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  • Question

    Our customer wants us to buy End of Life material on one contract and DD250 it to the contract. The material is expected to be used across several contracts that will be running concurrently for the same program and buying activity. Is there a process as agile as the CAP process like borrow payback, that can be used with non-serialized GFM, without a continual stream of contract mods? The intent is to make sure that we are compliant with all Government requirements such as reporting.


    Answer

    The GFM, as defined in 52.245-1 Government Property,.is designed to allow the contractor to incorporate government owned raw materials into a final contract.  If the contract is set up with this in mind, then it becomes an accounting issue.  If the contract says the government will provide all the raw titanium and contractor uses 10,000 pounds of government furnished titanium at $30 per pound to make an end item, then it becomes an accounting issue.  The cost of $300,000 gets included into the cost of the end item.  If the contract was set up that way, then there is no modification required.  It sounds like what is happening is you are traying to add GFM to a contract that did not contemplate GFM.  In that case, consideration via a modification is the process.

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