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  • Question

    A PLCO is working with the buying command to get proper disposition instructions issued to a defense contractor. All options are quickly becoming exhausted. There is a large forge and heat treatment system so large that the contractor built part of their facility around it. The forge is very old, and now obsolete. It is excess to performance of a contract (that no one can find). The buying command of course wished to abandon the property to the contractor. The contractor naturally is refusing, which is well within their right. The next option is to scrap the property out using an outside vendor as this would be a pretty big operation. The contractor solicited an offer from a outside vendor to perform this work. The buying command refused saying it was too expensive and an overpriced quote. What shall a PLCO do in this situation?


    Answer

    It is unclear as to whether the property in question is nonsensitive or sensitive. If the property is not “sensitive property” as defined at FAR 45.101, the Government may abandon it in place upon notice to the Contractor. At that time all obligations of the Government regarding the property ceases. If the property is sensitive, the Government cannot abandon it in place without the contractor’s consent. [See FAR 45.603(a) and FAR 52.245-1(k).]

    It is important to note that contractors are required to establish a system of internal controls to manage Government property in its possession. Contractors are responsible for that property from initial acquisition, and receipt, through stewardship, custody, and use until formally relieved of stewardship. That system of internal controls includes establishing and maintaining records of all Government property in its possession as well as that in the possession of its subcontractors. Those records should result in a clear audit trail. Therefore, the contractor should be able to convey exactly what contract the forge was provided/acquired for and/or transferred to as well as any data that indicates whether the property is sensitive on nonsensitive. Such information is needed in the completion of Standard Form 1428, Inventory Disposal Schedule or its electronic equivalent as required by FAR 52.245-1(j)2). It is suggested that the PLCO and the buying command seek the assistance of the Property Administrator. The Property Administrator should have an in-depth knowledge of the Contractor’s property management system and may be able to assist in resolving this matter.

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