15740 Federal Register / Vol. 60, No. 58 / Monday, March 27, 1995 / Proposed Rules

days before the meeting in which the

commenter desires to be heard. Requests

for comment opportunity, and written

comments, should be sent to Greg

Lipscomb at the address under FOR

FURTHER INFORMATION CONTACT, stated

above.

Agenda

The planned agenda for the first

meeting is as follows:

1. Introductions and Welcoming

Remarks

2. Nomination of Facilitator

3. Introduction of Committee Members

4. Committee Charter and Related

Matters

5. Organizational Protocols

6. Agreement on ‘‘Consensus’’

7. Work Program and Documentation

8. Organization of Work and Working

Groups

9. Meeting Schedule and Locations

10. Agenda for Next Meeting

11. Other Business.

Federal Communications Commission.

William F. Caton,

Acting Secretary.

[FR Doc. 95–7379 Filed 3–24–95; 8:45 am]

BILLING CODE 6712–01–M

DEPARTMENT OF DEFENSE

48 CFR Part 45 and 52

Federal Acquisition Regulation;

Government Property Class Deviation

AGENCY: Department of Defense.

ACTION: Notice of proposed class

deviation.

SUMMARY: The Department of Defense

(DoD) is proposing a class deviation

from the Federal Acquisition Regulation

(FAR) record keeping and physical

inventory requirements for Special

Tooling, Special Test Equipment and

Plant Equipment with an acquisition

cost of $1,500 or less. The proposed

class deviation will apply to defense

contractors, holding them accountable

for such property, but relieving them of

he requirement to track it, while

revisions to the FAR are being drafted.

DATES: Comments on the proposed class

deviation should be submitted in

writing at the address shown below on

or before may 26, 1995 to be considered

in the formulation of the final class

deviation.

ADDRESSES: Interested parties should

submit written comments to: Mrs. Linda

W. Neilson, DAR Council, Attn: IMD

3D139, PDUSD(A&T)DP/DAR, 3062

Defense Pentagon, Washington DC

20301–3062. FAX (703) 602–0350.

FOR FURTHER INFORMATION CONTACT:

Ms. Angelena Moy, telephone (703)

604–5385.

SUPPLEMENTARY INFORMATION:

A. Background

On September 16, 1994, (59 FR 47583)

the Director of Defense Procurement,

Department of Defense, announced an

initiative to rewrite FAR part 45,

Government Property, to make it easier

to understand and to minimize the

burdens imposed on contractors and the

government. The Director of Defense

Procurement is providing a forum for an

exchange of ideas and information with

government and industry personnel by

holding public meetings, soliciting

public comments, and publishing

notices of the public meetings in the

Federal Register. Interested parties were

invited to provide written suggestions or

comments in the notice of public

hearing dated September 16, 1994 (59

FR 47583). Twenty-two commentors

provided approximately 500 comments,

including a recommendation that relief

from the FAR tracking requirements for

government property under $1,500

would reduce administrative burdens

and provide cost savings.

In order to capture any savings

quickly, DoD is proposing a class

deviation from current FAR record

keeping and physical inventory

requirements for Special Tooling,

Special Test Equipment and Plant

Equipment with an acquisition cost of

$1,500 or less. The proposed class

deviation was included as a discussion

topic at the public meeting held on

January 24, 1995 (60 FR 2370). DoD

proposes to deviate from certain FAR

requirements as follows:

Part 45—Government Property

45.101 Definitions.

• Deviation authorizes the use of two

additional definitions:

‘‘Low Value Property,’’ as used in this

part, means Government property in the

classes of special tooling, special test

equipment, and plant equipment with

an acquisition cost of $1,500 or less.

Specifically excluded from this

definition are agency-peculiar property,

material, real property, and sensitive

property.

‘‘Sensitive Property,’’ as used in this

part, means Government property for

which the theft, loss, or misplacement

could be potentially dangerous to the

public health or safety, or which must

be subject to exceptional physical

security, protection, control,

maintenance, or accountability,

including, but not limited to, hazardous

property, precious metals, arms,

ammunition, explosives, and classified

property.

45.504 Contractor’s liability.

• Deviation authorizes contractors to

report loss, damage, or destruction of

items of low value property at contract

termination or completion instead of

when the facts become known.

45.505 Records and reports of

Government property.

• Deviation authorizes the exemption

of low value property from the

requirement of 45.505(g) for contractor

property control systems to contain a

system or technique to locate any item

of Government property within a

reasonable period of time. As a result,

periodic physical inventories need not

be performed for low value property.

