[Federal Register Volume 88, Number 245 (Friday, December 22, 2023)]
[Rules and Regulations]
[Pages 88533-88539]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-27939]
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DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Parts 211, 212, 245, and 252
[Docket DARS-2023-0017]
RIN 0750-AL14
Defense Federal Acquisition Regulation Supplement: Consolidation
of DoD Government Property Clauses (DFARS Case 2020-D029)
AGENCY: Defense Acquisition Regulations System, Department of Defense
(DoD).
ACTION: Final rule.
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SUMMARY: DoD is issuing a final rule amending the Defense Federal
Acquisition Regulation Supplement (DFARS) to consolidate existing
contract clauses for the management and reporting of Government
property into a single contract clause. The final rule also replaces
references to legacy software applications used for reporting
Government property within the DoD enterprise-wide eBusiness platform,
and converts existing form-based processes into electronic processes
within that platform.
DATES: Effective January 22, 2024.
FOR FURTHER INFORMATION CONTACT: Heather Kitchens, telephone 571-296-
7152.
SUPPLEMENTARY INFORMATION:
I. Background
DoD published a proposed rule in the Federal Register at 88 FR
25600 on April 27, 2023, to amend the DFARS to consolidate contract
clauses related to management and reporting of Government property,
update references to certain forms that are being incorporated into
electronic processes, and update references to applications used to
report receipt, shipment, transfer, or loss of Government property, or
excess Government property. DoD developed the Government-Furnished
Property (GFP) module within the Procurement Integrated Enterprise
Environment (PIEE) to house the GFP life-cycle reporting requirements
to provide end-to-end accountability for all GFP transactions within a
single, secure, integrated system, while employing enhancements in
technology to reduce burden on the public and the Government. The final
rule creates a new consolidated clause at DFARS 252.245-7005,
Management and Reporting of Government Property, and removes and
reserves the following DFARS clauses:
[[Page 88534]]
252.211-7007, Reporting of Government-Furnished Property.
252.245-7001, Tagging, Labeling, and Marking of
Government-furnished Property.
252.245-7002, Reporting Loss of Government Property.
252.245-7004, Reporting, Reutilization, and Disposal.
Four respondents submitted public comments in response to the
proposed rule.
II. Discussion and Analysis
DoD reviewed the public comments in the development of the final
rule. Public comments from three respondents were unrelated to the
rule, and therefore were not considered in the development of the final
rule. A discussion of the respondent's comments and the changes made to
the rule, as a result of those comments, is provided as follows:
A. Summary of Significant Changes From the Proposed Rule
The term ``physical'' was removed from the requirement to report
receipt of GFP. The discussion of workmanship errors was removed from
the requirement to report loss of property. The seven-day reporting
requirement for loss was removed, thereby defaulting to the timeframe
identified in the clause at Federal Acquisition Regulation (FAR)
52.245-1, Government Property. Marking of GFP was clarified by stating
it is only applicable to items being repaired by a contractor. Outdated
weblinks were revised.
B. Analysis of Public Comments
1. Marking Government-Furnished Property
Comment: The respondent questioned why the proposed rule creates a
new requirement for marking equipment.
Response: DFARS clause 252.245-7001 Tagging, Labeling, and Marking
of Government-Furnished Property, requires contractors to mark all
Government-furnished property that is identified as serially managed
and has not been previously marked. The consolidated clause, DFARS
252.245-7005, reduces that requirement to only mark items that are
identified as serially managed, where the contractor has access to the
technical data and the technical data indicates a marking requirement.
To further restrict the application of this requirement, the language
has been modified to clarify that the marking requirement only applies
to serially managed items being repaired by the contractor, where the
contractor has access to the technical data and the technical data
requires marking. DFARS clause 252.245-7001 is removed and reserved by
this final rule.
Comment: The respondent questioned why the term ``technical
drawings'' does not include technical data in other media and stated
that the term may be misinterpreted. The respondent expressed concern
that the requirement could be misinterpreted as requiring contractors
to have technical data packages on all GFP.
Response: The final rule retains the term ``technical drawing'' in
paragraph (d) of the new clause at DFARS 252.245-7005. This term
reflects the Government's needs and is more limited in scope that other
terms such as ``technical data'' or ``technical data package.'' In
addition, restricting this requirement to items the contractor is
repairing eliminates the opportunity to misinterpret the requirement
and to potentially apply it to a broader scope than intended.
Comment: The respondent asked for clarification if an item has been
marked but not registered, and if that is a new requirement.
Response: As noted above, the requirement for marking items is an
existing requirement. In this final rule, marking has been limited to
repairs, where the technical drawing requires marking and registration
of the item, and therefore has limited and specific applicability.
2. Misinterpretation of DFARS PGI
Comment: The respondent commented on marking contractor acquired
property (CAP) when it is delivered. The comments identified that the
statement in DFARS PGI 245.402-71(3)(iii) on the delivery of
contractor-acquired property, ``Contractor-acquired property items
shall be marked as required by DFARS clause 252.211-7003'', was
interpreted to require marking of CAP at delivery.
