GFE (Government Furnished Equipment)

What is GFE (Government Furnished Equipment)?

Government Furnished Equipment (GFE) refers to property owned by the U.S. Government that is provided to a contractor for use in performing a government contract. It is distinct from Government Furnished Property (GFP) as GFE is typically standalone equipment, while GFP is a broader term that includes equipment, materials, and real property.

Definition

GFE is equipment in the possession of, or directly acquired by, the Government and subsequently furnished to a contractor for the execution of a contract. The provision of GFE is typically outlined in the contract's "Government Property" clause, usually based on FAR 52.245-1. The government retains title to the GFE, and the contractor is responsible for its proper use, maintenance, and accountability. The decision to furnish equipment rather than require the contractor to acquire it is usually based on factors such as cost savings, standardization, or national security considerations. Understanding the terms and conditions related to GFE is crucial for contractors because it directly affects contract costs, performance obligations, and potential liability.

Key Points

• Proper Accounting: Contractors must maintain accurate records of all GFE received, used, and returned. This includes serial numbers, condition codes, and any modifications made.
• Maintenance and Repair: Contractors are usually responsible for the routine maintenance and repair of GFE, as specified in the contract. Significant repairs may require government approval.
• Risk of Loss or Damage: The contract usually stipulates responsibility for loss, damage, or destruction of GFE. Contractors may be liable for losses caused by negligence.
• Contractual Compliance: Compliance with the Government Property clause is essential. Failure to properly manage GFE can result in contract penalties, negative performance evaluations, or even termination for default.

Practical Examples

1. Defense Systems Integration: A defense contractor receives sophisticated radar equipment (GFE) from the government to integrate into a new military aircraft. The contractor must maintain the radar according to strict government specifications and return it in working order at project completion.
2. IT Infrastructure Support: An IT services contractor is provided with government-owned servers (GFE) to manage a federal agency's network. The contractor is responsible for the physical security of the servers and must adhere to strict cybersecurity protocols.
3. Research and Development: A research laboratory receives specialized scientific instruments (GFE) from a government agency to conduct experiments. The lab must track usage hours and maintain calibration records, providing regular reports to the agency.