SURPLUS USEABLE PROPERTY SALE 

DEFENSE REUTILIZATION AND MARKETING SERVICE 

INVITATION FOR BID 

Number 08-0001 

STEP TWO OF TWO-STEP SOLICITATION 

May 2008 

(Updated with Amendments 1-6) 
Invitation For Bid 08-0001 

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SURPLUS USEABLE PROPERTY 

INVITATION FOR BID 

Number 08-0001 

TABLE OF CONTENTS

GENERAL STATEMENTS OF CONTRACT...........................................................................2

ITEM DESCRIPTION ..................................................................................................................7

ARTICLE ONE: BID EVALUATION AND CONTRACT AWARD ........................10

Section 1 – Bid Evaluation ..................................................................................10

Section 2 – Contract Award................................................................................10

Section 3 – Post-Award Conference ...................................................................10

ARTICLE TWO: PARTIES TO THE CONTRACT...................................................11

Section 1 – Contractor Information...................................................................11

Section 2 – Transfer and Hypothecation ...........................................................11

Section 3 – Contract of Sale ................................................................................11

Section 4 – Authority of Sales Contracting Officer (SCO................................11

ARTICLE THREE: CONTRACT FINANCIAL RETENTION.................................11

Section 1 – Bid Deposit........................................................................................11

Section 2 – Payment Deposit...............................................................................11

Section 3 – Financial Guarantee Bond...............................................................12

ARTICLE FOUR: CONTRACT PERFORMANCE ...................................................12

Section 1 – Performance Period .........................................................................12

Section 2 – Phase-In Period.................................................................................12

Section 3 – Termination for Convenience of the Government ........................12

ARTICLE FIVE: DISTRIBUTIONS TO DRMS .........................................................15

Section 1 – Monthly Up-Front Property Purchase ...........................................15

Section 2 – Monthly Back-End Property Payment...........................................15

Section 3 – Method of Payment ..........................................................................15

Section 4 – Failure to Make Timely Payment ...................................................15

ARTICLE SIX: PRODUCT POOL, PROPERTY REFERRALS AND TITLE 

TRANSFER..........................................................................................................15

Section 1 – Product Pool......................................................................................15

Section 2 – Property Referrals............................................................................16

ARTICLE SEVEN: DEMILITARIZATION CODES AND TRADE SECURITY 

CONTROL (TSC) REQUIREMENTS..............................................................18

Section 1 – Demilitarization Codes.....................................................................18

Section 2 – Contractor’s Trade Security Control Requirements....................19

Section 3 – Munitions List Items and Commerce Control List Items ............19

ARTICLE EIGHT: INVENTORY ASSURANCE.......................................................21
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Section 1 – Do-Not-Sell (DNS) List.....................................................................21

Section 2 – Demilitarization Code Change (DCC) List....................................21

Section 3 – Property Assurance Contractor De-Incentives .............................21

ARTICLE NINE: GOVERNMENT REQUIRED REPORTS ....................................22

Section 1 – Inventory Reports.............................................................................22

Section 2 – Resale and Returns Report..............................................................22

Section 3 – Seller Indirect Cost (SIC) Report ...................................................22

Section 4 – Small Business Participation Reports.............................................22

Section 5 – Non Responsive Resale Buyer Report ............................................22

Section 6 – Federal Asset Sales (FAS) Requirements.......................................22

ARTICLE TEN: PROPERTY STORAGE AND GOVERNMENT OWNED 

MATERIAL HANDLING EQUIPMENT (MHE)............................................23

Section 1 – Property Storage on Government Facilities ..................................23

Section 2 – Property Storage on Government Facilities – Receipt In Place 

Property ....................................................................................................23

Section 3 – DRMS Infrastructure.......................................................................24

Section 4 – Government Owned Material Handling Equipment (MHE).......24

ARTICLE ELEVEN: PROPERTY RETURNS............................................................24

Section 1 – Property Accountability of Items Issued to Contractor ...............24

Section 2 – Line Item Discrepancies...................................................................24

Section 3 – Property Retrieval of Controlled Items..........................................24

Section 4 – Reutilization/Transfer/Donation (RTD) Property Returns..........25

ARTICLE TWELVE: CONTRACT OPERATION REQUIREMENTS...................25

Section 1 – Contractor Participation in Federal Asset Sales...........................25

Section 2 – Contractor Small Business Participation.......................................25

Section 3 – Contractor Awareness of the DRMS Environmental Management 

System (EMS)...........................................................................................26

Section 4 – Inventory Assurance by Contractor ...............................................26

Section 5 – Contractor Web Based Application................................................26

Section 6 – Automatic Data Processing Equipment (ADPE) Certification by 

Contractor ................................................................................................27

Section 7 – Food and Drug Administration (FDA) Certification for Medical 

Devices.......................................................................................................27

ARTICLE THIRTEEN: MATERIAL BREACH.........................................................27

Section 1 – Notice of Material Breach................................................................28

Section 2 – Response to Notice - .........................................................................28

Section 3 – Termination ......................................................................................28

Section 4 – Intentional Breach............................................................................28

Section 5 – DRMS Remedies for Material Breach by Contractor ..................28

Section 6 – Indemnification of DRMS by Contractor ......................................28

Section 7 – Indemnification of Contractor by DRMS ......................................28

ARTICLE FOURTEEN: CONTRACT SELLER INDIRECT COSTS .....................28
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Section 1 – Documentation and Payment of Seller Indirect Costs..................28

ARTICLE FIFTEEN: CONTRACT COMPLIANCE, AUDITS AND REVIEWS...29

Section 1 – Compliance with Applicable Laws and Regulations.....................29

Section 2 – Licenses and Permits........................................................................29

Section 3 – Duties of Care and Loyalty..............................................................29

Section 4 – Prohibited Activities.........................................................................29

Section 5 – Contractor Cooperation in DOD Investigations/Audits...............29

Section 6 – Contractor Record Retention..........................................................30

Section 7 – Records Maintenance.......................................................................30

Section 8 – Inspection of Records and Workplace by Government................30

Section 9 – Purpose and Content of Compliance Audits, Reviews and Further 

Reviews......................................................................................................30

Section 10 – Methods and Procedures for Compliance Reviews.....................30

Section 11 – Further Reviews..............................................................................31

Section 12 – Compliance Notification ................................................................31

Section 13 – Costs of Oversight ..........................................................................31

Section 14 – Notice of Audit Adjustment...........................................................31

Section 15 – Procedures for Adjudication of Audit Adjustments...................31

Section 16 – Remedies for Audit Adjustments..................................................31

ARTICLE SIXTEEN: DISPUTES.................................................................................32

Section 1 – Disputes .............................................................................................32

Section 2 – Claims................................................................................................32

Section 3 – Decisions............................................................................................32

Section 4 – Alternative Dispute Resolution (ADR)...........................................32

ARTICLE SEVENTEEN: INSURANCE AND BOND REQUIREMENTS ..............32

Section 1 – Insurance and Bond Contract Requirements................................32

Section 2 – Modification of Special Circumstance Conditions........................32

Section 3 – Further Modifications......................................................................33

Section 4 – Evidence of Insurance ......................................................................33

ARTICLE 18: DELETED IN ITS ENTIRETY ............................................................33

ARTICLE NINETEEN: MISCELLANEOUS PROVISIONS ....................................33

Section 1 – Binding Effect ...................................................................................33

Section 2 – Notices................................................................................................33

Section 3 – Severability........................................................................................34

Section 4 – Headings............................................................................................34

Section 5 – Survival..............................................................................................34

Section 6 – Waiver ...............................................................................................34

Section 7 – Force Majeure...................................................................................34

Section 8 – Use of DRMS Name; Public Communications ..............................34

Section 9 – Tense and Gender.............................................................................34

Section 10 – Entire Agreement; Modification...................................................35

Section 11 – Computation of Time .....................................................................35
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Section 12 – Electronic Communication............................................................35

ADDITIONAL TERMS AND CONDITIONS OF SALE........................................................36

ADDITIONAL CONTRACT ADVISEMENTS ...........................................................37

DEFINITIONS .................................................................................................................40
Invitation For Bid 08-0001 

1 

SURPLUS USEABLE PROPERTY 

 INVITATION FOR BID

Number 08-0001 

STEP TWO OF TWO-STEP SEALED BID

This Invitation For Bid (IFB) is issued by the Defense Reutilization and Marketing 

Service (DRMS) to initiate Step Two of a two-step sealed bid sales process. The only bids the 

Sales Contracting Officer (SCO) may consider for award of a contract are those received from 

bidders that have submitted acceptable technical proposals during Step One of this solicitation 

under RFTP 08-0001. 

The successful bidder's technical proposal shall be incorporated into any contract 

awarded in response to this IFB, thus any deviation from the proposal will require a contract 

modification. In all other respects, the provisions of this IFB shall govern the contract 

contemplated hereby without regard to assumptions, plans, forecasts, conditions or any other 

matters set forth in any prospective bidder's technical proposal submitted in Step One.

Forms for submitting a bid are provided on the DRMS web site, www.drms.dla.mil,then 

click on Sales Customer. Your Bid Forms and $100,000.00 bid deposit must be delivered to and 

received by DRMS before the bid opening at 1:00 p.m. EDST on Wednesday, June 11, 2008. 

Address your Bid Forms and Bid Deposit to: 

Mr. Neil Watters 

Sales Contracting Officer 

DRMS J-362 

74 North Washington Avenue 

Battle Creek, Michigan 49037-

3092 

Fax: (269) 961-7568 
Invitation For Bid 08-0001 

GENERAL STATEMENTS OF CONTRACT

Certain contents and provisions of this IFB, including Appendices, Attachments and 

Schedules, are described in general. The following General Statements of Contract are not intended 

to be complete and do not take precedence over the terms and conditions of this contract. The 

requirements for all matters discussed in the General Statements are fully defined in the Terms and 

Conditions Section of this IFB. Any historical data provided in this IFB was derived using existing 

sources and is presented for general reference only.

Prior to prospective bidders submitting a bid for this IFB, DRMS will offer a tour of a DRMO 

facility and a pre-proposal conference where a contract overview will be presented and an opportunity 

for prospective bidders to pose questions. The tour and conference will take place on Wednesday, 

March 12, 2008 at 8:00AM at DRMO San Antonio, 2603 Parker Road, Building 4199, Fort Sam 

Houston, TX. The purpose of the conference is to provide the Government an opportunity to present 

solicitation terms and conditions, explain and provide clarity to the Agency’s expectation in 

performance, and respond to questions from prospective bidders. All questions and answers provided 

at the tour and pre-proposal conference will be posted to the DRMS website, www.drms.dla.mil, for 

viewing. 

Prospective bidders are encouraged to attend the site visit tour/pre-proposal conference on 

March 12, 2008. The point of contact for the scheduled site visit tour/pre-proposal conference is Ms. 

Becky Bellinger, Sales Contracting Officer. She can be reached via telephone at (269) 961-7079 or 

electronically, becky.bellinger@dla.mil. Prospective bidders are asked to register for the conference 

with Ms. Bellinger no later than March 5, 2008 by electronically advising the name of the firm and the 

number of attendees. Interested bidders are requested to submit any questions they may have 

electronically to Ms. Bellinger no later than February 29, 2008. Such questions shall be answered and 

made available to all interested parties at the conference. Receipt of advance questions provides the 

Government adequate time for proper response. Questions must be directed to the above email address. 

Remarks and explanations provided at the conference shall not be considered to supersede or otherwise 

qualify any of the terms of this solicitation unless formally incorporated by amendment. 

This IFB relates to useable property that the Government has determined to be surplus to the 

needs of the Department of Defense and the Federal Government. Useable property is defined with 

respect to a particular item, as a designation assigned by or with the approval of DRMS personnel 

meaning that the item has value in excess of that of the item’s material content. Normally, the property 

will be comprised of items identified by the Government as safe to sell and generally located in the 

Continental United States (CONUS) to include Alaska, Hawaii, and Guam, however, the Government 

may include locations outside CONUS at the agreement of both parties. Property issued under this 

contract will predominately contain a demilitarization code of A, and may contain demilitarization B 

and Q. In addition, DRMS may opt to include hazardous material (under mutual agreement), such as 

lead acid batteries, paints, sealants, and fuels; and certain demilitarization code F items where the 

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Invitation For Bid 08-0001 

demilitarization has been performed. NOTE: Bidders are advised that national security decisions 

are currently pending that could affect the sale of demilitarization code B and Q items. These 

items may be removed from the product pool in the future. 

DRMS receives property at DRMS facilities in CONUS, and one facility each in Guam and 

Hawaii, and two in Alaska. DRMS may also receive generator property that is not located at a DRMS 

facility, therefore, may refer for sale to the Contractor at Receipt In Place (RIP) locations. Recycling 

Control Point (RCP) DLA Depot property will be issued to the Contractor at one of the four DRMS 

Controlled Property Centers (CPCs) currently located at Columbus, OH; Norfolk, VA; Huntsville, AL; 

and Stockton, CA.

 The successful bidder commits to purchase property issued under this contract on a Delivery 

Order for a thirty-six (36) month performance period commencing from the date of submission of the 

initial Delivery Order to the Contractor. DRMS may unilaterally exercise options to extend the 

performance period for up to an additional twenty-four (24) months via two twelve month options, 

based on Government requirements. 

A bid will consist of one bid percentage specified by the bidder for the Government’s acquisition 

value of all property received. The winning bid will be determined by the bidder submitting the highest 

bid percentage. The successful bidder agrees to pay the Government the bid percentage submitted by 

the bidder of the Government’s acquisition value for each line item issued each month, referred to as the 

up-front payment. In addition, the Contractor must pay DRMS an additional 1.0% of the Government’s 

acquisition value for property within 120 days of appearing on a Delivery Order, referred to as the backend payment. 

Within ten (10) days of contract award, the Contractor must pay DRMS a payment deposit 

totaling five hundred thousand dollars ($500,000) (in addition to the $100,000 bid deposit required at 

the time of bid submission). The payment deposit will be held by DRMS until the conclusion of the 

contract wind-down period. The Contractor is also required to provide a financial guarantee bond in the 

amount of $4.5 million. 

Prior to award of this contract, the Contractor will be required to obtain a Trade Security Control 

clearance by providing the Trade Security Control Office a properly completed End-Use Certificate 

(EUC) in the form of a DLA Form 1822 (copy available on the DRMS web site, www.drms.dla.mil, 

then click on Sales Customer. The clearance investigation determines that the entity is who it claims to 

be, is doing business at the name and location claimed, and that there are no disqualifying factors 

present (i.e., convictions for illegal export of military technology, debarment by a Government activity, 

etc.). 

All property that the Government issues under this contract requires property assurance 

responsibilities on the part of the Contractor which may result in the property being returned to the 

Government. DRMS will furnish the Contractor a Do-Not-Sell (DNS) List (to include updates as often 

as necessary) and a Demilitarization Code Change (DCC) List (also updated as often as necessary) 

representing items that are or have become prohibited from sale. Contractor will return any item on the 

DNS and DCC lists prior to release to resale customers and shall identify the return by the applicable 

Delivery Order and Disposal Turn-In Document (DTID). De-incentives will apply to the Contractor 

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Invitation For Bid 08-0001 

with regard to the resale of items that DRMS has identified as becoming controlled or DEMIL required 

and placed on the DNS or DCC List. 

Certain property identified for return may have already been resold by the Contractor and no 

longer in the Contractor’s possession. DRMS suggests the Contractor advise resale buyers that due to 

national security, the Government may ask for the return of property. Contractor will be required to 

inform their customer of the property’s status and request that it be returned. Contractor agrees to 

withhold further sales participation from customers who are non-responsive or who refuse to return the 

property still within their possession. 

