(b) If Government property is provided to a subcontractor by a prime contractor, the latter shall be required to hold the subcontractor liable for any loss of or damage to such property: Provided, however, That if the prime contract falls under either § 13.102-1 (b) or (c), the prime contractor may, with the prior approval of the contracting officer:

(1) Include in any cost-reimbursement type subcontract thereunder provisions similar to those contained in paragraph (g) of the clause in § 7.203-21 of this chapter; and

(2) Include in any fixed-price subcontract meeting the criteria set forth in § 13.1021(b) a provision similar to that contained in § 7.104-24 (c) of this chapter.

Contracting officers shall, prior to approving the inclusion of the provisions referred to above in any subcontract, balance the need for the protection and care of Government property against the cost thereof. A prime contractor who provides Government property to a subcontractor shall not be relieved of any responsibility to the Government that he may have under the terms of his contract.

[31 F.R. 13336, Oct. 14, 1966, as amended at 36 F.R. 7949, Apr. 28, 1971]

§ 13.103 Furnishing military property.

(a) Military property may be furnished to contractors when necessary for use as a standard or model, for testing the contractors' end item where suitable commercial equipment is not available, to establish equipment compatibility, or for such other similar reasons as the head of a procuring activity or his designee determines to be in the best interest of the Government.

(b) Military property may be furnished to contractors under a facilities contract, a supply or service contract, or a special bailment contract. Each contract under which such property is furnished shall provide that:

(1) Each item of the property be identified by its Federal Item Identification Number and Government nomenclature;

(2) The property be accounted for under that contract; and

(3) Upon its completion or termination, the contractor shall request and comply with disposition instructions from the contracting officer.

§ 13.104 Profits and fees.

No fee is to be provided or allowed a facilities contractor under a facilities contract. Where Government production and research property is provided under facilities contracts, profit or fee (plus or minus) shall be considered in the negotiation of the related separate contract or contracts for supplies or services, consistent with the profit guidelines established in § 3.808 of this chapter.

§ 13.105

Use for or by contractors of test facilities owned and operated by the Government.

The on-site use for or by contractors of existing Government-owned test facilities located at installations owned and operated by the Government may be authorized in connection with the performance of Government contracts only when:

(a) There is no commercial test capability adequate for the testing needs, or (b) Substantial cost savings will result from use of the Government-owned test facilities.

Whenever any such use is authorized. adequate consideration comparable to commercial charges, if any, shall be obtained under any affected contract. [30 F.R. 12009, Sept. 21, 1965]

§ 13.106 Furnishing motor vehicles to Government contractors.

(a) For all major Department of Defense projects in which substantial numbers of motor vehicles, as described in § 22.800 of this chapter, will be required for use by contractor personnel, a determination shall be made as early as possible in the program effort as to the feasibility of providing the vehicles as Government furnished equipment. Unless there are substantial reasons to the contrary, the vehicles shall be so proIvided when the following conditions are met:

(1) The Government contract will bear the entire cost of the vehicle program,

(2) The prospective contractors do not have, or would not be expected to have, an existing and continuing capability for providing the vehicles necessary to perform the contract from their own resources;

(3) The number of vehicles required in the performance of the contract is predictable with a reasonable degree of

accuracy and is expected to remain fairly constant over a period of 1 year or more; and

(4) Substantial savings can be expected.

(b) The required vehicles shall not be provided by the Government when they will be used to support the normal and continuing operation of a contractor in the performance of defense contracts generally (or with a mix of use in commercial activities) and the cost thereof would be distributed in overhead among unrelated contracts or partially allocated to commercial use.

(c) All Government furnished vehicles will be identified as contractor-operated vehicles, to distinguish them from vehicles operated by components of the Department of Defense, as prescribed in section VIII of the Joint Procedures for Management of Administrative Use Motor Vehicles (AR 58-1; OPNAV P44-2; AFM 77-1; MCO P11240.46; DSAR 4510.5).

