ect to industrial facilities, additional recds shall be maintained by the property Iministrator or higher headquarters, as ay be required by the respective Departents pursuant to paragraph 303.1 (c). Exptions to the above policy may be authored by the respective Departments in special rcumstances, such as where the admintrative expense of maintaining Governent personnel at the contractor's plant or oviding frequent official visits to the plant ould exceed the cost of maintaining Govnment records or otherwise not be in the est interest of the Government.

(b) The contractor's property control sysm shall be reviewed and approved in riting by the property administrator either

the inception of each contract or perilically, as provided in B-203(b). In approriate cases, the review will include a deterination as to whether a multicontract cost id material control system would be in the terests of the Government. Any necessary orrective action will be required of the conactor prior to approval. Such corrective ction will normally be effected by the propty administrator through mediation with le contractor. Where corrective action ould involve substantial increased costs or here agreement as to the corrective action not reached through mediation, the differices will be referred to the contract iministrator.

(c) The contractors' property control sysm will provide financial accounts for Govnment-owned industrial facilities in the ›ntractors' possession or control. The sysm will be subject to internal control standds and be supported by property records r such facilities; in the manner described paragraph 304.

(d) The official records shall be kept in ich condition that at any stage of comletion of the work under a contract the atus of Government property may be ready ascertained.

(e) Separate property records for each ›ntract are desirable but a consolidated roperty record may be maintained provided at the consolidated record provides the formation set forth in paragraph 304. (f) Property records shall be established r any usable components which are peranently removed from items of Governent property, as a result of modification, ⚫ otherwise.

(g) Special tooling and equipment fabrited from materials which are the property the Government will be appropriately corded immediately upon fabrication. pecial tooling and equipment fabricated om materials which are the property of le contractor will be appropriately recorded t the time title passes to the Government. (h) Departmental policies will govern the tablishment of monetary levels below hich individual item records of plant equipent will not be required.

(a) The unit price of Contractor-acquired property shall be determined in accordance with the system established by the Contractor in conformance with sound accounting principles and consistently applied.

(b) The unit price of Government furnished property shall be determined by the Government and furnished to the Contrac

tor.

303. Records to be maintained by Government personnel.

303.1 Records of specific contracts where property is involved. (a) Where a contract provides for the use of Government Property a copy of the contract shall be made available or furnished to the Property Administrator.

(b) The property administrator shall maintain a record of each contract assigned to him for property administration. That record shall contain the following minimum information:

(1) Contract number and name of Contractor.

(11) Type of contract (CPFF, fixed price, research and development, etc.)

(111) End item to be produced or services to be performed, and the points of inspection and acceptance.

(iv) Record of amendments and changes pertaining to Government Property.

(v) Listing and type of all subcontracts which involve Government Property.

(vi) Provisions of contract pertaining to liability of the Contractor for loss, damage or improper use of Government Property.

(vii) Record of Contract Administrators and dates of tenure.

(viii) Record of Property Administrators and dates of tenure.

(1x) Record of Plant Representatives (or Officers-in-Charge) and dates of tenure. (x) Record of written approval of Contractor's property control procedures.

(x1) Record of deviations granted in property procedures. (The deviations granted shall be in accordance with procedural regulations issued by each department.)

(xii) Record of property audits and inspections performed by the responsible agencies in each department.

(xiii) Records of property inspections during production and usage analyses performed. (xiv) Record of any deficiencies found in property control and the corrective action taken.

(xv) Interim and final clearance data for Government property.

(c) The contractor shall be required to furnish written receipts for all, or specific classes of Government provided property only in those instances where such action is determined by the property administrator to be essential for maintenance of minimum acceptable property controls. In these instances the property administrator shall maintain for each contract a file of such documents or property record cards. Where such evidence of receipt is required, it shall be provided by the contractor not later than

the time he submits his application for payment (public voucher). Otherwise, the property administrator shall utilize the contractor's file of documents evidencing receipt and not establish a duplicate file.