There may also be occasions when the Government will request the return of property issued to 

the Contractor because it is required for DOD/DRMS mission. DRMS does not anticipate a large 

volume of property will be requested in this manner. DRMS will refund the Contractor’s purchase 

price for the return of the items requested by DRMS and will advise Contractor of return process at 

DRMS expense. 

 

Contractor agrees to fully cooperate with the Government when informed by DRMS of any 

reviews or investigations by any DOD or Federal Government investigative service or agency. 

Contractor agrees to provide DRMS with all requested information regarding the property or 

information relating to the customer purchasing the property. Contractor must make all sales records, 

property, and customer’s records pertaining to such investigations available to DRMS upon request. 

The Contractor may be asked to serve as a sales broker for DRMS from time to time as DRMS 

may elect to refer certain non-DRMS assets to the Contractor in support of the DRMS Sales program. 

Title to these items will remain with the Government until sale to a resale buyer and removal of the 

property from Government premises. DRMS will issue these items in-place and the resale must also 

take place at the in-place location. Any inspection or sale of this property must have prior approval of 

DRMS. Contractor will be required to hold all item bid amounts separate from other funds. 

 In accordance with the June 4, 2001 memorandum from the Deputy Secretary of Defense, certain 

security measures have been imposed when disposing of Automatic Data Processing Equipment 

(ADPE). A copy of the specific guidance is available on the DRMS web site, www.drms.dla.mil, then 

click on Sales Customer. Therefore, specific verification/certification processes and reporting 

requirements must be provided in the event the following FSCs are issued to the Contractor: 

 7020 – ADP CENTRAL PROCESSING UNIT, ANALOG 

 7021 – ADP CENTRAL PROCESSING UNIT, DIGITAL 

 7022 – ADP CENTRAL PROCESSING UNIT, HYBRID 

 7025 – ADP INPUT/OUTPUT AND STORAGE DEVICES 

 DRMS will not provide the Contractor indoor or outdoor storage space for the purposes of this 

contract, therefore, the Contractor is required to obtain their own storage space. Temporary staging 

areas will be provided for the Contractor to pack and sort property for shipping to Contractor’s storage 

facilities. Property being stored by the Contractor must be safeguarded to the satisfaction of the 

Government at all times. The Government reserves the right to conduct “no-notice” site inspections as 

needed. Special circumstances may arise where DRMS will allow the property to remain on a 

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Invitation For Bid 08-0001 

Government facility, however, expressed authorization from DRMS is required. The Contractor will be 

charged storage charges for property not removed from a Government facility in a timely manner. 

Government owned Material Handling Equipment (MHE) will be made available to the Contractor at 

the discretion of the Government. 

The Contractor is required to participate in the Government’s Federal Asset Sales (eFAS) 

Program whereby the Contractor agrees to integrate all sales being conducted by the Contractor to the 

website, GovSales.gov, a Real and Personal Property Portal that facilitates the sale for all Government 

Agencies. Required quarterly reports reflecting Contractor sales performance must be provided to the 

GSA GovSales Planning Office. 

The Contractor must meet certain small business participation goals when reselling the property 

issued under this contract. Required monthly reports reflecting the participation must be provided to 

DRMS. 

The contract requires that the Contractor fulfill certain requirements related to national security, 

DRMS customer service, and compliance review. In addition, the Contractor is fully auditable, 

therefore, will remain cooperative with DRMS audit requirements to include accounting statements, 

insurance coverage, inventory control and asset tracking procedures, inventory aging, and 

returning/retrieving controlled/demilitarization items, both prior to resale and after. Any and all of the 

Contractor’s records must be made available to DRMS, to include providing DRMS copies and/or 

allowing DRMS to make copies of all records requested. Records will be made available in either 

electronic or hard copy form as required by DRMS. The contract also contains certain provisions 

regarding the logistical interface with DRMS and its generators. 

The Contractor must work effectively with DRMO personnel with respect to logistics, and must 

interact with DRMS personnel with regard to national security matters, customer service requests of 

DRMS, financial reporting, compliance monitoring and dispute resolution. 

The Government reserves the right to conduct a post-award conference as early as two weeks 

after award. The purpose of the conference is to ensure the Contractor fully understands the terms and 

conditions of this contract. The location and date of the conference will be determined by DRMS and 

the costs incurred by Contractor personnel attending shall be paid in full by the Contractor without 

reimbursement by DRMS. 

A prospective bidder should be aware of certain risk factors that could affect a bidder’s 

assessment of this contract and the calculations supporting the resulting bid. Although DRMS does not 

represent that it has identified all such risk factors, the following, in addition to those risks identified 

elsewhere in this IFB, should be considered by a prospective bidder: 

The future volume, quality, condition, market value, types (i.e., distribution of property 

referrals across Federal Supply Classes (FSCs), and geographic concentrations (i.e., 

referrals for sale at particular delivery points) of the property cannot be predicted. 

 Described generally, applicable statutes and regulations grant DRMS less flexibility to 

agree to amend a contract after award than prospective bidders may have experienced in other 

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Invitation For Bid 08-0001 

contractual settings. Prospective bidders should assume that the provisions of the contract 

cannot be significantly amended after award. 

This IFB may be the subject of one or more protests to the U.S. General Accountability 

Office. Moreover, it is possible that, either pending or after award, one or more third parties that 

object to this contract could institute litigation involving both DRMS and the Contractor. DRMS 

cannot predict the likelihood or the possible grounds for such litigation. Nevertheless, this is a 

risk factor that should be assessed by a prospective bidder. 

Applicable statutes, regulations, policies and inter-service agreements govern whether the 

disposition of particular items of surplus is through DRMS or through other disposition modes. The 

volume and nature of the property referred for sale under this contract could be affected by changes in 

such governing statutes, regulations, policies and inter-service agreements. 

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK 

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Invitation For Bid 08-0001 

 ITEM DESCRIPTION 

It has been determined that after the DOD/DRMS Reutilization, Transfer, or Donation process, 

the items within the property pool are no longer needed by the Department of Defense or Federal 

Government and consist of: 

ITEM 1: Useable property normally comprised of items identified by the Government as safe 

to sell and located in the Continental United States to include Alaska, Hawaii, and Guam, however, at 

times, the Government may include locations outside of the Continental United States at the agreement 

of both parties. Property issued will predominately contain a demilitarization code of A and may 

include B, Q and F. The Government may elect to offer property consisting of hazardous material 

(under mutual agreement), such as lead acid batteries, paints, sealants, and fuels; and certain 

demilitarization code F items where the demilitarization has been performed. NOTE: Bidders are 

advised that national security decisions are currently pending that could impact the sale of 

demilitarization code B and Q items and, these items could be removed from the product pool in 

the future. 

Described very generally, a demilitarization code is a single alpha character assigned by the item 

manager that identifies the degree of demilitarization necessary prior to accomplishing final disposition 

of an item. For the purposes of this IFB, the following definitions are provided: 

DEMIL Code A – Demilitarization not required. 

DEMIL Code B – Demilitarization not required, however Trade Security Controls (as set forth 

by the Department of State) required at time of disposition. 

DEMIL Code Q – Demilitarization not required, however Trade Security Controls (as set forth 

by the Department of Commerce) required at time of disposition. 

DEMIL Code F – Demilitarization instructions to be furnished by the Item/Technical 

Manager/Equipment Specialist, however, Trade Security Controls (as set forth by the Department of 

State) required at time of disposition. 

The Government will decide items to be sold to the Contractor regardless of Federal Supply 

Class (FSC), location, or demilitarization code. Contractor has no right to any property that is not 

issued on a delivery order under the terms of this contract. The Government guarantees to issue the 

Contractor the lesser of either 130,000 line items of property annually or issue to the Contractor, 

property with an annual acquisition value of $600,000,000 under this contract. DRMS reserves the 

right to sell property or offer property through alternative sales or contract means for all property not 

considered part of this contract. 

Each line item of property will be identified by either a National Stock Number (NSN) or a 

Local Stock Number (LSN) provided by the generator -- usually a military base or other Department of 

Defense (DOD) facility. NSNs are obtained from centralized federal procurement records. For items 

identified by the generator by NSN, DRMS employs an automated system that matches the NSN to the 

item's acquisition value as recorded in these procurement records. 

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Invitation For Bid 08-0001 

Local Stock Numbers (LSNs) are assigned by personnel of the generator for when the item's 

NSN is unknown or unavailable. The acquisition value of an item identified by LSN is determined by 

the generator and reported to DRMS on the documentation associated with release of the item by the 

generator to DRMS. LSN acquisition values are either the generator's recorded original procurement 

cost or its estimate of the item's replacement cost. In some instances, DRMS receiving personnel will 

correct the generator's turn-in documentation by replacing an LSN with an NSN. In such cases the 

item's acquisition value is that corresponding to the NSN rather than that originally reported by the 

generator. 

The following data presented is a sample of the data DRMS is making available to prospective 

bidders on the DRMS web site, www.drms.dla.mil, then click on Sales Customer. The data provides a 

sales history to include returns of FSCs, DEMIL Codes, line items, and acquisition values. Bidders are 

advised that any sales history information is provided for informational purposes only. Prior year 

property generations and sales data are not predictors of future generations or sales. 

This table represents a small summary of property delivered on the current usable sales contract for FY05, FY06, and FY07 

 and is sorted by which location it was delivered under.

NOTE: All property locations with type "RCP" will be delivered to Stockton, Huntsville, Norfolk, or Columbus (OH).

DRMO DRMO Name Type L/I Qty AcqVal L/I Qty AcqVal L/I Qty AcqVal

SXVA Campbell 7,744 217,474 $33,584,956.39 2,546 101,560 $14,690,702.42 0 0 $0.00

SYCA Colorado Springs 7,819 132,755 $42,227,296.29 10,218 146,117 $73,303,138.20 6,211 196,547 $35,973,397.59

SXGF Eglin 18,933 143,373 $72,470,358.88 18,933 116,430 $71,801,958.59 579 9,543 $21,977,697.53

SSBA Guam 9,876 197,388 $14,787,809.05 12,990 182,209 $8,696,234.61 9,364 115,861 $18,403,040.46

SSAA Hawaii MEO 23,372 503,431 $52,365,667.99 14,341 310,860 $40,411,920.36 12,550 212,914 $39,495,988.47

SYBA Hill MEO 12,540 705,406 $87,983,465.66 13,031 428,031 $83,526,757.07 9,890 350,532 $100,472,761.43

SZ7A Hood 8,959 198,520 $52,984,395.13 2,070 59,166 $12,296,323.74 0 0 $0.00

S9WB Jacksonville RCP 10,439 343,909 $151,745,089.87 2,060 48,876 $102,543,687.17 2,107 50,798 $62,798,469.16

SXGA Jacksonville 13,835 648,304 $124,826,838.49 10,396 657,454 $62,798,477.30 3 5 $153,071.00

SZPA Lewis MEO 18,181 1,370,420 $92,132,956.50 15,654 670,231 $84,486,254.06 14,367 554,945 $78,354,926.17

STWA Meade 24,757 207,535 $113,620,186.33 9,522 116,818 $41,773,904.44 3,295 40,422 $30,261,117.10

SVEA Mechanicsburg MEO 12,842 837,044 $81,508,603.06 20,544 1,781,444 $153,129,072.32 23,550 1,330,375 $148,373,295.84

S9WN New Cumberland RCP 9,605 1,070,357 $49,428,304.35 7,082 1,404,906 $44,811,729.53 9,036 3,299,948 $47,608,487.88

S9WE Norfolk RCP 13,971 263,294 $106,257,232.21 6,579 117,782 $176,642,939.04 8,003 205,125 $91,182,683.61

ST1A Norfolk MEO 21,116 607,668 $97,353,909.64 18,667 322,420 $62,765,841.09 14,196 369,968 $77,145,536.28

SY6P Polk 8,011 138,933 $29,154,974.18 4,734 86,047 $16,785,546.44 168 172 $5,313,950.00

S9WP Richmond RCP 7,672 303,199 $16,486,710.45 6,166 1,049,969 $11,048,449.13 16,547 1,745,529 $18,026,442.97

ST4A Richmond 13,234 243,249 $75,574,941.83 13,251 166,226 $68,969,798.93 2,039 40,449 $8,741,116.64

SY4A Riley MEO 11,081 520,339 $50,878,983.65 7,346 380,743 $33,313,744.90 5,422 289,687 $48,827,806.80

SY6A San Antonio 9,655 138,834 $58,226,974.63 1,413 17,793 $16,677,753.32 3,206 93,163 $22,622,943.49

S9WA San Diego RCP 10,302 235,923 $160,965,273.58 21,596 293,304 $225,506,129.62 5,225 102,658 $133,748,511.91

SYUA San Diego 11,755 328,958 $62,959,482.55 2,244 212,263 $21,201,602.81 0 0 $0.00

S9WS Sharpe RCP 13,513 918,761 $30,404,039.44 7,627 1,247,406 $30,324,432.27 19,091 3,075,977 $46,870,365.59

ST1J St Juliens 18,436 708,583 $120,228,320.67 11,405 497,184 $103,746,449.56 1,309 59,435 $25,227,542.07

SVXP Wright-Patterson 10,476 197,171 $43,565,081.43 16,470 61,994 $36,305,575.09 71 2,021 $198,350.00

FY 2005 Delivered FY 2006 Delivered FY 2007 Delivered

8 
Invitation For Bid 08-0001 

This table represents a small summary of property that has been delivered under the current DRMS usable sales contract for FY05, FY06,

and FY07. This data has been sorted by the Federal Stock Class and is accurate to the best of the Governments knowledge. The data 

does not represent property that will be delivered under the future contract.

FY 2005 Delivered FY 2006 Delivered FY 2007 Delivered

FSC Description Demil L/I Qty AcqVal L/I Qty AcqVal L/I Qty AcqVal

1560 Airframe Structural Comp B 10,389 183,364 $76,511,964.71 6,884 71,826 $50,821,551.60 6,876 81,464 $55,946,405.06

4730 Fittings And Specialties; H A 6,042 167,678 $9,516,140.89 5,126 217,895 $7,975,711.62 5,623 293,720 $10,455,261.69

4820 Valves, Nonpowered A 3,706 25,874 $18,456,904.13 3,505 22,354 $21,123,964.08 4,710 83,567 $21,228,599.09

4920 Aircraft Maintenance And A 3,659 9,700 $74,185,735.40 3,102 8,944 $72,098,799.01 1,671 4,705 $40,140,160.91

5330 Packing And Gasket Mate A 3,176 206,832 $6,609,663.04 2,979 265,893 $6,098,077.83 3,274 254,309 $12,871,230.58

5340 Miscellaneous Hardware A 3,473 334,634 $10,101,626.39 3,596 194,703 $7,714,965.80 3,750 637,229 $7,908,276.02

5935 Connectors, Electrical A 9,255 1,193,936 $11,099,078.20 8,671 263,432 $9,233,783.80 13,634 574,463 $12,231,384.85

6130 Converters, Electrical, No A 5,104 22,180 $35,616,604.86 4,097 16,500 $27,878,903.58 1,596 10,217 $21,515,077.05

6130 Converters, Electrical, No B 4,181 15,803 $154,857,908.00 3,561 14,418 $160,576,597.11 3,204 13,242 $114,275,938.83

6515 Medical And Surgical Instr A 8,385 94,360 $50,308,253.84 7,997 123,126 $43,892,546.16 8,113 156,694 $44,469,384.16

6530 Hospital Furniture, Equipm A 2,965 22,114 $16,818,053.51 2,931 66,895 $20,070,481.45 4,013 76,701 $24,831,706.88

6625 Electrical/Electronic Prope A 21,251 53,794 $203,791,818.53 15,285 43,640 $181,157,292.48 5,614 20,896 $50,697,502.89

7025 Adp Input/Output And Sto A 81,643 1,052,779 $263,753,583.12 53,564 440,918 $179,275,260.49 6,106 45,563 $20,259,664.11

8415 Clothing, Special Purpose A 23,122 1,162,838 $46,322,518.31 12,515 702,725 $28,416,914.59 7,241 545,483 $23,131,403.61

8465 Individual Equipment A 9,226 871,049 $22,958,485.04 8,608 952,941 $18,387,137.37 7,793 1,185,435 $19,805,298.47

This data represents a small summary of returns from the current DRMS usable sales contract and is sorted by FSC showing 

the workload, quantity, and acquisition value of the property that has been returned. Policy changes could influence the volume

of returns in the future.

