35.014 Government property and title
Source: FAR 35.014 on acquisition.gov
FAR 35.014 sets clear rules for property control and title to equipment in R&D contracts, especially for nonprofits, requiring approvals, compliance with civil rights, and adherence to government property clauses.
Overview
FAR 35.014 outlines the requirements for managing government property and determining title to equipment and tangible personal property acquired under research and development (R&D) contracts, particularly those with nonprofit institutions of higher education and nonprofit research organizations. It references FAR Part 45 for property control and provides specific rules for vesting title to equipment purchased with government funds, including cost thresholds, approval requirements, and conditions for vesting title in the contractor or the government. The section also incorporates civil rights compliance as a prerequisite for vesting title and clarifies that these policies are implemented through Government Property contract clauses.
Key Rules
- Property Control Requirements
- All R&D contracts must follow FAR Part 45 for establishing and maintaining control over government property.
- Title to Equipment for Nonprofits
- For contracts with nonprofit research institutions, contractors may retain title to equipment under $5,000 (or lower agency threshold) with advance approval; for equipment $5,000 or more, title vesting is determined by contract terms and may vest in the contractor or government.
- Depreciation and Use Charges
- If title vests in the contractor, depreciation or use charges for that equipment are not allowable on any government contract.
- Government Installation Equipment
- If equipment is needed at a government installation after contract completion, title need not transfer to the contractor.
- Civil Rights Compliance
- Contractors must agree to non-discrimination requirements before title can vest.
Responsibilities
- Contracting Officers: Ensure property control, approve title vesting, and include appropriate clauses.
- Contractors: Maintain property control, obtain approvals, comply with title and civil rights requirements, and avoid unallowable charges.
- Agencies: May set lower thresholds and must enforce compliance and oversight.
Practical Implications
- Ensures clear rules for property ownership and control in R&D contracts, reducing disputes.
- Contractors must be proactive in seeking approvals and understanding title implications.
- Non-compliance with civil rights or property rules can jeopardize title rights and contract payments.
(a) The requirements in part 45 for establishing and maintaining control over Government property apply to all R&D contracts.
(b) In implementing http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title31-section6306&num=0&edition=prelim" target="_blank">31 U.S.C.6306, and unless an agency head provides otherwise, the policies in paragraphs (1) through (4) following, regarding title to equipment (and other tangible personal property) purchased by the contractor using Government funds provided for the conduct of basic or applied scientific research, apply to contracts with nonprofit institutions of higher education and nonprofit organizations whose primary purpose is the conduct of scientific research:
(1) If the contractor obtains the contracting officer’s advance approval, the contractor shall automatically acquire and retain title to any item of equipment costing less than $5,000 (or a lesser amount established by agency regulations) acquired on a reimbursable basis.
(2) If purchased equipment costs $5,000 (or a lesser amount established by agency regulations) or more, and as the parties specifically agree in the contract, title may-
(i) Vest in the contractor upon acquisition without further obligation to the Government;
(ii) Vest in the contractor, subject to the Government’s right to direct transfer of the title to the Government or to a third party within 12 months after the contract’s completion or termination (transfer of title to the Government or third party shall not be the basis for any claim by the contractor); or
(iii) Vest in the Government, if the contracting officer determines that vesting of title in the contractor would not further the objectives of the agency’s research program.
(3) If title to equipment is vested in the contractor, depreciation, amortization, or use charges are not allowable with respect to that equipment under any existing or future Government contract or subcontract.
(4) If the contract is performed at a Government installation and there is a continuing need for the equipment following contract completion, title need not be transferred to the contractor.
(c) The absence of an agreement covering title to equipment acquired by the contractor with Government funds that cost $1,000 or more does not limit an agency’s right to act to vest title in a contractor as authorized by 31 U.S.C.6306.
(d)
(1) Vesting title under paragraph (b) of this section is subject to civil rights legislation, 42 U.S.C.2000d. Before title is vested, the contractor must agree that-
No person in the United States or its outlying areas shall, on the ground of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be otherwise subjected to discrimination under this contemplated financial assistance (title to equipment).
(2) By signing the contract, the contractor accepts and agrees to comply with this requirement.
(e) The policies in paragraphs (b)(1) through (b)(3) and paragraph (d) of this section are implemented in the Government Property clauses.