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  • Question

    What is the appropriate procedure for allowing contractors to purchase contractor-acquired items at acquisition costs and credit the contract?


    Answer

    FAR 45.602-1 permits the contractor to purchase a contractor-acquired or contractor produced item at the acquisition cost and to credit “THE contract.”  It does not allow the credit to be applied to the new contract.

    c) Contractors shall obtain the plant clearance officer’s approval to remove Government property from an inventory disposal schedule.

    (1) Plant clearance officers should approve removal when –
    (i) The contractor wishes to purchase a contractor-acquired or contractor-produced item at acquisition cost and credit the contract;

    FAR 52.245-1(j)(2)(i)(B)
    allows the Contractor to purchase the property at the acquisition cost.

    Crediting the “new contract” is not allowed because it is inconsistent with the pricing arrangement of the original contract where the contractor is allowed to purchase an item and charge it to that contract.  The contractor acquired property was acquired with funds from the original contract as a direct item of cost.  Any money received from the sale of this property at the acquisition cost must therefore be credited back to that contract and not to the new contract.


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