(d) The Property Administrator shall maintain for each contract a file containing copies of all instruments affecting relief from responsibility for Government Property.

303.2 Control records to be maintained. The Property Administrator shall maintain a system of file control that will permit the ready location of any document that he is required by this section to maintain.

303.3 Record of completed products. The Property Administrator shall maintain a record of all completed products produced under the contract, based upon authenticated receiving reports or processed vendors' shipping documents, as follows:

(a) When there is no lapse of time between Government inspection and acceptance of the completed products and shipment from the plant site, the records shall, as a minimum, consist of a summarization of quantities accepted and shipped. When end items are accepted by the Government and stored with the Contractor the record shall show the quantities stored and location.

(b) Some contracts provide that completed products are to be retained by the Contractor for further use under the contract. Upon acceptance of such items they shall be considered to be "Government-furnished property” and shall be recorded as prescribed in paragraph 304.

304 Records to be maintained by the contractor. It is the contractor's responsibility (1) to maintain adequate control records in accordance with the requirements of this Manual of all Government property provided under a contract, including property provided under such contract as may be in the possession or control of a subcontractor, and to establish separate property accounts to be located at the subcontractor's plant and at the contractor's secondary site when so requested by the property administrator.

304.1 Records of materials. All Government material furnished to the contractor, as well as all other material, title to which has passed to the Government, by reason of allocation from contractor-owned stores, or by reason of purchase by the contractor for direct charge to a Government contract, or otherwise, shall be recorded in accordance with the contractor's property control system, as follows:

(a) Contractor's property control system. Except as provided in (d) and (e) below, the contractor's property control system shall be such as to provide the following information: (1) Contract number.

(11) Nomenclature or description of item. (iii) Quantity received.

(iv) Quantity issued.

(v) Balance on hand.

(vi) Posting reference.

(vii) Date received or issued.

(viii) Unit price.

(ix) Location.

(x) Disposition action taken.

(b) Consolidated stock record. Where a contractor has more than one Government contract under which Government material is provided, a consolidated record for materials may be authorized, provided the total quantity of any item is allocated to each contract by contract number and each requisition of material from contractorowned stores is charged to the contract o which the material is to be used. The supporting document or issue slip shall show the contract number or equivalent code designation to which the issue is charged.

(c) Custodial records. Custodial records shall be maintained for tool crib items, guard force items, protective clothing and other items issued for the use of individuals in the performance of their work under the contract.

(d) Use of receipt and issue documenti. Based on a determination of the property administrator in accordance with B-301(b), the contractor may maintain in lieu d "stock records" a file of appropriately crossreferenced documents representing receipt. issue, and adjustments of Government-provided material in performance of a Government contract. Such determination shall be consistent with generally accepted accounting practices and a low frequency of receipt and issue of the items of material specified, i.e., usually issued directly upon receipt). Accordingly:

(1) The property administrator may suthorize this method of property control for Government-provided material, including but not limited to items used in manufacturing or maintenance, office supplies, etc.; and

(11) This method of property control may be used for research and development contracts.

(e) Multicontract cost and material control (1) Description and scope. A multicontract cost and material control system constitutes a modification of the requirements for physical identification of Government material and substitutes therefor a system of financial accounting. The system operates as follows:

(1) The contractor may acquire, purchase. requisition, receive, store, and issue like items of material for the total requirements of all contracts included in the system without identifying the material to each contract. (ii) The contractor may commingle, during all stages of contract performance. Government-owned and contractor-owned material and work in process, which was furnished, acquired, or produced for all Government contracts of any type covered by the system, without physical segregation or identification to individual contracts.

(iii) In lieu of physical segregation and identification to individual contracts, periodic calculation of requirements and distribution of costs to all contracts permits the allocation of material costs to products

delivered. This system, by reflecting the materials expended to perform each contract at any stage in production, permits usage analysis to determine reasonableness of consumption and expenditure of Government material prescribed in B-203(f).