Response: While DFARS PGI 245.402-71(3)(iii) is not part of DFARS
Case 2020-D029, the reference to DFARS clause 252.211-7003, Item Unique
Identification and Valuation, is correct. DFARS clause 252.211-7003 is
required ``. . . in solicitations and contracts, including
solicitations and contracts using FAR part 12 procedures for the
acquisition of commercial products and commercial services, for
supplies, and for services involving the furnishing of supplies. . .
.'' This would include where line items are established for the
delivery of CAP. It is the presence of the clause 252.211-7003 that may
require the marking of CAP at delivery.
Comment: The respondent inquired why there is no existing
requirement to report or mark items shipped-in-place.
Response: DFARS clause 252.211-7003 identifies the criteria for
marking and requires reporting the receipt of all Government-furnished
property. The clause does not provide an exception or exclusion for
property shipped-in-place. If an item requires marking under the
clause, the marking is required regardless of the shipping destination.
3. Data Elements
Comment: The respondent stated the rule creates a ``proxy''
National Stock Number where it states one of the data elements is ``(1)
National stock number (NSN).'' The respondent asked if an NSN is not
available, if it is appropriate to use either the combination of
manufacturer's CAGE code and part number, or model number.
Response: DFARS 252.245-7005 includes more specific details of the
requirement in FAR 52.245-1 that the contractor's property records
contain ``The name, part number and description, National Stock Number
(if needed for additional item identification tracking and/or
disposition), and other data elements as necessary and required in
accordance with the terms and conditions of the contract.'' It is not
creating a proxy but indicates a preference for when the National Stock
Number is used and identifies the alternatives, when it is not.
Comment: The respondent stated that sometimes serially managed
assets are received without serial numbers, and therefore instructions
should be provided that the serial number is not mandatory.
Response: The requirement relates to the ability of the
contractor's system to capture data when they create records. The
requirement is that the contractor records be able to record serial
numbers for serially managed items when a unique item identifier (UII)
is not present, not that a serial number is mandatory in all cases.
4. Reporting Consumption of Serially Managed Assets
Comment: The respondent inquired as to why reporting of serially
managed assets occurs when consumed into higher-level components as a
new requirement.
Response: This is not a new requirement as the DFARS clause
252.211-7007 required the reporting of serially managed items when they
are ``Consumed or expended, reasonably and properly, or otherwise
accounted for, in the performance of the contract
[[Page 88535]]
as determined by the Government property administrator, including
reasonable inventory adjustments.'' DFARS clause 252.245-7005 also
requires reporting when serially-managed items of GFP are incorporated
into a higher-level component, assembly, or end item.
5. Physical Receipt
Comment: The respondent stated that the term ``physical'' receipt
is confusing as receipt may be virtual for property transferred in
place or received by a subcontractor on behalf of the contractor.
Response: The term physical has been removed in the final rule.
6. Reporting Transfer of GFP
Comment: The respondent took exception to the requirement to report
the transfer of property between contracts, both in the proposed rule
and DFARS clause 252.211-7007, as the transfer of property between
contracts should be done by the Government through modification.
Response: FAR 45.106 and DFARS PGI 245.103-71 both require a
contract modification to transfer the accountability of property
between contracts. FAR 45.106 states that once transferred the property
becomes Government-furnished property on the new contract. Just as the
Government listing the property in the contract does not show receipt
of the property, the contract modification does not reflect any
physical or virtual updates to the contractor records to reflect the
change in accountability. The contractor reporting of transfers at
DFARS 252.245-7005(b)(ii) shows that the action required by the
modification changing accountability is complete as required to enable
accurate accountability of assets. This is not a change from the clause
252.211-7007.
7. Reporting Through Commercial Asset Visibility
Comment: The respondent questioned whether there is duplication
between the requirements of the proposed rule (and the DFARS clause
252.211-7007) with requirements to report to the Commercial Asset
Visibility System (CAV). CAV is a system used by the Department of the
Navy to track assets during the repair process. The recommendation is
made that reporting reparables should be removed from this case in
favor of new rulemaking.
Response: The respondent's recommendation is not accepted. CAV
reporting covers a specific organization's reporting requirements that
include reporting not covered by the proposed rule and excludes
reporting required on all Government property. FAR clause 52.245-1, at
paragraphs (f)(1)(iii) and (vi), identifies that there will be contract
specific reporting requirements. Including contract specific reporting
requirements, however, does not eliminate DoD's need for standard
reporting for all GFP. DoD has created significant efficiencies and
reduced the burden on contractors by incorporating multiple legacy
tools into the PIEE GFP Module. This rule advances the process of
creating standard Government property reporting, and DoD continues to
reduce duplicative reporting where practical.
8. Timeframe for Reporting
Comment: The respondent inquired as to whether creating a standard
timeframe for reporting is arbitrary and will increase the cost of
compliance.
