When a contract indicates "no commingling of GFM is authorized", is it refering to the comingling of GFM with CFM or the comingling of GFM parts from one contract to another or both?
Since your contract uses imprecise terms that are not defined and in fact may conflict with accepted FAR defined terms, it’s impossible to answer your question.
Let’s start by channeling S.I. Hayakawa who was, among other things a U.S. Senator, a Professor and germane to this issue, a semanticist. Why do I do this? Simply that the meaning of words and abbreviations count! So let’s start with some sourced baseline words & abbreviations and illustrate the problem in providing an answer.
First off, I’m sorry to report that neither, the abbreviation “GFM” (Government-furnished Material) nor “CFM” (Contractor-furnished Material) are defined terms within the Federal Acquisition Regulation. Both are imprecise at best and misleading at worst.) Please reference AAP - Material GFM/CAM Furnished to Subcontractor)
So, unless you have written definitions for these terms that the acquisition community agrees upon, their use should be avoided simply because they are not terms with sourced definitions. Therefore they are imprecise and prone to self-interpretation by each reader which may be both misleading and cause confusion.
What are better accepted words that convey precise meaning? Let’s look at FAR 45.101.
· “Government-furnished property” means property in the possession of, or directly acquired by, the Government and subsequently furnished to the Contractor for performance of a contract. Government-furnished property includes, but is not limited to, spares and property furnished for repair, maintenance, overhaul, or modification. Government-furnished property (GFP) also includes contractor-acquired property if the contractor-acquired property is a deliverable under a cost contract when accepted by the Government for continued use under the contract.
· “Material” means property that may be consumed or expended during the performance of a contract, component parts of a higher assembly, or items that lose their individual identity through incorporation into an end-item. Material does not include equipment, special tooling, and special test equipment or real property.
· “Contractor-acquired property” means property acquired, fabricated, or otherwise provided by the contractor for performing a contract and to which the Government has title.
· “Equipment” means a tangible item that is functionally complete for its intended purpose, durable, nonexpendable, and needed for the performance of a contract. Equipment is not intended for sale, and does not ordinarily lose its identity or become a component part of another article when put into use. Equipment does not include material, real property, special test equipment or special tooling.
NOTE: “Material” is consumed, expended, and/or loses its individual identity through incorporation into an end item while “equipment” does not lose its identity or become incorporated into the end item as a general rule.
Next, let’s look at what the FAR clause at 52.245-1 says about “commingling” of Government property; specifically, “material” (as defined in FAR Subpart 45.101).
FAR 52.245-1(f)(1)(vii)(B) states the following:
(B) Unless otherwise authorized in this contract or by the Property Administrator the Contractor shall not commingle Government material with material not owned by the Government.
However, you should also be aware that if the contractor uses an approved Material Management Accounting System (MMAS), authorized under DFARS clause 252.242-7004, they may comingle contractor-acquired property (CAP) which is, “property acquired, fabricated, or otherwise provided by the contractor for performing a contract and to which the Government has title,” with contractor-owned material. They MAY NOT however commingle GFP, Material classification with contractor-owned material. No other classification of Government property (equipment, special tooling, special test equipment, real property) falls under MMAS either.
NOTE: Taking these two references together, the contractor shall not commingle GFP, material classification with their own material unless authorized to do so under the contract or by the Government Property Administrator (PA). They MAY commingle CAP with their contractor-owned material IF they have an MMAS system pursuant to the MMAS DFARS clause
Now that you have a handle on definitions and what the FAR & DFARS clauses (if on contract) says about what “material” the contract shall not or may commingle, let’s distinguish between the concepts of “commingling” and “colocation,” neither of which are defined in the FAR.
· Comingling - to blend thoroughly into a harmonious whole
Thought – Would it be possible to separate such items? Probably not!
· Colocation - to locate together; especially : to place (two or more units) close together so as to share common facilities
Thought – Would it be possible to separate such items? – Probably so!
NOTE: The concept of commingling applies to “material” and the concept of colocation applies to those things that are more readily separable.
NOW!! Let’s work on your questions and reveal the issues with answering them.
1. “When a contract indicates "no commingling of GFM is authorized",…
a. H.19 COMMINGLING OF MATERIAL The Contractor shall not commingle Government Furnished Material (GFM) at JSMC or GDAO. GFM is identified in Attachment 0003 of the contract. H.19.2
i. The Contractor shall be allowed to commingle Contractor Furnished Material (CFM), ANAD Code A, Code A Bulk Items, and any other parts not listed at JSMC.
ii. The Contractor shall be allowed to commingle Code F, ANAD DOF, Code A Bulk Items, and any other parts not listed at GDAO.
iii. The Contractor shall be allowed to commingle all parts at Scranton and Tallahassee (TLH).
b. FAR 52.245-1(f)(1)(vii)(B) – states that the contractor shall not commingle GFP, material classification with material not owned by the Government
c. DFARS 252.242-7004 (if on contract) – permits the commingling of CAP with contractor-owned material but also does not permit the commingling of GFP, material classification with contractor-owned material
CONCLUSION: Presented above is the contract “order of precedence” relative to contractual direction to the contractor relative to the concept of “commingling.” There are several problems. The definition of GFM is unknown. Second, there is no definition of “CFM” and no comparison is possible. Third, the listing of such “CFM” was not provided or otherwise available.
2. “…is it referring to the comingling of GFM with CFM or the comingling of GFM parts from one contract to another or both?”
CONCLUSION: Since there is still no definition of what GFM and CFM are and how each equates to acceptable FAR defined Government property terms such as “material” and “equipment” I can’t distinguish between “material” which shall not be commingled as it is blended and becomes indistinguishable as to ownership; or “equipment” which may be collocated since it does not lose its identity and can be distinguished as to ownership.
Individual contracts MAY direct the contractor to individually store or warehouse GFP or CAP (no matter which classification) for their contract. Where that is not directed via the contract, the contractor must still have a Property Management System (PMS) that distinguishes ownership of all classifications of GFP or CAP by contract. Their PMS must be able to distinguish those items that may be collocated because they may be distinguished as to contract rather easily. But their PMS must also identify by segregation GFP, material classification items that are indistinguishable as to contract if they were commingled. The bottom line is that each contract terms and conditions must be scrutinized as to physical separation requirements of Government property; then the contractors PMS must be similarly scrutinized to assure contractor PMS ability to determine Government property identification to individual contracts where segregation is not called out by contract.
Work to clarify non-standard terms such as GFM and CFM since they are ill-defined and open to interpretation. Utilize accepted FAR terms to convey and understand precisely what is meant. Finally, work with your respective contracting officers, the contractor and the Government PA to sort this out.
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