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    FAR 45.106 -- Transferring Accountability, states "Government property shall be transferred from one contract to another only when firm requirements exist under the gaining contract (see 45.102). Such transfers shall be documented by modifications to both gaining and losing contracts. Once transferred, all property shall be considered Government furnished property to the gaining contract. The warranties of suitability of use and timely delivery of Government furnished property do not apply to property acquired or fabricated by the contractor as contractor-acquired property that is subsequently transferred to another contract with the same contractor." I've been informed that this only pertains to contracts within the same agency, e.g., DoD contract to contract vice Department of State to DoD. Is this accurate? Is there additional documentaion pertianing to the tranfer?


    Answer

    This Ask A Professor (AAP) question correctly states the FAR requirement (FAR 45.106) for transferring Government Property.

    45.106 -- Transferring Accountability.

    Government property shall be transferred from one contract to another only when firm requirements exist under the gaining contract (see 45.102). Such transfers shall be documented by modifications to both gaining and losing contracts. Once transferred, all property shall be considered Government furnished property to the gaining contract. The warranties of suitability of use and timely delivery of Government furnished property do not apply to property acquired or fabricated by the contractor as contractor-acquired property that is subsequently transferred to another contract with the same contractor.

    Prior to June 2007 the Government Property Clauses at
    FAR 52.245-2 (fixed price) or FAR 52.245-5 (cost reimbursement) provided direction to the Contractor for “Final accounting and disposition of Government Property.”  The Government Property Clause states “The Contractor shall prepare for shipment, deliver f.o.b. origin, or dispose of the Government property as may be directed or authorized by the Contracting Officer.”  The FAR requirements for the Government Property Clause at 52.245-1 as of August 2010 state:

    (j) Contractor inventory disposal. Except as otherwise provided for in this contract, the Contractor shall not dispose of Contractor inventory until authorized to do so by the Plant Clearance Officer.


    The Contracting Officer (pre June 2007) or the Plant Clearance Officer (after June 2007) is responsible for property disposal actions.  However, the action described in this Ask A Professor Question refers to a transfer and not a disposal.  Contracting Officers are responsible for transferring Government Property.


    When Government Property is transferred it means that the Government has authorized the accountability of the property to be transferred to a contract from either another Government contract or Government source.  Approvals for transferring Government Property must be given by the Contracting Officer who has administration authority for the property under the accountable contract (losing contract).  The Contracting Officer under the gaining contract must also approve the transfer.  The written approval should be in the form of appropriate contract modification to both the losing and gaining contracts.  Transfers should be accomplished according to instruction in the gaining contract or, in the absence of complete instructions in the contract, documentation pertaining to the transfer should be forwarded to the appropriate Contracting Officer for consideration of an equitable adjustment of both the gaining and losing contract.  Transfers should not be accomplished unless authorized in the receiving contract and no longer required on the losing contract.


    The situation described in this AAP mentions that the Government Property is to be transferred from a State Department contract to LOGCAP IV, a State Department Task Order under a DoD contract.”  The Contracting Officers from both the losing and gaining contracts must decide if this is acceptable based upon the contract requirements, Status of Forces Agreements (SOFA), U.S. Department of State mandates, applicable laws, Executive Orders, etc.

    The Department of State Acquisition Regulation (DOSAR) Part 645 Government Property did not provide much help with regard to this question.  However, DOSAR Part 601.602 was helpful in affirming the authority of their Contracting Officers (read below).

    601.602 Contracting officers.

    601.602-1 Authority.
    (a) DOS contracts are awarded pursuant to the foreign affairs management responsibilities conferred on the Secretary of State (22 U.S.C. 2656), and the various laws, regulations, and Executive Orders relating thereto.
    (b) Except as otherwise provided by law, DOS regulations, and this DOSAR, the Procurement Executive has the authority to execute, award, and administer contracts, purchase orders, other contractual arrangements, and other agreements, including FAR-covered interagency acquisition agreements, for the expenditure of funds involved in the acquisition of personal property, services, and for the sale of personal property. The Procurement Executive may further delegate this authority to those DOS employees appointed or designated to the contracting activities enumerated in 601.603-70.
    (c) The contracting officer shall not award, modify, or terminate a contract unless all reviews, clearances, and approvals prescribed in the FAR or DOSAR have been obtained, and all applicable requirements of law, the FAR, the DOSAR, and other regulations have been met.

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