[32 F.R. 10173, July 11, 1967] § 13.107

erty.

Control of Government prop

The control of Government property shall be in accordance with the provisions of § 30.2 of this chapter except, in contracts with educational or other nonprofit organizations, § 30.3 of this chapter is applicable; unless otherwise authorized in this part. [32 F.R. 16408, Nov. 30, 1967]

§ 13.108 Correction of defective system for control of Government property. (a) When the property administrator is not successful in obtaining compliance with contract requirements, he shall advise the administrative contracting officer. If the administrative contracting officer concurs with the property administrator, he shall advise the contractor in writing of the changes or additions required in his property control system and shall establish a schedule for accomplishment of the corrective actions. The contractor shall be informed that approval of his property control system I will be withheld (or withdrawn if previously approved) unless corrective actions is accomplished within the specified period. Such notice shall also advise the contractor that in the event approval of his property control system is withheld (or withdrawn if previously approved) (1) his liability for loss or damage may

be increased, and (2) information concerning the property control system shall be entered in the Contractor Performance Record. If the contractor fails to make satisfactory progress for correction of the deficiencies in accordance with the schedule, the administrative contracting officer shall 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.

(b) Upon withholding or withdrawing the approval of the contractor's property control system, the administrative contracting officer shall prepare a special DD Form 1661, Contractor Performance Record. The DD Form 1661 shall identify one or more contracts under which the contractor is required to establish an acceptable property control system and shall explain under "Remarks" the deficiencies found in the contractor's system and the magnitude of contracts involving Government property. Copies of the DD Form 1661 shall be furnished to the cognizant Contractor Performance Record Monitor. The procuring contracting officer will be advised of any actions recommended which are not within the province of the contract administration office. When suitable corrective action is taken by the contractor, a revised DD Form 1661 shall be forwarded to the Contractor Performance Record Monitor.

[36 F.R. 7949, Apr. 28, 1971]

§ 13.201

Subpart B-Material

of

Policy on furnishing material. It is the general policy of the Department of Defense that contractors will furnish all material required for the performance Government contracts. However, the Government should furnish material to a contractor when it is determined to be in the best interest of the Government by reason of economy, standardization, the expediting of production, or other appropriate circumstances.

§ 13.202 Procedure.

(a) Material to be furnished by the Government shall be set forth in the solicitation in sufficient detail to permit evaluation by prospective contractors.

(b) Where material is to be furnished by the Government, the contract shall state whether the requisitioning docu

mentation is to be prepared by the contractor or the procuring activity. When the responsibility is placed upon the contractor, such documentation shall be prepared in accordance with the “Manual for Military Standard Requisitioning and Issue Procedure (MILSTRIP) for Defense Contractors," Appendix H (§ 30.6 of this chapter).

[30 F.R. 12009, Sept. 21, 1965]

§ 13.203 Changing the amount of material to be furnished by the Govern

ment.

(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 paragraph (b) of the appropriate Government Property clause in Subpart G of this part.

[30 F.R. 12009, Sept. 21, 1965]

§ 13.204 Disposition.

The disposition of residual Government material shall be in accordance with Departmental regulations governing the disposition of surplus property. See Part 8 of this chapter for disposition of contractor inventory.

[30 F.R. 12009, Sept. 21, 1965] Subpart C-Providing Government Production and Research Property to Contractors

§ 13.301 Providing facilities.

(a) It is the policy of the Department of Defense that contractors will furnish all facilities required for the perform

ance of Government contracts. Facilities will not be provided to contractors for expansion, replacement, modernization or other purpose except as follows:

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

(2) For mobilization production of items being procured in accordance with an approved mobilization plan (ASOD) package; or

(3) When

(i) The Secretary of the Department or his designee, in the case of new facilities, or an authorized official of the Department in the case of existing Government-owned facilities, determines that: The Defense contract cannot be fulfilled by any other practical means, or it is in the public interest; and

(ii) The contractor, represented by an executive corporate official, or his equivalent in noncorporate entities, either expresses in writing his unwillingness or financial inability to acquire the necessary facilities with his resources, or explains in writing that time will not permit him to make the necessary arrangements to obtain timely delivery of such facilities to meet defense requirements even though he is willing and financially able to acquire the facilities. In this latter case, existing Governmentowned facilities (not new purchases) may be provided until the contractor purchased facilities are delivered and installed.

