45.104 -- Review and Correction of Contractor's Property Control Systems.
(c) If it is necessary to withdraw approval of contractor's property control system, the sample letter at 53.9009 may be used, modified as appropriate.
45.190 -- Leasing Personal Property
(a) It is Army policy to lease personal property under the control of the Department of the Army, not for the time needed for public use, and not excess property (as defined by Title 40 United States Code, section 472), upon the terms stated in (c), when it will promote the national defense or be in the public interest.
(b) Pursuant to 10 U.S.C. 2667, the ASA(RDA) has delegated to HCAs, with authority to redelegate, the authority to lease industrial property within the scope of the considerations in (a), provided that such leases and their authorization conform to the applicable provisions of FAR Part 45 and DFARS Part 245, and AR 700-131.
(c) Each lease may not be more than 5 years and shall --
(i) Permit the Secretary of the Army to revoke the lease at any time;
(ii) With regard to property subject to FAR Part 45 and DFARS Part 245, be governed by the provisions thereof. With regard to all other industrial property, each lease shall provide that the lessee will pay a fair monetary rental. Fair monetary rental shall be determined on the basis of prevailing commercial rates or computed in accordance with sound commercial accounting practices for the fixing of rental on such property including a return on capital investment and administrative cost as well as depreciation. Single or multiple shift operations as proposed by the lessee will be considered in establishing fair monetary rental. The rental shall, in any event, be such as to prevent the lessee from obtaining any "unfair competitive advantage" over competitors by reason of such lease;
(iii) Provide that the lessee shall bear the expense of removing, packing, and shipping of the leased property and also the expense of returning and reinstalling the property or processing it for extended storage upon expiration or termination of the lease;
(iv) Provide that the lessee will maintain the leased property in good operating condition and will return it upon the expiration or termination of the lease in as good condition as that existing at the commencement of the lease, as subsequently improved, or as it should have been improved under the terms of the lease, less ordinary wear and tear or within specified tolerance limits. However, leases of railway equipment may provide for assumption of maintenance responsibility by the lessor, provided also that mileage earnings shall be retained by the Government;
(v) Provide that the lessee will make no changes or alterations to the leased property except with the consent of the Government;
(vi) Provide that, if and to the extent that the leased property is later made taxable by State or local governments under an act of Congress, the lease shall be renegotiated; and
(vii) Recite that it is executed under the authority of Title 10, United States Code, Section 2667, as implemented by AR 700-131, Loan and Lease of Army Materiel.
(d) Leases of industrial property not conforming to (c) shall, prior to execution, be submitted to the ASA(RDA) for approval.
Subpart 45.3 -- Providing Government Property to Contractors
Offering or providing any Government property to contractors must be justified in a written D&F which clearly demonstrates that it will be in the best interest of the Government. The D&F must be prepared by the requiring activity and, unless it is for signature at the OSD level (see 45.302-1(a)(4)), must be signed by the program/project manager, activity/installation commander or District Engineer, as appropriate. The D&F shall be included in the contract file. (See FAR 45.302-45.310 and DFARS 245.302-245.310 for rules governing specific types of property and circumstances.)
45.302 -- Providing Facilities.
(a)
(4) The D&F must include a --
(i) Description of the type of end item or service to be produced or provided;
(ii) Cost benefit analysis which addresses the cost of storing, handling, administering, safeguarding, maintaining/servicing and replacing property; liability to the Government if facilities are not available or serviceable; and the impact of providing Government-owned facilities on the contractor's incentive to make future investments in contractor-owned facilities;
(iii) Description of the methods and resources to be used in property administration to ensure the contractor will maintain severability and prevent commingling; and
(iv) Discussion of the impact on mobilization planning.
Coordinate D&Fs for facilities being provided in connection with installation support functions with the installation commander or District Engineer, as appropriate.
45.309 -- Providing Government Production and Research Property Under Special Restrictions.
See 35.014-90 for special requirements for research and development contracts.
45.391 -- Documentation of Government Property in Solicitations and Contracts.
(a) All solicitations offering Government property for use by contractors and all contracts under which the Government is to furnish property to contractors must contain specific identification of all Government property to be offered or furnished, to include nomenclature, quantity, acquisition value and, where applicable, model number, serial number and year of manufacture.
(b) Contracting officers shall ensure that changes to Government property made over time are reflected by modifications to the contract.
45.392 -- Maintenance of Records of Contracts Bearing Government Property.
Each contracting activity shall maintain a record of all open contracts which provide for Government property to be furnished to or acquired by the contractor.
Subpart 45.4 -- Contractor Use and Rental of Government Property
The contracting officer shall document the contract file to show the basis for rent-free use of Government property.
45.407 -- Non-Government Use of Plant Equipment.
(a)
(i) Approval authority is delegated to the HCAs without power of redelegation. Each request for approval shall include at least the following information:
(ii) How the Government's interest is served. Identify and justify use of one or more of the criteria in FAR 45.407(b). Support with quantitative data.
(iii) How the percentage of non-Government use was computed, to include the following (account for 100 percent of available time):
(a) Total available time.
(b) Government-use time.
(c) Idle time.
(iv) When a rental charge is proposed, the amount of the charge and how it was computed. If charge is to be different from prescribed rates, provide justification.
(v) When rent-free use is proposed, both tangible and intangible consideration passing to the Government and the contractor.
(vi) Whether or not the contractor will gain a competitive advantage if request is approved. Explain.