45.505–1 Basic information.

• Deviation excludes low value

property from the present requirement

for contractors to maintain current

location for each item of government

property. Contractor’s property control

records for each item of low value

property in the contractor’s possession

must provide the basic information

listed in FAR paragraphs 45.505–1 (a)(1)

through (a)(7). However, contractors

will not be required to update changes

in location of each item of low value

property which occur after

establishment of the official government

property record. This exemption does

not apply to ‘‘sensitive property.’’

45.508 hysical inventories.

• With the exception of inventories

conducted upon termination or

completion, the deviation authorizes an

exemption for low value property from

the requirements of FAR 45.508 for

contractors to periodically physically

inventory all Government property

(except materials issued from stock for

manufacturing, research, design, or

other services required by the contract)

in their possession or control and to

cause subcontractors to do likewise. In

addition, the deviation requires a

contractor whose property control

system is disapproved to perform a

physical inventory and report all loss,

damage, or destruction of Government

property prior to system reapproval.

Part 52—Solicitation Provisions and

Contract Clauses

52.245–2 Government Property (FixedPrice Contracts) (DEC 1989).

• Deviation authorizes the

substitution of the following paragraph

(c)(2) for paragraph (c)(2) of the basic

clause. The substitute paragraph (c)(2)

makes it clear that title to items of
Federal Register / Vol. 60, No. 58 / Monday, March 27, 1995 / Proposed Rules 15741

Government property lost, damaged, or

destroyed and replaced under the risk of

loss provisions of the clause, vests in

the Government:

(c)(2) All Government-furnished

property, property acquired by the

Contractor, or all property replaced by

the Contractor under the risk of loss

provisions of this clause, title to which

vests in the Government under this

paragraph (collectively referred to as

‘‘Government property’’), are subject to

the provisions of this clause. However,

special tooling accountable to this

contract is subject to the provisions of

the Special Tooling clause and is not

subject to the provisions of this clause.

Title to Government property shall not

be affected by its incorporation into or

attachment to any property not owned

by the Government, nor shall

Government property become a fixture

or lose its identity as personal property

by being attached to any real property.

52.245–2 Government Property (Fixed

Price Contracts) (Alternate I) (APR

1984).

• Deviation authorizes substitution of

‘‘Limited risk of loss’’ for the title of

paragraph (g), and substitution of the

following subparagraph (g)(2), which

requires contractors to assume the risk

of, and be responsible for, any loss,

damage, or destruction of low value

property, with the exception of

reasonable wear and tear:

(g)(2) The Contractor assumes the risk

of and shall be responsible for, any loss

or destruction of, or damage to low

value property upon its delivery to the

Contractor or upon passage of title to the

Government under paragraph (c) of this

clause. However, the Contractor is not

responsible for reasonable wear and tear

of low value property or for low value

property properly consumed in

performing this contract. With respect to

all other Government property, the

Contractor shall not be liable for loss or

destruction of, or damage to, the

Government property provided under

this contract (or, if an educational or

nonprofit organization, for expenses

incidental to such loss, destruction, or

damage), except as provided in

subparagraphs (3) and (4) below.

• Deviation authorizes substitution of

the following subparagraph (g)(6),

which allows contractors to report loss,

damage, or destruction of items of low

value property at contract termination

or completion:

(g)(6) Upon loss or destruction of, or

damage to, Government property

provided under this contract, (with the

exception of low value property for

which loss, damage, or destruction is

reported at contract termination or

completion), the Contractor shall so

notify the Contracting Officer and shall

communicate with the loss and salvage

organization, if any, designated by the

Contracting Officer. With the assistance

of any such organization, the Contractor

shall take all reasonable action to

protect the Government property from

further damage, separate the damaged

and undamaged Government property,

put all the affected Government

property in the best possible order, and

furnish to the Contracting Officer as

statement of—

(i) The lost, destroyed, or damaged

Government property;

(ii) The time and origin of the loss,

destruction, or damage;

(iii) All known interests in

commingled property of which the

Government property is a part; and

(iv) The insurance, if any, covering

any part of or interest in such

commingled property.

• Deviation authorizes substitution of

the following subparagraph (g)(8),

which makes the cost of insurance due

to assumption of risk of loss for low

value property an allowable cost

pursuant to FAR 31.205–19:

(g)(8) The Contractor represents that it

is not including in the price and agrees

it will not hereafter include in any price

to the Government any charge or reserve

for insurance (including any selfinsurance fund or reserve) covering loss

or destruction of, or damage to,

Government property, except:

(i) to the extent that the Government

may have expressly required the

Contractor to carry such insurance

under another provision of this contract;

or

(ii) low value property.