New facilities shall not be furnished unless existing Government-owned facilities are either inadequate or cannot be economically furnished. A copy of the contractor's written statement, with a brief statement of the circumstances justifying the provision of facilities, shall be furnished to the Office of the Assistant Secretary of Defense (I&L), Attention: WS. A copy must also accompany the request for facilities approval pursuant to § 13.302.

(b) In any case, competitive solicitations shall not include an offer by the Government to provide new facilities, nor shall solicitations offer to furnish existing Government facilities that must be moved into plants of contractors unless adequate price competition cannot be otherwise obtained. In the latter case, the contractor statement under paragraph (a) (3)(ii) of this section shall not be required, but contractors shall be

required to identify the Governmentowned facilities desired to be moved into their plants.

(c) New facilities shall 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 contractors to make full utilization of subcontractors possessing adequate and available capacity;

(3) Having the contractor rent facilities from commercial sources; and

(4) Using existing Government-owned facilities.

(d) New construction or improvements having general utility shall not be provided with appropriations for research or development unless authorized by law.

(e) Facilities shall not be provided by the Government to contractors under this part solely for nongovernment use.

(f) Facilities having a unit cost of less than $1,000 shall not be provided to contractors except as authorized under contracts with:

(1) Nonprofit institutions of higher education or other nonprofit organizations whose primary purpose is the conduct of scientific research (see § 4.116-3 of this chapter);

(2) Contractors operating a Government-owned plant on a fee basis; or (3) Contractors performing on-site at Government installations.

(g) Prior to acquiring new facilities listed in the joint DOD handbooks reference in § 13.312 and having an item acquisition cost of $1,000 or more, DOD Industrial Plant Equipment Requisition (DD Form 1419) shall be submitted to the Defense Industrial Plant Equipment Center, Memphis, Tenn. 38102, to ascertain whether existing Governmentowned facilities can be utilized. No acquisition of any listed item shall be made until a certificate of nonavailability is received from the Defense Industrial Plant Equipment Center. Prior, however, to issuing a certificate of nonavailability, DIPEC shall determine if technical data (e.g., parts listings, maintenance, overhaul and repair manuals, wiring diagrams, etc.) required for use in the maintenance and repair of the new facilities, is available at the Defense Depot Mechanicsburg. If it is determined that such data is not available at the time of issuance of the nonavailabil

ity certificate for equipment, DIPEC may request, by an appropriate instruction in block 51 of DD Form 1419, that an additional set of the technical (maintenance) data be acquired with the new facilities when they are procured. This additional set of data shall be delivered to the Defense Depot Mechanicsburg, Mechanicsburg, Pa. 17055, Attention: Technical Data Library. When warranted by the urgency of the situation, requests for screening may be submitted to DIPEC by whatever means determined expedient. When submitting urgent screening requirements other than on a DD Form 1419, the following elements of information must be furnished for each item of equipment: (1) Case number;

(2) PEC/SCC/FSN;

(3) Description data sufficient to enable DIPEC to make an urgency determination of availability;

(4) Date item required;

(5) Name and address of requiring agency;

(6) Contract, appendix, item number, and program;

(7) Statement as to whether item is for production or mobilization, replacement or modernization, whether item will be procured if not available from DIPEC, and date of availability from procurement; and

(8) Assigned urgency rating. Upon notification of availability by DIPEC, a DD Form 1419 will be submitted to DIPEC for each item accepted by the requestor. However, if DIPEC does not have the item available, or cannot furnish the item within the time specified by the requestor, DIPEC will furnish a statement of nonavailability including a certificate number. This statement will be the official Certificate of Nonavailability and will confirm that the plant equipment item has been screened against the idle inventory.