(iv) The system may appropriately include all Government contracts of any type which involve common repetitive operations.

(v) The system does not require commingling of all common materials of all contracts included. For example, items of Government-furnished material of high value or in short supply may be excluded from commingling and reserved for use in performance of the contract under which furnished.

(vi) Notwithstanding B-207.1, physical inventories of material in stores included in the system (other than work in process) will be taken by the contractor at least annually, price extended, and reconciled to the quantitative balance for each line item, and adjustments recorded in the stock record and Such financial inventory control accounts. physical inventories and adjustments shall be reviewed by and are subject to the apAn proval of the property administrator. equitable distribution to cost accounts of any inventory losses will be subject to a like review and approval.

(2) Authorization. The Head of a Procuring Activity or his designee (or if more than one Procuring Activity or Government agency is involved, the Head of the Procuring Activity having the preponderant monetary interest, with the concurrence of other interested Heads of Procuring Activities or their designees, and equivalent officials of other interested Government agencies) may authorize a contractor who is performing or will perform more than one Government contract to use a multicontract cost and material control system in accordance with this paragraph. The approving authority will, for each system, approve such detailed operating procedures as are necessary for that particular system.

(3) Criteria. A multicontract cost and material control system may be authorized if the following criteria are met

(1) the contractor demonstrates that savings or improved operations will result from adoption of the system or that it will otherwise be in the interest of the Government;

(ii) the contractor's accounting system is adequate to satisfy the requirements set out in B-304.8; and

(iii) the system is applied to existing Government contracts only and excludes materials acquired or costs incurred for nongovernment work or in anticipation of future Government work.

The

304.2 Records of special tooling. Contractor's property control system shall be such as to provide the following minimum information regarding each item of Government owned special tooling:

(a) Contract number or equivalent code designation.

(b) Nomenclature or description of item. (c) Identification number and item on which used.

(d) Quantity received or fabricated. (e) Voucher reference.

(f) Location.

(g) Disposition action taken.
(h) Unit price or group price.

304.3 Records of plant equipment. (a) The contractor shall maintain individual records of each item of Government-owned plant equipment having a unit cost of $500 or more which shall consist of the following information:

(1) Name

and address of contractor (which should be printed on the record).

(ii) Federal supply code for manufacturer (Cataloging Handbooks H4-1, H4-2) and, at the option of the contractor, the name and address of the equipment manufacturer.

(iii) Model number of the plant equipment item.

(iv) Serial number and year built (when available).

(v) U.S. Government identification number.

(vi) Noun name of the item and the Federal Supply Classification (Cataloging Handbooks H2-1, H2-2, and H2-3).

(vii) Acquisition document reference and date.

(viii) Disposition document reference and date.

(ix) Contract number under which acquired.

(x) Unit price when provided by Governwhen ment or cost (f.o.b. manufacturer) contractor acquired.

The record may be maintained manually or by mechanized accounting methods. Notwithstanding the approval of the Contractor's Record and Property Control System, the contractor shall, with respect to plant equipment items acquired after 1 July 1961, having a unit cost of $500 or more, prepare DD Form 1342, shown in F-200.1342, at the time of acquisition or receipt. When such items become idle or excess to the needs of the contractor, the contractor shall also prepare the DD Form 1342s, shown in F200.1342s. If changes occur in original data or supplemental data is required, a revised DD Form 1342 must be prepared by the contractor. The contractor shall retain the original of such forms and the copies shall be delivered to the property administrator who shall provide the blank DD Forms. The contractor may, at his option, use said original of DD Form 1342 as his official property record for such item.

(b) Record of accessory and auxiliary equipment. Individual records for accessory and auxiliary equipment which is attached to or otherwise a part of an item of plant equipment and which is required for its normal operation need not be maintained, but the description of such accessory and auxiliary equipment shall be entered on the respective plant equipment records.

systems.