52.245–5 Government Property (CostReimbursement, Time-and-Material, or

Labor-Hour Contracts) (JAN 1986).

• Deviation authorizes substitution of

the following paragraphs (c)(2) and

(c)(3), which clarify that title to items of

government property lost, damaged, or

destroyed and replaced under the risk of

loss provisions of the clause vests in the

government:

(c)(2) Title to all property purchased

by the Contractor for which the

Contractor is entitled to be reimbursed

as a direct item of cost under this

contract or for which the Contractor is

responsible to replace under the risk of

loss provisions of this clause shall pass

to and vest in the Government upon the

vendor’s delivery of such property.

(c)(3) Title to all other property, the

cost of which is reimbursable to the

Contractor, or for which the Contractor

is responsible to replace under the risk

of loss provisions of this clause shall

pass to and vest in the Government

upon—

(i) Issuance of the property for use in

contract performance;

(ii) Commencement of processing of

the property for use in contract

performance; or

(iii) Reimbursement of the cost of the

property by the Government, whichever

occurs first.

• Deviation authorizes substitution of

‘‘Risk of loss’’ for the title of paragraph

(g), and substitution of the following

subparagraph (g)(1), which requires

contractors to assume the risk of, and be

responsible for, any loss, damage, or

destruction of low value property, with

the exception of reasonable wear and

tear:

(g) (1) The Contractor assumes the risk

of, shall be responsible for, and shall not

be entitled to reimbursement as an

allowable cost for any loss or

destruction of, or damage to low value

property upon its delivery to the

contractor or upon passage of title to the

Government under paragraph (c) of this

clause. However, the contractor is not

responsible for reasonable wear and tear

of low value property or for low value

property properly consumed in

performing this contract. With respect to

all other Government property, the

Contractor shall not be liable for loss or

destruction of, or damage to, the

Government property provided under

this Contract or for expenses incidental

to such loss, destruction, or damage,

except as provided in subparagraphs (2)

and (3) below.

• Deviation authorizes substitution of

the following subparagraph (g)(5),

which allows contractors to report loss,

damage, or destruction of items of low

value property at contract termination

or completion:

(g)(5) Upon loss or destruction of, or

damage to, Government property

provided under this contract, with the

exception of low value property for

which loss, damage, or destruction is

reported at contract termination or

completion, the Contractor shall so

notify the Contracting Officer and shall

communicate with the loss and salvage

organization, if any, designated by the

Contracting Officer. With the assistance

of any such organization, the Contractor

shall take all reasonable action to

protect the Government property from

further damage, separate the damaged

and undamaged Government property,

put all the affected Government

property in the best possible order, and

furnish to the Contracting Officer a

statement of—

(i) The lost, destroyed, or damaged

Government property;
15742 Federal Register / Vol. 60, No. 58 / Monday, March 27, 1995 / Proposed Rules

(ii) The time and origin of the loss,

destruction, or damage;

(iii) All known interests in

commingled property of which the

Government property is a part; and

(iv) The insurance, if any, covering

any part of or interest in such

commingled property.

• Deviation authorizes substitution of

the following subparagraph (g)(7),

which makes the cost of insurance due

to DoD contractors’ assumption of risk

of loss for low value property an

allowable cost pursuant to FAR 31.205–

19:

(g)(7) The Contractor shall not be

reimbursed for, and shall not include as

an item of overhead, the cost of

insurance or of any reserve covering risk

of loss or destruction of, or damage to,

Government property, except:

(i) to the extent that the Government

may have expressly required the

Contractor to carry such insurance

under another provision of this contract;

or

(ii) low value property.

52.245–7 Government Property

(Consolidated Facilities) (APR 1984).

• Deviation authorizes substitution of

the following subparagraphs (d)(2) and

(d)(4), which clarify that title to items of

Government property lost, damaged, or

destroyed, and replaced under the risk

of loss provisions of this clause vests in

the Government:

(d)(2) Title to all facilities and

components shall pass to and vest in the

Government upon delivery by the

vendor of all such items purchased by

the Contractor for which it is entitled to

be reimbursed as a direct item of cost

under this contract or for which the

Contractor is responsible to replace

under the risk of loss provisions

specified in the clause at FAR 52.245–

8, Liability for the Facilities.