Response: The data reported on Government property is used for
numerous purposes by multiple functional communities including finance,
logistics, asset managers, and acquisition. These stakeholders were
involved in the drafting of the proposed rule. The seven-day standard
represents a time that supports their needs for timely information and
minimizes the need for contract specific reporting or timeframes. The
establishment of a timeframe does not increase the volume of what will
be reported or the time it takes to report each action, and therefore
should have no impact on the public burden compared to the previous
requirement. To minimize the impact on contractors, reporting of loss
has been removed from the seven-day reporting requirement so that any
action with an established timeframe in FAR clause 52.245-1 will use
the existing FAR timeframe.
9. Reporting of Loss Can Be Misinterpreted
Comment: The respondent inquired whether the statement ``Unless
otherwise provided for in this contract, this requirement applies to a
loss of GFP that results from damage that occurs during work in process
(e.g., workmanship errors)'' will be subject to misinterpretation and
does not consider long-standing industry processes.
Response: The statement has been removed from the final rule to
avoid the possibility of misinterpretation.
10. Economic Burden of Rule
Comment: The respondent disagreed with the statement that DoD does
not expect the proposed rule to have a significant economic impact on a
substantial number of small entities within the meaning of the
Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because the rule is
not creating any new requirements for contractors.
Response: The items identified as new requirements by the
respondent in prior comments are requirements in the existing contract
clauses. Many of those requirements have been simplified or reduced in
the final rule to reduce the impact on contractors. The improvements in
automation and the standardization of business processes in this rule
are expected to substantially reduce the burden on industry.
11. Use of Hyperlinks
Comment: The respondent expressed concern for the practice of
including hyperlinks to documents within policy.
Response: Hyperlinks in the rule were reviewed for accuracy and
relevance as follows: (1) SAM.GOV as an authoritative Government
source; (2) the Procurement Integrated Enterprise Environment (PIEE) to
provide access to the GFP Module, the required application for
reporting; and (3) the Defense Logistics Standards Manual to provide
ready access to supply condition code information. These links are
beneficial to contractors who will need to execute the requirements of
DFARS clause 252.245-7005.
12. Request for Additional Rulemaking
Comment: The respondent inquired if the Department should provide
instruction on reporting of embedded items removed during repair.
Response: Reporting of embedded items during repair is based on the
requirements of the contract and the GFP attachment. The request for
policy clarification will be reviewed and may be subject to future
rulemaking.
C. Other Changes
The final rule adds a clarification that the IUID Registry is to be
used for the purpose of verifying whether a marked item had been
registered.
III. Applicability to Contracts at or Below the Simplified Acquisition
Threshold (SAT), for Commercial Products (Including Commercially
Available Off-the-Shelf (COTS) Items), and for Commercial Services
This final rule creates a new DFARS contract clause 252.245-7XXX,
Management and Reporting of Government Property. DFARS 252.245-7XXX is
prescribed at DFARS 245.107(4) for use in solicitations and contracts
containing the clause at FAR 52.245-1, Government Property. DFARS
252.245-7XXX is applicable to acquisitions at or below the SAT and to
[[Page 88536]]
acquisitions of commercial products and commercial services, when the
contract contains the clause at FAR 52.245-1. For DoD, the FAR clause
52.245-1 is required to be used in all purchase orders for repair,
maintenance, overhaul, or modification of Government property
regardless of the unit acquisition cost of the items to be repaired.
These types of purchase orders are likely to fall under the SAT. Not
applying this clause to contracts below the SAT and for the acquisition
of commercial products, including COTS items, and commercial services
would exclude contracts intended to be covered by this rule and
undermine the overarching purpose of the rule. Consequently, DoD is
applying the rule to contracts at or below the SAT, for the acquisition
of commercial products including COTS items, and for the acquisition of
commercial services.
IV. Expected Impact of the Rule
The final rule consolidates the requirements for Government
property reporting from multiple DFARS contract clauses into a single
DFARS clause, reflecting the move of this activity into a single
integrated eBusiness platform. This change will improve the ability of
contractors and the Government to access and use the data across the
Government property life cycle. The technical enhancements of the PIEE
GFP Module allow for importing data, which will substantially reduce
the reporting burden on DoD contractors while improving the accuracy of
information. The PIEE GFP Module further enables DoD to consolidate and
electronically share data about Government property in the possession
of contractors, thereby improving accountability and auditability.
V. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess
all costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). E.O.
13563 emphasizes the importance of quantifying both costs and benefits,
of reducing costs, of harmonizing rules, and of promoting flexibility.
This is not a significant regulatory action and, therefore, was not
subject to review under section 6(b) of E.O. 12866, Regulatory Planning
and Review, as amended.
