacement of defective Government property.

(B) Other risks may need to be considered, discussed, and documented.

(iv) Element 4: Government requirements cannot otherwise be met. Document why the furnishing of

Government property is critical and significant to meeting acquisition plan objectives.

PGI 245.103-71 Transferring Government property accountability.

(1) Use only the Standard Form 30 to execute transfers of Government property accountability

between existing contracts. No other forms or documents, such as the DD Form 1149, Requisition

and Invoice/Shipping Document, are authorized for the transfer of Government property

accountability from one contract to another.

(2) Modifications for the transfer of Government property accountability shall:

(i) Use the Government-furnished property (GFP) attachment prescribed at PGI 245.103-72 .

(ii) Incorporate FAR clauses 52.245-1, Government Property, and 52.245-9, Use and Charges, and

the associated DFARS clauses (see 245.107, Contract clauses) to the extent that the gaining contract

lacks the required clauses.
PGI 245.103-72 Government-furnished property attachments to solicitations

and awards.

(a) When Government-furnished property (GFP) is anticipated, create the GFP attachment in the

GFP module of the Procurement Integrated Enterprise Environment (PIEE) at

https://piee.eb.mil/piee-landing to—

(1) Specify the required GFP data elements; and

(2) Identify GFP serially-managed items, GFP nonserially-managed items, and GFP items that may be

requisitioned from the DoD supply system by the contractor; and

(3) Accomplish the electronic transmission of the GFP attachment to the contract in the Electronic

Data Access application in the PIEE.

(b) For more information on the GFP attachments, see

https://dodprocurementtoolbox.com/site-pages/gfp-attachments.]

PGI 245.103-73 Government property under sustainment contracts.

(1) Sustainment contracts, including those for performance-based logistics, sustainment support,

contractor logistics support, life-cycle product support, and weapon systems product support (see 10

U.S.C. 4324(d)), may require the contractor to hold or manage Government inventory. In such cases,

regularly scheduled (typically, semiannually) inventory reporting from the contractor is required to

ensure that inventory levels meet program requirements and Government inventory in excess of

authorized amounts is identified. The requiring activity is responsible for providing the contracting

officer with reporting requirements for Government inventory. See the Data Item Description DIPSSS-80727A, Government Furnished Material (GFM) by National Stock Number, and the

instructions for completing the DD Form 1423 Contract Data Requirements List (CDRL) for

inventory reporting requirements on sustainment contracts available at

http://dodprocurementtoolbox.com/site-pages/gfp-resources.

(2) During acquisition planning, pricing contracts, exercising options, and assessing past

performance, contracting officers should review the requiring activity’s assessment of the

information generated by the inventory reporting requirements.

(3) In some circumstances, under fixed-price sustainment contracts, contract deliverables consist of

non-hardware items, such as operational readiness rate goals or mean time between failures of a

system. In order to meet these deliverables, contractors are required to provide certain property

items to the Government. In such cases, the contract does not include specific delivery line items

requiring formal delivery of the property. By extension, the Government will not have title to the

property at the time the contractor provides the property. In such cases, title to the property passes

to the Government upon Government acceptance (as defined in FAR 46.101) of the items at the

destination stated in the contract. Contracting officers shall ensure that the contract—

(i) Clearly defines how and when acceptance will be performed; and

(ii) Includes applicable requirements for quality assurance, part marking, anti-counterfeiting, or

other requirement for the delivery of the property.
PGI 245.103-74 Contracting office responsibilities.

(1) Prepare the GFP attachments in accordance with the procedures in PGI245.103 -72.

(2) The following require a contract modification and an update to the GFP attachment in the GFP

module of the PIEE to create a consolidated, conformed list of property to be contractually provided

under the contract.

(i) Any change to the mandatory fields of the GFP attachment (see PGI 245.103-72).

(ii) Addition or deletion of any GFP or anticipated GFP under the contract.

(iii) Transfer of GFP accountability between existing contracts (see PGI 245.103-71).

(iv) Delivery and Government acceptance of contractor-acquired property when retained by the

contractor for use under a contract (see PGI 245.402-71).

(v) Substitution of GFP for previously furnished GFP, GFP to be furnished, or property to be acquired

by the contractor for the Government under the contract.

(vi) Withdrawal of authority for contractor use of GFP.

(3) Include in applicable solicitations and contracts the CDRL provided by the requiring activity for

reporting Government inventory held under sustainment contracts (see PGI 245.103-73 ).

PGI 245.105 Contractors property management system

compliance.

(d) Disposition of findings.

(2) Initial determination.

(ii)(A) Within 10 days of receiving the report, if the contracting officer makes a determination that

there is a significant deficiency, the contracting officer should provide an initial determination of

deficiencies and a copy of the report to the contractor and require the contractor to submit a written

response.

(C) Evaluation of contractor's response. Within 30 days of receiving the contractor’s response, the

contracting officer, in consultation with the auditor or cognizant functional specialist, should

evaluate the contractor’s response and make a final determination.

(3) Final Determination.

(ii)(A) Monitoring contractor's corrective action. The contracting officer and property administrator

shall monitor the contractor's progress in correcting deficiencies. If the contractor fails to make

adequate progress, the contracting officer shall take whatever action is necessary to ensure that the

contractor corrects the deficiencies. Examples of actions the contracting officer can take are:

withdraw or withhold approval of the system; bringing the issue to the attention of higher level

management, implementing or increasing the withholding in accordance with the clause at

252.242-7005, Contractor Business Systems, and recommending non-award of potential contracts.
(B) Correction of significant deficiencies.

(1) When the contractor notifies the contracting officer that the contractor has corrected the

significant deficiencies, the contracting officer shall request the property administrator to review the

correction to determine if the deficiencies have been resolved.

(2) The contracting officer shall determine if the contractor has corrected the deficiencies.

(3) If the contracting officer determines the contractor has corrected the deficiencies, the

contracting officer's notification shall be sent to the property administrator; auditor; payment office;

appropriate action officers responsible for reporting past performance at the requiring activities;

and each contracting and contract administration office having substantial business with the

contractor as applicable.