FY 2005 Returned FY 2006 Returned FY 2007 Returned

FSC Description Demil L/I Qty AcqVal L/I Qty AcqVal L/I Qty AcqVal

1560 Airframe Structural Comp B 126 15,976 ($15,287,353.61) 214 2,093 ($3,570,133.71) 241 2,183 ($5,475,778.13)

4730 Fittings And Specialties; A 49 4,844 ($281,839.85) 85 4,664 ($217,324.63) 81 4,973 ($207,930.41)

4920 Aircraft Maintenance And A 56 140 ($4,504,180.22) 92 245 ($12,814,733.01) 48 81 ($1,995,431.93)

4935 Guided Missile Maintena B 14 29 ($4,328,967.08) 65 298 ($4,377,122.81) 16 57 ($763,193.58)

5820 Radio And Television Co A 56 243 ($491,664.46) 69 215 ($706,925.15) 23 73 ($245,737.53)

5895 Miscellaneous Communi A 69 519 ($49,437,435.65) 101 835 ($7,724,516.88) 99 1,262 ($1,649,898.36)

5895 Miscellaneous Communi B 54 435 ($33,573,914.45) 113 715 ($12,742,636.29) 52 631 ($12,179,780.58)

5935 Connectors, Electrical A 163 2,092 ($111,531.07) 178 2,210 ($233,805.43) 257 9,966 ($659,890.64)

5985 Antennas, Waveguide An B 32 97 ($292,730.96) 73 324 ($831,857.83) 69 408 ($2,486,453.81)

5999 Miscellaneous Electrical A A 47 634 ($110,073.27) 79 5,456 ($83,253.80) 66 3,176 ($60,582.04)

6130 Converters, Electrical, No A 67 292 ($98,217.19) 67 513 ($269,250.78) 33 295 ($469,085.60)

6515 Medical And Surgical Ins A 86 887 ($3,047,682.29) 89 741 ($660,954.53) 303 1,547 ($2,705,293.32)

6530 Hospital Furniture, Equip A 52 356 ($277,396.22) 62 1,178 ($417,239.47) 133 4,260 ($1,382,469.10)

6625 Electrical/Electronic Prop A 167 920 ($13,516,894.25) 291 1,126 ($37,057,030.53) 379 657 ($4,945,626.82)

6625 Electrical/Electronic Prop B 60 186 ($2,010,944.47) 116 316 ($5,961,159.08) 126 196 ($2,905,457.57)

7010 Adpe Configuration A 101 211 ($696,770.01) 81 303 ($13,132,046.08) 12 81 ($43,264.27)

7021 Adp Central Processing U A 169 582 ($1,484,276.68) 265 1,172 ($29,258,378.95) 27 310 ($467,667.78)

7025 Adp Input/Output And Sto A 547 4,432 ($4,587,201.71) 711 19,604 ($18,735,265.87) 363 5,124 ($1,806,962.74)

7050 Adp Components A 8 47 ($107,060.36) 64 713 ($147,613.65) 22 212 ($415,280.93)

7105 Household Furniture A 165 2,048 ($250,012.90) 114 2,452 ($436,886.37) 50 3,073 ($494,517.85)

7110 Office Furniture A 423 4,248 ($470,169.47) 408 2,979 ($319,841.31) 243 2,393 ($271,271.20)

7125 Cabinets, Lockers, Bins A A 62 386 ($94,724.64) 64 331 ($37,902.90) 37 369 ($38,611.00)

8405 Outerwear, Men's A 50 2,701 ($104,198.20) 78 11,495 ($159,570.35) 278 17,345 ($648,483.58)

8415 Clothing, Special Purpos A 222 23,443 ($981,049.74) 597 26,642 ($1,403,452.58) 1,017 58,845 ($2,843,645.80)

8465 Individual Equipment A 189 21,353 ($263,125.92) 205 15,809 ($373,992.95) 289 38,217 ($708,154.14)

THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK

9 
Invitation For Bid 08-0001 

ADDITIONAL TERMS AND CONDITIONS OF SALE

The following Articles (not part of the Sale By Reference (SBR)) apply and constitute terms 

and conditions of this sale: 

ARTICLE ONE: Bid Evaluation and Contract Award 

Section 1 – Bid Evaluation - Award will be made to the responsive, responsible bidder that has 

submitted the highest bid price consisting of one bid percentage specified by the bidder. The bid must 

be expressed as a percentage of the acquisition value of the property delivered under this contract and 

must exceed zero, and only four (4) digits to the right of the decimal without rounding. The winning 

bid will be determined by the bidder submitting the highest bid percentage. After the contract is 

awarded, the Contractor's upfront purchase price for property will be determined by multiplying the 

applicable bid percentage by the item's acquisition value. The Government reserves the right to not 

award a contract if such contract is deemed not to be in the Government’s best interest. Further, the 

Government may also reject any bid if DRMS determines that accepting such bid would not be in the 

Government's best interest. 

Section 2 – Contract Award – At the time of bid opening, the SCO will determine if each bid is 

responsive, prior to award of the contract. The contract will be awarded to the highest responsive 

bidder. In the event of a termination of the original Contractor within sixty (60) days of the date of 

award, the SCO may award the contract to the next highest responsive bidder determined by the SCO if 

bids have not expired, and such award is otherwise determined to be in the Government's best interest, 

price and other factors considered. 

Section 3 – Post-Award Conference - The Government reserves the right to conduct a post-award 

conference as early as two weeks after award. The purpose of the conference is to ensure the 

Contractor fully understands the terms and conditions of this contract. The location and date of the 

conference will be determined by DRMS and the costs incurred by Contractor personnel attending shall 

be paid in full by the Contractor. 

Section 4 – Pre-Award Survey - After solicitation opening/closing and prior to award, the Government 

may conduct a Pre-Award survey of one or more offerors who may become eligible for award after final 

evaluation. Offerors must cooperate in the Pre-Award process by assisting in arrangements or by 

providing requested information in a timely manner. The Pre-Award survey may be conducted at the 

Contractor’s facility(ies) or other location(s) as deemed necessary by the Government and may include a 

review of Contractor’s facilities and equipment, financial capability or disclosure of a Contractor’s 

financial condition, quality assurance, safety, and transportation. The Pre-Award survey is one of the 

factors used by the Government to determine the Contractor’s ability to satisfactorily perform the work 

set forth in this solicitation. Offerors are advised that accomplishment of a Pre-Award survey or 

furnishing documents to the Government in support of the Pre-Award survey is part of the evaluation of 

the responsibility process and is not to be construed as an indication that an offeror will receive award of 

a contract. 

10 
Invitation For Bid 08-0001 

ARTICLE TWO: Parties to the Contract 

Section 1 – Contractor Information - Within thirty (30) days of the date of contract award, Contractor 

shall provide DRMS the following information: 

(A) Designation of key persons, if any, in addition to those identified in Contractors technical 

proposal 

(B) Contractor shall provide the SCO notification of any changes to the above within ten (10) 

days of the change. 

Section 2 – Transfer and Hypothecation 

 (A) General Prohibition - Except as specifically provided herein or specifically approved by 

DRMS in writing, the Contractor may not directly or indirectly sell, transfer, assign, pledge, offer as 

collateral or otherwise hypothecate all or any part of its rights or obligations under the contract. 

(B) Attempted Transfer - Any attempted transfer in violation of the provisions of this Article 

shall be null and void, and shall constitute a material breach of this contract. 

Section 3 – Contract of Sale

 (A) Relationship of Parties - This contract is an agreement for the sale of the property by 

DRMS as seller to Contractor as the buyer. Contractor and DRMS expressly disavow the creation of 

any other relationship, including without limitation principal-agent, master-servant, employer-employee, 

general or limited partnership, or joint venture, between DRMS and the Contractor.

 (B) Parties to Contract - The parties to this contract are DRMS and the Contractor. The 

exclusive representative of DRMS for all purposes under this contract is the SCO, and all notices, 

demands, requests, consents, approvals, declarations, reports and other communications to DRMS from 

Contractor shall be deemed ineffective unless addressed to the SCO. Communications from the 

Contractor to anyone other than the SCO shall not be deemed received by DRMS. 

Section 4 – Authority of Sales Contracting Officer (SCO) - On behalf of DRMS, the SCO has the 

authority to represent DRMS and to commit DRMS to take such actions as are permitted or required and 

to extend or waive timing requirements or deadlines as may reasonably be required under the 

circumstances of this contract. 

ARTICLE THREE: Contract Financial Retention 

Section 1 – Bid Deposit - Each bid must be accompanied by a refundable bid deposit in the form of a 

guaranteed instrument (cashier’s or certified check) in the amount of one-hundred thousand dollars 

($100,000.00) payable to U.S. Treasury. DRMS will retain the bid deposit until completion of the winddown period. The bid deposit will be applied to any unpaid billings or to offset any other claim that 

DRMS may have against the Contractor. DRMS shall return any available balance of the bid deposit, 

without interest, to Contractor at the completion of the wind-down period. 

Section 2 – Payment Deposit - Within ten (10) days of contract award, Contractor shall provide 

 DRMS the amount of five-hundred thousand dollars ($500,000.00), referred to as the payment deposit. 

The payment deposit must be made via guaranteed instrument, cashier/certified check, wire transfer or 

11 
Invitation For Bid 08-0001 

Electronic Funds Transfer (EFT). DRMS will retain the payment deposit until the completion of the 

wind-down period. The payment deposit will be applied to any unpaid billings or to offset any other 

claim that DRMS may have against the Contractor. DRMS shall return any available balance of the 

payment deposit, without interest, to Contractor at the completion of the wind-down period. 

Section 3 – Financial Guarantee Bond – Within thirty (30) days of award Contractor shall obtain a 

financial guarantee bond in favor of DRMS in the amount of four million five hundred thousand dollars 

($4,500,000.00). The purpose of the Financial Guarantee Bond shall be to provide a source of payment 

to DRMS in an amount reasonably sufficient to satisfy the financial obligations of Contractor or for 

damages arising out of a material breach by Contractor. The Financial Guarantee Bond shall be issued 

by such surety and in such form that are acceptable to DRMS. The Bond shall be carried for the 

duration of the contract, however, may be renewed on an annual basis, renewable at the sole option of 

the surety. 

ARTICLE FOUR: Contract Performance 

Section 1 – Performance Period - Subject to the early cancellation option provisions and the 

Termination for Convenience of the Government provisions, the Government shall provide property for 

a thirty-six (36) month period from the date of the initial delivery order to Contractor. DRMS may 

exercise two one-year options to extend the performance period for up to an additional twenty-four (24) 

months based on Government requirements. The Government may extend the term of this contract by 

providing written notice to the Contractor within 120 days of contract end. The preliminary notice does 

not commit the Government to an extension. If the Government exercises this option, the extended 

contract shall be considered to include this option clause. The total duration of this contract, including 

the exercise of any options shall not exceed sixty (60) months or five (5) years. 

Section 2 – Phase-In Period - The Contractor must be fully operational and prepared to accept all 

property within three (3) months of award. If Contractor is unable to receive property after three (3) 

months, DRMS shall have the right to sell property to other buyers until the Contractor is functional and 

able to receive property. Contractor must notify the Government when they are ready to accept 

property. Contractor may request acceleration of referrals at any delivery point, and DRMS will 

respond to such request in the exercise of its sole discretion. 

Section 3 – Termination for Convenience of the Government – The Government may terminate 

performance of work under this contract in whole or, from time to time, in part if the SCO determines 

that a termination is in the Government’s interest. The SCO shall terminate by delivering to the 

Contractor a Notice of Termination specifying the extent of termination and the effective date. 

After receipt of a Notice of Termination, and except as directed by the SCO, the Contractor shall 

immediately proceed with the following obligations, regardless of any delay in determining or adjusting 

any amounts due under this clause: 

 (1) Stop work as specified in the notice. 

 (2) Unless otherwise directed by the SCO, place no further subcontracts or orders (referred to as 

subcontracts in this clause) for materials, services, or facilities. Stop any pending sales and make no 

further sales to resale buyers. 

12 
Invitation For Bid 08-0001 

 (3) Terminate all subcontracts to the extent they relate to the work terminated. 

 (4) Unless otherwise directed by the SCO, assign to the Government, as directed by the SCO, all 

right, title, and interest of the property issued by Delivery Order whether in Contractor or subcontractor 

facilities. Whether property is in Contractor or subcontractor facilities, coordinate with the SCO the 

return of any property issued to the Contractor by Delivery Order to the Government or move property 

to Contractor owned facilities for Government retrieval upon written direction from the SCO. 

 (5) With approval or ratification to the extent required by the SCO, settle all outstanding 

liabilities and termination settlement proposals arising from the termination of subcontracts. 

 (6) Take any action that may be necessary, or that the SCO may direct, for the protection and 

preservation of the property related to this contract that is under title and/or in the possession of the 

Contractor or subcontractor and in which the Government has or may acquire an interest until 

surrendered to the Government or its agent. The Contractor and SCO shall agree on payment for the 

preservation and protection of goods. Failure to agree on an amount will be a dispute under the 

Disputes clause. 

The Contractor shall submit a complete termination inventory schedule to include a list, certified 

as to DTID and quantity, of termination inventory no later than 30 days from the effective date of 

termination, unless extended in writing by the SCO upon written request of the Contractor within this 30 

day period. The Government will review the inventory list within 14 days and contact the Contractor 

with any discrepancies and notify the Contractor of items that the Contractor can retain title of. The 

retention of title of these items will be by mutual agreement. 

If the Contractor has any cost it wishes the Government to consider prior to the Government 

assessing settlement costs, they must be submitted within 14 days of final removal of returned surplus 

property to the Government. Any cost submitted by the Contractor must be determined to be allocable, 

allowable, and reasonable and supported with documentation to the degree required by the SCO. Unless 

extended in writing by the SCO, upon written request of the Contractor, the SCO shall determine the 

settlement proposal within 14 days of receipt of any submission of final Contractor settlement costs. If 

the Contractor fails to submit their proposal for settlement cost within the time allowed, the SCO may 

determine, on the basis of information available, the amount, if any, due the Contractor or owed by the 

Contractor. If the Contractor pays for return of the property issued on Delivery Order, the cost of return 

of the property issued by Delivery Order will be offset by any payment the Government has already 

received for said property. If the Government pays for the return of property payment received for the 

property will be returned less any Government determined settlement costs to be paid by the 

Government. 

The Contractor has 14 days to review the contract settlement proposal and request any additional 

information. Payment to be made by either party shall be made within 30 days of Contractor receipt of 

the settlement proposal. Any amount due the Contractor may include a reasonable allowance for profit 

for work completed. If the Contractor fails to pay settlement cost within the specified time, the cost will 

be deducted from any deposit funds available from the performance of this contract. Any remaining 

funds from the deposit will be returned by the Government. 