VI. Congressional Review Act
As required by the Congressional Review Act (5 U.S.C. 801-808)
before an interim or final rule takes effect, DoD will submit a copy of
the interim or final rule with the form, Submission of Federal Rules
under the Congressional Review Act, to the U.S. Senate, the U.S. House
of Representatives, and the Comptroller General of the United States. A
major rule under the Congressional Review Act cannot take effect until
60 days after it is published in the Federal Register. The Office of
Information and Regulatory Affairs has determined that this rule is not
a major rule as defined by 5 U.S.C. 804.
VII. Regulatory Flexibility Act
A final regulatory flexibility analysis has been prepared
consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq.,
and is summarized as follows:
DoD is amending the Defense Federal Acquisition Regulation
Supplement (DFARS) to consolidate existing contract clauses for the
management and reporting of Government property into a single DFARS
clause, eliminate some form-based reporting by providing an electronic
equivalent, and replace references to legacy software applications used
for the reporting of Government property with updated language
directing the Government and contractors to utilize the Procurement
Integrated Enterprise Environment (PIEE) Government-furnished property
(GFP) Module within the DoD enterprise-wide eBusiness platform. DoD
developed the GFP module within the PIEE to house the GFP life-cycle
reporting requirements, thus providing end-to-end accountability for
all GFP transactions within a single, secure, integrated system. Use of
the PIEE GFP Module capitalizes on technological enhancements and
reduces burden on the public and the Government.
The objective of the rule is to create more efficient instructions
for reporting Government property by consolidating reporting
requirements for Government property. The rule transitions instructions
for property reporting from multiple stand-alone, legacy software
applications to the PIEE GFP Module, a fully integrated, DoD
enterprise-wide eBusiness platform. Use of the new system functionality
will enable DoD to address numerous audit findings and security
concerns. The legal basis for the rule is 41 U.S.C. 1303.
No comments were received in response to the initial regulatory
flexibility analysis.
This rule will likely affect some small business concerns that are
provided Government-furnished property in the performance of their
contracts. Data generated from the Federal Procurement Data System for
fiscal years 2019 through 2021 indicates that, on average, 2,022 unique
small entities per year received awards with Government property that
would be subject to this rule.
The rule does not impose any new reporting, recordkeeping, or
compliance requirements. The replacement application used for reporting
is intended to maintain the status quo regarding the information to be
reported and to reduce compliance requirements due to the technological
advances in the PIEE GFP Module.
There are no practical alternatives that would reduce burden on
small entities and still meet the objective of creating efficiency by
consolidating reporting requirements for Government property.
VIII. Paperwork Reduction Act
This rule contains information collection requirements that have
been approved by the Office of Management and Budget under the
Paperwork Reduction Act (44 U.S.C. chapter 35). This information
collection requirement is assigned OMB Control Number 0704-0246,
Defense Federal Acquisition Regulation Supplement (DFARS) part 245,
Government Property.
List of Subjects in 48 CFR Parts 211, 212, 245, and 252
Government procurement.
Jennifer D. Johnson,
Editor/Publisher, Defense Acquisition Regulations System.
Therefore, 48 CFR parts 211, 212, 245, and 252 are amended as
follows:
0
1. The authority citation for 48 CFR parts 211, 212, 245, and 252
continues to read as follows:
Authority: 41 U.S.C. 1303 and 48 CFR chapter 1.
PART 211--DESCRIBING AGENCY NEEDS
211.274-4 [Removed]
0
2. Remove section 211.274-4.
211.274-5 and 211.274-6 [Redesignated as 211.274-4 and 211.274-5]
0
3. Redesignate sections 211.274-5 and 211.274-6 as sections 211.274-4
and 211.274-5, respectively.
211.274-5 [Amended]
0
4. Amend the newly redesignated section 211.274-5 by--
[[Page 88537]]
0
a. Redesignating paragraphs (a)(1), (2), and (3) as paragraphs (a)
introductory text and (a)(1) and (2), respectively;
0
b. Removing paragraph (b); and
0
c. Redesignating paragraph (c) as paragraph (b).
PART 212--ACQUISITION OF COMMERCIAL PRODUCTS AND COMMERCIAL
SERVICES
0
5. Amend section 212.301--
0
a. In paragraph (f)(v)(A) by removing ``211.274-6(a)(1)'' and adding
``211.274-5(a)'' in its place;
0
b. By removing paragraph (f)(v)(B);
0
c. By redesignating paragraph (f)(v)(C) as paragraph (f)(v)(B);
0
d. In the newly redesignated paragraph (f)(v)(B) by removing ``211.274-
6(c)'' and adding ``211.274-5(b)'' in its place;
0
e. Redesignating paragraphs (f)(xix) and (xx) as paragraphs (f)(xx) and
(xxi), respectively; and
0
f. Adding a new paragraph (f)(xix).
The addition reads as follows:
212.301 Solicitation provisions and contract clauses for the
acquisition of commercial products and commercial services.
* * * * *
(f) * * *
(xix) Part 245--Government Property. Use the clause at 252.245-
7005, Management and Reporting of Government Property, as prescribed in
245.107(4).
