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).

306. Property control records. The Contractor shall maintain proper control over all Government property in accordance with methods which have been established by the contractor and approved by the property administrator consistent with the following:

(a) Material issued directly upon receipt, minor plant equipment and special tooling(1) Fixed price contracts. In the case of Government-furnished material which is issued directly by the contractor upon receipt so as to be considered expended under the contract, and in the case of minor plant equipment, and special tooling, the documents evidencing receipt and issue maintained by the contractor will be accepted as property control records; and

(11) Cost type contracts. For material, whether Government-furnished or contractor-acquired, issued by the contractor directly so as to be considered expended under the contract, for minor plant equipment, and for special tooling, the Government invoices, contractor's purchase documents or other documentary evidence of acquisition and issue, will be accepted as adequate property control records.

(b) Material maintained in stocks. In the case of material furnished by the Government under fixed price contracts, and in the case of material furnished by the Government or procured by the Contractor, title to which vests in the Government, under cost-type contracts, which material is maintained by the Contractor in stock or stores, the Contractor shall compile and maintain appropriate records covering the description, cost when known, acquisition and disposition, and such other information as may be required to identify the property. Records of consumption on a unit or accumulated basis shall also be maintained. The Contractor shall be prepared to locate such property within a reasonable time after request therefor.

(c) Plant equipment. The contractor shall maintain property accounting records as stated in C-207.4 and C-207.5 for Government-owned plant equipment in his possession.

(d) Real property. In the case of real property furnished by the Government under fixed price contracts, and in the case of real property furnished by the Government or acquired by the Contractor, title to which vests in the Government, under cost-type contracts, the Contractor shall maintain a continuous itemized record of the description, location, acquisition cost, and disposition of all Government real property, includ

ing unimproved real property, all alterations and all construction work, and any site connected with such alteration or construction, acquired by purchase, lease or other. wise. This itemized record may be in the form of a cross-reference to maps, drawings, plans and specifications.

(e) Records of related data and information. Except as provided in this subparagraph, the requirements of this § 30.3 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 Governmentfurnished property in accordance with sound industrial practice.

307 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

(A) 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;

(B) 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;

(C) 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; or

(D) Property is commingled, as authorized by 210 of this section.

(11) 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. The identification "U.S." property shall not be changed solely to conform to the provisions of this paragraph;

(111) 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

the nature of the material from which it is made makes it impracticable, in which case such item will be assigned a Government = identification number for record purposes, which number shall be shown in the plant equipment property record; or the equipment is accessory or auxiliary and attached to or otherwise a part of an item of plant equipment and is required for its normal operation, in which case such item shall be entered and described on the record of the equipment to which it is attached or of 2 which it is otherwise a part. Once a Govvernment 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 (iv) below). Identification shall be effected by affixing a e 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:

(A) 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 changed solely to conform to the provisions of this paragraph;

(B) A two-part identification number, furnished by the Government, consisting solely of numerals except as provided in (C) 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 (iv) below; and (C) In the case of items included within a standard Departmental registration system, for example, automotive, construction, or weight-handling equipment, application for a proper registration number will be made to the cognizant Department, which number shall be used in lieu of any other identification number.

(iv) Government identification markings shall be removed prior to sale or scrapping. The markings so removed shall be shown on the appropriate documents involved. In the case of a transfer of funding and control responsibilities to other Military Departments new identification markings, in accordance with the requirements of (11) or (111) above, may be affixed upon receipt of the equipment by the receiving Military Department.

(b) Recording Government identification numbers. Assigned Government property identification numbers will be recorded on all applicable receiving documents, shipping documents, and any other documents pertaining to the property accounts.

308. Segregation and commingling. The contractor shall keep Government property segregated, except where commingling is approved by the property administrator as being to the mutual benefit of the Government and the contractor, or where the Government property involved is plant equipment, special tooling or minor plant equipment which is clearly identified or marked as Government property and is supported by appropriate control records.

309. Inventories. (a) Interim physical inventory. The contractor shall take a physical inventory of Government property whenever required by the property administrator, but such inventory shall not normally be required of the contractor more often than once a year. The inventory shall show the quantity and monetary value of each item of property inventories, and shall normally be limited to materials and minor equipment held in stocks and stores, and plant equipment. It shall be classified by categories of whatever items are inventories, such as material, special tooling, minor equipment, plant equipment, etc.

