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    1.  The requester is an employee of the U.S. Navy. Therefore, the FAR, DFARS and NMCARS references quoted below in pertinent part are applicable to this response.

    FAR 52.245-1 -- Government Property
    (a) Definitions. As used in this clause— “Contractor-acquired property” means property acquired, fabricated, or otherwise provided by the Contractor for performing a contract, and to which the Government has title.

    “Government property” means all property owned or leased by the Government. Government property includes both Government-furnished and Contractor-acquired property. Government property includes material, equipment, special tooling, special test equipment, and real property.

    (e) Title to Government property.
    (3) Title under Cost-Reimbursement or Time-and-Material Contracts or Cost-Reimbursable contract line items under Fixed-Price contracts.
      (ii) Title to all other property, the cost of which is reimbursable to the Contractor, shall pass to and vest in the Government upon—
      (A) Issuance of the property for use in contract performance;
      (B) Commencement of processing of the property for use in contract performance; or
      (C) Reimbursement of the cost of the property by the Government, whichever occurs first.

    SCR H20 – CONTRACTOR ACQUIRED/OWNED FIXED-WING AND ROTARY-WING AIRCRAFT ASSETS (Relevant terms from the SCR specified in the Schedule, Section H)

    The Contractor shall acquire or provide, as applicable: two Beechcraft 1900D fixed-wing aircraft (S/N's UE12 and UE27) and; two S-61N rotary-wing aircraft (S/N's 61-470 and 61-767 ), as prime Contractor owned capital assets for use under this contract.  The following conditions shall apply to the above assets or such other assets that maybe subsequently acquired as replacements:

    The aircraft shall be dedicated to the exclusive use of the AUTEC project over the effective life of this contract.

    The Contractor shall retain full title and will maintain full control of aircraft utilization over the effective life of this contract.

    FAR 52.215-8 -- Order of Precedence -- Uniform Contract Format
    Any inconsistency in this solicitation or contract shall be resolved by giving precedence in the following order:
    (a) The Schedule (excluding the specifications).
    (b) Representations and other instructions.
    (c) Contract clauses.
    (d) Other documents, exhibits, and attachments.
    (e) The specifications.

    FAR Subpart 1.4 -- Deviations From the FAR
    FAR 1.401 -- Definition
    “Deviation” means any one or combination of the following: 
    (a) The issuance or use of a policy, procedure, solicitation provision (see definition in 2.101), contract clause (see definition in 2.101), method, or practice of conducting acquisition actions of any kind at any stage of the acquisition process that is inconsistent with the FAR.

    FAR 1.402 – Policy
    Unless precluded by law, executive order, or regulation, deviations from the FAR may be granted as specified in this subpart when necessary to meet the specific needs and requirements of each agency.

    FAR 1.403 -- Individual Deviations
    Individual deviations affect only one contract action, …, may be authorized by [the] agency head. The Contracting Officer must document the justification and agency approval in the contract file.

    DFARS 201.304 -- Agency control and compliance procedures
    (4) Each department and agency must develop and, upon approval by OUSD(AT&L)DPAP, implement, maintain, and comply with a plan for controlling the use of clauses other than those prescribed by FAR or DFARS.

    DFARS Subpart 201.4—Deviations from FAR
    DFARS 201.402 – Policy
    (1) The Director of Defense Procurement and Acquisition Policy, Office of the Under Secretary of Defense (Acquisition, Technology, and Logistics) (OUSD(AT&L)DPAP), is the approval authority within DoD for any individual or class deviation from—
      (i) FAR 3.104, Procurement Integrity, or DFARS 203.104, Procurement Integrity;
      (ii) FAR Subpart 27.4, Rights in Data and Copyrights, or DFARS Subpart 227.4, Rights in Data and Copyrights;
      (iii) FAR Part 30, Cost Accounting Standards Administration, or DFARS Part 230, Cost Accounting Standards Administration;
      (iv) FAR Subpart 31.1, Applicability, or DFARS Subpart 231.1, Applicability (contract cost principles);
      (v) FAR Subpart 31.2, Contracts with Commercial Organizations, or DFARS Subpart 231.2, Contracts with Commercial Organizations; or
      (vi) FAR Part 32, Contract Financing (except Subparts 32.7 and 32.8 and the payment clauses prescribed by Subpart 32.1), or DFARS Part 232, Contract Financing (except Subparts 232.7 and 232.8).

    DFARS 201.403 – Individual deviations
    (1) Individual deviations, except those described in 201.402(1) and paragraph (2) of this section, must be approved in accordance with the department/agency plan prescribed by 201.304(4).