* * * * *
PART 245--GOVERNMENT PROPERTY
0
6. Amend section 245.102--
0
a. By revising paragraph (2);
0
b. In the paragraph (4) heading and paragraphs (4)(i) and (4)(ii)(A) by
removing ``Government-furnished property'' and adding ``GFP'' in their
places, respectively; and
0
c. By revising paragraph (5).
The revisions read as follows:
245.102 Policy.
* * * * *
(2) Government supply sources. When a contractor will be
responsible for preparing requisitioning documentation to acquire
Government-furnished property (GFP) from Government supply sources,
include in the contract the requirement to prepare the documentation in
accordance with DLM 4000.25, Defense Logistics Management Standards
(DLMS), Volume 2, Supply Standards and Procedures. Copies are available
from the address cited at PGI 251.102.
* * * * *
(5) Reporting Government property. It is DoD policy that all
Government property be reported in the GFP module or Wide Area WorkFlow
module of the Procurement Integrated Enterprise Environment (PIEE) as
required by the clause at 252.245-7005, Management and Reporting of
Government Property.
0
7. Revise section 245.103-72 to read as follows:
245.103-72 Government-furnished property attachments to solicitations
and awards.
When performance will require the use of GFP, contracting officers
shall include the GFP attachment to solicitations and awards. See PGI
245.103-72 for links to the formats and procedures for preparing the
GFP attachment.
0
8. Amend section 245.107 by--
0
a. Removing paragraphs (3), (4), and (6);
0
b. Redesignating paragraph (5) as paragraph (3); and
0
c. Adding a new paragraph (4).
The addition reads as follows:
245.107 Contract clauses.
* * * * *
(4) Use the clause at 252.245-7005, Management and Reporting of
Government Property, in solicitations and contracts, including
solicitations and contracts using FAR part 12 procedures for the
acquisition of commercial products and commercial services, that
contain the clause at FAR 52.245-1, Government Property.
245.201-70 [Removed]
0
9. Remove section 245.201-70.
245.201-71 [Redesignated as 245.201-70]
0
10. Redesignate section 245.201-71 as 245.201-70 and revise the newly
designated section to read as follows:
245.201-70 Security classification.
Follow the procedures at PGI 245.201-70 for security
classification.
0
11. Amend section 245.604-1--
0
a. In paragraph (1) by removing ``(formal or informal sales)'';
0
b. By revising the paragraph (2) heading;
0
c. In paragraph (3)(ii) by removing ``252.245-7004, Reporting,
Reutilization, and Disposal'' and adding ``252.245-7005, Management and
Reporting of Government Property'' in its place;
0
d. In the paragraph (4) heading and paragraphs (4)(i) introductory text
and (4)(ii) by removing ``Noncompetitive'' and adding ``Negotiated'' in
its place wherever it appears, and in paragraph (4)(iii) introductory
text by removing ``noncompetitive'' and adding ``negotiated'' in its
place; and
0
e. In paragraph (5) by removing ``Implementation of Trade Security
Controls'' and adding ``Implementation of Trade Security Controls
(TSCs) for Transfers of DoD Personal Property to Parties Outside DoD
Control'' in its place.
The revision reads as follows:
245.604-1 Sales procedures.
* * * * *
(2) Invitation for bid procedures. * * *
* * * * *
SUBPART 245.70 [Removed and Reserved]
0
12. Remove and reserve subpart 245.70 consisting of sections 245.7001
and 245.7001-1 through 245.7001-6.
PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
252.211-7003 [Amended]
0
13. Amend section 252.211-7003 introductory text by removing ``211.274-
6(a)(1)'' and adding ``211.274-5(a)'' in its place.
252.211-7007 [Removed and Reserved]
0
14. Remove and reserve section 252.211-7007.
252.211-7008 [Amended]
0
15. Amend section 252.211-7008 introductory text by removing ``211.274-
6(c)'' and adding ``211.274-5(b)'' in its place.
252.245-7001 [Removed and Reserved]
0
16. Remove and reserve section 252.245-7001.
252.245-7002 [Removed and Reserved]
0
17. Remove and reserve section 252.245-7002.
252.245-7003 [Amended]
0
18. Amend section 252.245-7003 introductory text by removing
``245.107(5)'' and adding ``245.107(3)'' in its place.
252.245-7004 [Removed and Reserved]
0
19. Remove and reserve section 252.245-7004.
0
20. Add section 252.245-7005 to read as follows:
252.245-7005 Management and Reporting of Government Property.
As prescribed in 245.107(4), use the following clause:
Management and Reporting of Government Property (Jan 2024)
(a) Definitions. As used in this clause--
[[Page 88538]]
As is means that the Government makes no warranty with respect
to the serviceability and/or suitability of the Government property
for contract performance and that the Government will not pay for
any repairs, replacement, and/or refurbishment of the property.