If the Contractor and the SCO fail to agree on the amount that may have been determined due to 

the Contractor by the Government due to the termination of the sales contract, the SCO shall pay the 

Contractor the amounts determined by the SCO within the specified time. Any amount due to be paid 

13 
Invitation For Bid 08-0001 

by the Contractor and not paid within the specified time period shall be charged interest based on the 

rate determined by the Secretary of Treasury. 

The cost principles and procedures of Part 31 of the Federal Acquisition Regulation, in effect on 

the date of this contract, shall govern all costs claimed, agreed to, or determined under this clause. 

The Contractor shall have the right of appeal, under the Disputes clause, from any determination 

made by the SCO, except that if the Contractor failed to submit the termination settlement proposal or a 

request for equitable adjustment within the time provided. 

In arriving at the amount due the Contractor under this clause, there shall be deducted; 

 

 (1) Any claim which the Government has against the Contractor under this contract; and 

 (2) The agreed price for, or the proceeds of sale of, materials, supplies, or other things 

acquired by the Contractor or sold under the provisions of this clause and not recovered by or credited to 

the Government. 

This clause has the same full effect, if this contract is terminated in partial. 

Unless otherwise provided in this contract or by statute, the Contractor shall maintain all records 

and documents relating to the terminated portion of this contract for 3 years after final settlement. This 

includes all books and other evidence bearing on the Contractor’s costs and expenses under this 

contract. The Contractor shall make these records and documents available to the Government, at the 

Contractor’s office, at all reasonable times, without any direct charge. If approved by the SCO, 

photographs, microphotographs, or other authentic reproductions may be maintained instead of original 

records and documents. 

 

Section 4 - Wind-Down Commencement Date - Beginning with the date that is the earlier of either the 

end of the performance period or the effective date of termination by reason of DRMS or Contractor 

exercising the early cancellation option or by reason of a material breach, the contract shall wind-down 

for a period of 120 days. 

Section 5 - Cessation of Property Referrals - There shall be no further referrals of property by DRMS 

to Contractor from the wind-down commencement date forward. Submission of monthly, quarterly and 

annual reports shall continue as before the wind-down commencement date until the wind-down is 

completed. 

Section 6 - Conduct of Wind-Down - From the wind-down commencement date forward, Contractor 

shall perform their remaining obligations hereunder in accordance with the provisions of this contract. 

During contract wind-down period should the Contractor elect not to sell property that as been 

previously issued on a Delivery Order, it shall be the Contractor’s sole responsibility for any cost 

associated with the return of the property to the Government. Any purchase price paid by the 

Contractor shall not be refunded to the Contractor. As in Article Six, the Contractor has the right to 

return, and is required to return, property after having paid the Contractor’s purchase price should the 

Contractor elect to not resell. 

14 
Invitation For Bid 08-0001 

ARTICLE FIVE: Distributions to DRMS 

Section 1 – Monthly Up-Front Property Purchase – Contractor will pay DRMS the billed amount for 

the up-front purchase of property each month. DRMS will issue a Statement of Account (SOA) to the 

Contractor no later than the last day of each month. The SOA will reflect the up-front purchase price 

(based on the Contractor’s bid price) for the property issued to the Contractor during the prior month 

less any credits applied during the month for returned property. The balance reflected on the SOA will 

be the amount owed to DRMS by the Contractor for the particular month billed. Contractor is required 

to submit payment to DRMS no later than the 15th of each month. 

Section 2 – Monthly Back-End Property Payment – In addition to the Up-front purchase price 

described in Section 1 of this article, the contractor will also pay DRMS 1.0% of the acquisition value 

120 days after appearing on a Delivery Order. DRMS will issue a Statement of Account (SOA) to the 

Contractor on the last day of the month. The SOA will reflect the back-end payment for property that 

was issued to the Contractor 120 days ago. Contractor is required to submit payment to DRMS no later 

than the 15th of each month. 

 

Section 3 – Method of Payment - DRMS prefers payment to be made via an Electronic Funds Transfer 

(EFT), however, payments may also be made via wire transfer, guaranteed instrument (certified or 

cashier’s check) made payable to U.S. Treasury. The account number for EFT and wire transfers will be 

provided by the SCO and updated whenever necessary. 

Section 4 – Failure to Make Timely Payment - Should Contractor fail to pay to DRMS the full 

amount owed as reflected on the SOA each month on or before the date that such payment is due, 

DRMS may, in its sole discretion, (i) apply that portion of the payment deposit that is necessary to pay 

the amount owed, and (ii) notify Contractor that such failure constitutes a material breach that the 

Contractor must cure within ten (10) days of notice thereof by paying to DRMS an amount equal to onehundred twenty percent (120%) of the subject amount owed, which payment shall be applied by DRMS 

to replenish and increase the amount of the payment deposit. The Contractor shall also be assessed 

interest on the payment based on the current rate as determined by the Secretary of Treasury. The 

interest will be added to the next month’s Statement of Account. 

ARTICLE SIX: Product Pool, Property Referrals and Title Transfer 

Section 1 – Product Pool 

(A) Property Flow - Property included in this contract will normally be comprised of useable 

items identified by the Government as safe to sell and located in the Continental United States, to 

include Alaska, Hawaii, and Guam, however, at times, the Government may include locations outside of 

CONUS at the agreement of both parties. Property issued will predominately contain a demilitarization 

code of A, and may include B, Q and F. NOTE: National security decisions are currently pending 

that could impact the sale of demilitarization code B and Q items and, therefore, could be 

removed from the product pool in the future. The Government guarantees to issue the Contractor 

the lesser of 130,000 lines items of property annually or issue to the Contractor property with an 

15 
Invitation For Bid 08-0001 

acquisition value of $600,000,000.00 annually under this contract. DRMS reserves the right to sell 

property or offer property through alternative sales or contract means for all property not considered part 

of this contract. The Government may elect to offer property consisting of hazardous material, 

such as lead acid batteries, paints, sealants, and fuels; and certain demilitarization code F items 

where the demilitarization has been performed. 

(B) Government’s Right to Retrieve Property - The Government reserves the right to retrieve 

or restrict property from the Contractor that is found to have become controlled or is needed in support 

of or impacts the DOD mission. Contractor must return those items upon notification from the 

Government and must coordinate return shipment with the SCO. DRMS will refund Contractor’s 

purchase price in addition to the cost associated with the cost of return of the property to DRMS. 

DRMS will not reimburse the Contractor for any lost revenue associated with property that has been 

sold to a resale buyer. 

(C) Contractor’s Right to Non-Delivery Order Items - The Government will decide items to 

be sold to the Contractor regardless of FSC, location, or demilitarization code. Contractor has no right 

to any property that is not issued to them on a delivery order. Subject to certain limited exceptions, the 

Contractor will have the contractual obligation to purchase the flow of property when issued on a 

delivery order. The Contractor, however, will also have the right to return, and is required to return, 

property after having paid the Contractor's purchase price should the Contractor elect to not resell. The 

Contractor shall coordinate return of property with the SCO. Contractor is liable for all cost associated 

with the return of property to the Government. The price paid by the Contractor to the Government for 

the property will not be refunded to the Contractor once it is paid to the Government. All property 

returns must be properly identified to DRMS by the original Disposal Turn-In Document (DTID) 

number. DRMS reserves the right to sell property or offer property through alternative sales or contract 

means for all property not issued on a Delivery Order under this IFB. 

Section 2 – Property Referrals 

(A) Location - Property that is referred for sale to Contractor shall be located within the 

Continental United States to include Alaska, Hawaii and Guam. DRMS may opt to deliver property to 

the contractor located outside CONUS with contractor’s acceptance. With the exception, granted by the 

SCO, of certain Receipt In Place (RIP) property, and rolling stock/bulk property, Contractor will pack, 

load and transport property listed on a Delivery Order to Contractor’s identified facilities. 

 (B) Initial Delivery Order - DRMS shall deliver the initial Delivery Order to the Contractor on 

the dates that are (i) within the time specified for the phase-in period, and (ii) the date DRMS has 

received and approved all the information required under the provisions of this contract. 

 (C) Delivery Order - At least twice per calendar month, and no more than once weekly, the 

Government shall issue a consolidated list to the Contractor called a Delivery Order. 

(D) Delivery Order Format - DRMS will provide the Delivery Order to the 

Contractor in a electronic transmission (E-Mail). DRMS shall provide training to the Contractor as 

necessary to clarify the fields of the Delivery Order, however at a minimum, the following information 

will be represented on the Delivery Order: 

 Physical Location of the Property Shipment 

 Disposal Turn in Document Number 

 Requisition Number if RCP Property 

 National Stock Number (NSN)/Local Stock Number (LSN)

 Inventory Item Name

 Item Unit of Issue 

16 
Invitation For Bid 08-0001 

 Quantity 

 Item Unit Price 

 Acquisition Value 

 Contractor's Purchase Price

DEMIL Code 

 (E) Title Transfer of Property - Unless otherwise provided in this IFB, DRMS shall transfer 

title to the Contractor when property appears on a Delivery Order. Title to RIP property or rolling 

stock/bulk property will also occur when property appears on a Delivery Order. Any subsequent resale 

transactions of property are between the Contractor and the resale buyer, not the Government and the 

resale buyer 

 (F) Waiver Option to Property by Contractor – Contractor has the option to waive rights to a 

particular line item of property where title has transferred to the Contractor if Contractor elects to not 

pursue resale. The waiver option does not relieve the Contractor from the responsibility of payment of 

the Contractor’s up-front or back-end purchase price for the line item involved. If property is located at 

Contractor’s facility, Contractor shall be responsible for the property’s return to DRMS and any 

associated cost for the return of property to DRMS. All options exercised under this condition must be 

approved by and fully coordinated with the SCO. 

 (G) Items Requiring Partial Mutilation – Some end-use items within the DRMS inventory 

require mutilation prior to resale and are not considered or identified by DRMS as useable property. 

However, parts from such items may be permissibly removed from the end-item prior to mutilation and 

would then be eligible for resale. Such items may include parachutes requiring the shroud to be cut, 

and certain vehicles identified as Gama Goats, Go Ability with Overall Economy and Reliability 

(GOER) Vehicles, High-Mobility Multipurpose Wheeled Vehicles (HMMWVs), R-9 Re-Fuelers, Crash 

Fire Rescue Trucks and M-151 Vehicles requiring various partial mutilation to preclude use for their 

intended purpose. DRMS may from time to time, in the exercise of its sole discretion, notify 

Contractor in writing of the availability of certain such items. Within ten (10) business days of such 

notice, Contractor may in the exercise of its sole discretion notify DRMS that Contractor elects to 

purchase such items at a price based on the Contractor’s bid percentage and acquisition value reflected 

on the Delivery Order. Contractor and DRMS shall cooperate as necessary in the circumstances to 

effect delivery of such items and the Contractor shall remove the subject parts in an agreed upon time 

after delivery. 

 (H) Risk of Loss – Contractor is responsible for paying for all items appearing on the Delivery 

Order unless it is approved as a line item discrepancy by the SCO. Contractor shall bear the risk of loss 

for all other property where title has transferred to the Contractor and Contractor has lost or damaged 

the property due to negligence. 

 (I) Line Item Discrepancies – Contractor must notify the SCO of any line item discrepancies, 

i.e., quantity overage/shortage, acquisition value, item misdescription, etc., within 21days of being 

issued on a Delivery Order. Contractor must provide notification to DRMS with supporting 

documentation of such line item discrepancy and the property must be made available for inspection by 

DRMS. Failure to provide notice of an alleged discrepancy in accordance with the criteria set forth in 

this subparagraph may result in denial of the line item discrepancy. The amount of any credit to which 

the Contractor is entitled to shall be deducted from the amount of Contractor’s next Statement of 

Account. Line item discrepancies for property issued at a DRMS facility must be identified by the 

Contractor at the time of DRMS/Contractor joint inventory and prior to Contractor removing property. 

Acquisition values are assigned by the Government and normally not up for dispute. 

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Invitation For Bid 08-0001 

 (J) Line Item Excessive Acquisition Value - Any line item with a reported acquisition value in 

excess of $10M (ten million dollars) shall be excluded from this contract at the sole option of the 

Contractor. The SCO must be notified within thirty (30) days of title passing to the Contractor of the 

reported item. Any reported items shall be returned to DRMS and the Contractor’s purchase price shall 

be refunded by DRMS. The Contractor shall be responsible for any cost associated with the return of 

property to DRMS, however, under the circumstances of return of items over $10M in acquisition value, 

the Contractor shall be reimbursed for the price paid to DRMS for the property. 

 (K) RIP and Rolling Stock Property – Certain items may be issued to the Contractor from a RIP 

location. DRMS may elect to allow resale on-site of rolling stock/bulk property items. DRMS shall 

identify this property to the Contractor at the time it appears on the Delivery Order. Contractor may be 

allowed to conduct the resale of rolling stock/bulk items from the DRMS location. 

(L) Referral of CV-2 Property due to Termination or Cancellation of CV-2 - If the 

CV-2 contract ends in termination or cancellation, DRMS may elect in the exercise of its sole discretion 

to refer certain CV-2 product pool items for sale to the Contractor pursuant to the provisions of this 

contract. The Contractor shall be required to purchase such items as provided herein. DRMS shall 

provide written notice of such election to the Contractor. 

 (M) Property Surges - Contractor acknowledges that certain installations may close during the 

performance period of this contract. As a result, large generations of property could be turned into 

DRMS and could ultimately be referred under this contract. DRMS and the Contractor agree to 

cooperate and institute special procedures as necessary in connection with property surges. 

(N) Non-DRMS Assets - The Contractor may be asked to serve as a sales broker by DRMS from 

time to time as DRMS may elect to refer certain non-DRMS assets to the Contractor. As such, these 

items are not entered on the DRMS accountable record. DRMS may choose, with Contractor’s 

agreement, to have the Contractor re-sell these items on a case-by-case basis for a sales fee of 12% of 

the resale. Title to this property remains with the Government until sale to a resale buyer and removal 

of the items from Government premises. DRMS will issue these items as receipt-in-place and the resale 

must be conducted in-place as well. Any inspections or sales of this property must have prior approval 

by DRMS. Contractor will be required to account for, identify, and pay DRMS separately from other 

funds each month that are involved with this contract. 

ARTICLE SEVEN: Demilitarization Codes and Trade Security Control (TSC) 

Requirements 

Section 1 – Demilitarization Codes - Many of the items in the product pool are subject to Trade 

Security Controls (TSC) (i.e., export restrictions) based on their demilitarization code assignment and 

their offensive/defensive capabilities. These fall into one of two categories. One is assigned 

demilitarization code Q Commerce Control List Items (CCLI) that are designated by the Department of 

Commerce pursuant to the provisions of the Export Administration Act of 1979, Executive Order 12924 

and regulations promulgated there under. Demilitarization codes B and F items are Munitions List 

Items (MLI) designated by the Department of State pursuant to the provisions of the Arms Export 

Control Act and implementing regulations. 

Demilitarization code B, Q and F items need not be demilitarized before sale, but export of these 

items requires export licenses issued by the Department of State or the Department of Commerce. 

DRMS presently sells such items within CONUS pursuant to the procedures described below. As 

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Invitation For Bid 08-0001 

described below, the Contractor will also be required to comply with current TSC procedures and will 

be required to comply with any new TSC requirements that may be mandated during the performance 

period. Such new requirements may impose higher costs upon the Contractor. 

