As stated in question background, the program in question is a small, Post-MS C Navy program just completing LRIP, with final delivery from Prime Contractor scheduled for 30 September. COVID has impacted the Program Office's Operational Testing schedule/timeline (planned for just after acceptance of LRIP articles), and temporary short-term, no-cost storage of the LRIP articles at the contractor facility (immediately following acceptance) has been determined to be available and advantageous for the program.
The Program Office is attempting to determine the appropriate methods of: 1) documenting acceptance of LRIP articles, and 2) temporarily transferring custody of LRIP articles back to the contractor for no-cost temporary storage. The Program Office has historically used the DD250 form to document LRIP acceptance and the DD1149 form to document transfer of Government Property custody from one party to another, but is looking to verify the appropriateness of this approach in this circumstance.
Due to the program's contracting circumstances, service-wide property management systems (e.g., Wide Area Work Flow, Procurement Integrated Enterprise Environment, etc.) are not applicable, and the Program Office is seeking to "manually" track and perform a similar transaction using paperwork/form.
Great questions and we applaud you for reaching out for guidance prior to finalizing your contract language. These are two very commonly misunderstood and incorrectly applied contract practices. DoD does not allow for no cost storage agreements and no longer uses 1149’s for the contract transfer of Government Property.
DFARS prohibits no cost storage agreements or contracts.
“DFARS 245.570 Storage at the Government's expense. All storage contracts or agreements shall be separately priced and shall include all costs associated with the storage.”
What may seem as a cost savings and in the Governments, best interest is not. Once an item is both inspected and accepted via a DD250 it completes the contract terms and no longer has a performance requirement. Once this takes place, there is no longer a requirement for the contractor to maintain the items under their property management system per FAR 52.245-1, and the limited liability provision is also no longer valid leaving the Contractor at full risk of loss for the Government Property. Just because it is Government property does not mean that it is automatically under the protection of contract terms. With out a contract it is simply Government Property in the possession of the contractor. It is the contract language that allows the Government (Contracting Officer or Property Administrator) to grant relief; with that said, if it is no longer covered by the contract, the CO and PA no longer have the authority to grant relief.
“NMCARS 5245.602-3(c) Prior to authorizing retention of items in storage the contracting officer shall ensure that a retention plan has been developed. Retention plans shall include the justification for storage, a detailed description of the property to be stored, storage costs, location, planned period of storage, and source of funds for storage. The use of "nocosts" or no direct cost storage agreements is prohibited.”
As stated earlier, 1149’s are not allowed for the transfer of Government Property from one contract to another. An 1149 may be used to transfer Government Property from one physical location to another but not the transfer of contract accountability. DFARS PGI 245.103-71 provides guidance on the transfer of Government Property.
“PGI 245.103-71 Transferring Government property accountability.
(1) Use only the Standard Form 30 to execute transfers of Government property accountability between existing contracts. No other forms or documents, such as the DD Form 1149, Requisition and Invoice/Shipping Document, are authorized for the transfer of Government property accountability from one contract to another.
(2) Modifications for the transfer of Government property accountability shall:
(i) Use the fillable PDF formats prescribed at PGI 245.103-72 .
(ii) Incorporate FAR clauses 52.245-1, Government Property, and 52.245-9, Use and Charges, and the associated DFARS clauses (see 245.107, Contract clauses) to the extent that the gaining contract lacks the required clauses.”