(f) Other serviceable or usable property (see § 8.101-18), and

(g) Scrap or salvage.

Classification of property by the contractor in the schedules shall be subject to the approval of the contracting officer. [29 F.R. 6930, May 27, 1964, as amended at 5998, Apr. 29, 1965]

§ 8.503-3 Inventory descriptions.

A commercial description adequate for disposal and screening purposes, of all items having commercial value shall be included in the inventory schedules. Where any items of termination inventory bear a Government identification number, such number shall be listed on the inventory schedules. In the case of other items, the contractor shall furnish a description sufficient to enable the contracting officer to determine the proper disposition thereof. The contractor shall consult the contracting officer when in doubt as to the extent of description required. The contractor need not itemize material believed to be scrap or salvage if (a) such material is physically segregated in the contractor's plant; and (b) the contractor submits a statement describing the material generally, setting forth its approximate cost, and giving such other information as may be necessary for the contracting officer to determine whether the material is scrap or salvage. If the material is determined by the contracting officer to be scrap or salvage (see § 8.504), the contractor may make a single descriptive entry on an inventory schedule covering such material and indicating its approximate total cost.

§ 8.503-4 Inventory schedule certificate.

The certificate on the inventory schedules listed in §§ 8.802-4 through 8.802-8 and set forth in F-200.542, F-200.542c, F-200.543, F-200.543c, F-200.544, F-200.544c, F-200.545, F-200.545c, and F-200.8321 shall be executed by the contractor on each schedule submitted. The certificate, among other things, tenders title to the Government of the property listed therein, unless the Government already has title thereto. In the case of industrial plant equipment, a DD Form 1342s, DoD Property Record Supple

1 Appendix F has been filed with the Office of the Federal Register; copies of forms may be obtained through the contracting officer in any of the military departments.

Under no circumstances shall the contractor's inventory schedules include any items (except for property delivery of which has been required by the Government and except for Government-furnished property) reasonably usable on other work of the contractor without loss to it. (See § 15.205-42.)

§ 8.503-6 Withdrawals from inventory schedules.

If at any time prior to final disposition any items of contractor-acquired property listed in the contractor's inventory schedules become reasonably usable on other work of the contractor without loss to it and this fact is known to the contractor, the contractor is required to purchase or retain such items at cost in accordance with §§ 8.502-1 or 8.502-3, whichever is applicable, and shall amend its inventory schedules and its settlement proposal accordingly. Upon notification to the contracting officer, the contractor may similarly purchase or retain at cost any other items of property included in its inventory schedules. Withdrawal of Government-furnished property included in inventory schedules is subject to approval by the contracting officer. § 8.503-7

Rejection and correction of inadequate schedules.

(a) General. Contracting officers shall cause to be verified, to the extent practicable, the physical count and condition of inventories, including Governmentfurnished property, listed on the contractor's inventory schedules. If any inventory schedule submitted by a contractor is found to be inadequate, the contractor shall be promptly notified and required to correct or supplement the schedule as to the items which are deficient. Inventory schedules shall not be rejected if the information contained therein is adequate for disposal purposes, even if complete cost data on work in process are not available. Rejection of

an inventory schedule shall be limited where possible to specific items thereon and shall not necessarily render the entire schedule unacceptable.

(b) Effect on plant clearance period. (1) Where only individual items on the inventory schedules covering all items of a particular property classification are in need of correction or amplification, the inventory schedules as submitted shall be considered acceptable for purposes of starting the final phase of a plant clearance period (see § 8.101-12). However, where the inadequacy of an inventory schedule requires the return of the entire schedule to the contractor for correction or revision, the final phase of the plant clearance period as to the property classification covered thereby shall not begin until acceptable final schedules covering that property classification have been submitted.

(2) The contracting officer shall advise the contractor of any deficiencies apparent in the inventory schedule within €15 days after receipt of the final schedcule, or the schedules shall be deemed acceptable for purposes of starting the I final phase of a plant clearance period. However, should substantial errors develop which were not apparent from the inventory schedules previously deemed = acceptable, the final phase of a plant clearance period shall not be deemed to have commenced until corrected sched:ules have been submitted unless the conttracting officer determines that no unI warranted delay in disposal operations : was occasioned thereby.