Section 2 – Contractor’s Trade Security Control Requirements - Prior to award of this contract, the 

Contractor will be required to obtain a TSC clearance by providing TSC Assessment Office a properly 

completed End-Use Certificate (EUC) in the form of a DLA Form 1822 (copy available on the DRMS 

web site, www.drms.dla.mil, then click on Sales Customer. The clearance may need to be renewed 

during the performance period of this contract and at the request of the Government. The clearance 

investigation determines that the entity is who it claims to be, doing business at the name and location 

claimed and that there are no disqualifying factors present (i.e., convictions for illegal export of military 

technology, debarment by a Government activity, etc.). 

(A) Resale Buyer’s Trade Security Control Requirements - All secondary purchasers of 

DEMIL code B, Q or F sold to the contractor under this contract must also receive a similar clearance. 

The Contractor will be required to notify prospective buyers of the necessity to comply with TSC 

requirements and export controls. The Contractor will be required to obtain and keep on file for review 

by DRMS or other Government entities a properly completed EUC from the prospective resale buyer of 

each lot (or group of lots at a single re-sale event) of demilitarization code B, Q, and/or F items before 

releasing such items to the prospective resale buyer. For the vast majority of export controlled items, 

the Contractor’s resale buyer is under no obligation to submit any follow-up documentation after the 

original purchase. The Contractor’s export control compliance responsibilities will generally be limited 

accordingly to obtaining a properly completed EUC, releasing property to a buyer only after confirming 

that the buyer is cleared and acknowledges it’s responsibilities for follow-up sales (i.e., advising buyers 

not to sell beyond the United States without proper Department of State/Department of Commerce 

documents/notice), and maintaining the associated compliance records. 

(B) Contractor’s Responsibilities Prior to Award to Resale Buyer - Upon receipt of a 

properly completed EUC, the Contractor must also obtain Government approval before re-selling any 

TSC item and releasing property to the buyer. The TSC Assessment Office is the clearance authority 

and the determining authority relative to the proper completeness of End Use Certificates (EUCs). 

Contractor agrees to comply with any change to current TSC procedures should they occur. 

(C) Excluded Parties List System (EPLS) - Contractor is prohibited from awarding a contract 

to a customer identified as being suspended or debarred from receiving Government contracts. Prior to 

awarding any contract, Contractor agrees to search the Excluded Parties List System (EPLS) website at, 

www.epls.gov, to ensure the potential buyer, or their entity, is not excluded. 

 

Section 3 – Munitions List Items and Commerce Control List Items - 

 (A) Acknowledgment of Export Restrictions - Contractor acknowledges that some items in 

the product pool are subject to export restrictions and Trade Security Controls (TSC) including both 

Commerce Control List Items (CCLI) that are designated by the Department of Commerce pursuant to 

the provisions of the Export Administration Act of 1979, Executive Order 12924 and regulations 

promulgated there under and that have a DEMIL Code of “Q”, and Munitions List Items (MLI) that are 

designated by the Department of State pursuant to the provisions of the Arms Export Control Act and 

implementing regulations and that have a DEMIL Code of “B or F” for the purposes of this contract. 

(B) Munitions List Items and Commerce Control List Item (MLI/CCLI) Compliance - 

The use, disposition, export and re-export of MLI/CCLI property is subject to all applicable United 

States laws and regulations, including the Export Administration Control Act of 1979 (50 U.S.C. 

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Invitation For Bid 08-0001 

Appendix. 2401, et seq.); Arms Export Control Act (22 U.S.C. 2651, et seq.); International Traffic in 

Arms Regulation (22 C.F.R. 121); and Export Administration Regulation (15 C.F.R. 368, et seq.). 

Making false statements and concealment of any material information regarding the use, disposition, 

export or re-export of the property is not authorized in accordance with the provisions of this contract 

and may constitute a violation of the provisions of 18 U.S.C. 1001, which provides a maximum penalty 

of five years imprisonment and/or a maximum fine of $10,000; the provisions of 22 U.S.C. 22778, 

which provides a maximum penalty of ten years imprisonment and/or a maximum fine of $1,000,000; 

or, the provisions of 50 U.S.C. Appendix. 2410, which provides a maximum penalty of ten years 

imprisonment and/or a maximum fine of five times the value of the property exported or $1,000,000, 

whichever is greater, and which also provides for administrative sanctions, including civil penalties of 

up to $10,000, and the revocation of authority to export goods from the United States. 

(C) Commerce Control List Items (CCLI) – Contractor warrants that none of the CCLI items 

in this contract will be directly or indirectly used or disposed of for military use or exported unless a full 

disclosure of the origin of the property is made by Contractor. The disclosure must reference this sales 

contract number, and be submitted to: 

 Department of Commerce 

Office of Export Administration 

 P.O. Box 273 

 Washington, DC 20044 

Contractor understands and agrees that the Office of Export Administration may require Contractor to 

mutilate the property to the extent necessary to preclude its use for its originally intended purpose, 

and/or require Contractor to have or obtain an export license before the property may be exported 

outside of the United States, Puerto Rico, American Samoa, Guam the Trust Territory of the Pacific 

Islands or the Virgin Islands 

(D) Seagoing Containers – Contractor acknowledges that whenever a seagoing container is 

used by a resale buyer to remove property, Contractor shall report the container number and, if known, 

the destination port to DRMS before the container is loaded. 

(E) Airworthiness Certification – Contractor is responsible to make arrangements with the 

Federal Aviation Administration (FAA) for all inspections needed to obtain airworthiness certification. 

The FAA provides guidance and instructions to establish eligibility for civilian airworthiness 

certification for surplus military aircraft and aircraft assembled from spare and surplus parts. Before an 

Airworthiness Certificate is issued, the assembled aircraft must be in conformity with the data forming 

the basis for that FAA type-certificate. The responsibility to satisfy FAA requirements lies entirely with 

the Contractor and subsequent resale buyers. 

(F) Flight Safety and Critical Aircraft Parts (FSCAP) - The military services are responsible 

for ensuring all available historical records/documentation are included when repairable Flight Safety 

Critical Aircraft Parts (FSCAP) are turned into DRMS. Unused FSCAP, in original, undamaged 

packaging must be marked with NSN, contract number, CAGE Code(s) and part number. FSCAP items 

lacking appropriate records/documentation, or which are condemned, shall be mutilated by DRMS and 

not eligible under this contract. When a FSCAP item is transferred to DRMS, block 27 of the DTID will 

annotate the appropriate Criticality Code and the remarks section of the DTID shall contain the letters 

FSCAP. Serviceable or repairable FSCAP may undergo R/T/D and sales provided the historical records 

and documentation are furnished. DRMS makes no representation as to a part’s conformance with FAA 

requirements. As a condition of sale of a FSCAP, and prior to installing the parts, the receiving persons 

or organizations must subject the parts to inspection, repair, and/or overhaul by a competent 

manufacturer or other entity certified by the FAA to perform such inspection and repair. The aircraft 

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Invitation For Bid 08-0001 

parts may not meet FAA design standards, and/or may have been operated outside the limitations 

required under the Federal Aviation Regulations. Inspections and FAA approvals will be needed to 

determine an aircraft part condition for safe operation, or a part’s eligibility for installation on a civil 

aircraft. Failure to comply with FAA requirements can result in unacceptable safety risks and also 

subject Contractor or subsequent resale buyers to enforcement actions. Purchaser is required to notify 

resale buyers that the FSCAP cannot be used on commercial aircraft in absence of specific FAA 

approval (usually granted by an FAA Repair Shop), and further, cannot be sold back to the DOD or to 

foreign governments/military without the appropriate records/documentation. 

ARTICLE EIGHT: Inventory Assurance 

Section 1 – Do-Not-Sell (DNS) List - As often as necessary, DRMS will furnish the Contractor a DoNot-Sell (DNS) List representing items that are or have become controlled and no longer eligible for 

sale. Contractor is required to process their current inventory against the DNS List whenever an 

updated DNS List is provided by DRMS. The Contractor is required to return any item identified on the 

DNS List that is in the Contractor’s current inventory and not removed by a resale buyer. Contractor 

must present the costs for such returns to DRMS for approval. DRMS shall reimburse the Contractor’s 

purchase price in addition to the cost associated with the cost of return of the property to DRMS. 

DRMS will not reimburse the Contractor for any lost revenue associated with property that as been sold 

to a resale buyer. For property becoming controlled yet previously removed by a resale buyer, DRMS 

may also direct the Contractor to notify the buyer and attempt to recover the property. 

 

Section 2 – Demilitarization Code Change (DCC) List – DRMS will provide the Contractor a 

Demilitarization Code Change (DCC) List reflecting demilitarization code changes as they occur. The 

Contractor must run their current inventory against the DCC List whenever provided by DRMS. The 

Contractor is required to return any item that becomes DEMIL required as indicated that is in the 

Contractor’s current inventory and not removed by a resale buyer. DRMS shall reimburse the 

Contractor’s purchase price in addition to the cost associated with the cost of return of the property to 

DRMS. DRMS will not reimburse the Contractor for any lost revenue associated with property that as 

been sold to a resale buyer. For property becoming DEMIL required and previously removed by a 

resale buyer, DRMS may direct the Contractor to notify their buyer and attempt to recover the property. 

 

Section 3 – Property Assurance Contractor De-Incentives – De-Incentives will apply to the 

Contractor with regard to conducting a resale of items after DRMS has identified it as controlled or 

DEMIL required and placed the item on the DNS or DCC List. De-Incentives will apply in that DRMS 

will charge the Contractor 50% of the acquisition value of any item DRMS has identified to the 

Contractor as not eligible for sale based on the item commodity or demilitarization code, yet DRMS 

finds it for sale on the Contractor’s website. 

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Invitation For Bid 08-0001 

ARTICLE NINE: Government Required Reports 

Section 1 – Inventory Reports – Contractor is required to provide DRMS monthly reports reflecting a 

complete list of all items issued by DRMS on a Delivery Order that is currently in the possession of the 

Contractor. The report must record items by DTID and location and must identify all property that has 

not been removed from the Contractor /Government facilities. 

Section 2 – Resale and Returns Report – Contractor is required to provide a monthly report to DRMS 

that reflects property that has either been resold/removed or that has been returned to the Government 

without resale. The report must be in a spreadsheet format and include all fields provided on a Delivery 

Order. For items resold, the event and lot number constituting the resale must be included as well as 

resale customer information. 

Section 3 – Seller Indirect Cost (SIC) Report - In the event SIC is approved by the SCO, Contractor 

must provide a monthly report detailing the costs actually incurred. The report must be in a spreadsheet 

format and must include supporting documentation of the SIC. At no time does SIC include lost 

profits. 

Section 4 – Small Business Participation Reports – On a quarterly basis, the Contractor is required 

to provide DRMS a small business participation report. The report must be in a spreadsheet format and 

reflect a summary of the previous quarter’s participation. 

Section 5 – Non Responsive Resale Buyer Report – On a monthly basis, the Contractor is required to 

provide DRMS a spreadsheet listing resale buyers who failed to either respond or return property when 

requested by the Contractor. The spreadsheet must identify the resale Event and Lot number 

applicable, unique identification number, buyer’s name and address, NSN/LSN, Item Name, quantity, 

and demilitarization code. In addition, the spreadsheet must provide the dates of Contractor’s attempts 

to retrieve the property and the customer’s responses/non-responses. 

Section 6 – Federal Asset Sales (FAS) Requirements – Contractor is required to transmit all active 

sales information for each property to the eFAS/GovSales.gov portal using one of the following 

methods: 

• Property Listings in CSV format transmitted via SFTP 

• Property Listings in XML format transmitted via web service/SOAP 

•

On a quarterly basis, the Contractor is required to provide the following post sales data to the GovSales 

Planning Office: 

• Total Number of Assets Sold – Assets sold equals number of individual assets sold 

not number of lots sold 

• Total Number of Assets Posted on GovSales.gov Portal 

• Gross Revenue Received – Revenue equals sales proceeds 

• Percentage of Personal Property Assets Sold Equal to Greater than Market Value - 

This metric only applies to FSG 14 (Aircraft); FSG 19 (Boats); FSG 23 (Motor 

Vehicles including cars, trucks, buses, and motorcycles; and FSG 2420 (Wheeled 

Tractors) 

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Invitation For Bid 08-0001 

• Cycle Time – Time that an asset leaves the RTD process through payment 

• Total Net Sales Revenue – Proceeds minus costs 

• Implementation Guide Provided 

ARTICLE TEN: Property Storage and Government owned Material Handling 

Equipment (MHE) 

Section 1 – Property Storage on Government Facilities - The Contractor will remove the property 

appearing on a Delivery Order from the Government’s storage facility within 14 days of receipt of a 

Delivery Order. Temporary staging areas will be provided for the Contractor to pack and sort property 

for loading and shipping to Contractor’s storage facilities. At the time property is issued to the 

Contractor on a Delivery Order, DRMS may agree to allow resale of special circumstance items on 

DRMS facilities on a case by case basis. If property resale is permitted on Government property, the 

Contractor is responsible for any damage that is caused to any Government equipment or facility that 

arises out of the negligence of the Contractor, its vendors or resale buyers, to include the clean-up of any 

hazardous materials spills. Storage charges in the amount of $10.00 per day, per DTID, will apply for 

items not removed from Government facilities within 75 days of appearing on a Delivery Order for 

property DRMS has allowed the contractor to re-sell on DRMS property. Under no circumstance will 

former surplus Government property sold to the Contractor remain on Government premises beyond 121 

days after issuance of a Delivery Order. Property left on Government premises longer than 121 days 

will, at the Government’s sole discretion, revert to Government ownership and control without refund of 

any Contractor monies received. DRMS will include such charges on the monthly Statement of 

Account and the cost for the storage will be the total responsibility of the Contractor. Contractor is 

responsible for ensuring their resale customers have met the security requirements to enter the facility 

and are responsible for escorting their customers at all times. Contractor and Contractor’s resale 

customers shall have access to rolling stock/bulk property for inspection, reselling, packing, loading or 

shipping during hours that such facility is normally staffed. Contractor shall coordinate such access 

with the management of each facility. In addition, DOD customers may require additional storage 

space, therefore, property issued to Contractor may be required to be relocated by the Contractor and as 

an expense to the Contractor, not the Government. Contractor is not permitted to conduct property 

resale on a DRMS facility without the expressed authorization of DRMS. 

Section 2 – Property Storage on Government Facilities – Receipt In Place Property - Receipt In 

Place (RIP) locations will be identified to the Contractor by the Government, generally consisting of 

property issued from a site outside the DRMS footprint. When permitted by DRMS, the Contractor 

will be allowed to resell property from the RIP location. If property resale is permitted on Government 

property, the Contractor is responsible for any damage caused to any Government equipment or facility 

that arises out of the negligence of the Contractor, its vendors or resale buyers, to include the clean-up 

of any hazardous materials spills. Storage charges in the amount of $10.00 per day, per DTID, will 

apply for items not removed from Government facilities within 75 days of appearing on a Delivery 

Order. Under no circumstances will former surplus Government property sold to the Contractor remain 

on Government premises beyond 121 days after issuance of a Delivery Order. Property left on 

Government premises longer than 121 days will, at the Government’s sole discretion, revert to 

Government ownership and control without refund of any Contractor monies received. Contractor is 

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Invitation For Bid 08-0001 

responsible for ensuring their resale customers have met the security requirements to enter the facility 

and are responsible for escorting their customer at all times. Contractor and Contractor’s resale 

customers shall have access to RIP property for inspection, resale, packing, loading or shipping during 

hours that such facility is normally staffed. Contractor shall coordinate such access with the 

management of each facility. 

