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trol File is maintained as an adjunct to by means of written procedures that the contract working file);
communicate the organization's stand(b) Letters designating authorized ards, techniques, and instructions to representatives of the Contracting Of. operational personnel for uniform apficer for property matters;
plication. However, depending on the (c) Report of initial review, evalua number of contractor employees and tion, and approval of the contractors the nature, quantity, and value of the property control system;
property, a contractor may not need (d) Record of visits, property system written procedures for effective manexaminations and analyses, and appro agement of Government property. In priate work papers;
such cases, the Property Administra(e) Documents evidencing the fur tor, if he agrees that written procenishing of Government property;
dures are not required, will evaluate (f) Contractor's receipts for Govern the adequacy of the contractor's ment furnished property;
system on the basis of the contractor's (g) Contractor's notices of acquisi explanation of his controls and pretions of contractor purchased or fabri pare a brief description of the applicacated Government property as pre ble procedures for inclusion in the scribed in DOTPR Supplement 1; Contract Property Control File.
(h) Contractor's physical inventory (c) Upon completing his evaluation and financial property reports as pre of the contractor's system, the Properscribed in DOTPR Supplement 1;
ty Administrator will prepare a writ(i) Documents evidencing the remov ten summary of his findings to supal of Government property from the port approval of the system or requirecustody of the contractor, the transfer ment for corrective action prior to of Government property to another such approval. The Property Adminiscontract or another contractor, and trator will forward to the contractor a the disposal of Government property; listing of any deficiencies found as a
(j) Documents evidencing relief of result of the evaluation. The contracthe contractor from responsibility for tor will be requested to indicate within Government property due to loss, 30 days his willingness to correct the damage, destruction, or unreasonable deficiencies or to forward to the Propwear or deterioration or unjustifiable erty Administrator a statement of his consumption in the performance of position thereon. the contract;
(d) When the Property Administra(k) Any other correspondence affect tor is not successful in obtaining coming the status of Government property pliance with contract requirements, he under the contract; and
will advise the Contracting Officer. If (1) Statement of closure of the con the Contracting Officer concurs with tract property account.
the Property Administrator, he will 8 12-70.509 Evaluation and approval con
advise the contractor in writing of the
changes or additions required in his tractor's property control system.
property control system and will es(a) The choice of the methods to be tablish a schedule for accomplishment used for evaluation and approval of of the corrective actions. The contracthe contractors property control tor will be informed that approval of system is a matter of judgment by the his property control system will be Property Administrator, predicated on withheld (or withdrawn if previously the nature and amount of Govern approved) unless corrective action is ment property involved in any particu- accomplished within the specified lar contract. Regardless of the the period. Such notice will also advise the methods used, it is the responsibility contractor that in the event approval of the Property Administrator to de of his property control system is withtermine that the contractor's system held (or withdrawn if previously apwill meet the requirement of DOTPR proved) his liability for loss or damage Supplement 1 and other contract re. may be increased. If the contractor quirements as appropriate.
fails to make satisfactory progress for (b) It is normal contractor practice correction of the deficiencies in acto provide for the control of property cordance with the schedule, the Con
(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 fi
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 in clude the procedures governing Government property at such locations.
8 12-70.510 Review of contractor's proper.
ty control system during contract per
formance. (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 con. tract 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;
(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.