§ 8.504 Scrap and salvage.

§ 8.504-1 General.

Promptly after the submission of inventory schedules, by the contractor, the contracting officer shall review, or cause to be reviewed the contractor's treatment of any items of termination inventory as scrap or salvage (see § 8.503-3). The ; review shall include a careful examination of the inventory schedules and in appropriate cases physical inspection of the property involved. Prior to determining that such items are scrap or salvage, the contracting officer shall obtain such approvals as may be required by Departmental procedures. If the contracting officer determines that any of the materials listed by the contractor as scrap or salvage are serviceable or usable materials, the contractor shall, in accordance with such determination,

submit revised inventory schedules (see § 8.503-7). Property determined to be scrap and which, by other Government regulations, is required to be segregated by alloy or otherwise, shall be so segregated by the contractor. Property determined to be scrap or salvage may, with the approval of the contracting officer, be sold or otherwise disposed of by the contractor in accordance with the provisions of §§ 8.505, 8.507, or 8.509. In appropriate cases, when approved by the contracting officer, such sales may be consolidated with the contractor's sales of scrap and salvage generated, from his other work and in such cases, the scrap warranty required by § 8.504-2 may be waived in the discretion of the contracting officer.

[29 F.R. 6930, May 27, 1964]

§ 8.504-2 Scrap warranty.

(a) If any termination inventory is sold as scrap, a scrap warranty, substantially as set forth in § 8.805 shall be obtained.

(b) The scrap warranty may be released on behalf of the Government by the contracting officer if, as consideration for the release, the Government is paid the difference between (1) the price for which the material was sold as scrap and (2) an amount, approved by the contracting officer, not less than that which the material would bring if it were sold at a fair and reasonable price as set forth in § 8.507-2 (a), for purposes other than use as scrap. The release of the scrap warranty shall be given by the Government and the consideration paid to the Government, even though the contract containing the warranty was not made directly with the Government.

(c) In the event of resale of any material subject to a scrap warranty, the seller is required to obtain an appropriate scrap warranty from the purchaser thereof. Upon tender of this warranty to the Government, the seller shall be released by the Government from liability under his own warranty.

§ 8.505 Screening of serviceable and usable property.

arrange, in such manner as to avoid interruption of the contractor's operations, for physical inspection of such property at the contractor's plant if requested by prospective transferees. All transfers of property within the Department of Defense or other agencies of the Government shall be without reimbursement. Costs incident to transfer, including packing, crating, preparation for shipment, loading and transportation, shall be borne by the transferee.

(b) Except as set forth in paragraphs (c) and (d) of this section, screening, including donation screening, shall be in accordance with § 8.505-2 and shall be completed within a 90 day period, beginning with the date the contracting officer receives acceptable inventory schedules from the contractor. The 90th day shall be designated as the automatic release date (ARD) by the procuring Department. The automatic release date shall not be extended. If the automatic release date is a non-work day, screening shall be completed by the preceding work day.

(c) Industrial plant equipment shall be screened in accordance with § 8.505-3. Except for industrial plant equipment, termination inventory to which § 8.208-4 applies is not subject to this paragraph § 8.505.

(d) The following categories of serviceable or usable property are exempt from the screening requirements of § 8.505-2(b):

(1) Work in process;

(2) Special tooling (but not special test equipment); and

(3) Perishables, classified material, and property dangerous to public health or safety.

[29 F.R. 6930, May 27, 1964, as amended at 30 F.R. 5998, Apr. 29, 1965]

§ 8.505-2 Procedure.

(a) First through 30th day: Promptly upon receipt of acceptable inventory schedules from the contractor, serviceable or usable property shall be screened within the procuring Department and the requiring Department if such Department is not the procuring Department. The requiring Department shall have first priority for retention of listed items. Such screening shall be completed within 30 days or less, and in a manner consistent with the requirements of paragraph (b) of this section.