Commercial and Government Entity (CAGE) code means--
(1) An identifier assigned to entities located in the United
States or its outlying areas by the Defense Logistics Agency (DLA)
Commercial and Government Entity (CAGE) Branch to identify a
commercial or government entity by unique location; or
(2) An identifier assigned by a member of the North Atlantic
Treaty Organization (NATO) or by the NATO Support and Procurement
Agency (NSPA) to entities located outside the United States and its
outlying areas that the DLA Commercial and Government Entity (CAGE)
Branch records and maintains in the CAGE master file. This type of
code is known as a NATO CAGE (NCAGE) code.
Contractor-acquired property, contractor inventory, Government
property, Government-furnished property, and loss of Government
property have the meanings given in the Federal Acquisition
Regulation (FAR) 52.245-1, Government Property, clause of this
contract.
Demilitarization means the act of eliminating the functional
capabilities and inherent military design features from DoD personal
property. Methods and degree range from removal and destruction of
critical features to total destruction by cutting, tearing,
crushing, mangling, shredding, melting, burning, etc.
Export-controlled items has the meaning given in the Defense
Federal Acquisition Regulation Supplement (DFARS) 252.225-7048,
Export-Controlled Items, clause of this contract.
Ineligible transferee means an individual, an entity, or a
country--
(1) Excluded from Federal programs by the General Services
Administration as identified in the System for Award Management
Exclusions located at https://sam.gov;
(2) Delinquent on obligations to the U.S. Government under
surplus sales contracts;
(3) Designated by the Department of Defense as ineligible,
debarred, or suspended from defense contracts; or
(4) Subject to denial, debarment, or other sanctions under
export control laws and related laws and regulations, and orders
administered by the Department of State, the Department of Commerce,
the Department of Homeland Security, or the Department of the
Treasury.
Item unique identification means a system of assigning,
reporting, and marking DoD property with unique item identifiers
that have machine-readable data elements to distinguish an item from
all other like and unlike items.
National stock number means a 13-digit stock number used to
identify items of supply. It consists of a four-digit Federal Supply
Code and a nine-digit National Item Identification Number.
Reparable item means an item, typically in unserviceable
condition, furnished to the contractor for maintenance, repair,
modification, or overhaul.
Scrap means property that has no value except for its basic
material content. For purposes of demilitarization, scrap is defined
as recyclable waste and discarded materials derived from items that
have been rendered useless beyond repair, rehabilitation, or
restoration such that the item's original identity, utility, form,
fit, and function have been destroyed. Items can be classified as
scrap if processed by cutting, tearing, crushing, mangling,
shredding, or melting. Intact or recognizable components and parts
are not ``scrap.''
Serially-managed item means an item designated by DoD to be
uniquely tracked, controlled, or managed in maintenance, repair,
and/or supply systems by means of its serial number or unique item
identifier.
Serviceable or usable property means property with potential for
reutilization or sale as is or with minor repairs or alterations.
Supply condition code means a classification of materiel in
terms of readiness for issue and use or to identify action underway
to change the status of materiel.
Unique item identifier (UII) means a set of data elements marked
on an item that is globally unique and unambiguous. The term
includes a concatenated UII or a DoD recognized unique
identification equivalent.
(b) Reporting Government property. (1) The Contractor shall use
the Government Furnished Property (GFP) module of the Procurement
Integrated Enterprise Environment (PIEE) to--
(i) Report receipt of GFP;
(ii) Report the transfer of GFP to another DoD contract;
(iii) Report the shipment of GFP to the Government or to a
contractor. The GFP module generates the electronic equivalent of
the DD Form 1149, DD Form 1348-1, or other required shipping
documents;
(iv) Report when serially-managed items of GFP are incorporated
into a higher-level component, assembly, or end item;
(v) Report the loss of Government property in accordance with
paragraph (f)(1)(vii) of the FAR 52.245-1 clause of this contract;
(vi) Complete the plant clearance inventory schedule in
accordance with paragraph (j)(2) of the FAR 52.245-1 clause of this
contract, unless disposition instructions are otherwise included in
this contract. The GFP module generates the electronic equivalent of
the Standard Form (SF) 1428, Inventory Disposal Schedule; and
(vii) Submit a request to buy back or to convert to GFP items of
Contractor-acquired property.
(2) Information regarding the GFP module is available in the GFP
Module Vendor Guide at https://dodprocurementtoolbox.com/site-pages/gfp-resources. Users may also register for access to the GFP module
and obtain training on the PIEE home page at https://piee.eb.mil.
(3) In complying with paragraphs (b)(1)(i) through (iv) of this
clause, the Contractor shall report the updated status of the
property to the GFP module within 7 business days of the date the
change in status occurs, unless otherwise specified in the contract.
(4) The Contractor shall use Wide Area WorkFlow in accordance
with DFARS Appendix F, Material Inspection and Receiving Report, to
report the shipment of reparable items after completion of repair,
maintenance, modification, or overhaul.
(5) When Government property is in the possession of
subcontractors, the Contractor shall ensure that reporting is
accomplished using the data elements required in paragraph (c) of
this clause.
