1. Will these cellphones become CAP( Contractor Acquired Property) to the US Contractor performing services? 2. Why is the USG purchasing these phones and not the Foreign Army as they are the ones mandating the new requirement?
Under the fixed-price contract, if the Contractor is directed to acquire the cell phones and deliver them under a cost-reimbursable contract line item (CLIN) funded by the U.S. Government, the property would be contractor-acquired property (see FAR 45.402 - Title to contractor-acquired property.) The contract would need to be modified to insert the Government Property clause of FAR 52.245-1. This might also require a modification to the Letter of Offer and Acceptance (i.e., government-to-government agreement) if acquisition of property and title are not currently addressed. Also, keep in mind that the Contracting Officer has to comply with the policy of FAR 45.102 and DFARS Procedures, Guidance and Information 245.103-70.
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Since the need for the cell phones is driven by the new Foreign Army regulation consider FAR 45.302 - Contracts with foreign governments or international organizations. It states “Requests by, or for the benefit of, foreign Governments or international organizations to use Government property shall be processed in accordance with agency procedures.” This leads us to DFARS 245.302 - Contracts with foreign governments or international organizations. It authorizes the contracting officer to grant approval for the Contractor to use Government property for work undertaken as a DoD foreign military sale. You should check your local Component or Agency for detailed procedures.
Your second question would require speculation to answer. However, you bring up a valid point. As an alternative to the U.S. Government providing the property, the cell phones can be purchased by the Foreign Army. This is likely the best scenario since the Foreign Army will maintain control of the cell phones and the Contractor will be required to return the cell phones to the Foreign Army at the end of each duty day. In this scenario FAR 52.245-1 does not apply. It only applies to U.S. Government property (reference paragraph (m) of the clause). The Foreign Army would be treating the cell phones as equivalent to what is described in FAR Part 45 as property incidental to the place of performance.