(b) 31st through the 75th day: Four copies of the inventory schedules reflecting deletions of all retained items shall be prepared by the procuring Department and mailed or otherwise delivered to the General Services Administration regional office serving the region in which the property is located, not later than the 31st day from and including the day the schedules were received by the contracting officer. The schedules shall be transmitted with Report of Excess Personal Property (Standard Form 120) and appropriately identified as contractor inventory. At the time of transmittai to the General Services Administration, information copies of the revised inventory schedules shall be forwarded to the other military departments whenever aeronautical or electronic property is involved. Requests for transfers received by the procuring Department after the 31st day shall be forwarded immediately to the appropriate General Services Administration regional office with identification of the applicable Standard Form 120, the contractor's name, location, and contract number. The procuring Department shall advise the General Services Administration reigonal office of the automatic release date. The General Services Administration will prepare and issue circulars and catalogs to all agencies of the Government within the region. Requests for transfer of property shall be addressed to the General Services Administration during this period. Department of Defense activities requesting listed property will have priority on a "first-come, first-served" basis for such property through the 60th day. Thereafter, the General Services Administration will honor requests from any agency of the Government for transfer of property on a "first-come, first-served" basis. The General Services Administration will transmit to the Department of Defense activity, from which it received the inventory schedules, approved orders and shipping instructions for property to be transferred. Such orders and instructions shall be promptly honored and delivery authorized.

(c) 76th through 90th day: During this period the General Services Administration will provide for the screening of all remaining property by the Department of Health, Education, and Welfare for possible donation (see § 8.508). [29 F.R. 6931, May 27, 1964]

§ 8.505-3

Procedures for industrial plant equipment.

(a) First through 30th day: Upon receipt of acceptable DD Form 1342s, DoD Property Record Supplementary Data, for industrial plant equipment from the contractor, the contracting officer will designate the 90th day from the date of receipt as the automatic release date (ARD). The ARD will be entered in block 60 of the DD Form 1342s and shall not be extended, except as provided in paragraph (d) of this section. The contracting officer will forward two (2) copies of the DD Form 1342s to the Defense Industrial Plant Equipment Center, 38102, Memphis, Tenn., within 48 hours after establishing the ARD. The Defense Industrial Plant Equipment Center will screen inventory reports against all requirements submitted by DoD activities and against DoD reserve requirements, with priority being given to requirements of the reporting Department through the 30th day. The Defense Logistics Services Center will provide for circulation of industrial plant equipment excess lists to activities designated by the Military Departments and to foreign countries and international organizations eligible for military assistance. DoD activities requesting industrial plant equipment from excess lists will prepare DD Form 1419, Requisition and Certificate of Non-Availability (see F-200.1419), giving special attention to cost reduction data required in block 22 of the form. DD Form 1419 will be transmitted to the Defense Industrial Plant Equipment Center for determination of item availability. Foreign governments will use normal requisitioning procedures to the Defense Logistics Services Center. The Defense Industrial Plant Equipment Center will issue appropriate instructions and property movement orders to the contracting officer.

(b) 31st through 75th day: On the 31st day, the Defense Logistics Services Center will forward, as appropriate, the excess data to the applicable General Services Administration Regional Office for Federal utilization screening through the 75th day. Requests received by the Defense Industrial Plant Equipment Center after the 31st day will be forwarded to the Defense Logistics Services Center which will advise the General Services Administration and request withdrawal. During the period from the

31st through the 75th day, the General Services Administration will honor requests from any agency of the Government on a "first come-first served" basis and will forward the approved transfer documents to the Defense Industrial Plant Equipment Center. The Defense Industrial Plant Equipment Center will issue appropriate instructions and property movement orders to the contracting officer.

(c) 76th through 90th day: During this period the General Services Administration will provide for the screening of all remaining industrial plant equipment by the Department of Health, Education, and Welfare for possible donation. The General Services Administration will receive Department of Health, Education, and Welfare requests for industrial plant equipment and will forward approved transfer documents to the Defense Industrial Plant Equipment Center, which will issue appropriate instructions and property movement orders to the contracting officer.

