ROLES AND RESPONSIBILITIES OF CONTRACTING OFFICER

For GOVERNMENT PROPERTY

Presented byDr. Douglas N. Goetz, CPPM, CFDr. Douglas N. Goetz, CPPM, CFProfessor of Contract Management Retired – Now IntermittentDefense Acquisition UniversityPresident, GP Consultants LLC

GOVERNMENT PROPERTYTOPICAL OUTLINE

OVERVIEW OF GOVERNMENT PROPERTYFAR Part 45 and Part 52

Policy requirements of FAR Part 45The Government Property Clauses

Contracting Officer RequirementsPre-award ResponsibilitiesPost-award Responsibilities

Some DO’S and DON’TS from a Contracting Perspective

GOVERNMENT PROPERTYFAR Part 45 Sets forth Policy and Procedures for

Providing Government Property (GP)Definitions peculiar to GP – 45.101Policy on Providing – 45.102Contractor PMS Compliance – 45.105Contract Clauses for GP – 45.107Solicitation & Evaluation Procedures re: GP – 45.2Use and Rental of GP – 45.3Title to GP – 45.4Support Property Administration for GP – 45.5Reporting, Reutilization and Disposal of GP – 45.6

GOVERNMENT PROPERTYThe GP Clauses – Reduced from 19 to 3

52.245-1 GP ClauseALT I: FP for competitive contracts (Full Risk of Loss)ALT II: CR for the conduct of basic or applied research

at nonprofit institutions of higher education or nonprofit organizations for scientific research.

52.245-2 GP Installation Operation Services52.245-9 Use and Charges

SO WHAT?!?!?If contracting actions are done improperly at the

beginning of the contract – they will haunt and potentially hurt us through out the performance of the contract.

Contracting Officers play a CRITICAL ROLE in the property management for Government property in the possession of Contractors

CONTRACTING OFFICER RESPONSIBILITIES

PRE-AWARD

DETERMINATION TO PROVIDE Government Property

Overarching Policy – 45.102Contractors are ordinarily required to

furnish ALL PROPERTYALL PROPERTY Necessary to perform Government contracts

DETERMINATION TO PROVIDE GOVERNMENT PROPERTYFAR 45.102

(b) CONTRACTING OFFICERS SHALL PROVIDE PROPERTY TO CONTRACTORS ONLY WHEN IT IS CLEARLY DEMONSTRATED--

DETERMINATION TO PROVIDE GP

(1) To be in the Government’s Best Interest;Examples may include but are not limited to expedited delivery, increased competition, supporting small business, etc.

(2) That the overall benefit to the procurement significantly outweighs the increased cost of administration, including ultimate property disposal;

COs MUST consider the costs to repair GP over its useful life based upon the age and condition of the GP to be potentially furnished, the potential cost to replace lost, damaged or destroyed GP, and the cost associated with the disposition of the GP INCLUDING items such as HAZARDOUS WASTES, EXPLOSIVES, DEMILITARIZATION, etc.

DETERMINATION TO PROVIDE GP(3) That providing the property does not substantially

increase the Government’s risk; andCOs may obtain information from the cognizant

PA of the potential contractor’s risk assessment rating as it applies to the management of GP

(4) That Government requirements cannot otherwise be metFor Example, Sole Source procurements,

emergency procurements, contingency contracting, etc.

DETERMINATION TO PROVIDE GPBe Careful!!!

45.102 (c) The contractor’s inability or unwillingness to supply its own resources is not a sufficient reason for the furnishing or acquisition of property

DETERMINATION TO PROVIDE GPYes, I know – it has always been EASY to FURNISH

Government Property (GP).We say, “It’s cheaper if we provide GFP!”We need to consider ALL of the variables associated

with furnishing GFP!As we are trying to REDUCE, to maximum extent

practicable, the furnishing of GP!So, ya’ gotta think about it!!!

CO DETERMINATION TO PROVIDE GP

Providing Government Furnished Property must be a conscious

deliberate well thought out ACQUISITION PLANNING

Decision!There are Natural Consequences.

INCLUSION OF GFP LISTINGSin the Solicitation

OK, so the CO has decided to provide GFPYou must include a LISTING(s), of that PROPOSED

GFP including the following Data:(1) The name, part number and description, manufacturer, model number, and National

Stock Number (if needed for additional item identification tracking and/or disposition);(2) Quantity/unit of measure;(3) Unit acquisition cost;(4) Unique-Item Identifier or equivalent (if available and necessary for individual item

tracking); and(5) A statement as to whether the property is to be furnished in an “as-is” condition and

instructions for physical inspection.

