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    Can you just give Government Property to a Contractor without including it on the contract? I saw a FAR clause 52.245-2, which states that the clause shall be inserted in fixed-price service contracts to be performed on a Government installation when Government furnished property will be provided for initial provisioning only and the Government is not responsible for repair or replacement. However, this clause requires the Government to list the Government Property provided under the clause. So that the Government doesn't have to come up with the complete list of Government Property to be provided, can the Government not go through the contract and instead just hand over the equipment? Thanks!


    Answer

    No, you cannot “just give Government Property to a Contractor without including it on the contract” when FAR 52.245-2 is a required clause that must be included in that contract.  The Government must not “hand over the equipment to the new contractor, at no cost, and not through the contract” because it may give a contractor an unfair competitive advantage.

    According to the dictionary, to “give” is to “present voluntarily and without expecting compensation; bestow: to give a birthday present to someone…”  A better choice of words used by The Federal Acquisition Regulation is the word “provide.”


    FAR 52.245-2 requires a listing of Government Property to be provided in an “as-is, where is” condition (read paragraph (a) and (e) of this clause).  The Contracting Officer (CO) must include this clause in contracts for Installation Operation Services, in fixed-price service contracts that will be performed on a Government installation “when Government furnished property will be provided for initial provisioning only and the Government is not responsible for repair or replacement.”

    The Contracting Officer is required to comply with the requirements of
    FAR 45.107 which requires the use of FAR 52.245-2.  The Contracting Officer does not have the authority to omit this clause when required (see FAR 45.107 (b)).  And, the CO does not have the authority to delete the clause requirement to furnish a list of Government Property.  

    FAR 52.245-2 must be used with FAR 52.245-1 Government property: see paragraph (d) “Except as provided in this clause, Government property furnished under this contract shall be governed by the Government Property clause of this contract.”  The purpose of furnishing a list of Government Property under FAR 52.245-1 is to distinguish the property that will be furnished “as-is, where is” from the property that will be furnished with a warranty.  Paragraph (d) of FAR 52.245-1 includes the warranties of suitability for use and timely delivery for the Government Property that is provided except for the items that are furnished “as-is, where is.”   For the Government Property listed in FAR 52.245-2(b) “The Government bears no responsibility for repair or replacement of any lost Government property.  If any or all of the Government property is lost or becomes no longer usable, the Contractor shall be responsible for replacement of the property at Contractor expense.”  The “list” is used to identify the Government Property that the

    Government is NOT responsible for repair or replacement.


    Can you just give Government Property to a Contractor without including it in the contract?  Doing so could be considered constructive abandonment.  A fundamental tenet of Federal procurement policy requires all Government contract property (whether Government furnished or contractor-acquired) to be contractually accountable to a contract.

     
    In an October 2011 Memorandum on Improving Financial Information and Achieving Audit Readiness the Under Secretary of Defense (Comptroller) was directed to revise a plan to meet the Congressional deadline for audit ready financial statements by 2017.  That Memorandum specifically mentions an “Increase emphasis on accountability for assets (Government Property).”  Accountability is the obligation of an individual or organization to account for its activities or entrusted property, accept responsibility for them, and to disclose the results in a transparent manner.  Establishing a list or record of Government Property is essential to facilitating the accountability of Government Property.
     

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