Section 3 – DRMS Infrastructure - Contractor acknowledges that DRMS may reduce its 

infrastructure, including without limitation by closure of some DRMOs. Contractor further 

acknowledges that this contract shall remain in force notwithstanding such infrastructure reduction 

measures that DRMS in its sole discretion may implement. 

Section 4 – Government Owned Material Handling Equipment (MHE) - Government owned 

Material Handling Equipment (MHE) will be made available to the Contractor at the discretion of the 

Government and Contractor will be responsible for all damage from use. 

ARTICLE ELEVEN: Property Returns 

Section 1 – Property Accountability of Items Issued to Contractor - Regardless of the ultimate 

disposal of items issued on a Delivery Order to the Contractor, DRMS must maintain cradle-to-grave 

accountability of all property. Throughout the contract performance and wind-down period, at a 

minimum, Contractor must identify all property regardless of the disposition method, by DTID number 

to DRMS. Under no circumstance may Contractor dispose of property without reporting the outcome 

to DRMS. 

Section 2 – Line Item Discrepancies – DRMS will issue property to Contractor on a Delivery Order. 

DRMS and the Contractor must compare the Delivery Order with the actual items available prior to the 

property leaving Government facilities. Line item discrepancies must be identified to DRMS at the time 

of the DRMS/Contractor joint inventory. The Contractor will either return the discrepant items to 

DRMS at the time they are identified, or if not returned, the applicable Delivery Order will be annotated 

of any line item discrepancies and signed by both DRMS and the Contractor. Financial adjustments 

will be reflected on the monthly Statement of Account. 

Section 3 – Property Retrieval of Controlled Items – 

(A) Property Located at Contractor’s Facilities - Property issued to the Contractor may later 

become controlled and not eligible for sale. DRMS will provide notification to the Contractor that 

identifies such property. Contractor must return the identified items to the Government within three (3) 

business days from the DRMS notification. DRMS will advise the method for return based on the 

applicable item and will reimburse the Contractor costs associated with the return of property to 

DRMS.. 

(B) Property Resold - Not Removed from Contractor’s Facilities – Contractor may have 

resold items that later become controlled and not eligible for sale. If the identified controlled item has 

not been removed from the Contractor’s facilities, Contractor agrees to not allow removal and will 

return the identified item to the Government within three (3) business days of the DRMS notification. 

DRMS will advise the method for return based on the applicable item and will reimburse the Contractor 

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Invitation For Bid 08-0001 

costs associated with the return of property to DRMS. DRMS will not reimburse the Contractor for any 

lost revenue associated with the return of property that has been resold. 

(C) Property Resold - Removed from Contractor’s Facilities – Contractor may have resold 

items that the resale buyer has physically removed from the Contractor’s facilities that later becomes 

controlled. Within three (3) days of the DRMS notification, Contractor is required to notify their 

customer and request the item’s return if the resale of such property has occurred within the last year. 

Contractor must initially contact their customer by either e-mail or registered letter. If the resale buyer 

is non-responsive to the initial request or fails to return the property, Contractor is responsible for 

contacting the resale buyer again within 21 days of the initial contact via a registered letter. 

(D) Status Report of Non-Responsive Resale Buyers - On a monthly basis, Contractor is 

responsible for notifying DRMS of the results of the property retrieval actions. The report must identify 

the resale buyers who are non-responsive to either the retrieval attempts or those that fail to return the 

property. Reports must be submitted to the SCO by the 15th of each month and must reflect the status 

of the previous month’s actions. Contractor must identify the controlled item by DTID, NSN/LSN, and 

provide the resale customer’s name, address, and phone number. 

(E) Sales Participation of Non-Responsive Resale Buyers - Based on the national security 

threat of the property being requested to be returned, DRMS reserves the right to request that the 

Contractor no longer conduct a resale to non-responsive customers. DRMS will notify the Contractor of 

individuals/companies falling into this category on a case by case basis. 

Section 4 – Reutilization/Transfer/Donation (RTD) Property Returns - There will be occasions 

when the Government will request the return of property issued to the Contractor because it is needed in 

support of the DRMS Reutilization/Transfer/Donation (RTD) mission. Contractor must return those 

items back to DRMS when identified by DRMS and that have not been resold and physically removed 

from the Contractor’s facilities. DRMS will issue the Contractor’s purchaser price for the return of the 

property. DRMS will advise the method for return based on the applicable item. DRMS shall 

reimburse the Contractor for the cost associated with the return of property to DRMS. DRMS 

Reutilization customers will be required to certify that the property requested is “mission essential” and 

DRMS will have checked current on-hand DRMS inventory and determined that there is no other like 

item on-hand that can meet the customer’s requirement. Property will only be requested back from the 

Contractor to meet a Transfer or Donation customer’s requests when either an error was made on the 

part of DRMS or the DRMS Property Accounting system causing the item to not receive full screening 

or the customer’s approved requisition was not processed appropriately by DRMS.

ARTICLE TWELVE: Contract Operation Requirements

Section 1 – Contractor Participation in Federal Asset Sales - Contractor is required to participate in 

the Government’s Federal Asset Sales Program whereby the Contractor agrees to integrate all sales 

being conducted to the website, GovSales.gov, a Real and Personal Property Portal that facilitates the 

sale for all Government Agencies. See Article Nine, Section 6, for the options available to post sales to 

the website. Required quarterly reports reflecting Contractor sales performance must be provided to the 

GSA GovSales Planning Office. 

Section 2 – Contractor Small Business Participation - The Contractor is required to ensure that forty 

(40) percent of the total gross proceeds generated by the resale of property issued under this contract is 

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Invitation For Bid 08-0001 

received from small business concerns with 100 or fewer employees and further, that 20 percent of those 

total gross sales are to firms with fewer than 25 employees. The Contractor is required to maintain and 

provide DRMS records on a monthly basis that reflect the participation. 

Section 3 – Contractor Awareness of the DRMS Environmental Management System (EMS) - 

DRMS implemented Environmental Management System (EMS) in accordance with ISO 

14001:2004(E). An EMS is an overall management system that includes organizational structure, 

planning activities, responsibilities, practices, procedures, processes and resources for developing, 

implementing, achieving, reviewing and maintaining the environmental policy of an organization. The 

DRMS EMS is designed to ensure all personnel, including Contractors whose work activities are being 

conducted on Government premises and could cause real or potential environmental impacts, are aware 

of how their work supports the EMS. 

Section 4 – Inventory Assurance by Contractor – 

 (A) Do-Not-Sell List/DEMIL Code Change List – Initially and then periodically thereafter,

DRMS will furnish the Contractor a Do-Not-Sell (DNS) List and a DEMIL Code Change (DCC) List 

representing items that are or have become controlled and no longer eligible for sale or that have 

experienced a DEMIL code change. Contractor is required to process their current inventory against 

the DNS/DCC List whenever an updated List is provided by DRMS. The Contractor is required to 

return any items identified on the DNS List or any item that has become DEMIL required on the DCC 

List that are in the Contractor’s current inventory and have not been removed by a resale buyer. 

(B) DRMS Verification of Assurance Process - The DRMS Verification Office will 

conduct daily reviews of the items that the Contractor is offering for sale to ensure items appearing on 

the DNS List or DCC List are not being sold. De-Incentives will apply in that DRMS will charge the 

Contractor 50% of the acquisition value of any item DRMS has identified to the Contractor as not 

eligible for sale based on the item commodity or demilitarization code, yet DRMS finds it for sale on the 

Contractor’s website. 

Section 5 – Contractor Web Based Application – Contractor must develop a web-based application 

for use on this contract with regard to reviewing property for accurate coding and sales eligibility. The 

Government and Contractor shall refer to this application as the Quarantine Tool (Q-Tool) and it will 

ultimately serve as a 5-day Government preview area of all items the Contractor has lotted for sale. 

During the 5-day preview, the Contractor is not allowed to make property visible to the general public. 

The Government must notify the Contractor of any item not eligible for sale within the 5-day preview 

time. All property approved as a result of the Q-Tool application must be offered for sale on the 

Contractor’s web site with a system generated icon/marker identifying the item as having been reviewed 

by the Government prior to posting for the sale. If the Contractor reassigns a previously approved item 

to another sales event, the item must be returned to the Q-Tool with the system generated icon/marker. 

The Q-Tool application must have the ability to export the data into a spreadsheet format and must 

include the following fields: 

 

 Sale Event ID Number/Lot Number 

 Site Location of the Property 

 Federal Supply Class (FSC) 

 National Item Identification Number (NIIN) or Local Stock Number (LSN) 

 Item Name/Description 

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Invitation For Bid 08-0001 

 Part Number 

 Demilitarization Code 

 Manufacturer and associated CAGE Code 

 Quarantine Date 

 Quantity 

 Acquisition Value 

 DTID 

 End Use of Item (if available) 

 Photograph of Item (if available) 

 

Section 6 – Automatic Data Processing Equipment (ADPE) Certification by Contractor – 

(A) Certification Process - Should DRMS elect to issue Automatic Data Processing 

Equipment (ADPE) to the Contractor on a Delivery Order, Contractor is required to certify FSCs 7020, 

7021, 7022, and 7025 in accordance with OASD Memo dated June 4, 2001, SUBJECT: Disposition of 

Unclassified DOD Computer Hard Drives provided in the Appendices of this IFB (copy available on the 

DRMS web site, www.drms.dla.mil, then click on Sales Customer). 

(B) Reporting Requirements – Contractor is required to provide DRMS with a log reflecting 

the CPUs received and processed. The log will include the DTID number made available by DRMS, 

manufacturer, model, and serial number; and will indicate whether a hard drive and/or data disc was 

present. The disposition of the hard drives will be a required field, to include the reporting of a 

discovery of “SECRET” or classified stickers on the property. In addition, Contractor must removal all 

Government markings or stickers before resale. 

(C) DRMS Inspection of Property – Contractor is required to allow DRMS or a 

DRMS sponsored agency to perform physical spot checks of property to include inspection of the CPUs 

to verify that the hard drives have been removed. Inspection of the destroyed hard drives will be 

permitted so as to determine the effectiveness of the destruction. 

Section 7 – Food and Drug Administration (FDA) Certification for Medical Devices - Contractor is 

required to complete a Food and Drug Administration (FDA) Certificate within ten (10) days of award. 

Contractor is also required to request and retain a FDA Certificate for each resale buyer of medical 

devices in Federal Stock Groups (FSGs) 65 and 66. Copy of form is available on the DRMS web site, 

www.drms.dla.mil, then click on Sales Customer. 

Section 8 – Duties of Care and Loyalty – 

(A) Duty of Care – Contractor shall not cause or permit any action or omission in the 

course of performing the contract that damages DRMS and constitutes gross negligence, recklessness, or 

intentional harm. Performance under this contract must be in compliance with all local, state and 

federal laws and regulations. Accordingly, it is the responsibility of the Contractor to ensure all such 

laws and regulations are adhered. 

(B) Duty of Loyalty – Contractor shall carry out the responsibilities under the contract 

with honesty, good faith and fairness towards DRMS.

ARTICLE THIRTEEN: Material Breach 

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Section 1 – Notice of Material Breach - In the event of a material breach or default of the respective 

duties in the performance of the contract, Contractor or DRMS, the party asserting such material breach 

shall serve notice upon the party that committed or is alleged in the notice to have committed such 

material breach. 

Section 2 – Response to Notice - Except as otherwise provided, the breaching party may cure the 

material breach within thirty (30) days of such notice referred to as the cure period or within such longer 

cure period as the notice may provide unless, within the cure period, the non-breaching party withdraws 

the notice in writing or extends the cure period in writing. 

 

Section 3 – Termination - Termination shall be effective upon notice by the non-breaching party to the 

breaching party served upon or after the date of such decision. Unless otherwise provided, Contractor 

and DRMS shall continue to perform their respective duties under the contract during the cure period. 

Section 4 – Intentional Breach - An asserted material breach comprised of an intentional breach of the 

duty of loyalty or the duty of care may not be cured unless DRMS, in its sole discretion, specifies a cure 

period in the notice. Termination shall be effective upon the later of the date of service of such notice or 

the expiration of the cure period. 

Section 5 – DRMS Remedies for Material Breach by Contractor - If the breaching party is the 

Contractor, DRMS may take any one, any combination or all of the following actions to satisfy its 

claims for any non-payments or other damages: 

(i) Apply the payment deposit; 

(ii) Present a claim for indemnity against Contractor; 

(iii) Present a claim upon the Fidelity Bond or any other applicable insurance or surety policy; 

(iv) Seek appointment of a receiver or trustee for Contractor; 

(v) Seek monetary damages, restitution or any other legal or equitable remedy to which it is entitled; 

(vi) Assert any other right, claim, or remedy available pursuant to the contract disputes act. 

Section 6 – Indemnification of DRMS by Contractor - Contractor will comply fully with the 

provisions of this contract. If the breaching party is the Contractor, the Contractor shall indemnify and 

hold DRMS harmless for all damages arising. 

Section 7 – Indemnification of Contractor by DRMS - If the breaching party is DRMS, DRMS shall 

indemnify and hold Contractor harmless for its damages. 

ARTICLE FOURTEEN: Contract Seller Indirect Costs 

Section 1 – Documentation and Payment of Seller Indirect Costs – 

(A) Seller Indirect Costs (SIC) – Pursuant to a DRMS mission changes, certain Contractor 

costs directly related to DRMS mission may be deemed Seller Indirect Costs (SIC), thus, the costs to 

perform such duty can be deducted entirely from distributions otherwise payable to DRMS. This 

mechanism largely leaves the risks associated with these issues with DRMS and accordingly should 

considerably lessen these concerns for the Contractor. All costs permitted as SIC, must be allocable, 

allowable, reasonable, pre-approved by DRMS on a case-by-case basis prior to being executed by the 

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Invitation For Bid 08-0001 

Contractor. DRMS approval of SIC must be in writing and not assumed to be approved by the 

Contractor and will never include reimbursements for lost profits. 

(B) Supporting Documentation - Each disbursement for a SIC shall be supported with a bona 

fide documentation (including records in an electronic medium) that adequately demonstrate that each 

such disbursement is in the proper amount for goods or services actually provided in advance of such 

disbursement. 

ARTICLE FIFTEEN: Contract Compliance, Audits and Reviews 

Section 1 – Compliance with Applicable Laws and Regulations – Contractor and its resale buyers 

shall comply with the requirements of all applicable federal, state, and local laws, regulations, 

ordinances, directives and instructions connected with the performance of this contract, including 

without limitation such requirements pertaining to income and payroll taxes, environmental matters and 

occupational safety. 

Section 2 – Licenses and Permits – Contractor shall obtain any necessary licenses and permits, and 

comply with all federal, state, and local laws and regulations in connection with the prosecution of the 

work. This responsibility requirement will be a matter of inquiry during the SCO’s pre-award 

evaluation of the bidder’s capability to perform the contract satisfactorily. It will also be a continuing 

matter of inquiry by the SCO during the performance of the contract. 

Section 3 – Duties of Care and Loyalty – The Contractor shall not cause or permit any action or 

omission in the course of performing the contract that constitutes gross negligence, recklessness or 

intentional harm. Contractor shall carry out their responsibilities under the contract with honesty, good 

faith and fairness toward DRMS. 