(h) The proposed acquisition of automatic data processing equipment as defined in §1.201-29 of this chapter shall be:

(1) Submitted on DD Form 1419 through the Administrative Contracting Officer to Headquarters, Defense Supply Agency, Attention: DSAH-LSR, Cameron Station, Alexandria, Va. 22314;

(2) Approved by the Senior ADPE policy official of the Department or Agency which generated the requirement for the contract end item; in the case of

ADPE to be acquired on a noncompetitive basis, the request for approval shall be forwarded to the Assistant Secretary of Defense (Comptroller) through the Senior ADPE policy official. Approval action is not required for any acquisition of punched card machines (PCM's), or for acquistion of other ADPE where the purchase costs are less than $100,000.

[34 F.R. 13845, Aug. 29, 1969, as amended at 35 F.R. 6835, Apr. 30, 1970]

§ 13.302

Securing approval for facilities projects.

(a) Requests for approval of facilities projects involving expenditures of $1,000,000 or more shall be forwarded to the Secretary concerned, who shall submit the matter to:

(1) The Assistant Secretary of Defense (Installations and Logistics) for production programs; or

(2) The Director of Defense Research and Engineering for research and development programs.

(b) Facilities projects involving expenditures of less than $1,000,000 shall be approved in accordance with Departmental procedures consistent with § 1.108 of this chapter.

(c) Facilities projects that involve real property transactions shall not be undertaken prior to reporting such transactions to the Committees on Armed Services of the House of Representatives and the Senate, as required by 10 U.S.C. 2662, and during the 30 day period prescribed therein. Such reporting shall be accomplished in accordance with Departmental procedures consistent with § 1.108 of this chapter.

§ 13.303 Use of facilities contracts.

(a) Except as provided in paragraph (b) of this section, facilities shall be provided by the Government to a contractor or subcontractor only under a facilities contract.

(b) Facilities may be provided to a contractor under a contract other than a facilities contract when:

(1) The cumulative total acquisition cost (actual or estimated) of the facilities provided to the contractor at one plant or general location does not exceed $50,000;

(2) The contract is for construction; (3) The contract is for the performance of work within an establishment or installation operated by the Government; or

(4) The contract is for the performance of services involving the operation of a Government-owned plant or installation and the facilities provided are to be used only in connection with such contract, which shall, to the extent practicable, contain the clauses in Subpart G, Part 7 of this chapter.

When facilities are provided under a contract other than a facilities contract, the contract shall contain the appropriate Government Property clause, except where, pursuant to subparagraph (4) of this paragraph, adequate contractual coverage is obtained through the use of clauses set forth in Subpart G, Part 7 of this chapter.

(c) Unless the contracting officer determines it to be impracticable, all facilities provided by a procuring activity for use by a contractor at any one plant or general location shall be governed by a single facilities contract.

(d) Special tooling and special test equipment will normally be provided to a contractor under a supply contract, but may be provided under a facilities contract when to do so is administratively desirable.

§ 13.304 Furnishing existing Government-owned special tooling.

(a) General. It is the policy of the Department of Defense that existing special tooling to which the Government has title, or the right to acquire title pursuant to the Special Tooling clause in § 7.104-25 of this chapter, be offered to prospective contractors for use in performing Government contracts and subcontracts, if:

(1) To do so will not interfere with production or program schedules having a greater priority;

(2) To do so is otherwise advantageous to the Government; and

(3) Its use would be authorized pursuant to § 13.402 or § 13.403 were it furnished.

(b) Contract provisions. Special tooling shall be furnished pursuant to either the appropriate clause referenced in Subpart G, Part 7 of this chapter or a facilities contract. In any case, the contract under which the special tooling is furnished shall contain a description thereof, and the terms and conditions applicable to its shipment to the plant of the contractor and to the cost of adapting and installing it. [36 F.R. 7949, Apr. 28, 1971]