(c) Record of manufacturing Where plant equipment and accessory type items are assembled and interconnected to form a single operating unit designed to perform continuously the same manufacturing process, such equipment may, for property and inventory control purposes, be grouped and reported as a single item of plant equipment on one plant equipment record in lieu of an individual record for each component comprising the item of plant equipment. This does not preclude the requirement for completely describing the component items nor does it preclude the use of more than one plant equipment record when additional space is required.

(d) Stock record. Summary stock records, rather than individual item records, shall be maintained for minor plant equipment and for plant equipment costing between $200 and $500 per unit. The summary stock record, or mechanized accounting system, shall contain the following information:

(1) Name and address of contractorwhich should be printed on the property record.

(11) Noun name and Federal Supply Classification of item.

(111) Acquisition document reference and date.

(iv) Disposition document reference and date.

(v) Contract number under which acquired.

(vi) Unit price.

(vii) Quantity received.

(viii) Quantity transferred or disposed of. (ix) Balance on hand.

In addition, where appropriate as determined by the property administrator, the serial number or Government identification number for each item shall be recorded in a permanent manner in the property records and, upon disposition, lined out or otherwise deleted from the record.

(e) Locator system. The contractor shall be prepared to locate any item of such property within a reasonable time after request therefor.

804.4

Records of real property. Records of real property shall consist of maps, drawings, plans and specifications supplemented, where necessary, to reflect building installations such as heating, electrical, sanitary, ventilating, drainage, sprinkler systems, etc. Appropriate changes will be made to the records to reflect alterations, additions, or extensions to real property. Where the maps, drawings, plans, and specifications do not adequately reflect descriptive data as to building installations, supplemental records will be maintained. The foregoing records (a) will be complete, (b) will show the original cost of the property and improvements, and the cost of changes and additions thereto, and (c) will be appropriately

indexed.

304.5 Records of scrap. The contractor shall maintain separate or consolidated records of all scrap or salvage generated. These records may be in accordance with the contractor's system of scrap or salvage control. if approved in writing by the property administrator, who shall take into consideration the need for protecting the Government's interest in the proration, disposition and allocation of proceeds resulting therefrom.

304.6 Records of related data and information. Except as provided in this subparagraph, the requirements of this 30.2 are not applicable to manufacturing or assembly drawings, installation, operation, repair or maintenance instructions, or other similar data and information furnished by the Government to the contractor. The contractor shall maintain property control and accountability with respect to such Gov. ernment-furnished Property in accordance with sound industrial practice.

304.7 Financial Control Accounts—(8) Industrial facilities. The contractor's property control system should be such as to provide semi-annually the dollar amount of Government-owned industrial facilities for each Military Department or Defense Agency, in the following classifications:

(1) Land and rights therein;

(11) Utility distribution systems; (111) Buildings, structures and improvements thereto, excluding plant equipment;

(iv) Plant equipment, excluding production equipment and minor plant equipment; and

(v) Production equipment.

The contractor's accounts will be susceptible to local reconciliation in total and subtotals as to whether contractor-acquired or Government-furnished. Reports of dollar amounts by the above classifications shall be furnished by the contractor to the property administrator upon request; but, such reports shall not be required more often than semi-annually.

(b) Material. The contractor shall furnish the total dollar amounts of all Government material which may be in his possession and shall separately indicate the amount attributable to material which has been furnished by the Government, and materia: which has been acquired by the contractor, title to which is in the Government. However, the following types of Government material are exempted from reporting:

(1) Scrap and salvage,

(11) Items forwarded to the contractor for repair and return to the Government, (111) Work in process,

(iv) Government material estimated to amount to less than $2,500 on any one contract, and

(v) Government shipping containers. Such reports shall be furnished by the contractor upon the request of the property sdministrator: Provided, That such reports shall not be required more often than semi

annually. Bureau of the Budget Report Control Symbol No. 22-R232 has been assigned to the reports required under (a) and (b).

