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    Am I correct that if the government "supplies" the item to be repaired, that is not GFE. But if the government provides parts or equipment, that is GFE. The work is to be done onsite at a USACE project. I would need additional information from the customer to understand if there is equipment provided other than the subject of the repair.


    Answer

    I believe that the question you may be actually asking is: Should the Government Property Clause (GPC) be included in this repair contract?  The answer is no, IF there will be no other government property provided to the contractor.  So you are half-way correctly interpreting FAR 45.107 (d). Purchase orders for property repair need not include a Government property clause when the unit acquisition cost of Government property to be repaired does not exceed the simplified acquisition threshold, unless other Government property (not for repair) is provided. However, items, although repair items, are still considered GFE.

    Let me clarify a couple of things that need to be mentioned about the application of the GPC. The reason the FAR does not require the clause to be included in contract under 45.107 (d) is that the items inherently have an associated controlled management process during the repair.   The GPC requires the contractor to establish, maintain and implement a property management system, which involves processes such as induction, establishing records, physical inventory, maintenance, disposal, etc.  Some of these requirements are inherently addressed as part of the repair process for example, induction and/or make other GPC required processes unnecessary like physical inventory. These repair items are inducted, repaired, inspected/accepted and then shipped back to the Government.  Since the contractor does not maintain possession after the completion of the repair process then there is no need for the GPC. Now once the repair is complete and the contractor is directed to retain the repaired items for additional work such as incorporating a repaired engine into a higher assembly, then the GPC will be required because the Government will need the contractor to have a Property Management System to control, protect, maintain, etc., those repaired items.

    Items that are provided by the government in performance of the work statement such as material, equipment, special tooling, special test equipment, being used/consumed for the performance of the contract work statement do require the GPC to ensure they are managed and maintained throughout the life of the contract.  These items remain at the contractor’s site for performance so the contractor would need a property management system to ensure the Government Property is protected, maintained, controlled, etc.

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