(b) Joint physical inventory and selective examinations. The property administrator, if he desires, may join with the contractor in taking the inventory required to be taken by the contractor. The property administrator shall have the right to take an inventory or make selective examinations, whenever he deems it necessary to protect the Government's interest.

(c) Terminal physical inventory. The contractor shall take upon completion or termination of the contract, a physical inventory adequate for disposal purposes of all Government property applicable to the contract in the custody, control, or possession of the contractor. The inventory shall be prepared on both a quantitative and monetary basis and be classified by categories, such as material, special tooling, minor equipment, plant equipment, etc. Standard items that have been modified may be described as standard items, with a general description of the modification. Items that have been constructed, such as test equipment, should be described in sufficient detail to permit a potential user to determine whether they are of sufficient interest to warrant further inspection.

310. Control of scrap and salvage. Procedures for the control of scrap and salvage shall not be required unless the property administrator determines that the scrap or salvage is substantial in amount and the Government is not receiving sufficient benefits from the use or disposal thereof in which event the following procedures shall be applicable:

(a) The contractor shall establish a procedure whereby all Government property that can be salvaged shall be returned to Government stock, which procedure shall be subject to the approval of the property administrator; and

(b) If the property administrator determines that the contractor's scrap procedures and records are adequate to protect the Government's interest, he shall approve same in writing and furnish the contractor a copy thereof. If the property administrator determines that corrective measures are necessary to protect the Government's interests, he shall so advise the contractor. Where corrective action would involve substantial increased costs or where agreement as to corrective action is not reached through mediation, the difference will be referred to the contract administrator.

[25 F.R. 14338, Dec. 31, 1960, as amended at 27 F.R. 11665, Nov. 27, 1962; 28 F.R. 12576, Nov. 23, 1963; 29 F.R. 2844, Feb. 29, 1964; 29 F.R. 6941, May 27, 1964]

§ 30.4 Appendix D-Rules for notice and hearing under gratuities clause in Armed Services Procurement Regulation 7.104-16.

1. Introduction. Section 631 of the Department of Defense Appropriation Act, 1952, Public Law 179, 82d Congress, and similar statutory requirements in subsequent Department of Defense appropriation acts, require all contracts, other than contracts for personal services, which call for the expenditure of funds appropriated for the military departments under the Act to contain a clause permitting the termination of the contractor's right to proceed under any such contract and permitting the Government to pursue the remedies that it could pursue in the event of breach of contract if it is found after notice and hearing by the Secretary of the department with which the contract was made, or by his duly authorized representative, that gratuities (in the form of entertainment, gifts or otherwise) were offered or given by the contractor or by his agent or representative to any officer or employee of the Government with a view toward securing a Government contract or favorable treatment with respect to the awarding or amending, or the making of any determination with respect to the performing of such contract. The military departments have prescribed the use of such clause, as set forth in the Armed Services Procurement Regulation, paragraph 7.104-16, in contracts as required by the above Act and in other procurement contracts. It is the purpose of these rules to make provision for the giving of the notice of hearing, for the conduct of the hearing, and for other procedural matters incident to the exercise of the rights and special remedies provided by the prescribed clause, wherever it is now or may hereafter be used in contracts of the military departments. In the interest of uniformity in proceedings before the three

The provisions of § 631 of Public Law 179, 82d Congress have been enacted as permanent law (5 U.S.C. 174).

military departments, these rules are hereby adopted. Nothing herein shall be construed to affect or impair (1) the pursuit of other remedies available to the Government in any instance, or (2) the right of termination of any contract for any reason available to the Government under the terms of such contract.

2. Definitions. Department. The term "department" means the Department of the Army, the Department of the Navy, or the Department of the Air Force.

Secretary. The term "Secretary" means the Secretary, the Under Secretary, or any Assistant Secretary of any military depart

ment.

Designee. The term "designee" means the person or board to whom authority has been delegated by the Secretary under Rule 3. The designee is the Secretary's authorized representative.

3. Delegation of authority. The Secretary may delegate to any person, military or civillan, or board of such persons within his Department all the authority of the Secretary conferred by statute or the prescribed contract clause to give notice of hearings, to conduct hearings and to make findings of fact with respect to (1) whether a gratuity was offered or given by a contractor or any agent or representative of such contractor to a Government officer or employee with a view toward securing a contract or securing favorable treatment with respect to the awarding or amending or the making of any determinations with respect to the perform. ance of such contract; and (11) where appropriate, the amount of the costs incurred by the contractor in providing such gratuity. If the Secretary delegates his authority to a board, one of the members thereof shall be a person trained in the law, and the Secretary shall designate one member to be the presiding officer of the board.