Section 4 – Prohibited Activities – Contractor shall not undertake the following activities without 

written permission from the SCO, which permission may be granted or withheld by DRMS in the 

exercise of its sole discretion: 

(a) Enter into a partnership, joint venture or other arrangement the purpose or effect of which is 

to engage indirectly in a transaction that would be prohibited by the provisions of this contract if 

undertaken by the Contractor directly; or 

 (b) Enter into contracts or other arrangements that would assign all or substantially all 

responsibility for and control of performance of the contract to another party or parties, without the prior 

written approval of DRMS which will consider such request in accordance with the Assignment of 

Claims Act of 1940, as amended, 41 U.S.C. sec. 15, and the Government's best interest. In the event of 

any improper assignment without the written approval of DRMS, this contract shall be terminated at the 

option of the Government in the exercise of its sole discretion; or 

(c) File a voluntary petition seeking liquidation, reorganization, arrangement or readjustment, in 

any form, of its debts under Title 11 of the United States Code (or corresponding provisions of future 

law) or any other federal or state insolvency law; file an answer consenting to or acquiescing in any such 

petition; make any assignment for the benefit of Contractor’s creditors; or admit in writing Contractor’s 

inability to pay its debts as they mature, without the prior written consent of DRMS. 

Section 5 – Contractor Cooperation in DOD Investigations/Audits – Contractor agrees to fully 

cooperate with the Government when informed by DRMS of an ongoing special investigation by any 

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Invitation For Bid 08-0001 

DOD or Federal Government investigation service or agency or during DRMS Compliance Reviews or 

Audits. Contractor agrees to provide DRMS with all requested information regarding property or 

information relating to the Contractor’s resale buyer. Contractor must make all sales records pertaining 

to such investigations available to DRMS within three (3) business days of the request. Requests for 

information should be provided in electronic format when possible. Contractor personnel with 

knowledge of the particular subject matter must be available to cooperate with any Government 

investigation 

Section 6 – Contractor Record Retention - Contractor shall make all books, records, documents and 

other supporting evidence available to satisfy contract administration and audit requirements by any 

Government agency identified by the SCO. Records must be made available for six (6) years after the 

wind-down period is concluded, or for such period of time as Contractor, for its own purposes, retains 

its books, records, documents, and other supporting evidence, whichever is longer. 

Section 7 – Records Maintenance – Contractor shall maintain all records accurately and in a manner 

that will allow clear and accurate auditing. Records pertaining to inventory shall contain, at a minimum, 

the National Stock Number or Local Stock Number, Disposal Turn-In Document (DTID) number, 

quantity, date sold, sale price, date Contractor received payment from the resale buyer, name and 

address of the resale buyer, and storage location prior to resale. The Government reserves the right to 

request and inspect these documents as it deems necessary. In the event that Contractor fails to maintain 

or provide any of these documents to the Government, the Government may in its sole discretion seek 

and cause termination. 

Section 8 – Inspection of Records and Workplace by Government - The Government has the right to 

audit the records and inventory the property and to review Contractor’s operations. The audit may 

consist of a complete or random sample examination. Contractor must ensure that, prior to any resale, 

the property is readily identifiable as formerly Government property. 

Section 9 – Purpose and Content of Compliance Audits, Reviews and Further Reviews - DRMS 

shall have the right to conduct Compliance Reviews of Contractor. DRMS may actually conduct the 

compliance reviews, or use other Government agencies or private firms, as the SCO deems appropriate. 

DRMS shall also have the right to conduct Further Reviews as provided herein. The purpose of such 

Compliance Reviews or Further Reviews is to determine, after the fact, the extent of Contractor’s 

compliance with the terms and provisions of the contract and applicable laws and regulations. 

Section 10 – Methods and Procedures for Compliance Reviews 

(A) Method - Compliance Reviews and Further Reviews may include, without limitation, 

examination of records, and, if necessary, personal interviews of persons who may have knowledge of 

facts regarding Contractor’s compliance with the provisions of this contract, including employees or of 

any supplier or resale buyer. 

(B) Procedures - A Compliance Review shall be conducted at any time during normal business 

hours and on any business day. Contractor shall permit inspection of any physical location used by the 

Contractor, including, without limitation, the inventory (including the records relating thereto), 

examination of the records, making copies and abstracts, and discussions of the affairs, finances and 

accounts of Contractor with any employee, subcontracting attorney or certified public accountant of 

Contractor. Contractor will produce any records identified by DRMS as necessary to support the review 

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Invitation For Bid 08-0001 

process and DRMS may maintain copies of all documentation/electronic files that support the review 

being conducted. DRMS shall use its best efforts to assure that Compliance Reviews are conducted in 

a manner that does not unduly burden or unreasonably impinge upon the efficient operation of the 

affairs of Contractor. 

(C) Scope - The scope of Compliance Reviews shall be as necessary to confirm Contractor's 

compliance with the provisions of the contract. 

Section 11 – Further Reviews - If a Compliance Review determines there is a reasonable basis to 

believe that a default or breach of this contract has occurred, DRMS, upon written notice to Contractor, 

may conduct any such further investigation that it deems appropriate under the circumstances, using 

such outside consultants, including attorneys, as it deems necessary or advisable. Contractor shall 

permit such persons, as are designated by DRMS, to visit and inspect any physical location used by the 

Contractor, including, without limitation, the inventory (including the records), and to examine the 

records, make copies and abstracts, and discussion of the affairs, finances and accounts of Contractor 

with any employee, subcontracting attorney or certified public accountant of the Contractor. 

Notwithstanding the foregoing, if Contractor gives notice to DRMS stating that a Further Review is not 

justified, DRMS shall delay the commencement of any such Further Review for a period of fourteen 

(14) days after the delivery of its notice thereof to permit Contractor to seek a determination of the 

appropriateness of the Further Review. 

Section 12 – Compliance Notification - After completing the Compliance Review and/or Further 

Review, DRMS shall notify Contractor in writing of any breach or default identified during the 

Compliance Review and/or Further Review. 

Section 13 – Costs of Oversight - DRMS shall pay all fees, costs and expenses DRMS incurred in 

connection with its Compliance Reviews and Further Reviews. 

Section 14 – Notice of Audit Adjustment - If any party determines that the records reflect any 

inaccuracies requiring entry of an adjustment, including, without limitation, the disbursement of any 

amount from the operating account or a transfer account that is inconsistent with any provision of the 

contract or the disposition of an item of property that is inconsistent with any provision of the contract, 

such party shall give written notice thereof to the other party or parties. 

Section 15 – Procedures for Adjudication of Audit Adjustments - If either Contractor or DRMS 

disputes an asserted audit adjustment, it may submit such dispute for resolution. Upon resolution of 

such dispute or, if no party submits a dispute for resolution within sixty (60) days of the notice of audit 

adjustment, the audit adjustment shall be deemed confirmed as asserted. 

Section 16 – Remedies for Audit Adjustments - Upon confirmation of an audit adjustment, Contractor 

will pay to the party in question, or the party will pay to Contractor, as the case may be, the amount 

required to restore the parties to their respective positions status quo ante, and Contractor will correct 

the records in accordance with the audit adjustment as confirmed. If, as a result of the audit adjustment, 

Contractor is to pay DRMS, each such payment shall include interest calculated by the US Treasury or 

at the rate provided by applicable law. 

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Invitation For Bid 08-0001 

ARTICLE SIXTEEN: Disputes 

Section 1 – Disputes – Any contract awarded as a result of this sale is subject to the Contract Disputes 

Act of 1978 (41 U.S.C. 601-613). 

Section 2 – Claims – The term, “Claim” as used in this Article is defined as a written demand or a 

written assertion by one of the contracting parties seeking the payment of money, adjustment, or 

interpretation of the contract terms, or other relief arising under or relating to this contract. A claim by 

the Contractor shall be made in writing and, unless otherwise stated in this contract, submitted within 6 

years after accrual of the claim to the SCO for a written decision. A claim by the Government against 

the Contractor shall be subject to a written decision by the SCO. A voucher, invoice, or request for 

payment that is not in dispute when submitted is not a claim for the purposes of the Contract Disputes 

Act. However, where such submission is subsequently not acted upon in a reasonable time, or disputed 

either as to liability or amount, may be converted to a claim pursuant to the Contract Disputes Act. 

Section 3 – Decisions - For Contractor claims the SCO must, render a decision within 60 days of the 

request or must notify the Contractor of the date by which the decision will be made. The SCO’s 

decision shall be final unless the Contractor appeals or files a suit as provided in the Act. The 

Contractor shall proceed diligently with performance of this contract, pending final resolution of any 

request for relief, claim, appeal, or action arising under the contract, and comply with any decision of 

the SCO. 

Section 4 – Alternative Dispute Resolution (ADR) – The parties agree to use their best efforts to 

resolve any disputes that may arise without litigation. If unassisted negotiations are unsuccessful, the 

parties will use Alternative Dispute Resolution (ADR) techniques in an attempt to resolve the dispute. 

If the ADR is not successful, the parties retain their existing rights. If the Contractor refuses an offer for 

ADR, the Contractor shall inform the SCO in writing, of the Contractor’s specific reasons for rejecting 

the offer. Litigation will only be considered as a last resort when ADR is unsuccessful or has been 

documented by the party rejecting ADR to be inappropriate for resolving the dispute. 

ARTICLE SEVENTEEN: Insurance and Bond Requirements 

Section 1 – Insurance and Bond Contract Requirements – Contractor shall obtain and maintain the 

following insurance and bond requirements throughout the performance and wind-down period: 

Section 2 – Modification of Special Circumstance Conditions 

(A) Sale by Reference (SBR) (Attachment VI) Part 5 - Additional Special Circumstance 

Conditions (DRMS Form 86, Oct 93), Article D, Liability and Insurance, paragraphs (a)(2) and (a)(3,) is 

modified as follows: 

(1) Bodily Injury Insurance in an amount of not less than two hundred fifty thousand 

dollars ($250,000.00) any one individual and one million dollars ($1,000,000) any one accident 

or occurrence. 

(2) Property Damage Liability Insurance in the amount of two hundred fifty thousand 

dollars ($250,000.00) (which shall include any and all property whether or not in the care, 

custody or control of Contractor). The annual coverage shall be not less than one million dollars 

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Invitation For Bid 08-0001 

($1,000,000). 

Section 3 – Further Modifications – 

(A) Sale by Reference Part 5, Article D, paragraph (a) is also amended as follows: 

(1) All risk coverage for fire and other property perils for all property owned by 

Contractor with aggregate coverage of five million dollars ($5,000,000.00). 

(2) Umbrella liability coverage up to two million dollars ($2,000,000.00). 

(3) Fidelity or blanket bond coverage in the amount of at least five million dollars 

($5,000,000.00). Contractor shall obtain and maintain such coverage with a responsible surety company 

with respect to all of Contractor's employees, officers and directors to protect Contractor against losses, 

including, without limitation, those arising from theft, embezzlement, fraud, or misplacement of funds, 

money, or documents. The issuer, policy terms and forms and amounts of coverage, including 

applicable deductibles, shall be satisfactory to DRMS, and the policy shall include a provision that the 

issuer shall notify DRMS in writing within five (5) business days of the cancellation or termination of 

any such coverage or of any modification of such coverage. Contractor shall notify DRMS in writing 

within five (5) business days after filing a claim under such coverage. 

(4) Comprehensive general liability, automobile liability, umbrella liability, 

Worker’s compensation and other insurance coverage as may be required by law. At its option, 

Contractor may obtain and maintain such additional insurance, including directors and officers coverage 

and errors and omissions coverage, as Contractor deems appropriate. 

Section 4 – Evidence of Insurance - Within thirty (30) days form the date of award, and annually 

thereafter, Contractor shall provide DRMS copies of policies, certificates of insurance or other proof 

evidencing the coverage required. Contractor must obtain the minimum coverage specified unless 

DRMS approves a variance from such minimum coverage. In the event that a specified coverage or 

limit is or in the future becomes commercially impractical, such approval shall not be unreasonably 

withheld. 

ARTICLE 18: Deleted in its entirety 

 

ARTICLE NINETEEN: Miscellaneous Provisions 

Section 1 – Binding Effect - Subject to the restrictions on transfers and encumbrances set forth, this 

contract shall insure to the benefit of and be binding upon DRMS and the Contractor and their 

respective legal representatives, successors and assigns. Whenever this contract refers to any party, 

such reference shall be deemed to include a reference to the legal representatives, successors and assigns 

of such party.

Section 2 – Notices - All notices, demands, requests, consents, approvals, declarations, reports and 

other communications required with regard to this contract shall be in writing except as otherwise 

provided and addressed as follows regardless of the medium used to deliver such: 

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Invitation For Bid 08-0001 

Mr. Neil Watters 

Sales Contracting Officer 

DRMS-362 

74 North Washington Avenue 

Battle Creek, Michigan 49017 

Fax number (269) 961-5283 

Section 3 – Severability - If any provision of this contract or the application to any 

person or circumstance shall be invalid or unenforceable to any extent, the remainder of this contract 

and the application of such provisions to other persons or circumstances shall not be affected and the 

intent of this contract shall be enforced to the greatest extent permitted by law, DRMS may in the 

exercise of its sole discretion cause termination by notice served within thirty (30) days of the date upon 

which such judgment becomes final, such termination to be effective five (5) days after the date of 

service of such notice. 

Section 4 – Headings - The headings appearing in this contract are inserted only as a matter of 

convenience and in no way define, limit, construe or describe the scope or intent of any article or section 

of this contract. 

Section 5 – Survival - The rights and obligations of the parties under this contract shall survive for a 

period of six (6) years after the completion of the wind-down period. 

Section 6 – Waiver - No consent or waiver, express or implied, by any party to or of any breach or 

default by any other party in the performance by such other party of its obligations under this contract 

shall be deemed or construed to be a consent or waiver to or of any other breach or default in the 

performance by such other party of the same or any other obligations of such other party under this 

contract. Failure on the part of any party to complain of any act or failure to act by any of the other 

parties or to declare any of the other parties in default, regardless of how long such failure continues, 

shall not constitute a waiver by such party of its rights hereunder. 

Section 7 – Force Majeure - The parties shall be excused for the period of any delay in the 

performance of any obligations under this contract when prevented from performing such obligations by 

cause or causes beyond their reasonable control, including, without limitation, civil commotion, war, 

invasion, rebellion, hostilities, military or usurped power, sabotage, pestilence, riots, fire or other 

casualty or acts of God. 

Section 8 – Use of DRMS Name; Public Communications - Contractor shall not use the name of 

DRMS, DLA or DOD or its logos for any marketing or other purposes without the express prior written 

consent of DRMS, which consent may be withheld for any reason whatsoever and is subject to the sole 

discretion of DRMS. Contractor shall not publicly denigrate the surplus property disposition program of 

the U.S. Department of Defense or the conduct thereof by DRMS. 

Section 9 – Tense and Gender - Unless the context clearly indicates otherwise, the singular shall 

include the plural and vice versa. Whenever the masculine, feminine or neuter gender is used 

inappropriately in this contract, this contract shall be read as if the appropriate gender had been used. 

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Invitation For Bid 08-0001 

Section 10 – Entire Agreement; Modification - This contract, and the materials incorporated herein by 

reference, constitute the entire agreement between the parties regarding the matters contained in this 

contract. If there is any inconsistency between the terms of this contract and those of any Appendix, 

Schedule or Exhibit, the terms of this contract shall govern. There are no promises or other agreements, 

oral or written, express or implied, between the parties other than as set forth in this contract. No 

change or modification of, or waiver or compromise under, this contract shall be valid unless it is in 

writing and signed by a duly authorized representative of the party against which it is to be enforced. 

Contractor understands and agrees to submit a written request for contract modification to the SCO prior 

to effecting any change from that stated in its technical proposal (including any subcontractors identified 

therein), and/or sale of Government property-item bid page, whether occurring before or after the 

release of the property. Contractor further agrees not to effect such changes without first receiving the 

written approval of the SCO. 