(vii) The extent to which the contractor will be harmed if the request is denied.
(viii) How the Industrial Preparedness Program will be adversely affected if the request is denied.
Subpart 45.5 -- Management of Government Property in the Possession of Contractors
45.503 -- Relief From Responsibility.
(a)
(5) This written determination by the contracting officer serves the same purpose as a Report of Survey (see AR 735-5) in a Military Property Account. The contracting officer shall document the contract file to show the circumstances surrounding the loss or damage and the property administrator's and contracting officer's actions to investigate the case. Cite the specific contract terms on which the determination is based, and include all the information required to fully support the determination.
45.504 -- Contractor's Liability.
When the contracting officer determines that the Government is due compensation, the contracting officer shall issue a written request (demand) to the contractor. Send a copy to the disbursing officer and a copy to the property administrator.
45.505 -- Records and Reports of Government Property.
(a) When the contractor's property control records are not used as the Government's official property records, the property administrator shall maintain the records and reports specified in FAR 45.505, DFARS 245.505, and DoD 4161-2-M that are necessary for effective property control, to include DD Form 1662.
45.505-14 -- Reports of Government Property.
(1) For contracts administered by the Army, property administrators shall forward one copy of each DD Form 1662 (RCS: DD-ACQ(A) 1087) to the U.S. Army Materiel Systems Analysis Activity, Attn: AMXSY-LR, Rock Island, IL 61299-7260 by 5 November each year. The transmittal letter shall include the following:
(A) Reasons for substantial increase or decrease in any of the reportable categories.
(B) Name and telephone number (DSN) of Government point of contact.
(90) Contracting activities shall use the Annual Summary Report of DoD Property in the Custody of Contractors furnished by the IEA during the second quarter of each fiscal year to actively manage the Government property they have entrusted to contractors. As a minimum, contracting activities shall --
(a) Compare the summary report with records kept in accordance with 45.392 and any other available records to detect --
(1) 777777Contracts with Government property for which no DD Form 1662 has been submitted;
(2) Contracts reporting Government property via DD Form 1662 but not in the records required by 45.392; and
(3) Contracts that are completed.
(b) If contracts are missing from the annual summary report, contracting activities shall, within 60 days of receipt of the summary, send written inquiry to the cognizant ACO at the DCMC regarding nonsubmission of the DD Form 1662 and/or status of contract completion and availability of Government property for reutilization, as appropriate.
(c)
(3) The standard Departmental registration system numbering is applicable to the following equipment:
(A) Motor vehicles (AR 58-1).
(B) Materials handling equipment (AR 708-1).
(C) Railroad equipment (AR 56-3).
45.508 -- Physical Inventories.
45.508-1 -- Inventories Upon Termination or Completion.
(b) Exception.
(i) The property administrator shall request the contractor to furnish the following at least 120 days prior to contract completion:
(A) A listing of all Government property required to support contractual follow-on requirements or other known requirements, including spares and mobilization readiness requirements. This listing shall identify the category, quantity, and acquisition cost of such property, i.e., IPE, 0PE, ST, STE, agency-peculiar property, and material.
(B) Justification for retention of any Government property not currently in use (see FAR 45.102(f)).
(ii) Upon receipt of the contractor's submission, the property administrator shall:
(A) Review and verify the contractor's stated Government property requirements, with assistance from other technical specialists when required.
(B) Forward a copy of the contractor's follow-on contract requirements list and retention justification statement, together with findings and recommendation, to the contracting officer.
(iii) Final decisions with respect to transfer of Government property to follow-on contracts shall be made by the contracting officer within 90 days after receipt of the contractor's list and justification statement. If transfer approval or other disposition instructions have not been received by the end of the 90-day period, the property administrator shall issue a follow-up which states, "Your failure to respond within 30 calendar days of the date of this follow-up inquiry will be interpreted to mean that the Government property in question should be disposed of in accordance with FAR 45.603."
(iv) Authorized transfer of Government property to a follow-on contract shall be accomplished by contract modifications which delete the property from the completed contract and incorporate it in the follow-on contract. The modifications shall include a list of the type, quantity and acquisition cost of property being transferred.
(v) The property administrator and the ACO should be sure that all property being transferred has been provided by the Government or acquired by the contractor under an appropriate contract type, i.e., facilities normally should be provided or acquired under a facilities contract as required by FAR 45.302-2 and 45.302-3. If facilities were provided to or acquired by the contractor improperly, the ACO shall notify the PCO and request the execution of a facilities contract or a contract modification incorporating the property in an existing facilities contract. When warranted, the ACO shall initiate action to recoup inappropriate fees or profits paid when facilities were provided to or acquired by the contractor improperly.
45.511 -- Audit of Property Control System.
See AR 36-5 for information on audits. Requests for waivers and deviations to accounting procedures for Government property furnished to, or acquired by, contractors under the terms of their contract shall be submitted in accordance with AR 735-5.
Subpart 45.6 -- Reporting, Redistribution, and Disposal of Contractor Inventory
45.612 -- Removal and Storage.
45.612-3 -- Special storage at Government's expense.
(a) Determinations that contractor inventory may be stored at the Government's expense for one year or more must be approved at a level higher than the contracting officer.
45.690 -- Reutilization of Government Property.
Immediately upon notification of contract completion, contract termination or Government property being reported as excess, the PCO shall query the owner of the property for instructions regarding reutilization or disposal of the property.