4. Notice and contents. Whenever information coming to the attention of the Department indicates that the procedures provided herein may be properly invoked, the Department may cause a written notice to be served upon the contractor in the manner hereinafter provided. The notice shall be signed by the Secretary or his designee and dated and shall include the following items:

(a) A statement of the time, place, and purpose of the hearing, and the authority and jurisdiction under which it will be held. The statement as to purpose need only identify the contract clause, the contract or contracts involved, and the ultimate facts to be determined. The time of the hearing shall not be less than 10 days after service of the notice.

(b) Brief allegations setting forth the circumstances surrounding the offering or giving of the gratuity, including a description of the alleged gratuity itself and its estimated cost to the contractor; an identification of the offeree or donee and of the

offerer or donor and the latter's relationship to the contractor; and the approximate date and place of the alleged offer or gift. Such allegations need be only sufficient to apprise the contractor reasonably of the issues involved in the hearing.

(c) A request that the contractor answer in writing the allegations of the notice, including in his answer such facts or argument as he may wish, and that he attend the hearing to adduce such evidence with respect to the alleged offer or gift as he may desire.

A suggested form of notice is set out as an appendix to these rules.

5. Service of notice. Service shall be made by mailing or delivering a copy of the notice to the contractor. Delivery of a copy means handing it to the party to be served, or, if the party is a corporation, partnership, or unincorporated association, handing it to an officer, partner, managing or general agent, or C any other agent authorized by appointment or by law to receive service of process, or by leaving the copy at the contractor's office with the person in charge thereof. Service by mall shall be made only by certified mail and service shall be complete upon mailing. The manner of service shall be evidenced by the - signed endorsement of the person making the service upon a copy of the notice to be included in the record of the proceeding. Service of notice may be accepted or waived by the contractor by written endorsement on a copy of the notice.

6. Continuances and delays. The authority to grant continuances or to adjourn the hearing shall rest with the person presiding at the hearing. Continuances will only be allowed for the most compelling reasons.

7. Parties. The parties to the hearing will be the contractor concerned and the Government. No intervention by other persons shall be permitted.

8. Representation and hearing assistants. The parties may be represented at the hearing and proceedings incident thereto by legal counsel. Upon the appearance of record of legal counsel of the contractor in the proceedings, service of papers as may thereafter be required may be made upon such legal counsel. The Department will make available such technical assistants, including a reporter, secretary or notary, as may be required.

9. Transcript. Testimony and arguments shall be reported verbatim. The reporter or secretary shall make available to the contractor and to the Government transcripts of the proceedings, including all testimony and copies of all documentary exhibits upon the payment of the reasonable costs thereof as the Department may by order fix.

10. Hearings. Hearings shall be conducted by the Secretary or his designee. Hearings will be as informal as may be reasonably appropriate under all the circumstances. Evidence and testimony, although not ordinarily admissible under legal rules of evi

dence, may be received subject to the discretion of the person presiding at the hearing. Immaterial, irrelevant, or unduly repetitious evidence shall be excluded. The parties may stipulate as to any facts or testimony. The testimony of witnesses shall be under oath and witnesses shall be subject to cross-examination. The hearing officer shall make such rulings with respect to the conduct of hearings as circumstances may require to ensure the orderly and expeditious presentation of evidence in a manner fair to the parties and consistent with these Rules and requirements of due process of

law.

11. Depositions. Following service of the notice of hearing, a deposition may be taken as herein provided, and placed in evidence whenever the ends of justice will be served thereby.

(a) Notice to take. When either party desires to take a deposition, unless the parties stipulate as to the time when, and place where, the deposition is to be taken, the name of the officer before whom it is to be taken, and the names and addresses of the witnesses, the moving party shall give to the opposite party at least ten days' notice of the time when and the place where such deposition will be taken, the name and address and official title of the officer before whom it is proposed to take the deposition, and the names of the witnesses. A deposition may be taken either upon written interrogatories or upon oral examination, as may be specified in the notice. If the deposition is to be taken upon written interrogatories, copies thereof must accompany the notice to take depositions; if the opposite party desires to submit cross-interrogatories, written cross interrogatories should be served upon the party giving the notice within 5 days from the receipt of the notice to take the deposition. Notices may be served upon the contractor as provided by Rule 4 or upon his legal counsel of record. Service upon the Government may be made upon the person signing the notice of hearing or the Government representative of record. If service is made by mail, the mail shall be registered and service will be complete upon mailing.

