Where within the contract and clauses associated does it require contractors to conduct the sale of surplus government titled property? Everyone refers me to the overarching GFP clause 52.245-1 and it does not implicitly state anything about sales except:
(9) Disposal proceeds. As directed by the Contracting Officer, the Contractor shall credit the net proceeds from the disposal of Contractor inventory to the contract, or to the Treasury of the United States as miscellaneous receipts.
I also read in 45.6 and 245.73 guidelines of sale, but these are only instructions for the PLCO/CO, not clauses for the contractor to abide by?
This is a great question in regard to the disposition of Government Property (Contract Property) in the possession of Contractors. And there are so many ways to approach this topic – so I am going to take a very linear approach. Really TWO approaches that yield the same outcome but tow approaches because the contract number you provided is dated “07.” As such I do not know whether the contract was awarded BEFORE or AFTER the major FAR rewrite regarding Government Property that was published as a final rule in 2007. Nor do I if there was a block change to this contract modifying the contract to reflect the POST-2007 GP Clause. [Note – it might be wise to include the applicable pertinent clause (And its date) in your background information in future questions.]
Open full Question Details
The disposition of Government Property provided to a contractor may be accomplished through many methods. For the Government to anticipate all of the variety of this action may be difficult to determine at time of award. Therefore, the Government has provided a number of options – some of which are determined at or near contract completion (Though disposition MAY take place at any time during contract performance).
Your question is specifically directed at the contractor asking where is the contractual requirement for the contractor to conduct a sale of excess/surplus Government property? Great question – so let’s follow the contractual trail for a moment.
1. The contractor has a Government contract.
2. The contract has Government property, either Government Furnished Property (GFP) or Contractor Acquired Property (CAP)
3. The contract contains the Government Property clause of 52.245-1 (Any version after August 2007).
Now is there a statement which requires the contractor to conduct a sale of Government Property? Check out a paragraph one paragraph BEFORE the one you cited inyour question.
The Government Property clause of FAR 52.245-1 - -specifically Paragraph (j)(8). It states, “(8) Disposition instructions.
(ii) The Contractor shall prepare for shipment, deliver f.o.b. origin, or dispose of Contractor inventory as directed by the Plant Clearance Officer.
So there IS an EXPLICIT STATEMENT regarding DIRECTION to the Contractor. Let me address THAT statement for a moment.
Notice a few things here – The first is WHO provides this direction -- The Plant Clearance Officer (PLCO). A PLCO is defined as “an authorized representative of the contracting officer, appointed in accordance with agency procedures, responsible for screening, redistributing, and disposing of contractor inventory from a contractor’s plant or work site.” So the PLCO has the AUTHORITY to provide direction in this area. The second issue is the use of the word “Shall!” Shall is defined in FAR 2.101. “Shall means the imperative.” So it is NOT as if the PLCO is asking the contractor to do “X” – the Clausal requirement is DIRECTING the contractor to do what the Plant Clearance Officer directs – in your case to conduct a sale of Government Property. The third item that may cause confusion are the words “Contractor Inventory.” Contractor Inventory is defined in FAR 52.245-1(a) under definitions – and though it is a lengthy technical definition – it includes Government furnished property as well as Contractor Acquired Property and even termination inventory.
The essence of this discussion is that Paragraph (j)(8) REQUIRES the contractor to comply with the Plant Clearance Officer’s DIRECTION to effect disposition of Government Property through an appropriate fashion – in this case through a sales process.
Now you made reference to other FAR Subparts – 45.6, as well as DFARS requirements. These two references are direction to the GOVERNMENT REPRESENTATIVES (Primarily the PLCO – but other folks DO need to know these requirements). They are NOT contractually binding upon the contractor - -they ARE policy and Direction to the GOVERNMENT – and the Government SHALL follow this regulation. In regard to formal or informal sales – those essentially come out of GSA guidance at Federal Management Regulation (FMR), at Part 102-38 (41 CFR Part 102-38).
The FAR at 45.604-3 refers us back to the FMR. But since you are dealing with a DoD Contract – well, the DFARS comes into play. DFARS 245.604-3 provides additional information to the PLCO. And yes – as you stated – these are binding upon the GOVERNMENT, and are NOT binding upon the contractor.
O.k., with all of this information provided – let me provide you the “Essence” of this issue.
If the contract contains a post 2007 Government Property Clause of 52.245-1, then the contractor is DIRECTED to comply with direction from the PLCO, i.e., the contractor SHALL comply with the PLCO’s direction. As such, it is a contractual requirement – and the contractor is obligated to comply. [NOTE: The Pre-2007 iteration of the GP Clauses (52.245-2 or 52.245-5) has equivalent directions!]
I can only hope that contractors and the government folks read their contracts and appropriate clauses more closely to fully understand their meaning and intent.