(d)(4) Title to other property, the cost

of which is reimbursable to the

Contractor under this contract or for

which the Contractor is responsible to

replace under the risk of loss provisions

specified in the clause at FAR 52.245–

8, Liability for the Facilities, shall pass

to and vest in the Government upon——

(i) Issuance of the property for use in

performing this contract;

(ii) Commencement of processing or

use of the property in performing this

contract; or

(iii) Reimbursement of the cost of the

property by the Government, whichever

occurs first.

52.245–8 Liability for the Facilities (APR

1984).

• Deviation authorizes substitution of

the following paragraph (b), which

requires contractors to assume risk of,

and be responsible for, any loss,

damage, or destruction of low value

property, except for reasonable wear

and tear:

(b) The Contractor assumes the risk of,

shall be responsible for, and shall not be

entitled to reimbursement as an

allowable cost for any loss or

destruction of, or damage to low value

property upon its delivery to the

contractor or upon passage of title to the

Government as specified in the clause at

FAR 52.245–7, Government Property

(Consolidated Facilities), FAR 52.245–

10, Government Property (Facilities

Acquisition) or FAR 52.245–11,

Government Property (Facilities Use).

However, the Contractor is not

responsible for reasonable wear and tear

of low value property or for low value

property properly consumed in

performing this contract. With respect to

all other Government property, the

Contractor shall not be liable for any

loss or destruction of, or damage to, the

facilities, or for expenses incidental to

such loss, destruction, or damage,

except as provided in this clause.

• Deviation authorizes substitution of

the following paragraph (f), which

makes the cost of insurance due to

assumption of risk of loss for low value

property an allowable cost pursuant to

FAR 31.205–19:

(f) Unless expressly directed in

writing by the Contracting Officer, the

Contractor shall not include in the price

or cost under any contract with the

Government the cost of insurance

(including self-insurance) against any

form of loss, destruction, or damage to

the facilities. However, the Contractor

may include the price or cost of such

insurance against any form of loss,

destruction, or damage to low value

property. Any insurance required under

this clause shall be in such form, in

such amounts, for such periods of time,

and with such insurers (including the

Contractor as self-insurer in appropriate

circumstances) as the Contracting

Officer shall require or approve. Such

insurance shall provide for 30 days

advance notice to the Contracting

Officer, in the event of cancellation or

material change in the policy coverage

on the part of the insurer. A certificate

of insurance or a certified copy of such

insurance shall be deposited promptly

with the Contracting Officer. The

Contractor shall, not less than 30 days

before the expiration of such insurance,

deliver to the Contracting Officer a

certificate of insurance or a certified

copy of each renewal policy. The

insurance shall be in the name of the

United States of America (Agency

Name), the Contractor, and such other

interested parties as the Contracting

Officer shall approve, and shall contain

a loss payable clause reading

substantially as follows: Any loss under

this policy shall be adjusted with

(Contractor) and the proceeds, at the

direction of the Government, shall be

paid to (Contractor). Proceeds not paid

to (Contractor) shall be paid to the office

designated by the Contracting Officer.

• Deviation authorizes substitution of

the following introductory text for

paragraph (g), which allows contractors

to report loss, damage, or destruction of

items of low value property only at

contract termination or completion:

(g) With the exception of low value

property for which the loss, damage, or

destruction is required to be reported at

contract termination or completion,

when there is any loss or destruction of,

or damage to, the facilities——

52.245–11 Government Property

(Facilities Use) (APR 1984).

• Deviation authorizes insertion of

the following new subparagraph (c)(2),

which clarifies that title to items of

Government property lost, damaged, or

destroyed, and replaced under the risk

of loss provisions of this clause vests in

the Government. The deviation also

authorizes substitution of the

numbering of the existing

subparagraphs (c)(2), (c)(3), and (c)(4) as

(c)(3), (c)(4), and (c)(5), respectively:

(c)(2) Title to facilities for which the

Contractor is responsible to replace

under the risk of loss provisions

specified in the clause at FAR 52.245–

8, Liability for the Facilities, shall pass

to and vest in the Government upon the

vendor’s delivery of such facilities. Title

to all other facilities for which the

Contractor is responsible to replace

under the risk of loss provisions

specified in the clause at FAR 52.245–

8 shall pass to an vest in the

Government upon——

(i) Issuance of the property for use in

contract performance;

(ii) Commencement of processing of

the property for use in contract

performance; or

(iii) Reimbursement of the cost of the

property by the Government, whichever

occurs first.

List of Subjects in 48 CFR Parts 45 and

52

Government procurement.

Claudia L. Naugle,

Executive Editor, Defense Acquisition

Regulations Council.

[FR Doc. 95–7340 Filed 3–24–95; 8:45 am]

BILLING CODE 5000–04–M