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  • Question

    Is this an out-of-scope action for the contractor when the contract property clause requires them to disposition excess property? Can we avoid this by adding funds to a CLIN specifically for disposition costs? Why wouldn't this be part of doing business with the government?


    Answer

    A phone call with the question submitter revealed many, many more facts and specific advice was given. This included scheduling a meeting with the KO, contractor, program manager, and the DCMA Team (ACO, PA, and Plant Clearance Officer).

    There is nothing in the FAR/DFARS/Agency supplement that would prohibit adding a CLIN for disposition costs, it would not be out of scope. But we’re scratching our heads on why this would be needed unless it was a very, very unique situation. Here’s why:

    Yes, if there is property on the contract and the clauses are in the contract then disposition costs if incurred would be part of doing business with the government and those are allowable, chargeable costs. Costs associated with disposition are based on what the disposition instructions are. Typically any costs incurred are charged to an indirect cost pool and not a direct charge. See FAR 52.245-1(b)(2) which states : “The Contractor's responsibility extends from the initial acquisition and receipt of property, through stewardship, custody, and use until formally relieved of responsibility by authorized means, including delivery, consumption, expending, sale (as surplus property), or other disposition, ...” bold italics added for emphasis.

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