E. Fritch Week 4: Lesson Government Property Returns Policy. Government contractors follow

E. Fritch

Week 4: Lesson

Government Property Returns Policy.

Government contractors follow FAR 52.245 and related regulations to return material in situations where the property ownership (material, components, etc.) becomes excess, and the government has the right to own.

In many cases, the material to be returned to the government is material, components, and equipment supplied by the government to contractors. In some cases, contractors acquire a product on fixed-cost contracts that are used exclusively on government products.

Similarities exist between return processes for Government contract items and commercial products going through reverse logistics. For example, the extraction of precious metals extracted in both the government as well as commercial operations. Silver, gold, palladium, iridium, osmium, rhodium, and ruthenium have value in markets. Below are highlights from FAR

52.245 that sub-contractors need to be aware of.

Administrative procedures for items in the return process for government contracts include requirements for the following information:

  (1) The identification and description of items and other information allowing things to be easily recognized. Specific terms and conditions may provide additional details on how title is needed.  

                          (2)Information on the quantity affected as well as inventory status.

                          (3) The price paid.

  (4) Unique-item identifier or equivalent (if available and necessary for individual item tracking).

                          (5) Unit of measure.

                          (6)Contract identification number or equivalent information.

                          (7)Location.

                          (8)Disposition.

                          (9) The transaction dates.

 (10) Indication of the time an item was in service.

Government contractors also have a responsibility to perform periodic audits of material subject to return to government contracting entities. The following is from FAR 52.245:

(1) Contractor property must be available for government employee access. The Contractor must provide reasonable periods for entry. All plans and affected items need to be provided for government employees to review. Systems, procedures, records, and supporting documentation that pertains to Government property need to be included. This access consists of all site locations and, with the Contractor’s consent, all subcontractor premises.

 (2) Government property records must be available to authorized Government personnel and shall be appropriately safeguarded.

 (3) Corrective action plans are required when contractors fail to follow acceptable practices to safeguard and account for government property.

Government Contractors are responsible for meeting specific “predisposal” requirements. If excess items or property can fulfill other contracts’ needs, the items should be transferred to the program that will benefit. Contractors should also be aware they are responsible for the loss or damage until objects are passed to the government. There is an exception for things that the government has supplied that become unusable while at the Contractor.

Contractors can use the FAR regulations as a guide for creating return logistics systems and procedures.