Ahhhh – but there is MORE…CO REQUESTS OF OFFERORSTWO ITEMS:

INFORMATION RELATED TO GP ALREADY IN THE OFFEROR’S POSSESSION

PROPERTY MANAGEMENT PLAN

CO REQUESTS OF OFFERORS45.201(c)

CO shall REQUIRE Contractors to Submit the following information

with their offers— (1) A list or description of all Government property that the offeror or its

subcontractors propose to use on a rent-free basis. The list shall identify the accountable

contract under which the property is held and the authorization for its use (from the

contracting officer having cognizance of the property);

(2) The dates during which the property will be available for use (including the first,

last, and all intervening months) and, for any property that will be used concurrently in

performing two or more contracts, the amounts of the respective uses in sufficient detail to

support prorating the rent;

(3) The amount of rent that would otherwise be charged in accordance with FAR

52.245-9, Use and Charges; and

OFFEROR IS REQUIRED TO SUBMIT THEIR PROPERTY MANAGEMENT PLAN45.201(c)(4)

CO is required to ask the Contractor for a Property Management Plan (PMP)Note – The FAR Part 45 rewrite should have created a

solicitation provision. We’re working on it now.PMPs are to be Executive Level Documents where

the contractor BRIEFLY describes its Property Management Processes

WHAT MAY BE IN A PMPOfferor may discuss:

Status of current Property Management SystemVoluntary Consensus Standards (VCS) in place or

proposed for useIndustry Leading Practices (ILP) in place or

proposed for useOther performance indicators, Metrics, Audit

Results, etc.

WHAT SHOULD THE CO DO WITH THE PMP?

Evaluate it for adequacy in terms of managing GP while in the Contractor’s possessionPast Performance Indicator

REAL WORLD APPLICATIONUse the Services of the Government Property

Administrator cognizant of that contractor/offeror (Generally DCMA – but may be others)

Eliminating Competitive AdvantageFor Fixed Price Contracts

Use a Rental Equivalent Evaluation Factor (REEF)Computed through the Use and Charges ClauseReduce Offer by REEF when comparing Contracting

WITH GP versus WITHOUTFor Cost Reimbursement type

Sorta’ a moot point

INCLUSION of the CORRECT CLAUSES45.107

Where there is GP under a contract --

CO MUST USE BOTH:FAR 52.245-1 and FAR 52.245-9

Government Property Clause and Use and Charges Clause

BUT/EXCEPT!!! No GP clauses required for property repair

contracts/purchase orders with GP below the Simplified Acquisition Threshold

CLAUSAL VARIATIONSFULL RISK OF LOSS

MUST USE THE ALT I to FAR 52.245-1For COMPETITIVE FP Contracts

When No Cost or Pricing Data is RequiredWITH NON-PROFIT ENTITIES

MUST USE THE ALT II to FAR 52.245-1Provides Vesting of TITLE to Contractor Acquired

Property in the Non-Profit

FUNDING FOR ACTIONSWhen the Equitable Adjustment portion

of the GP Clause is activatedWhen GFP is:

Not suitable for useNot delivered in a Timely basisDecreased

When GFP requires repair beyond NORMAL Maintenance

FUNDING FOR ACTIONSFunding for replacing LOST, DAMAGED,

DESTROYED, or STOLEN Government Property.Yes, contractors DO damage GP!

And, in mostAnd, in mostCases, the Cases, the

GovernmentGovernmentActs as a Acts as a

Self Insurer/Self Insurer/INSURANCEINSURANCE

COSTSCOSTS

FUNDING FOR ACTIONSFUNDING DISPOSAL ACTIONS

Including: DEMILITARIZATION DISPOSAL OF HAZARDOUS WASTES

NOTE: Contractors are ALREADY REQUIRED by the contract to “prepare for shipment and deliver FOB Origin.” Anything AFTER THIS is the Government’s Responsibility.

FUNDING FOR STORAGE“What are you going to do with that GP when the Contract

is complete?”

POST AWARD CO ISSUES

WHAT THE ACO (Sometimes/Often in coordination with

the PCO) needs to know

and do regarding GP!

POST AWARD CO RESPONSIBILITIESFAR PART 42 Discusses the Contract

Administration Delegation:42.302(a)(26) through (30)

42.302(a)(26) through (30)(26) Perform property administration (see Part 45).(27) [Reserved](28) Perform necessary screening, redistribution, and

disposal of contractor inventory.(29) Issue contract modifications requiring the contractor to

provide packing, crating, and handling services on excess Government property. When the ACO determines it to be in the Government’s interests, the services may be secured from a contractor other than the contractor in possession of the property.

42.302(a)(26) through (30)(30) When contractors request Government property—

(i) Evaluate the contractor’s requests for Government property and for changes to existing Government property and provide appropriate recommendations to the contracting officer;

(ii) Ensure required screening of Government property before acquisition by the contractor;

(iii) Approve use of Government property on a noninterference basis in accordance with the clause at 52.245-9, Use and Charges;

(iv) Ensure payment by the contractor of any rental due; and

(v) Ensure reporting of items no longer needed for Government production.

EMBEDDED WITHIN FAR 42…

ALL of the ACTIONS within FAR PART 45 that require

the CO’s AUTHORITY!And there are a bunch!

