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Government Property

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Standard Operating Procedure Table of Contents

Purpose

To provide procedures for authorizing government property under a contract. Government property means all property that is owned by or leased to the government or acquired by the government under the terms of a contract.

Procedure

FAR Part 45 prescribes policies and procedures for providing government property to contractors, as well as contractors' management and use of government property. It also prescribes policies and procedures for reporting, redistributing, and disposing of contractor inventory. NIH's Office of Logistics and Acquisition Operations (OLAO) provides additional information.

There are two types of government property that may be included on a contract. The two types are government-furnished property and contractor-acquired property

Government-furnished property means all property owned or leased by the government. Government property includes both government-furnished property and contractor-acquired property. Government property also includes material, equipment, special tooling, special test equipment, and real property. Government property does not include intellectual property and software.

Contractor-acquired property means property acquired, fabricated, or otherwise provided by the contractor for performing a contract and to which the government has title.  

It is HHS policy that contractors provide all property necessary for contract performance. However, an exception may be granted to provide government property (government-furnished or contractor-acquired), but only when approved by the contracting officer.  

Contracting officers shall provide property to contractors only if it is clearly demonstrated:
  • To be in the government’s best interest.
  • That the overall benefit to the acquisition significantly outweighs the increased cost of administration, including ultimate property disposal.
  • That providing the property does not substantially increase the government’s assumption of risk.
  • That government requirements cannot otherwise be met.

Contracting officers determine whether to provide contractors or subcontractors with government property based on these criteria with input from the contracting officer's representative (COR) and NIH property administrator. The contractor’s inability or unwillingness to supply its own resources is not sufficient reason for the furnishing or acquisition of property. 

If government property is requested by a successful offeror prior to award and is authorized by the contracting officer, the property will be included in the contract.  After award, contracting officers determine whether to use a contract modification or a contracting officer's authorization to authorize newly acquired government property. The authorization process is the same for processing pre-award or post-award property requests.

Offerors or Contractors

  • If an offeror is requesting that government property be provided, that request must be included in the business proposal. If a contractor requires government property, then a written request must be signed by an official that can bind the organization and submitted to the contracting officer.  All requests for government property must provide a written justification including:
    • A statement explaining why the property is essential to contract performance and whether the property will be used exclusively for the contract.  If the equipment is not to be used exclusively for the contract, e.g., shared equipment, provide written information on allocation of shared use.
    • A description of other alternatives (e.g., purchase or lease) pursued and why they are not viable options.
    • A statement explaining why the required property will not be provided by the contractor.
    • Price quotes from at least three vendors or a sole source justification.
    • Documentation of whether there are funds in the contract to cover the purchase.
  • Comply with terms and conditions of the government property clause included in Section I of the contract and all other terms and conditions of the contract regarding government property.
  • Include all government property under the contract on your annual property inventory report.

Contracting Officer's Representatives (COR)

  • Review offeror or contractor requests for government property to determine programmatic need and recommend approval or disapproval to the contracting officer.
  • At three months before the completion of a contract, provide the contracting officer with instructions for the disposition of government property.

Contract Specialists or Contracting Officers

  • Review government property request and forward to the COR to determine programmatic need.
  • If the contracting officer's representative (COR) recommends approval of a request for government property, and contract funds are available, email the NIH property administrator to initiate and document the excess property screening process. The email should include a description of the equipment being purchased, with part numbers and price. The emails will be printed, verified for availability, stamped, and faxed back to the requestor.  
  • After receiving screening certifications from the NIH property administrator, the contracting officer or contract specialist authorizes the purchase by preparing and signing a contracting officer's authorization, by letter or Form NIH 2321, or preparing a contract modification.   
  • Place contractor request for government property, with signed excess property screening certification, and contracting officer's authorization or contract modification in the official contract file.
  • Obtain and review annual property inventory report from the contractor to ensure all authorized property items have been added and updated. File annual property inventory report in the official contract file.
  • At least three months before contract is completed, take the following actions:
    • Obtain government property disposition instructions from the COR.
    • Provide disposition instructions to the contractor.
    • Document the file accordingly, ensuring maximum practical reutilization of government property.

Contacts

See the Office of Acquisitions staff listing for the appropriate contract specialist.

If you have knowledge to share or want more information on this topic, email deaweb@niaid.nih.gov with the title of this page or its URL and your question or comment. Thanks for helping us clarify and expand our knowledge base.

Links

FAR Part 45, Government Property

NIH Manual Chapter 26101-25-2, Personal Property Management Guide

SF-30, Amendment of Solicitation/Modification of Contract

Form NIH 2321

Contract Closeout SOP

Contract Modifications SOP

Contracting Officer SOP

Contracting Officer's Representative (COR) SOP

 

Last Updated October 02, 2014

Last Reviewed October 02, 2014