(b) Taking depositions. Depositions may be taken before and authenticated by any officer, military or civil, authorized by the laws of the United States or by the laws of the place where the deposition is taken, to administer oaths. Witnesses shall be under oath and shall be subject to cross-examination as at the hearing. Objections will be reserved for determination at the hearing; provided, however, objections as to the form of questions shall be made and noted in the deposition. Each deposition shall show the caption of the proceeding, the place and date of taking, the names of the witnesses, and the party by whom called. The officer taking a deposition shall enclose the original

deposition and exhibits, in a sealed packet, with postage or other transportation prepaid, and forward the same to the Secretary or his designee.

(c) Use of deposition. Testimony taken by deposition will not be considered until offered in whole or in part and received in evidence. A deposition taken by one party may be offered by the opposite party.

12. Submissions without appearance: absence of parties. If the contractor fails or refuses to appear or to make a written submission without appearing at the hearing, the hearing shall proceed upon such evidence as the Government may offer. The unexcused absence of any party shall not be occasion for delay of the hearing. Notwithstanding the nonappearance of the contractor at the hearing, proposed findings, conclusions, and argument may be submitted in writing on the contractor's behalf as provided in Rule 13.

13. Argument and request for findings. Within the discretion of the person presiding at the hearing, limited oral argument may be presented by the parties upon the completion of the hearing. Within ten days after the hearing is completed, both parties may file in writing with the person or board conducting the hearing proposed findings and conclusions with reasons and argument in support thereof. Copies will be provided to the opposite party.

14. Findings and decision. As soon 88 practicable after completion of the hearing and the timely submission of proposed findings and conclusions, the person or board that conducted the hearing shall make written findings and conclusions with respect to all material issues; reasons for the findings will be included at such length as may be appropriate. The findings where adverse to the contractor will include, in addition to other appropriate items, the following: (1) a description of the gratuity that was offered or given; (11) a statement of the costs incurred by the contractor in providing the gratuity; (iii) the name and relationship to the contractor of the person by whom the gratuity was offered or given on the contractor's behalf; (iv) the name and position of the officer or employee of the Government to whom the gratuity was offered or given; (v) a description of the contract which the Contractor sought to secure by the offering or giving of the gratuity, or a statement as to the nature of the favorable treatment so sought with respect to the awarding or amending, or the making of any determinations with respect to the performing of a contract. When the findings are made by a designee they shall be forwarded to the Secretary with recommendations as to whether the right of the contractor to proceed under any contract mentioned in the notice of hearing shall be terminated, and as to the exemplary damages to be imposed against the contractor, which shall be in

a gratuity

has been offered or given on behalf of the XYZ Corporation to an officer or employee of the Government of the United States with a view toward securing (a contract) (favorable treatment with respect to the awarding or amending, or the making of any determinations with respect to the performing of a contract). If it is found that a gratuity was so offered or given, your right to proceed under the contract may be terminated, and a penalty imposed in accordance with the contract clause mentioned above. In the event of such termination the Government will be entitled to pursue the remedies available for breach of contract.

2. The hearing at the time and place aforesaid will be held under the authority of (cite applicable Public Law and clause of contract(s)). Enclosed is a copy of the Rules promulgated by the Secretary of the

pursuant to which the hearing will be conducted. Papers pertaining to the proceedings may be captioned as above.

3. The contract(s) involved in the hearing, and which is (are) subject to termination if a gratuity is found to have been given or offered to secure favorable action as aforesaid, is (are) identified as follows: Contract number ------ dated under the cognizance of -- and executed by on behalf of the Government as the Contracting Officer.

4. The gratuity offered or given and the circumstances relating thereto are alleged to be as follows: (Include in a concise statement the nature of the alleged gratuity; s fair estimate of the costs incurred by the contractor in providing the gratuity; the identity of the offeree or donee and his posttion with the government; the identity of the offerer or donor and his relationship to