(vi) Materials accounted for under an approved multicontract cost and material control system.

304.8 Financial accounting requirements for multicontract cost and material control systems. Whenever a multicontract cost and material control system is authorized, the contractor's financial accounts must include all material, including Government-furnished material in the system. Specifically, his accounting system must be adequate to: (1) Provide on a complete and timely basis a clear "audit trail" from costs of materials acquired for each contract to materials used or disposed of on each contract; 7(11) Reflect separately for Governmentfurnished and contractor-acquired material in stores (except work in process) the inventory balances as affected by receipts, issues, adjustments and other dispositions;

(111) Determine unit costs for each identiflable part, component, subassembly, assembly, end item and contract item;

(iv) Calculate amounts for cost reimbursements and progress payments during the life of the contract by applying or allocating such unit costs developed through each stage of work in process to contract items for the requirements of each contract; and

(v) Insure that when material furnished by one procuring activity is used on a contract of another procuring activity, the furnishing activity receives credit for such material.

305. Numbering property accounts. A property account, consisting of records maintained either by a Contractor or Government personnel, shall be assigned a property account number.

PART IV-MISCELLANEOUS PROVISIONS

401. Identification. All Government property shall be recorded and identified as such by the contractor promptly upon receipt, and it shall remain so identified so long as it remains in the custody, control or possession of the contractor.

(a) Extent of identification. (1) As a general rule, all Government material and minor plant equipment shall be identified as Government property except in those cases where:

(1) No materials or minor plant equipment of the same type at the same location are owned by the contractor, his employees, or other contracting agencies;

(11) Adequate physical control is maintained over tool-crib items, guard force items, protective clothing and other items issued for use by individuals in the performance of their work under the contract;

(111) Property is of bulk type or by its general nature of packing or handling precludes adequate marking, as may be determined by the property administrator; and

(iv) Where property is commingled, as authorized by 206 of this section.

(2) Government-owned special tooling shall be marked with the designation of the Military Department responsible for funding and control of such tooling, as follows: Army-"USA", Navy-"USN", Air Force"USAF", and Defense Supply Agency"USD", unless it is determined that such marking will damage the special tooling or is otherwise impracticable. Marking and identification procedures may be expanded by the Department having cognizance over the tooling to include end item reference, drawing number, and such other information as may be desired in a given case.

a

(3) Unless already marked in accordance with these instructions, all Governmentowned plant equipment, including industrial reserve plant equipment, shall be marked by the contractor with a Government identification number, except minor plant equipment; or when the size of the equipment or nature of the material for which it is made makes it impracticable, and in which case such item will be assigned Government identification number for record purposes, which number shall be shown in the plant equipment property records; or the equipment is accessory or auxillary and attached to or otherwise a part of an item of plant equipment and is required for its normal operation (see 304.3 (a) of this section), in which case such item shall be entered and described on the record of the equipment to which it is attached or of which it is otherwise a part. Once a Government identification number has been affixed to an item of plant equipment, the identification will be permanent and will not be changed so long as the equipment remains under the control of the same Military Department (but see (4) below). Identification shall be effected by affixing a metal, fibre, plastic, or other plate directly to the equipment; by using indelible ink, acid or electric etch, steel dies, or any other legible, permanent, conspicuous, and tamper-proof method. Identification shall consist of the following markings:

(1) An indication of Government-ownership and of the Military Department responsible for funding and control of the plant equipment, as follows: Army—“USA”, Navy "USN", Air Force-"USAF", and Defense Supply Agency-"USD"; however, the identification "U.S." property shall not be charged solely to conform to the provisions of this paragraph.

(11) A two-part identification number, furnished by the Government, consisting solely of numerals except as provided in (111) below. The first part shall be the property account number, and the second part shall be a serial number. In case plant equipment furnished by the Government is already identified as property of a Military Department, no change shall be made in the markings, except as provided in (4) below.