Code of Federal Regulations: Containing a Codification of Documents of ...

trol File is maintained as an adjunct to the contract working file);

(b) Letters designating authorized representatives of the Contracting Officer for property matters;

(d) Record of visits, property system examinations and analyses, and appropriate work papers;

(e) Documents evidencing the furnishing of Government property;

(f) Contractor's receipts for Government furnished property;

(g) Contractor's notices of acquisitions of contractor purchased or fabricated Government property as prescribed in DOTPR Supplement 1;

(h) Contractor's physical inventory and financial property reports as prescribed in DOTPR Supplement 1;

(i) Documents evidencing the removal of Government property from the custody of the contractor, the transfer of Government property to another contract or another contractor, and the disposal of Government property;

(j) Documents evidencing relief of the contractor from responsibility for Government property due to loss, damage, destruction, or unreasonable wear or deterioration or unjustifiable consumption in the performance of the contract;

(k) Any other correspondence affecting the status of Government property under the contract; and

(1) Statement of closure of the contract property account.

§ 12-70.509 Evaluation and approval contractor's property control system.

(a) The choice of the methods to be used for evaluation and approval of the contractors property control system is a matter of judgment by the Property Administrator, predicated on the nature and amount of Government property involved in any particular contract. Regardless of the the methods used, it is the responsibility of the Property Administrator to determine that the contractor's system will meet the requirement of DOTPR Supplement 1 and other contract requirements as appropriate.

(b) It is normal contractor practice to provide for the control of property

by means of written procedures that communicate the organization's standards, techniques, and instructions to operational personnel for uniform application. However, depending on the number of contractor employees and the nature, quantity, and value of the property, a contractor may not need written procedures for effective management of Government property. In such cases, the Property Administrator, if he agrees that written procedures are not required, will evaluate the adequacy of the contractor's system on the basis of the contractor's explanation of his controls and prepare a brief description of the applicable procedures for inclusion in the Contract Property Control File.

(c) Upon completing his evaluation of the contractor's system, the Property Administrator will prepare a written summary of his findings to support approval of the system or requirement for corrective action prior to such approval. The Property Administrator will forward to the contractor a listing of any deficiencies found as a result of the evaluation. The contractor will be requested to indicate within 30 days his willingness to correct the deficiencies or to forward to the Property Administrator a statement of his position thereon.

(d) When the Property Administrator is not successful in obtaining compliance with contract requirements, he will advise the Contracting Officer. If the Contracting Officer concurs with the Property Administrator, he will advise the contractor in writing of the changes or additions required in his property control system and will establish a schedule for accomplishment of the corrective actions. The contractor will be informed that approval of his property control system will be withheld (or withdrawn if previously approved) unless corrective action is accomplished within the specified period. Such notice will also advise the contractor that in the event approval of his property control system is withheld (or withdrawn if previously approved) his liability for loss or damage may be increased. If the contractor fails to make satisfactory progress for correction of the deficiencies in accordance with the schedule, the Con

tracting Officer will advise him in writing, with a copy to the Property Administrator, that approval of his property control system is, as the case may be, withheld or withdrawn.

(e) When the contractor's property control system is acceptable, the Property Administrator will so advise the contractor in writing. When the contract involves Government property at subcontractor plants or prime contractor secondary locations, and the controls for the property at such locations have been determined to be adequate, the approval will be expanded to include the procedures governing Government property at such locations.

§ 12-70.510 Review of contractor's property control system during contract performance.

(a) While the contractor has an incurred obligation to comply, it is incumbent upon the Government to ensure that the contractor does in fact comply with the property control requirements of the contract. The preferred method for carrying out this responsibility is the periodic conduct by the Government of system reviews at the contractor's premises. The need for an frequency of such reviews should be based on case-by-case determinations, considering the particular circumstances relative to a given contract or contractor. When the Property Administrator feels that a system review is necessary, then he must arrange for the conduct of such a review by an appropriate means.

