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  • Question

    How do I account for the reincarnation credit in the contract? I have researched GFP clauses and nothing there seems to fit. How do include a CLIN for the return of an item for credit off the purchase of a new item?


    Answer

    The situation that you have described falls under the Exchange/Sale authority provided by Section 503 of Title 40, United States Code.  This authority allows executive agencies to exchange or sell similar items and apply the exchange proceeds, or in your case credit, in whole or in part to the property being acquired.  The action that OEM is proposing is legal and is a common business practice.  You do not need to account for the credit in the contract.  However, there are accounting and reporting requirements associated with the Exchange/Sale.  See Federal Management Regulation (FMR) Part 102-39—Replacement of Personal Property Pursuant to the Exchange/Sale Authority for more details.

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