Subpart 12-70.6—Vesting of Title to Equipment Under Research Contracts
(a) In accordance with the provisions of 42 U.S.C. 1892, DOT is authorized
to transfer title to equipment acquired 812-70.603 Contracts performed at Gov. with research contract funds to non- ernment installations. profit institutions of higher education
Notwithstanding the provisions of and to other nonprofit organizations § 12-70.602 of this part, when the conwhose primary purpose is the conduct tractor is performing at a Government of scientific research. This statutory installation and there will be a conauthority must be implemented by ex tinuing need for the equipment at that press provision in the Special Provi. location following completion of the sions of contracts with eligible con contract, title to such equipment will tractors, permitting the Contracting not be vested in or transferred to the Officer to transfer to the contractor contractor. title to equipment acquired with research contract funds at any time Subpart 12-70.7—Disposition of during the term of he contractor Excess and Residual Contract Inupon its completion or termination. ventory The contract will reserve the right to require the contractor to transfer title 8 12–70.701 General. to equipment costing $1,000 or more
(a) Disposition of excess and residual per unit to the Government or to a
contract inventory (hereinafter rethird party named by the Govern ferred to as “contract inventory”) ment, where the third party is eligible must be accomplished in a timely under existing statutes. The reserva manner and in accordance with statution will provide that the right may be tory and regulatory requirements. exercised at any time prior to final Regulations governing the disposition payment under the contract.
of contract inventory are: (b) Title to equipment not acquired (1) Federal Procurement Regulawith research contract funds will not tions (FPR), Part 1-8; be transferred but will remain vested (2) Federal Property Management in the Government.
Regulations (FPMR), Parts 101-43
through 101-45; § 12–70.602 Conditions of transfer.
(3) DOT Procurement Regulations In research contracts with eligible (DOTPR); and institutions and organizations, the
(4) Other DOT regulations as referContracting Officer may, upon his
enced herein. own initiative or upon the request of All actions taken by Contracting Offithe contractor, transfer title to equip- cers with respect to disposition of conment at any time during the term of tract inventory must be in strict conthe contract or upon its completion or formance with the above cited regulatermination. All transfers of title must tions. be based upon a written determination (b) Contracting Officers will issue by the Contracting Officer that trans- disposition instructions expeditiously fer with respect to the specific items upon receipt of acceptable contract inof equipment is consistent with the ventory reports. Contracts involving best interests of the Department.
Government property cannot be Until such time as title has been trans
closed out until all residual property ferred, the property will be adminis
has been accounted for and/or distered and controlled as “Government
posed of and the Government proper. property” in accordance with this part
ty file of the contract specifically and DOTPR Supplement 1. Upon
noted to that effect. transfer, such equipment ceases to be
(c) The disposal of nonseverable "Government property"; however, the
property will be governed by the provi
sions set forth in DOTPR $ 12-70.302. transfer of title will be subject to the terms and conditions of the contract 8 12-70.702 Application of FPR, FPMR and the requirements described in and other DOT regulations. DOTPR Supplement 1.
(a) FPR Subpart 1-8.5 sets forth policies and procedures for the disposi
tion of termination inventory and may (c) Reassignment within the procuralso be used for the disposition of con- ing activity (see § 12-70.702(c)); tract inventory generally. Pursuant to (d) Redistribution within DOT (see the authority contained in FPR 1- 812-70.702(c)); 8.000, FPR Subpart 1-8.5 will be uti (e) Utilization by other Government lized by the Department for the dispo
agencies (see FPMR Parts 101-32 and sition of contract inventory generally.
101-43); (b) FPR Subpart 1-8.5 incorporates
(f) Donation to eligible donees (see by reference various requirements and
FPMR Part 101-44); procedures of the FPMR pertaining to disposition of Government property,
(g) Sale—including purchase at less some of which are optional in nature
than cost by prime or subcontractor insofar as contract inventory is con
(see FPMR Part 101-45); cerned. However, it is the policy of the
(h) Abandonment or destruction Department, with respect to para
(see FPMR Part 101-45). graphs (e) through (h) of $ 12–70.704 to effect disposition of contract inven- Subpart 12-70.8—Contract Closure tory in accordance with the same requirements and procedures set forth $12-70.8013 Actions by the Property Adin the FPMR for disposition of other
ministrator. Government excess or surplus property.
