45.604-3
Proceeds from sales of surplus property
Proceeds from the sale of surplus government property must be remitted to the U.S. Treasury unless a statute or contract specifically authorizes another disposition.
Overview
FAR 45.604-3 outlines how proceeds from the sale of surplus government property must be handled. By default, any money received from such sales is required to be deposited into the U.S. Treasury as miscellaneous receipts. However, there are exceptions: if a statute, the contract, or a subcontract specifically authorizes it, the proceeds may instead be credited to the price or cost of the work performed under the contract. This ensures transparency and proper accounting for government property sales, and prevents unauthorized retention or use of sale proceeds by contractors or subcontractors.
Key Rules
- Default Disposition of Proceeds
- Sale proceeds must be credited to the U.S. Treasury as miscellaneous receipts.
- Exceptions to Default Rule
- If a statute, contract, or subcontract authorizes, proceeds may be credited to the contract price or cost of work instead.
Responsibilities
- Contracting Officers: Ensure contract terms comply with this requirement and verify proper disposition of sale proceeds.
- Contractors: Must remit sale proceeds to the Treasury unless specifically authorized otherwise by statute or contract.
- Agencies: Oversee compliance and ensure proper accounting for all proceeds from surplus property sales.
Practical Implications
- This rule prevents contractors from improperly benefiting from the sale of government property.
- Contractors must carefully review contract terms and statutory authorities before retaining or applying sale proceeds.
- Failure to comply can result in audit findings, repayment obligations, or other penalties.