(d) If a Department of Defense requirement develops after the 90th day for an item which has not been withdrawn, the ARD may be extended as justified through the contracting officer and with the approval of the contractor.

(e) Items of Industrial Plant Equipment with an acquisition value of less than $1,000 shall not be reported to the Defense Supply Agency but shall be reported and screened in accordance with § 8.505-2.

[30 F.R. 5998, Apr. 29, 1965]

inventory, in the manner, at the times, to the extent, and at the prices directed or authorized by the contracting officer, except that the contractor (a) is not required to extend credit to any purchaser, and (b) may purchase or retain at less than cost any items of termination inventory not retained by him at cost. Any property which is included in the contractor's inventory schedules, which has not been acquired by the Government under § 8.505, may be purchased or retained at less than cost by the contractor or sold by the contractor to a third party as provided in § 8.507-2 or § 8.5073 at any time after notification by the contracting officer that screening has been accomplished or will not be required. Any such purchase, retention or sale shall be subject to the approval of the contracting officer, as part of or prior to the final settlement (see § 8.512 as to review by Property Disposal Review Boards).

[29 F.R. 6932, May 27, 1964]

(a) Except as provided in § 8.507-3, termination inventory shall be offered for sale on a competitive basis. Generally, 3 bids shall be obtained, one of which may be submitted by the contractor. However, solicitations shall not be restricted to three bids, unless the circumstances clearly justify such a restriction. The property shall be sold to that responsible bidder whose bid is most advantageous to the Government, price and other factors considered, or purchased or retained by the contractor if his bid is most advantageous to the Government; provided, that the price shall be fair and reasonable in the light of reasonable knowledge or test of the market, due regard being had for current prices for any raw materials or products for which quotations are published, and to the circumstances, nature, condition, quantity, and location of property. Any bid by the contractor shall be submitted in the same manner as and concurrently with other bids. The contractor shall not be entitled to preference in any sale. (b) Bids shall be solicited sufficiently in advance of the opening of bids to allow bidders an adequate opportunity to prepare and submit their bids. The contracting officer shall furnish the contractor from available records and bidders lists the names of prospective purchasers. Bids shall be solicited from the original suppliers and those prospective

bidders designated by the contracting officer. Bids shall be solicited by any one of the methods set forth below; provided, that when deemed necessary by the contractor to assure full and free competition, more than one method may be used; and provided further that where the original acquisition cost of serviceable material available for sale at any one time and location is $25,000 or more, in addition to any other method of solicitation used, the sale shall also be advertised in a newspaper of general circulation as provided in subparagraph (4) of this paragraph.

(1) A notice of the proposed sale may be mailed or delivered to all prospective bidders; if this method is used, the bidders list shall include all responsible prospective purchasers known to the contractor and located in the general area in which the property is located;

(2) A notice of the proposed sale may be displayed at appropriate public places; (3) A notice of the proposed sale may be published in appropriate trade journals or magazines;

(4) A notice of the proposed sale may be published in a newspaper of general circulation in the locality in which the property is located; or

(5) Where the amount or value of the property is not large enough to warrant preparation of a formal notice of the proposed sale, or other special circumstances are present, invitations to bid may, with the contracting officer's approval, be issued orally, by telephone, or by other informal media, so long as the element of competition is maintained, and each such sale is fully documented.

(c) Any notice of a proposed sale under paragraph (b) of this section shall indicate in general terms the types of material for sale, shall give the date on or after which such material will be available for sale, and shall reserve the right to reject any or all bids submitted. So far as feasible, lots shall be offered in such reasonable quantities as to permit all bidders, small as well as large, to compete on equal terms. § 8.507-3 Other sales.

(a) Sales, or purchases or retentions at less than cost by the contractor, may, if the Government's interests are adequately protected, be authorized by the contracting officer without competitive bids when essential in the interest of