    (2) Contracting officers outside the United States may deviate from prescribed nonstatutory FAR and DFARS clauses when—
      (i) Contracting for support services, supplies, or construction, with the governments of North Atlantic Treaty Organization (NATO) countries or other allies (as described in 10 U.S.C. 2341(2)), or with United Nations or NATO organizations; and
      (ii) Such governments or organizations will not agree to the standard clauses.

    NMCARS 5201.304 (DFARS 201.304) – Agency control and compliance procedures
    (4) DON Procedures for Control of Component Clause Use. Navy/Marine Corps contracting activities shall follow the approved DON Control Plan for Component Clauses available at
    https://acquisition.navy.mil/rda/content/view/full/7071
    This Plan sets forth specific requirements that must be met before use of Component clauses in DON solicitations and contracts. All Component clauses used in DON solicitations and contracts shall be properly approved before use.
      (i) Definitions.
      (A) “Component” means an organizational entity exercising contracting authority within DON.
      (B) "Navy Clause Baseline" means all properly approved DON component clauses.

      (ii) Requirements.
      (B) Approvals. The required approval authorities for use of Component clauses are established in Paragraph 4 of the DON Control Plan for Component Clauses and DFARS 201.304(1)(i). Component clauses which do not meet the conditions for USD(AT&L)/DPAP approval require HCA approval, which is delegable only as set forth in the Plan. However, ASN(RD&A)/DASN(A&LM) approval is required for any Component clause which results in a FAR/DFARS/NMCARS deviation. Approvals of deviations are set forth in paragraph 5 of the Plan. Copies of all approved Component clauses shall be submitted to DASN(A&LM) via electronic mail address at RDAPolicy@navy.mil for inclusion in the Navy clause baseline within 30 days of approval.

    NMCARS Subpart 5201.4—Deviations from the FAR
    NMCARS 5201.402 (DFARS 201.402) Policy.
    (2) Submit to DASN(A&LM), those requests for individual or class deviation that require approval at a level higher than the HCA.

    NMCARS 5201.403 (DFARS 201.403) Individual deviations.
    (1) DASN(A&LM) is the approval authority for:
      (i) individual deviations from the FAR or DFARS other than those specified in 5201.403(2), DFARS 201.402(1) and DFARS 201.403(2).
      (ii) individual or class deviations from NMCARS.
      (iii) deviations from certain component clauses (see 5201.304(4)).

    END OF APPLICABLE REFERENCES

    2. Normally, pursuant to FAR 52.215-8, the provisions of the Schedule (Section H in this case) would take precedence over the contract clauses (i.e., Section I) in the event of a conflict between these provisions. However, in this case, the provisions of SCR H.20 described above which grant the contractor title to the property in question directly conflict with Government policy as set forth in clause FAR 52.245-1(e)(3)(ii) which grants the Government title to this property.  Because SCR H.20 represents a contract provision that is expressly inconsistent with the FAR, it constitutes a FAR deviation as defined in FAR 1.401. Therefore, the use of SCR H.20 in the contract will require the formal approval of an individual FAR deviation by the agency head pursuant to FAR 1.402 and in accordance with FAR 1.403 before it can properly be used in the contract.

    3. Our review of SCR H.20 indicates that an individual FAR deviation permitting the use of SCR H.20 for this contract action does not appear to meet any of the situations described above under DFARS 201.402 that would require the approval by the Director of Defense Procurement and Acquisition Policy (OUSD(AT&L)DPAP).  Therefore, pursuant to DFARS 201.403(1), we believe that this individual FAR deviation can be approved by the Navy in accordance with agency procedures.  As set forth under NMCARS 5201.304(4), NMCARS 5201.402, and NMCARS 5201.403 as described above, we believe that the contracting activity must submit the request for an individual deviation authorizing the use of SCR H.20 in the contract to the DASN(A&LM) for approval.

    4. Our review of SCR H.20 indicates that even though the contractor has title, the provisions of this clause severely restrict the use of the assets by the contractor as though the Government retained title to the property. The purpose of this clause appears to be to grant title to the contractor in order to facilitate the efforts required to obtain all required Federal Aviation Administration (FAA) and Air Mobility Command Survey and Analysis Office (HQ AMC/XOB) certifications, licenses, and/or approvals for these aircraft and to relieve the contracting activity of this burden. As such, this clause appears to represent an innovative contracting approach that is encouraged by FAR 1.402.  Therefore, provided that this business approach is properly documented and justified, we see no reason based on the information provided why formal approval should not be granted by the DASN(A&LM) for the use of SCR H.20. Once the use of SCR H.20 is formally approved and properly incorporated into the contract, then it would take precedence over the provisions specified in FAR 52.245-1(e)(3)(ii) regarding title to the property. Please consult your contracting activity procedures that must be followed for processing individual FAR deviations to the DASN(A&LM) for approval.

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