Can the small contractor transfer the excess and if so, does the contractor need contracting officer approval? What is the regulatory reference.
The following response is based solely on the question and background information provided.
The answer to the second question is yes, the contracting officer’s approval is required to move the accountability from one contract to another.
One means would be to receive the CAP under a CLIN and issuing transfer Mods to the losing and gaining contracts as recently discussed here: https://www.dau.mil/aap/Pages/qdetails.aspx?cgiSubjectAreaID=5&cgiQuestionID=129244
If consistent with the contractor’s Property Management and Accounting procedures, there is another option under FAR 52.245-1(j)(1)(i) Predisposal requirements (emphasis added):
… In lieu of transferring the property, the Contracting Officer may authorize the Contractor to credit the costs of Contractor acquired property (material only) to the losing contract, and debit the gaining contract with the corresponding cost, when such material is needed for use on another contract.
If there is a firm requirement on the gaining contract, recommend discussing these options with your KO and the contractor.
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