(c) Records of Government property. To facilitate reporting of
Government property to the GFP module, the Contractor's property
records, in addition to the requirements of paragraph (f)(1)(iii) of
the FAR 52.245-1 clause of this contract, shall enable recording of
the following data elements:
(1) National stock number (NSN). If an NSN is not available, use
either the combination of the manufacturer's CAGE code and part
number, or model number.
(2) CAGE code on the accountable Government contract.
(3) Received/sent (shipped) date.
(4) Accountable Government contract number.
(5) Serial number (for serially-managed items that do not have a
UII); and
(6) Supply condition code (only required for reporting of
reparable items). For information on Federal supply condition codes,
see DLM 4000.25, Defense Logistics Management Standards (DLMS),
Volume 2, Supply Standards and Procedures, Appendix 2.5 at https://www.dla.mil/HQ/InformationOperations/DLMS/elibrary/manuals/v2/.
(d) Marking, reporting, and UII registration of GFP
requirements. The Contractor--
(1) Shall assign the UII and mark the reparable items identified
as serially managed in the GFP attachment to this contract with an
item unique identification (IUID) data matrix, when the technical
drawing for the item is accessible to the Contractor and includes
IUID data matrix location and marking method;
(2) Shall report the UII either before or during shipment of the
repaired item;
(3) Is not required to mark items that were previously marked
with an IUID data matrix and registered in accordance with DFARS
252.211-7003, Item Unique Identification and Valuation; and
(4) Shall assign a new UII, then mark and register the item,
when the conditions of paragraph (d)(1) are met, if an item is found
to be marked but not registered in the IUID Registry.
(e) Disposing of Government property. (1) The Contractor shall
complete the plant clearance inventory schedule using the plant
clearance capability of the GFP module of the PIEE to generate an
electronic equivalent of the SF 1428, Inventory Disposal Schedule.
The plant clearance inventory schedule requires the following:
(i) If known, the applicable Federal supply code (FSC) for all
items, except items in scrap condition.
(ii) If known, the manufacturer name for all aircraft components
under Federal supply group 16 or 17 and FSCs 2620, 2810, 2915, 2925,
2935, 2945, 2995, 4920, 5821, 5826, 5841, 6340, and 6615.
[[Page 88539]]
(iii) The manufacturer name, make, model number, model year, and
serial number for all aircraft under FSCs 1510 and 1520.
(2) If the schedules are acceptable, the plant clearance officer
will confirm acceptance in the GFP module plant clearance
capability, which will transmit a notification to the Contractor.
The electronic acceptance is equivalent to the DD Form 1637, Notice
of Acceptance of Inventory.
(f) Demilitarization, mutilation, and destruction. If
demilitarization, mutilation, or destruction of contractor inventory
is required, the Contractor shall demilitarize, mutilate, or destroy
contractor inventory, in accordance with the terms and conditions of
the contract and consistent with Defense Demilitarization Manual,
DoD Manual (DoDM) 4160.28-M, edition in effect as of the date of
this contract. If the property is available for purchase, the plant
clearance officer may authorize the purchaser to demilitarize,
mutilate, or destroy as a condition of sale provided the property is
not inherently dangerous to public health and safety.
(g) Classified Contractor inventory. The Contractor shall
dispose of classified contractor inventory in accordance with
applicable security guides and regulations or as directed by the
Contracting Officer.
(h) Inherently dangerous Contractor inventory. Contractor
inventory that is dangerous to public health or safety shall not be
disposed of unless rendered innocuous or until adequate safeguards
are provided.
(i) Contractor inventory located in foreign countries.
Consistent with contract terms and conditions, property disposition
shall be in accordance with foreign and U.S. laws and regulations,
including laws and regulations involving export controls, host
nation requirements, final governing standards, and government-to-
government agreements. The Contractor's responsibility to comply
with all applicable laws and regulations regarding export-controlled
items exists independent of, and is not established or limited by,
the information provided by this clause.
(j) Disposal of scrap--(1) Contractor scrap procedures. (i) The
Contractor shall include, within its property management procedure,
a process for the accountability and management of Government-owned
scrap. The process shall, at a minimum, provide for the effective
and efficient disposition of scrap, including sales to scrap
dealers, so as to minimize costs, maximize sales proceeds, and
contain the necessary internal controls for mitigating the improper
release of non-scrap property.
(ii) The Contractor may commingle Government and contractor-
owned scrap and provide routine disposal of scrap, with plant
clearance officer concurrence, when determined to be effective and
efficient.
(2) Scrap warranty. The plant clearance officer may require the
Contractor to secure from scrap buyers a DD Form 1639, Scrap
Warranty.
(k) Sale of surplus Contractor inventory--(1)Sales procedures.
(i) The Contractor shall conduct sales of contractor inventory (both
useable property and scrap) in accordance with the requirements of
this contract and plant clearance officer direction. The Contractor
shall include in its invitation for bids the sales terms and
conditions provided by the plant clearance officer.