Section 11 – Computation of Time - In computing any period of time prescribed or allowed by this 

contract, the day of the act, event, or default from which the designated period of time begins to run 

shall not be included. The last day of the period so computed shall be included unless it is not a 

business day, in which event the period runs until the end of the next business day. 

Section 12 – Electronic Communication - DRMS and Contractor shall cooperate to facilitate delivery 

of Delivery Orders, Statement of Accounts, and other required reports to the extent reasonably practical 

by electronic transmission, such as by electronic mail or file transfer, rather than by delivery of a 

physical removable magnetic or optical storage medium. 

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Invitation For Bid 08-0001 

ADDITIONAL TERMS AND CONDITIONS OF SALE

The following General Information and Instructions and Special Conditions of Sale contained in 

the Defense Reutilization and Marketing Service pamphlet entitled, “Sale by Reference - Instructions, 

Terms and Conditions Applicable to Department of Defense Personal Property Offered for Sale by 

Defense Reutilization and Marketing Service, March 1994” (hereinafter, Sale by Reference; a copy of 

the Sale by Reference is available on the DRMS web site, www.drms.dla.mil, then click on Sales 

Customer), are hereby incorporated by reference and become a part of this IFB and any resulting 

contract: 

Part 1 General Information and Instructions - All Conditions except 4. 

Part 2 General Sale Terms and Conditions - All Conditions except 4, 7, 12, 14, 28, 29, 30, 32 & 33. 

Part 4 Special Sealed Bid Term Conditions - All Conditions except Articles A and D. 

Part 5 Additional Special Circumstance Conditions – As follows: 

 Article D: Liability and Insurance 

 Article F: Privacy Act Materials 

 Article H: Radio Frequency Devices 

 Article L: Medical Devices 

Part 7 Additional Special Circumstance Conditions Hazardous and Dangerous Property - As follows: 

 Article C: Transporting Hazardous Material Containers 

 Article E: Dangerous Property 

 Article F: Compressed Gas Cylinders 

 Article J: Respiratory Protection Program 

 Article L: Asbestos 

 Article M: Packaging, Marking, and Disposal of Asbestos 

 Article N: Asbestos Dust Control and House Keeping and Clean-up 

 Procedures 

 Article Q: Cartridge Cases 

 Article R: Disposition and Use of Hazardous Property 

 Article S: Government’s Right of Surveillance 

 Article T: Right of Refusal for Hazardous Property 

 Article U: Record Maintenance 

 Article V: Certified and Non-Certified Radiation Emitting Electronic 

 Products 

 Article W: Radioactive Material 

 Article X: Beryllium Dust/Powder 

THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK 

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Invitation For Bid 08-0001 

ADDITIONAL CONTRACT ADVISEMENTS 

Prospective bidders should note that work performed on Government premises, such as at 

DRMOs and other delivery points, may be subject to the provisions of Public Law 89-176, September 

10, 1965 (18 U.S.C. 4082(c)(2)) and Executive Order 11755, December 29, 1973 (convict labor), and/or 

the Contract Work Hours and Safety Standards Act (40 U.S.C. 327-333) and regulations of the Secretary 

of Labor there under (overtime compensation). 

Prospective bidders should also note that provisions of the Food, Drug and Cosmetic Act, 21 

U.S.C. 311 et seq. and regulations promulgated there under forbid the sale of adulterated or misbranded 

medical devices. 

Prospective bidders should also note that there are certain Public Laws that may impact the flow 

of items: 

Public Law 98-575, Commercial Space Launch Act (“CSLA”), dated October 30, 1984 - The 

purposes of the CSLA are to promote economic growth and entrepreneurial activity through the 

utilization of the space environment for peaceful purposes; encourage the private sector to provide 

launch vehicles and associated launch services; facilitate/encourage the acquisition (sale, lease, 

transaction in lieu of sale, or otherwise) by the private sector of launch property of the U.S. which is 

"excess or otherwise not needed for public use," in consultation with Secretary of Transportation. 

Donation screening is not required prior to sale. 

Wildfire Suppression Aircraft Transfer Act of 1996, dated January 3, 1996 - This act authorizes the 

sale of excess Department of Defense (DOD) aircraft and aircraft parts to facilitate the suppression of 

wildfire. Prior to the sale, the Secretary of Agriculture must certify that the person or entity is capable 

of meeting the terms and conditions of a contract to deliver fire retardant by air. The purchaser must 

certify that the aircraft and aircraft parts will be used only for wildfire suppression purposes. 

Public Law 106-181, Oil Spill Containment Act - This statute, also known as “The Wendell H. Ford 

Aviation Investment and Reform Act for the 21st Century,” allows DOD, during the period 4 April 2000 

through 30 September 2002, to sell aircraft and aircraft parts to a person or entity that provides oil spill 

response services (including the application of oil dispersants by air).

HAZARDOUS PROPERTY: Should hazardous property be issued under this contract, the 

Government cautions that the item, material, or substance, or one or more components, parts, 

constituents or ingredients thereof may be corrosive, reactive, ignitable or exhibit other hazardous or 

toxic properties. The Government assumes no liability for any damage to the property of the 

Contractor, to the property of any other person, or the public property, or for any personal injury, illness, 

disability or death to the Contractor, Contractor’s employees, or any other person subject to Contractor’s 

control, or to any other person including members of the general public, or for any other consequential 

damages arising from or incident to the purchase, use, processing, disposition, or any subsequent 

operations performed upon, exposure to or contact with any component, part, constituent or ingredient 

of this item, material or substance. The Contractor agrees to hold harmless and indemnify the 

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Invitation For Bid 08-0001 

Government for any and all costs and expenses incurred incident to any claim, suit, demand, judgment, 

action, debt, liability costs and attorney’s fees or any other request for monies or any other type of relief 

arising from or incident to the purchase, use, processing, disposition, subsequent operation performed 

upon, exposure to or contact with any component, part, constituent or ingredient of this item, material or 

substance, whether intentional or accidental. 

RESOURCE CONSERVATION AND RECOVERY ACT NOTICE: EPA Hazardous Waste 

Regulations, 40 CFR Part 260 et seq. published at 45 Federal Register 33063-33285, May 19, 1980, 

became effective on November 19, 1980. These cradle-to-grave regulations detail the responsibilities of 

generators, transporters, treaters, storers and disposers of hazardous waste. Civil and criminal penalties 

are available for noncompliance. DRMS does not intend to transfer any RCRA regulated hazardous 

waste under this contract as regulated waste is disposed of under DRMS' hazardous waste contracts. 

However, DRMS can make no representations as to when and under what circumstances state, federal or 

local environmental regulations may be applicable to Property transferred to and held by the Contractor. 

CHEMICAL AGENT RESISTANT COATING (CARC) PAINT: Prospective offerors are 

cautioned that that some items are, or likely to contain or be coated with a chemical agent resistant to 

coatings containing trivalent chrome, lead, cobalt-zinc hexamethylene disocyanate and other chemicals 

which are a hazard to human health if not processed properly. The Government brings the following 

precautions/warnings to the attention of prospective offerors who plan to apply the CARC paint or 

disturb the coating on the property in any way: 

Airline respirators should be used during application processing (applying/sanding/torch 

cutting, etc.) unless air sampling shows exposure to be below OSHA/host Government standards, 

then a chemical cartridge air-purifying respirator must be used. 

CARC paint should be isolated from heat, electrical equipment, sparks and open flame during 

storage or application. Local exhaust ventilation should be used for inside processing. 

Exposure to vapor/mist/dust or fumes can cause irritation to respiratory tract (lung, nose, 

throat), edema, dermatitis, dizziness, rash, itching, swelling of extremities, eye irritation or 

damage to nervous system, kidney or liver. Coating may be fatal if swallowed. 

REFRIGERANT: Refrigeration equipment and appliances are subject to the Clean Air Act (CAA) 

Amendments of 1990 which prohibit the venting or release to the environment of Class I or Class II 

ozone depleting substances, and are also subject to the Refrigerant Recycling Rule in 40 Code of 

Federal Regulations (CFR) Subpart F 82, 150-166, requiring the recovery and verification of refrigerant 

removal by a certified technician, using certified recovery equipment prior to final disposal as scrap or 

in a landfill. 

WARRANTY FOR USEABLE AIRCRAFT COMPONENTS / PARTS: The Contractor is advised 

that the aircraft components/parts on this sale may not currently be certified by the appropriate 

regulatory agencies for use on civilian aircraft. The Contractor represents, warrants, and guarantees to 

the Government that this (these) item(s) will not be used, offered for sale, or sold for use in civilian 

aircraft unless proper certification is obtained from the appropriate regulatory agencies. This (these) 

item(s) also may not be installed on any civilian aircraft unless installed by a Federal Aviation 

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Administration (FAA) certified repairman and/or mechanic. The Contractor agrees to hold the 

Government harmless from any and all demands, suits, actions, or claims of whatsoever nature arising 

from or out of violation of this warranty. 

AIRCRAFT INSIGNIA AND MARKINGS: The Contractor will be required to permanently remove 

or obliterate all Military Service distinctive markings from aircraft prior to removal from the 

Government premises. The Contractor may remove or obliterate the markings by scraping, grinding, 

use of paint removers, or by other means upon approval of the SCO. This requirement does not apply to 

aircraft which are required to be demilitarized. 

HELICOPTER BLADES AND TAIL ROTORS: It is the responsibility of the recipient to determine 

if the helicopter blade or tail rotor as designed and manufactured can be put to the use intended by the 

recipient since there may be use requirements which may not be met by military specifications or 

serviceability criteria. Each item has an accompanying historical record with which the further use of 

the item for its designed purpose can be determined. 

KITCHEN STOVES: Contractor shall ensure that the warning statement which is affixed to such 

items regarding their design features and reuse will not be removed prior to sale to an ultimate user, and 

Contractor shall include this clause in its entirety in any later sale or transfer of title, unless Contractor 

modifies, replaces or repairs the stoves to remove or eliminate the hazard. 

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Invitation For Bid 08-0001 

DEFINITIONS 

Actual Cost: An amount determined on the basis of the cost incurred. 

Allocable Cost: A cost is allocable to a Government contract if it is incurred specifically for the 

contract, if it benefits both the contract and other work and can be distributed to them in a reasonable 

proportion to the benefits received, or is necessary to the overall operation of the business, although a 

direct relationship to any particular cost objective cannot be shown. 

Allowable Cost: A cost is allowable only when the cost is reasonable and allocable. The Contractor 

is responsible for accounting for costs appropriately and for maintaining records, including supporting 

documentation, adequate to demonstrate that any cost claimed have been incurred, are allocable to the 

contract, and comply with applicable cost principles in FAR Part 31 and DOD or DLA supplements. 

The SCO may disallow all or part of a claimed cost that is inadequately supported. 

Acquisition Cost: The amount identified as the original cost or estimated replacement cost paid for 

property. 

Acquisition Value: The amount indicated on Delivery Order that is computed by multiplying the 

“Quantity” by the “Item Unit Price”. 

Alternative Dispute Resolution (ADR): Any procedure (for example, mediation, conciliation, 

facilitation, fact-finding, etc.), or any other method to which the parties agree for resolving issues in 

controversy, except the term does not include unassisted negotiations. 

Bid Percentage: The amount, expressed as a percentage of Acquisition Value, offered by the 

Contractor. 

Business Day: Any day that is not a Saturday, Sunday or a Federal Government observed holiday. 

Federal holidays presently include New Year's Day, Martin Luther King, Jr. Day, President's Day, 

Memorial Day, Independence Day, Labor Day, Columbus Day, Veteran's Day, Thanksgiving Day and 

Christmas Day. 

Contractor's Purchase Price: The Acquisition Value of a particular item of property multiplied 

by the applicable Bid Percentage offered.

Controlled Property Center (CPC): A DRMS facility where property is reviewed and verified. 

CONUS: Continental United States. 

Day: A business calendar day. 

Defense Reutilization and Marketing Office (DRMO): The organization entity having 

responsibility for the control over disposal property. 

Defense Reutilization and Marketing Service (DRMS): The organization vested with 

operational command and administration of the Defense Reutilization and Marketing Program. 

Demilitarization Code: A single character alpha code assigned by the Item Manager identifying 

the degree of demilitarization necessary prior to accomplishing final disposition of an item. 

Direct Cost: Costs identified specifically with a contract. 

DOD: Department of Defense. 

Disposal Turn in Document Number (DTID): A 14-position alpha/numeric combination used 

to identify a line item of property consisting of Department Of Defense (DOD) address code, julian date 

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Invitation For Bid 08-0001 

and serial number. The DD Form 1348-1A/2 is the standard document for turn-in of property to the 

DRMO. This may be submitted in electronic format. 

Federal Supply Class (FSC): A commodity classification code primarily used in the National 

Stock Number (NSN). The first 2 digits of the code identify the group and the last 2 digits identify the 

classes within the group. 

Generator: The activity that produces the excess, surplus, foreign excess or other property; usually 

the entity formerly in physical possession and/or control of the property. 

Hazardous Material (HM): Any material that is capable of posing an unreasonable risk to health, 

safety, and property during transportation in the United States. Overseas, HM is defined in the 

applicable Final Governing Standards or Overseas Environmental Baseline Guidance Document, and/or 

host nation laws and regulations. 

Hazardous Waste (HW): Any property regulated under the Resource Conservation and Recovery 

Act (RCRA) or state regulation as a hazardous waste. 

Invitation For Bid: An offer for bid submission. 

Line Item: A single line entry on a reporting form that indicates a quantity of property located at any 

one activity having the same description, condition code and unit cost. The reporting form can be either 

a generator-initiated DTID/ETID, or a contractor-developed tally-in sheet when used for furniture 

receipts. A line item may be comprised of one or multiple units. 

Local Stock Number (LSN): A locally purchased item with no NSN assignment. 

National Item Identification Number (NIIN): A 9-digit number (immediately following the 

FSC) assigned to an item of supply that differentiates it from all other items of supply. 

National Stock Number (NSN): A 13-digit number consisting of the 4-digit FSC and the 9-digit 

NIIN that is assigned to identify an item of supply within the materiel management function. 

Performance Period: Timeframe of the contract, to include any options offered. 

Reasonable Cost: A cost is reasonable if, in its nature and amount, does not exceed that which 

would be incurred by a prudent person in the conduct of competitive business. Reasonableness of 

specific costs must be examined with particular care in connection with firms or their separate divisions 

that may not be subject to effective competitive restraints. No presumption of reasonableness shall be 

attached to the incurrence of costs by the Contractor. If an initial review of the facts results in a 

challenge of a specific cost by the SCO, the burden of proof shall be upon the Contractor to establish 

that such costs is reasonable. 

Receipt In Place (RIP): Property being held at a location outside the DRMS network although on 

the DRMS accountable record during the disposal process and safeguarded by the Generator. 

R/T/D: Reutilization/Transfer/Donation. 

Sales Contracting Officer (SCO): A duly appointed individual granted the authority to sell 

surplus and foreign excess personal property by various prescribed methods of sale. 

Scrap Property: A designation assigned by or with the approval of DRMS personnel meaning the 

items has no value in excess of that of the item’s basic material content. 

Unallowable Cost: Any cost that, under the provisions of any pertinent law, regulation, or contract, 

cannot be included in prices, cost-reimbursements, or settlements under a Government contract to which 

it is allocable. 

Useable Property: A designation assigned by or with the approval of DRMS personnel meaning 

that the item has value in excess of that of the item’s material content. 

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