§ 12-70.203 Changing the amount of material to be furnished by the Government.

(a) At any time after a contract has been entered into, whether as a result of formal advertising or negotiation, the contract may be bilaterally modified to provide for the furnishing of Government material or to increase the amount to be furnished, provided there is adequate consideration for such modification.

(b) When it is anticipated that substantial quantities of Government material will become available for the contract by transfer from another contract or otherwise, the contract may provide that a unilateral increase in the amount of material to be furnished by the Government may be ordered by the contracting officer, and that the contract shall be equitably adjusted therefor.

(c) Unilateral decreases in or substitutions for the material specified under a contract to be provided by the Government may be ordered by the contracting officer, subject to the equitable adjustment of the contract, in accordance with the provisions of the applicable Government property clause(s) and other terms of the contract.

Subpart 12-70.3-Providing Government Facilities to Contractors

12-70.301 Policy.

(a) It is the policy of the Department of Transportation that contractors will furnish all facilities required for the performance of Government contracts. Facilities will not be provided to a contractor, nor will competitive solicitations offer to provide such property, except as follows:

(1) For use in a Government-owned, contractor-operated plant operated on a cost-plus-fixed-fee basis; or

(2) When the Contracting Officer determines in writing that (i) the contract cannot be fulfilled by any other practical means, or (ii) it is in the public interest.

(b) New facilities will not be provided by the Government where an economical, practical and appropriate alternative exists. Examples include:

(1) Procuring from sources not requiring Government-owned facilities;

(2) Requiring the contractor to make full utilization of subcontractors possessing adequate and available capacity;

(3) Having the contractor rent facilities from commercial sources; and (4) Using existing Governmentowned facilities.

(c) Prospective contractors who propose to use Government facilities, including property offered for use in the solicitation as well as property already in possession of the contractor or his subcontractors, will be required to identify such property in their bids or proposals. Unless prior writtern approval has been obtained by the procurement Contracting Officer, prospective contractors who propose to use Government facilities already in possession of the contractor or his subcontractors under other contracts will be required to submit written approval for the use of such property from the contracting officer cognizant of such property.

§ 12-70.302 Providing Government facilities when disposal is limited.

(a) Nonseverable property. Government facilities, other than foundations and similar improvements necessary for the installation of plant equipment, shall not be installed or constructed on land not owned by the Government in such fashion as to be nonseverable, unless the Head of a Procuring Activity determines in writing that such location is necessary, and:

(1) The contract under which such property is provided contains a provision for reimbursing the Government for the fair value of the property at the completion or termination of the contract or within a reasonable time thereafter (for example, in appropriate cases, such a provision may require the contractor to purchase the property at a value to be determined by appraisal, or at a price equal to its acquisition cost less depreciation at a specified rate considering its estimated useful life, or may require the contractor to reimburse the Government for its scrap or salvage value if the Head

of a Procuring Activity determines that its estimated useful life will not extend beyond the expiration of the contract or the completion of the work for which the property was provided); (2) The Government has an option to acquire the underlying land; or

(3) The contract under which such property is provided contains an alternate provision that the Head of the Procuring Activity considers to be adequate to protect the interests of the Government therein. (The authority of the Head of the Procuring Activity under this paragraph may not be delegated.)

(b) Property Subject to Patent or Other Proprietary Rights. If patent or other proprietary rights of a contractor may restrict the disposal of Government facilities, the condition in either paragraph (a)(1) or (a)(3) of this section shall be satisfied before such property is provided.

12-70.303 Offers to furnish Government facilities.

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(a) Generally, where Government facilities are offered for use in a competitive procurement, the solicitation should provide that the user assume all costs related to making the property available, to avoid the need for separate evaluation of such costs. Where this is not feasible, or it is otherwise in the Government's interest, the Government may assume such costs provided they are included in the evaluation of bids or proposals.

(b) When a solicitation contains an offer to furnish Government facilities (including an offer to use Government property already in the possession of a prospective contractor), and when the furnishing and use of such property will result in either direct and measurable costs to the Government or direct and measurable savings to the Government, then:

(1) Such costs or savings will be set forth in the solicitation;

(2) The manner in which such costs or savings will be applied in the evaluation of bids or proposals will be set forth in the solicitation; and

(3) Such costs or savings will be considered in the evaluation of bids and proposals.