(ii) The Contractor may conduct internet-based sales, to include
use of a third party.
(iii) If the Contractor wishes to bid on the sale, the
Contractor or its employees shall submit bids to the plant clearance
officer prior to soliciting bids from other prospective bidders.
(iv) The Contractor shall solicit bids to obtain adequate
competition. Negotiated sales are subject to obtaining such
competition as is feasible under the circumstances of the negotiated
sale.
(v) The Contractor shall solicit bids at least 15 calendar days
before bid opening to allow adequate opportunity to inspect the
property and prepare bids.
(vi) For large sales, the Contractor may use summary lists of
items offered as bid sheets with detailed descriptions attached.
(vii) In addition to providing notice of the proposed sale to
prospective bidders, the Contractor may, when the results are
expected to justify the additional expense, display a notice of the
proposed sale in appropriate public places, e.g., publish a sales
notice on the internet, in appropriate trade journals or magazines,
and in local newspapers.
(viii) The plant clearance officer or designated Government
representative will witness the bid opening. The Contractor shall
submit the bid abstract in electronic format to the plant clearance
officer within 2 days of bid opening. If the Contractor is unable to
submit the bid abstract electronically, the Contractor may submit 2
copies of the abstract manually within 2 days of bid opening. The
plant clearance officer will not approve award to any bidder who is
an ineligible transferee.
(2) Required terms and conditions for sales contracts. The
Contractor shall include the following terms and conditions in sales
contracts:
(i) For sales contracts or other documents transferring title:
``The Purchaser certifies that the property covered by this
contract will be used in [insert name of country]. In the event of
resale or export by the Purchaser of any of the property, the
Purchaser agrees to obtain the appropriate U.S. and foreign export
or re-export license approval.''
(ii) For sales contracts that require demilitarization,
mutilation, or destruction of property:
``The following items [insert list provided by plant clearance
officer] require demilitarization, mutilation, or destruction by the
Purchaser. Additional instructions are provided in accordance with
Defense Demilitarization Manual, DoDM 4160.28-M, edition in effect
as of the date of this sales contract. A Government representative
will certify and verify demilitarization of items. Prepare
demilitarization certificates in accordance with DoDM 4160.28,
Volume 2, section 4.5, DEMIL Certificate (see figure 2, Example
DEMIL Certificate).''
(iii) Removal and title transfer:
``Property requiring demilitarization shall not be removed, and
title shall not pass to the Purchaser, until demilitarization has
been accomplished and verified by a Government representative.''
(iv) Assumption of cost incident to demilitarization:
``The Purchaser agrees to assume all costs incident to the
demilitarization and to restore the working area to its present
condition after removing the demilitarized property.''
(v) Failure to demilitarize:
``If the Purchaser fails to demilitarize, mutilate, or destroy
the property as specified in the sales contract, the Contractor may,
upon giving 10 days written notice to the Purchaser--
(A) Repossess, demilitarize, and return the property to the
Purchaser, in which case the Purchaser hereby agrees to pay to the
Contractor, prior to the return of the property, all costs incurred
by the Contractor in repossessing, demilitarizing, and returning the
property;
(B) Repossess, demilitarize, and resell the property, and charge
the defaulting Purchaser with all costs incurred by the Contractor.
The Contractor shall deduct these costs from the purchase price and
refund the balance of the purchase price, if any, to the Purchaser.
In the event the costs exceed the purchase price, the defaulting
Purchaser hereby agrees to pay these costs to the Contractor; or
(C) Repossess and resell the property under similar terms and
conditions, and charge the defaulting Purchaser with all costs
incurred by the Contractor. The Contractor shall deduct these costs
from the original purchase price and refund the balance of the
purchase price, if any, to the defaulting Purchaser. Should the
excess costs to the Contractor exceed the purchase price, the
defaulting Purchaser hereby agrees to pay these costs to the
Contractor.''
(l) Restrictions on purchase or retention of Contractor
inventory. The Contractor may not knowingly sell the inventory to
any person or that person's agent, employee, or household member if
that person--
(1) Is a civilian employee of DoD or the U.S. Coast Guard;
(2) Is a member of the Armed Forces of the United States,
including the U.S. Coast Guard; or
(3) Has any functional or supervisory responsibilities for or
within DoD's property disposal, disposition, or plant clearance
programs or for the disposal of contractor inventory.
(m) Proceeds from sales of surplus property. Unless otherwise
provided in the contract, the proceeds of any sale, purchase, or
retention shall be--
(1) Forwarded to the Contracting Officer;
(2) Credited to the Government as part of the settlement
agreement pursuant to the termination of the contract;
(3) Credited to the price or cost of the contract; or
(4) Applied as otherwise directed by the Contracting Officer.
(End of clause)
[FR Doc. 2023-27939 Filed 12-21-23; 8:45 am]
BILLING CODE 6001-FR-P