52.245-1
Government Property
Contractors must establish robust property management systems and comply with strict controls, recordkeeping, and reporting requirements to safeguard and account for all Government property in their possession.
Overview
FAR 52.245-1, Government Property, establishes comprehensive requirements for the management, use, and disposition of Government property in the possession of contractors. It defines key terms, outlines contractor and Government responsibilities, and sets forth procedures for property management systems, recordkeeping, reporting, liability, and closeout. The clause applies to contracts where the Government provides property or where contractors acquire property for contract performance, ensuring accountability and safeguarding of Government assets.
Key Rules
- Definitions and Scope
- Provides detailed definitions for terms such as Government property, contractor-acquired property, loss of Government property, and sensitive property, clarifying the types of property and responsibilities covered.
- Property Management System
- Contractors must establish and maintain internal controls and systems for managing Government property, including acquisition, use, maintenance, and disposition, and must disclose significant system changes to the Property Administrator.
- Use and Modification of Property
- Government property may only be used for contract performance unless otherwise authorized; modifications or cannibalization require Contracting Officer approval.
- Government-Furnished Property
- The Government is responsible for delivering suitable property as specified; contractors may request equitable adjustments for delays or unsuitable property.
- Title and Accountability
- Title to Government property generally remains with the Government, with specific rules for cost-reimbursement and fixed-price contracts.
- Records and Reporting
- Contractors must maintain auditable records, perform inventories, report discrepancies and losses, and flow down requirements to subcontractors.
- Liability and Relief
- Contractors are generally not liable for loss except in cases of willful misconduct, lack of good faith, or inadequate property management; relief is provided when property is properly accounted for or disposed of.
Responsibilities
- Contracting Officers: Oversee property administration, approve system changes, authorize use/modification, and determine liability or relief.
- Contractors: Implement property management systems, maintain records, report losses/discrepancies, ensure subcontractor compliance, and protect Government property.
- Agencies: Appoint Property Administrators, review contractor systems, and enforce compliance.
Practical Implications
- Ensures accountability and protection of Government assets in contractor possession.
- Impacts daily operations through strict recordkeeping, reporting, and inventory requirements.
- Common pitfalls include inadequate property management systems, failure to report losses, and improper use or disposition of property.