(b) Notwithstanding the requirements of paragraph (a) of this section, it is the continuing responsibility of the Property Administrator to be alert to any indications that the contractor's property control system may be deficient. Examples of such indications are as follows:

(1) Failure of the contractor to acknowledge receipt of Government furnished property;

(2) Failure of the contractor to provide notices of contractor acquisitions of Government property when the contract provides for such acquisition;

(3) Failure of the contractor to submit the annual physical inventory and financial property reports specified in DOTPR Supplement 1;

(4) Discrepancies in contractor's records and weaknesses in control as reflected by the contractor's physical inventory reports;

(5) Contractor's financial property reports do not reconcile with DOT financial control accounts;

(6) Analysis of contractor's costs indicates consumption of material in excess of that considered reasonable;

(7) Inability of the contractor to furnish property listings when requested to do so; or

(8) Analysis of contractor's request for relief of responsibility due to loss or damage indicates inadequate control.

(c) When the Property Administrator has reason to believe that the contractor's property control system is deficient or inadequate, the Property Administrator must take prompt action to obtain correction of such problems. In some cases, discussions with the contractor may suffice. In other cases, it may be necessary to arrange for an on-site system review as discussed in paragraph (a) of this section. Another alternative is to request the conduct of an audit by the appropriate Government contract audit activity. If the situation demands, the procedures set forth in § 12-70.509(d) of this part will be applied.

(d) Records and accounts of Government property will be audited by the Government as frequently as conditions warrant or as may be specifically requested by the Contracting Officer. Audits may take place at any time during the performance of the contract, upon completion or termination of the contract, or at any time thereafter. Audits will include records maintained by the contractor and Government-maintained records for the property involved. Government personnel and the contractor are required to make all property records, including correspondence related thereto, available to the auditors.

to transfer title to equipment acquired with research contract funds to nonprofit institutions of higher education and to other nonprofit organizations whose primary purpose is the conduct of scientific research. This statutory authority must be implemented by express provision in the Special Provisions of contracts with eligible contractors, permitting the Contracting Officer to transfer to the contractor title to equipment acquired with research contract funds at any time during the term of he contract or upon its completion or termination. The contract will reserve the right to require the contractor to transfer title to equipment costing $1,000 or more per unit to the Government or to a third party named by the Government, where the third party is eligible under existing statutes. The reservation will provide that the right may be exercised at any time prior to final payment under the contract.

(b) Title to equipment not acquired with research contract funds will not be transferred but will remain vested in the Government.

§ 12-70.602 Conditions of transfer.

In research contracts with eligible institutions and organizations, the Contracting Officer may, upon his own initiative or upon the request of the contractor, transfer title to equipment at any time during the term of the contract or upon its completion or termination. All transfers of title must be based upon a written determination by the Contracting Officer that transfer with respect to the specific items of equipment is consistent with the best interests of the Department. Until such time as title has been transferred, the property will be administered and controlled as "Government property" in accordance with this part and DOTPR Supplement 1. Upon transfer, such equipment ceases to be "Government property"; however, the transfer of title will be subject to the terms and conditions of the contract and the requirements described in DOTPR Supplement 1.

(a) Disposition of excess and residual contract inventory (hereinafter referred to as "contract inventory") must be accomplished in a timely manner and in accordance with statutory and regulatory requirements. Regulations governing the disposition of contract inventory are:

(1) Federal Procurement Regulations (FPR), Part 1-8;

(2) Federal Property Management Regulations (FPMR), Parts 101-43 through 101-45;

(3) DOT Procurement Regulations (DOTPR); and

(4) Other DOT regulations as referenced herein.

All actions taken by Contracting Officers with respect to disposition of contract inventory must be in strict conformance with the above cited regulations.

(b) Contracting Officers will issue disposition instructions expeditiously upon receipt of acceptable contract inventory reports. Contracts involving Government property cannot be closed out until all residual property has been accounted for and/or disposed of and the Government property file of the contract specifically noted to that effect.

§ 12-70.702 Application of FPR, FPMR and other DOT regulations.

(a) FPR Subpart 1-8.5 sets forth policies and procedures for the disposi

tion of termination inventory and may also be used for the disposition of contract inventory generally. Pursuant to the authority contained in FPR 18.000, FPR Subpart 1-8.5 will be utilized by the Department for the disposition of contract inventory generally.

(b) FPR Subpart 1-8.5 incorporates by reference various requirements and procedures of the FPMR pertaining to disposition of Government property, some of which are optional in nature insofar as contract inventory is concerned. However, it is the policy of the Department, with respect to paragraphs (e) through (h) of § 12-70.704 to effect disposition of contract inventory in accordance with the same requirements and procedures set forth in the FPMR for disposition of other Government excess or surplus proper

ty.