(c) Government facilities may be offered on an "as is" basis in solicitations for fixed-price type contracts, whether such property is in storage or in the possession of a contractor, provided that the property can be inspected by bidders or proposers prior to the submission of their offers. In such cases, the solicitation will state:

(1) The availability and location of the property, and the conditions under which it may be inspected;

(2) That the property will be offered in its current condition, f.o.b. present location;

(3) That bidders or proposers must satisfy themselves that the property is suitable for their use;

or

(4) That any costs of transporting, installing, modifying, repairing, otherwise making the property suitable for use shall be borne by the successful bidder or proposer; and

(5) The bidders or proposers to whom the property is offered, if it is not to be offered to all.

(d) If it is not feasible to make Government facilities available to all bidders or proposes, solicitations offering to furnish such property may limit the offer accordingly.

§ 12-70.304 Changing Government facilities to be provided.

The amount of Government facilities specified under a contract to be provided may be increased by a bilateral modification of the contract. Such increases will be made only when approved in accordance with the policies prescribed in this Subpart 12-70.3 and when the Government receives adequate consideration therefor. Unilateral decreases in or substitutions for the Government property specified under a contract to be provided by the Government may be ordered by the contracting officer, subject to the equitable adjustment of the contract, in accordance with the appropriate Government property clause and other terms of the contract.

It is the policy of the Department of Transportation to put Government facilities which are in the possession of a contractor or subcontractor to the greatest possible use in the performance of Government contracts or subcontracts. Facilities over which DOT has cognizance and which are in the possession of a contractor or subcontractor will not be authorized for use except for the performance of Government contracts or subcontracts, unless other use of such property is specifically authorized by law or other DOT regulation. When a contractor is authorized to use facilities over which DOT has cognizance for the performance of Government contracts or subcontracts, no charge will be made for such use. However, the Contracting Officer having cognizance of the prime contract must determine that the Government will receive adequate consideration for the use of the property through reduced costs for the supplies or services or otherwise.

§ 12-70.402 Use of facilities under the cognizance of another department or agency.

When DOT procurement contracting officer has obtained approval for the use by a contractor or subcontractor of Government facilities over which another department or agency has cognizance, and regulations of such department or agency require that the contractor be charged for such use, then the contract will provide for the payment of such charge. It is the responsibility of the contracting officer of the department or agency having cognizance of the property to collect for such charges.

§ 12-70.403 Use by another department or agency of facilities under the cognizance of DOT.

When a contracting officer of another department or agency requests approval for the use by a contractor or subcontractor of facilities over which DOT has cognizance, it is the responsi

§ 12-70.502 Responsibilities of the Contracting Officer.

The Contracting Officer is responsible for:

(a) Assuring that all contracts which provide for the use of Government property include necessary provisions relative to the use, control, and disposition of such property, including the appropriate Government property clause and DOT PR Supplement 1Manual for Control of Property in the Possession of Contractors;

(b) Performing, or arranging for the performance of, all actions required to effect and carry out the provisions of the contract and this part relative to Government property;

(c) Providing necessary direction to the contractor, either directly or through an authorized representative of the contracting officer, on all matters pertaining to Government property;

(d) Obtaining from the contractor all required reports and other management data; and

(e) Cooperating with and assisting the appropriate DOT accounting office in all matters pertaining to the financial accounting for Government property.

§ 12-70.503 Actions requiring approval of the Contracting Officer.

The actions listed below (and which are subject to other applicable provisions of this part) require the written approval of the Contracting Officer, except that the actions set forth in paragraphs (e) and (f) of this section may be approved by an authorized representative of the Contracting Officer who has been designated as such in writing. The contractor will be notified in writing when an authorized representative has been so designated. No other person will be permitted to approve these actions on behalf of the Government

(a) Providing Government property to a contractor when providing such property has not been previously authorized in the contract.

(b) Changing the amount of Government property specified to be provided in a contract.

(c) Authorizing the use by a contractor of Government property provided under one contract for work under another contract, unless the latter contract specifically authorizes such use.

(d) Relieving a contractor of responsibility for Government property due to loss, damage, destruction, or unreasonable wear or deterioration or unjustifiable consumption in the performance of the contract.

(e) Directing the removal of Government property from the custody of a contractor, the transfer of Government property to another contract or to another contractor (but only when such transfer has been authorized pursuant to paragraph (a), (b), or (c) of this section), or the disposal of Government property.