(a) Upon completion or termination (c) The reporting and screening of of a contract, the Property Adminiscontract inventory for possible redis- trator must monitor the actions of the tribution within DOT will be accom contractor and the Government with plished in the same manner, and to respect to the return, transfer, or the same extent, as required for other other disposition of Government proptypes of excess property. Procedures erty. Prior to closing of the contract, applicable to such reporting and the Property Administrator will deterscreening will be prescribed in is mine that: suances published under the Depart (1) All Government property proment's internal management directives
vided under the contract has been system.
properly accounted for; 8 12-70.703 Reports of contract inventory.
(2) Disposition of Government prop
erty has been properly accomplished Requirements and procedures for
and documented; the submission of contract inventory
(3) Adjustment documents, includreports by contractors are set forth in DOTPR Supplement 1. Procedures ap
ing request of the contractor for relief plicable to the processing of such re
from responsibility, have been procports by Contracting Officers are set
essed to completion; forth in FPR Subpart 1-8.5.
(4) Proceeds from disposals or other
property transactions, including ad8 12-70.704 Disposition methods and pri. justments, have been properly credorities.
ited to the contract or paid to the Subject to the Government exercis- Government as directed by the Coning its rights to require delivery of any tracting Officer; items of contract inventory to satisfy (5) All questions as to title to propknown Government requirements, erty fabricated or acquired under the contract inventory will be disposed of contract have been resolved and apby the following methods in the prior propriately documented; and ity indicated:
(6) The Contract Property Control (a) Purchase or retention of contrac- File is complete and ready for retiretor acquired property at cost by prime
ment. contractor or subcontractors (see FPR
(b) Upon completion of the above Subpart 1-8.5); (b) Return of contractor acquired
actions, the Contract Property Control
File will be annotated accordingly and property to suppliers (see FPR Sub
retired with the contract file. part 1-8.5);
Subpart 12-70.9—Contract Clauses,
(Sec. 205(c), 63 Stat. 389; 40 U.S.C. 486(c), 10 U.S.C. 2301-2314) [42 FR 45268, Sept. 8, 1977)
Supplement 1-Manual for Control of
Property in Possession of Contractors
$ 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,
(c) 12-7.303-7 Fixed Price Research and Development 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 1-Introduction SI-100 General. S1-101 Definitions. S1-102 Segregation or Commingling of
Government Property and Contractor's
Property. S1-103 Written Property Control Proce
dures. S1-104 Audit of Property Control System
Part 2–Contractor's Responsibility S1-200 General. S1-201 Assumption of Responsibility. S1-202 Evidence of Receipt of Government
Property. S1-203 Report of Property Purchased or
Fabricated. S1-204 Discrepancies Incident to Ship
ment. S1-205 Relief from Responsibility. S1-206 Contractor's Liability.
§ 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 Manage
ment Manual (02/06/74) Chapter I, “Re
lease of Information". DOT 1340.5B Contract Information
System (01/12/73). DOT 4200.1A Logistics and Certain Logis
tics-Related Reporting Requirements
(05/09/72). DOT 4200.4 Unsolicited Contract Propos
als (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 Contrac
tual 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 Regula
tions (06/15/68). DOT 4200.9 Approval of Acquisition of
Major Systems (09/07/72). DOT 4200.10 Sole Source Review and Ap
proval (09/07/72). DOT 4200.11 Source Selection (09/07/72). DOT 4200.12 Review of Proposed Contract
Part 3—Records of Government Property S1-300 General. S1-301 Pricing. S1-302 Records of Material. S1-303 Records of Noncapitalized Equip
ment. S1-304 Records of Capitalized Equipment. S1-305 Records of Real Property. S1-306 Records of Scrap and Salvage. S1-307 Records of Related Data and Infor
mation. S1-308 Records of Completed Products. S1-309 Financial Control Accounts and Reports.
Part 4-Identification S1-400 General. S1-401 Material and Noncapitalized Equip
ment. S1-402 Capitalized Equipment.
Part 5–Physical Inventories S1-500 General. S1-501 Annual Inventories. S1-502 Reporting Results of Annual Inven
tories. S1-503 Inventories Upon Termination or