POST AWARD CO RESPONSIBILITIES

A QUICK LISTING of RESPONSIBILITIESEquitable AdjustmentsPMS ActionsLiability ActionsMaintenance Funding ActionsModification of Contracts for Changing GPModification of Contracts for Authorizing USECollection of Rent

ACO ResponsibilitiesEquitable Adjustment

IAW 52.245-1(d) “Government Furnished Property” and

52.245-1(i) “Equitable Adjustment” FOR:

GFP Not Suitable for Use, Late Delivery, Decrease, or Repair (Beyond normal Maintenance)

ACO Responsibilities

PMS ActionsCorrection of the contractor’s PMS

FAR 45.105Request the contractor to correct any

deficiencies in their PMS.Failure may result in revocation of the

Government’s Assumption of Risk or other Remedies

ACO ResponsibilitiesLiability Actions

ONE RESPONSIBILITY & TWO AUTHORITIESFUND for the REPAIR/REPLACEMENT of GP that

was LDD&T (PCO/ACO both involved)REVOKE the Government’s Assumption of Risk (FAR

45.104 and 52.245-1(h)(iii) “HOLD” the contractor Liable for the Loss, Damage,

Destruction or Theft of GP In accordance with the Terms and Conditions of the contract. Full versus Limited Risk of Loss

ACO ResponsibilitiesMaintenance Funding Actions

52.245-1(f)(1)(ix)Contractor is responsible for “Normal”

maintenance costs.Government is responsible for “Capital”

type RehabilitationPCO/ACO both involved

ACO ResponsibilitiesModification of Contract for Changing GP

Transfer of Accountability FAR 45.106MODS to BOTH Losing and Gaining Contracts

PCO/ACO Both Involved

Modification of Contract when EXISTING GP in Contractor’s possession needs to be Modified

ACO Responsibilities

Modification of Contracts for Authorizing USE (Post Award Utilization Requests)Contractor authorized to USE GP on the instant

contractAny other use requires AUTHORIZATION to

BOTHACCOUNTABLE ContractRequesting USING Contract

ACO ResponsibilitiesCollection of Rent

FAR 52.245-9Must be Authorized by the CO to USERental Requests Submitted to the ACOACO Verifies Rental ComputationACO Collects Rent payable to the

“Treasurer of the United States” (Not the ACO) (sorry… small attempt at humor)

ACO Responsibilities

FUND FOR DISPOSAL OF GPContractor, for GP, is required to:

PREPARE FOR SHIPMENTDELIVER FOB Point

Government MAY have to Pay for the Disposal of GP That May:Be HazardousRequire DemilitarizationExceed Contractually Authorized PROCESSING

TIME (120 Days) (Yes, the Government may have to PAY!)

Some DO’S and DON’TS for Contracting Professionals

DO have the Program Manager or Requiring Activity Provide JUSTIFICATION to Support the Providing of GPFAR 45.102 (b)(1) & (2) & (3) and (4)

Some DO’S and DON’TS for Contracting Officers

DON’T agree to furnish Government Property unless you meet the policy requirements of FAR 45.102And DOCUMENT the ACTIONThis is a “MONETARY” Decision ($$$)

DO Ensure the PROPER LISTING of GFPFurnished WITH Government WarrantiesFurnished “AS IS”Furnished under FAR 52.245-2

As is, where is, no warranties

THREEPOTENTIAL

LISTS of GFP

Some DO’S and DON’TS for Contracting Officers

DO Ensure That The GP Clause Is In The Contract (When

Applicable)

DON’T Direct The Contractor To Acquire Property For The

Government That May Normally Be The Contractor’s

Responsibility (FAR Part 31 and CAS Issue)

DO Mod The Contract When Adding Or Decreasing GP

Some DO’S and DON’TS for Contracting Officers DON’T Ask The Contractor To “Ship

In Place” Without Establishing Contractual Accountability (Due To Liability Issues)

When On Base Or Installation DO Specify DRMO Use Versus GP Clause Disposition Process.

Some DO’S and DON’TS for Contracting Officers

DON’T “GIVE” GP To The Contractor at Contract Completion Because Your Contract No Longer Needs It…Violation Of Law (Federal Property And

Administrative Services Act Of 1949) DON’T Abandon GP To The Contractor When

The Contractor Is Performing On A Government Base Or Installation.

Some DO’S and DON’TS for Contracting Officers

DON’T Direct The Contractor To Retain GP After Contract Completion Because They “MAY” Be Awarded Another Government Contract.

Do Contact the Appropriate Government Property Administrator If You Have Technical Questions About GP in the contractor’s possession!

So… What have we covered?OVERVIEW OF GOVERNMENT

PROPERTYFAR Part 45 and Part 52

Policy requirements of FAR Part 45The Government Property Clauses

Contracting Officer RequirementsPre-award ResponsibilitiesPost-award Responsibilities

Some DO’S and DON’TS from a Contracting Perspective

Thank you!

Dr. Douglas N. Goetz, CPPM, CFOLD DAU PROFESSOR

Recently Retired – now Rehired.President of the newly incorporated GP Associates.

Chief cook and bottle washer at Home, responsible for all “honeydue” requirements – though my wife has told me

to stay out of HER house!

233 N. Maple AveFairborn, OH 45324

GPDOCTOR@ATT.NET1- 888-576-0200