(c) The reporting and screening of contract inventory for possible redistribution within DOT will be accomplished in the same manner, and to the same extent, as required for other types of excess property. Procedures applicable to such reporting and screening will be prescribed in issuances published under the Department's internal management directives system.

§ 12-70.703 Reports of contract inventory.

Requirements and procedures for the submission of contract inventory reports by contractors are set forth in DOTPR Supplement 1. Procedures applicable to the processing of such reports by Contracting Officers are set forth in FPR Subpart 1-8.5.

§ 12-70.704 Disposition methods and priorities.

Subject to the Government exercising its rights to require delivery of any items of contract inventory to satisfy known Government requirements, contract inventory will be disposed of by the following methods in the priority indicated:

(a) Purchase or retention of contractor acquired property at cost by prime contractor or subcontractors (see FPR Subpart 1-8.5);

(b) Return of contractor acquired property to suppliers (see FPR Subpart 1-8.5);

(d) Redistribution within DOT (see § 12-70.702(c));

(e) Utilization by other Government agencies (see FPMR Parts 101-32 and 101-43);

(f) Donation to eligible donees (see FPMR Part 101-44);

(g) Sale-including purchase at less than cost by prime or subcontractor (see FPMR Part 101-45);

(h) Abandonment or destruction (see FPMR Part 101-45).

Subpart 12-70.8-Contract Closure

§ 12-70.8013 Actions by the Property Administrator.

(a) Upon completion or termination of a contract, the Property Administrator must monitor the actions of the contractor and the Government with respect to the return, transfer, or other disposition of Government property. Prior to closing of the contract, the Property Administrator will determine that:

(1) All Government property provided under the contract has been properly accounted for;

(2) Disposition of Government property has been properly accomplished and documented;

(3) Adjustment documents, including request of the contractor for relief from responsibility, have been processed to completion;

(4) Proceeds from disposals or other property transactions, including adjustments, have been properly credited to the contract or paid to the Government as directed by the Contracting Officer;

(5) All questions as to title to property fabricated or acquired under the contract have been resolved and appropriately documented; and

(6) The Contract Property Control File is complete and ready for retirement.

(b) Upon completion of the above actions, the Contract Property Control File will be annotated accordingly and retired with the contract file.

Subpart 12-70.9-Contract Clauses, Government Property

§ 12-70.901 Contract clauses.

Contract clauses and guidance as to their use in specific types of contracts may be found in the following sections:

(a) 12-7.151-8 Fixed Price Supply Contracts,

(b) 12-7.203-21 Cost Reimbursement Type Supply Contracts,

(d) 12-7.402-25 Cost Reimbursement Type Research and Development Contracts,

(e) 12-7.651-5 Fixed Price Construction Contracts,

(f) 12-7.5201-9 Fixed Price Vessel Repair, Alteration or Conversion Contracts.

PART 12-99-DEPARTMENTAL ORDERS

§ 12-99.000 Scope of part.

This part contains the following Departmental orders and notices which pertain to procurement:

DOT 1210.5 DOT Public Affairs Management Manual (02/06/74) Chapter I, "Release of Information".

DOT 1340.5B Contract

System (01/12/73).

Information

DOT 4200.1A Logistics and Certain Logistics-Related Reporting Requirements (05/09/72).

DOT 4200.4 Unsolicited Contract Proposals (12/27/67).

DOT 4200.5 Debarred Bidder's List (01/15/ 68).

DOT 4200.6C Field Contract Inspection Staffs (06/23/75).

DOT 4200.1A Authority to Make Contractual Commitments (09/25/68). DOT 4200.1A Prefixes for Department of Transportation Contract Numbers (04/ 05/71).

DOT 4200.3 Establishment of Department of Transportation Procurement Regulations (06/15/68).

DOT 4200.9 Approval of Acquisition of Major Systems (09/07/72).

DOT 4200.10 Sole Source Review and Approval (09/07/72).

DOT 4200.11 Source Selection (09/07/72). DOT 4200.12 Review of Proposed Contract Awards (09/07/72).

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