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    Is is mandatory for contractors follow the requirments of DOD manual 4161.2m. I make note that the FMR Volume 12 Chapter 7 070201 purpose states that Loss damaged, Destruction, or theft of Contractor-Acquired Property and government furnished material shall be processed in accordance with DOD Manual for the Performance of Contract property ADMINISTRATION, dod 4161.2-m, and the terms and conditions of the contract to which the loss, damaged, destroied, or stolen property, was accountable. If this manual is no longer valid then one cannot follow the FMR.


    Answer

    The short answer is NO…
     
    …but read the LONG answer because it’s good!
     
    First - DoD Instruction 4161.2, “Acquisition, Management and Disposal of Government-Owned Contract Property,” December 31 1991 (current version, September 26 1997) first authorized the issuance of DoD 4161.2-M, “Manual for the Performance of Contract Property Administration” or more simply known as the “Property Manual.”   DoDI 4161.2 is again being revised and authorization for DoD 4161.2-M will not be renewed effectively and actually rescinding DoD 4161.2-M, Property Manual.  The final draft of DoDI 4161.2 is circulating for approval – therefore “the Property Manual” may be rescinded shortly.  You may expect wide coverage of this event!
     
    You may or may not be aware that contractors themselves are not DIRECTLY compelled compliance with documents such as DoDI 4161.2 or the currently authorized DoD 4161.2-M, Property Manual.  In fact if you carefully read the paragraph of DoDI 4161.2, APPLICABILITY, it clearly indicates to whom it applies to as follows: 
     
    “This Instruction applies to the Office of the Secretary of Defense, the Military Departments, the Defense Agencies, and the DoD Field Activities (hereafter referred to as “the DoD Components”).
     
    In fact the title of the soon-to-be-rescinded DoD 4161.2-M, “Manual for the Performance of Contract Property Administration” clearly conveys that this document was the “play book” by which Government personnel were to carry out their property administration duties at differing levels (Contracting Officer, Property administrator, etc).  That being said, it was not only popular reading by contractors possessing Government property on contract, but quite unintentionally became a template for contractors around which they formed the basis of their property management systems.
     
    With the revision of FAR Clause 52.245-1 in June 2007 (current revision is Aug 2010); the soon-to-be-rescinded Property Manual became less relevant based upon the intent and spirit captured in paragraph (b)(1) as follows:
     
    (b) Property management.
    (1) The Contractor shall have a system to manage (control, use, preserve, protect, repair and maintain) Government property in its possession. The system shall be adequate to satisfy the requirements of this clause. In doing so, the Contractor shall initiate and maintain the processes, systems, procedures, records, and methodologies necessary for effective control of Government property, consistent with voluntary consensus standards and/or industry-leading practices and standards for Government property management except where inconsistent with law or regulation. During the period of performance, the Contractor shall disclose any significant changes to their property management system to the Property Administrator prior to implementation.
     
    What was the spirit and intent of the above highlighted words?  Clearly it was to enable contractors to develop management systems, not based upon what the Government wants (via a specification or Government document such as the Property Manual), but what made most sense to the individual contractor using voluntary consensus standard and/or industry leading practices.  Basically this empowers contractors to be creative and evolve their property management systems; not be constrained by Government direction.  In fact, Government “requirements” generally are captured as “outcomes” as noted in paragraph (f)(1) as follows:
     
    (f) Contractor plans and systems.
    (1) Contractors shall establish and implement property management plans, systems, and procedures at the contract, program, site or entity level to enable the following outcomes:
     
    Having said all this, the content of DoD 4161.2-M may continue to serve your company (and others) as a “best practice” backbone around which your property management system is based.  While you were never actually “bound by” it, you should no longer feel constrained by it and may, at some point in time wish to “evolve” your system based upon the liberties provided you in YOUR contract directionFAR clause 52.245-1!
     
    Second.  DoD 7000.14-R, "Department of Defense Financial Management Regulations Volume 12, Chapter 7 is under revision and will delete the requirement to comply with DoD 4161.2-M, but remains current until it is revised and/or DoD 4161.2-M is rescinded.  Similar to that noted above contractors themselves are not DIRECTLY compelled compliance with DoD 7000.14-R, "Department of Defense Financial Management Regulations.  Again, reading the paragraph dealing with, APPLICABILITY, you will note that it clearly indicates to whom it applies to as follows:
     
    APPLICABILITY
    The DoD FMR applies to the Office of the Secretary of Defense, Military Departments, Chairman of the Joint Chiefs of Staff and Joint Staff, Unified and Specified Commands, Inspector General of the DoD, Defense Agencies, and DoD Field Activities (hereafter referred to collectively as “DoD Components”).
     
    As a summary, I find it laudable that you are reading and trying to comply with guidance that is a requirement of Government agencies to comply with, not directly the contractors.  Where does the contractor find the specific guidance they are to comply with?  IN THE CONTRACT!!  Unless such document compliance is specifically compelled in the contract, I’d advise that you carefully read and understand who the document applies to and if necessary seek clarification and guidance regarding such issues with the Procuring Contracting Officer or if assigned, the Administrative Contracting Officer.
     
     
    References:
    ·  DoD 7000.14-R, "Department of Defense Financial Management Regulations (FMRs)," Volumes 1-15
    ·  DoD Instruction 4161.2, “Acquisition, Management and Disposal of Government-Owned Contract Property,”
    ·  DoD 4161.2-M, “Manual for the Performance of Contract Property Administration”
    ·  FAR Clause 52.245-1
     

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