(f) Approving a contractor's property control system.

§ 12-70.504 Assignment of responsibility for Property Administration.

The Contracting Officer may delegate to another individual the authority to administer the contract requirements and obligations relative to Government property. The individual to whom this authority is delegated will be designated in writing as the Property Administrator for the contract, and the contractor will be notified of such designation in writing. In selecting a

§ 12-70.505 Responsibilities of the Property Administrator.

A designated Property Administrator should be assigned the responsibilities and duties set forth below. This listing is provided for guidance and is not intended to be inclusive or exclusive. Any responsibilities of the contracting Officer relative to Government property which are not assigned to a property administrator remain with the Contracting Officer

(a) Establishing and maintaining a property control file for each contract. (b) Evaluating and approving the contractor's property control system.

(c) Reviewing the contractor's property control system during contract performance, to the extent required by § 12-70.510.

(d) Advising the Contracting Officer as to the contractor's noncompliance with approved procedures.

(e) Resolving property administration matters with the contractor's management and with Government procurement, property, accounting, and audit personnel.

(f) Obtaining assistance in property matters from other Government personnel in such technical areas as accounting, audit, disposal, quality assurance, engineering, and pricing.

(g) Providing necessary direction to the contractor on matters pertaining to Government property, including authorization for the commingling of government and contractor property.

(h) Assisting the servicing DOT accounting office in matters pertaining to financial accounting for Government property.

(i) Analyzing the use or consumption of Government property by the contractor to determine reasonableness of consumption and proper utilization.

(j) Preparing written determinations, for the Contracting Officer's sig

nature, for relieving the contractor of responsibility for Government property due to loss, damage, destruction, or unreasonable wear or deterioration or unjustifiable consumption in the performance of the contract.

(k) Effecting the removal of Government property from the custody of a contractor, the transfer of Government property to another contract or to another contractor, and the disposal of Government property.

(1) Certifying to the Contracting Officer that all Government property provided under a completed or terminated contract has been properly accounted for the disposition effected.

Manual for control of property in possession of contractors.

This manual sets forth basic requirements to be observed by contractors in establishing and maintaining control over Government property provided for performance of contracts with the Department. The manual supplements provisions of the contract that apply to Government property, but does not supersede them. The contract provisions will govern in the event of any conflict with the manual. If there is evidence that Government property will be required in performance of a contract, the Contracting Officer will reference the manual in the solicitation and make it available on request. The manual will be incorporated by reference in all contracts which provide for the use of Government property and will be issued to the contractor at time of award if not previously provided.

§ 12-70.507 Records of Government property.

(a) Records of Government property established and maintained by the contractor pursuant to the terms of the contract will be designated and utilized as the official contract records. Exceptions to this policy may be authorized by the Contracting Officer for those contracts in which contract administration is retained by the procurement office involving Government property:

(1) Furnished to a contractor for repair or servicing and return to the

shipping organization or (2) furnished to a contractor for use on a Government installation. In such cases, the property will be accounted for as a suspense item within the Government property account designated by the procurement office, and the Government property clause will be appropriately modified.

(b) Maintenance of official records for DOT financial accounting purposes is the responsibility of the DOT accounting activity that provides accounting service to the procurement office responsible for the contract. The Property Administrator will ensure that the servicing accounting activity is provided copies of documents necessary to maintain financial accounting for Government property, including: (1) Government shipments, (2) notices of contractor acquisitions, (3) physical inventory reports, (4) transfers and disposals, and (5) contractors annual financial property reports as specified in DOTPR Supplement 1.

(c) Each procurement office having contracts involving Government property will maintain a consolidated and current listing of all such contracts. This listing is to be primarily used for the purpose of verifying that contractors submit the annual reports prescribed in DOTPR Supplement 1. The Property Administrator will prompt action to obtain any delinquent reports and will assist the accounting activity as necessary in effecting reconciliation between contractor property reports and the DOT financial accounts.

take

(d) When contracts involving property are reported for inclusion in the DOT Contract Information System, the procurement office will ensure that input to the system includes the required property code.

8 12-70.508 Contract property control file.

Upon award of a contract, the Property Administrator will establish a Contract Property Control File which will include as a minimum:

(a) Copy of the contract or extract of provisions thereof establishing requirements for property administration (except when the Property Con