Sign In
  • Question

    Based upon this 50 / 50 split in funds, should 50% of the sale of property (construction equipment) be allocated back to the Inland Waterways Trust Fund? If it is the wish of the Inland Waterways Trust Board to have their share returned to the price of the contract should this be added to the contract or is a memo sufficient? The contract states nothing about property being sold and credited back to the Inland Waterways Trust Fund, however, FMR 102-38.295 states that: (a) You may retain that portion of the sales proceeds, in accordance with your agreement with the holding agency, equal to your direct costs and reasonably related indirect costs (including your share of the Government wide costs to support the eFAS Internet portal and Government wide reporting requirements) incurred in selling personal property. (b) A holding agency may retain that portion of the sales proceeds equal to its costs of care and handling directly related to the sale of personal property by the SC (e.g., shipment to the SC, storage pending sale, and inspection by prospective buyers). (c) After accounting for amounts retained under paragraphs (a) and (b) of this section, as applicable, a holding agency may retain the balance of proceeds from the sale of its agency personal property when (1) It has the statutory authority to retain all proceeds from sales of personal property; (2) The property sold was acquired with non-appropriated funds as defined in 102-36.40 of this subchapter B; (3) The property sold was surplus Government property that was in the custody of a contractor or subcontractor, and the contract or subcontract provisions authorize the proceeds of sale to be credited to the price or cost of the contract or subcontract; Any answers or additional information on this topic would be appreciated. Thank you.


    Answer

    A 50/50 split of the surplus property proceeds would be a fair and recommended proposition if there is no additional contract language or requirement(s) for how the proceeds should be handled. The language in your contract only address the sales to be returned to the contract, which is in line with the current FAR regulations.  FAR requires the proceeds to be credited to the Treasury of the United States or the contract requirements where authorized under the contract (see FAR 45.604-3 below); however, since the funding was shared between two separate funding entities there may be additional specific requirements for the monies provided by the Trust Fund on how the surplus proceeds will exit the contract.  Prior to making any final decisions I would recommend looking into any special or unique accounting requirements for monies associated with the (non-appropriated) Trust Fund.  If it is silent then the best you can do assuming there is no additional documented agreements, is have all the stakeholders sit down and determine a fair and reasonable plan for allocating the surplus proceeds in accordance with FMR & Agency requirements.
     
    If in fact the Inland Waterways Trust Board wants to have their share returned to the price of the contract; the contract already allows for this per the language you identified. However, if the either side wants to take full ownership of any of the assets then it would be reasonable for them to pay the 50% of the other funds share.  
     

    45.604-3 Proceeds from sales of surplus property.

    Proceeds of any sale are to be credited to the Treasury of the United States as miscellaneous receipts, unless otherwise authorized by statute or the contract or any subcontract thereunder authorizes the proceeds to be credited to the price or cost of the work

    Open full Question Details