§ 18-8.503-2 Separate schedules.

Separate sets of schedules shall be submitted on the forms prescribed in Subpart 18-8, this Part, for contractoracquired and for Government-furnished property. Within each of these categories, property shall be grouped separately in the following classifications:

(a) Production equipment;

(b) Aeronautical material and equipment;

(c) Electronic material and equipment;

(d) Special tooling;

(e) Special test equipment;

(f) Other serviceable or usable property (see § 18-8.101-18); and

(g) Scrap or salvage.

Classification of property by the contractor in the schedules shall be subject to the approval of the contracting officer.

§ 18-8.503-3 Inventory descriptions.

A commercial description, adequate for disposal and screening purposes, of all items having commercial value shall be included in the inventory schedules. Where any items of termination inventory bear a Government identification number, such number shall be listed on the inventory schedules. In the case of other items, the contractor shall furnish a description sufficient to enable the contracting officer to determine the proper disposition thereof. The contractor shall consult the contracting officer when in doubt as to the extent of description required. The contractor need not itemize material believed to be scrap or salvage if (a) such material is physically segregated in the contractor's plan; and (b) the contractor submits a statement describing the material generally, setting forth its approximate cost, and giving such other information as may be necessary for the contracting officer to determine whether the material is scrap or salvage. If the material is determined by the contracting officer to be scrap or salvage (see § 18-8.504), the contractor may make a single descriptive entry on an inventory schedule covering such material and indicating its approximate total cost.

certificate, among other things, tenders title to the Government of the property listed therein, unless the Government already has title thereto.

§ 18-8.503-5 Common items.

Under no circumstances shall the contractor's inventory schedules include any items (except for property delivery of which has been required by the Government and except for Governmentfurnished property) reasonably usable on other work of the contractor without loss to it. (See § 18-15.205-42.)

§ 18-8.503-6 Withdrawals from inventory schedules.

If at any time prior to final disposition any items of contractor-acquired property listed in the contractor's inventory schedules become reasonably usable on other work of the contractor without loss to him and this fact is known to the contractor, the contractor is required to purchase or retain such items at cost in accordance with § 18-8.502-1 or § 18-8.502-3, whichever is applicable, and shall amend his inventory schedules and his settlement proposal accordingly. Upon notification to the contracting officer, the contractor may similarly purchase or retain at cost any other items of property included in his inventory schedules. Withdrawal of Government-furnished property included in inventory schedules is subject to approval by the contracting officer.

§ 18-8.503-7

Rejection and correction

of inadequate schedules.

(a) General. Contracting officers shall cause to be verified, to the extent practicable, the physical count and condition of inventories, including Government-furnished property, listed on the contractor's inventory schedules. If any inventory schedule submitted by a contractor is found to be inadequate, the contractor shall be promptly notified and required to correct or supplement the schedule as to the items which are deficient. Inventory schedules shall not be rejected if the information contained therein is adequate for disposal purposes, even if complete cost data on work in process are not available. Rejection of an inventory schedule shall be limited where possible to specific items thereon and shall not necessarily render the entire schedule unacceptable.

(b) Effect on plant clearance period. (1) Where only individual items on the inventory schedules covering all items of

a particular property classification are in need of correction or amplification, the inventory schedules as submitted shall be considered acceptable for purposes of starting the final phase of a plant clearance period (see § 18-8.10112). However, where the inadequacy of an inventory schedule requires the return of the entire schedule to the contractor for correction or revision, the final phase of the plant clearance period as to the property classification covered thereby shall not begin until acceptable final schedules covering that property classification have been submitted.

(2) The contracting officer shall advise the contractor of any deficiencies apparent in the inventory schedule within 15 days after receipt of the final schedule, or the schedules shall be deemed acceptable for purposes of starting the final phase of a plant clearance period. However, should substantial errors develop which were not apparent from the inventory schedules previously deemed acceptable, the final phase of a plant clearance period shall not be deemed to have commenced until corrected schedules have been submitted, unless the contracting officer determines that no unwarranted delay in disposal operations was occasioned thereby. § 18-8.504 Scrap and salvage. § 18-8.504-1

General.

Promptly after the submission of inventory schedules, by the contractor, the contracting officer shall review, or cause to be reviewed the contractor's treatment of any items of termination inventory as scrap or salvage (see § 18-8.503-3). The review shall include a careful examination of the inventory schedules and in appropriate cases physical inspection of the property involved. Prior to determining that such items are scrap or salvage, the contracting officer shall obtain such screening clearances and other approvals as may be required. If the contracting officer determines that any of the materials listed by the contractor as scrap or salvage are serviceable or usable materials, the contractor shall, in accordance with such determination, submit revised inventory schedules (see § 18-8.503-7). Property determined to be scrap and which, by other Government regulations, is required to be segregated by alloy or otherwise, shall be so segregated by the contractor. Property determined to be scrap or salvage

may, with the approval of the contracting officer, be sold or otherwise disposed of by the contractor in accordance with the provisions of § 18-8.505, § 18-8.507, or § 18-8.509. In appropriate cases, when approved by the contracting officer, such sales may be consolidated with the contractor's sales of scrap and salvage generated, from his other work and in such cases, the scrap warranty required by § 18-8.504-2 may be waived in the discretion of the contracting officer.

§ 18-8.504-2 Scrap warranty.

(a) If any termination inventory is sold as scrap, a scrap warranty, substantially as set forth in 8.805 shall be obtained.

(b) The scrap warranty may be released on behalf of the Government by the contracting officer if, as consideration for the release, the Government is paid the difference between (1) the price for which the material was sold as scrap and (2) an amount, approved by the contracting officer, not less than that which the material would bring if it were sold at a fair and reasonable price as set forth in § 18-8.507-2(a), for purposes other than use as scrap. The release of the scrap warranty shall be given by the Government and the consideration paid to the Government, even though the contract containing the warranty was not made directly with the Government.

(c) In the event of resale of any material subject to a scrap warranty, the seller is required to obtain an appropriate scrap warranty from the purchaser thereof. Upon tender of this warranty to the Government, the seller shall be released by the Government from liability under his own warranty.

§ 18-8.505 Screening of serviceable and usable property.

NASA contracting officers shall submit all termination inventory schedules to the cognizant NASA property officer for screening and utilization in accordance with NASA Management Instruction 4310.1. Automatic data processing equipment, including that on lease in which the Government is entitled to rental benefits, shall be reported for screening in accordance with § 18-8.505-1. [33 F.R. 17982, Dec. 4, 1968]

§ 18-8.505-1 Procedures for automatic data processing equipment (ADPE). (a) Those items of ADPE as defined in § 18-1.235 (regardless of FSC) which

are Government-owned or which are leased by the contractor under terms which provide to the Government an option to purchase or other residual interests (including the right to use until expiration of the lease) will be reported to the Property Management Office of the Installation on Standard Form 120, "Report of Excess Personal Property". Normally the time required for acquisition studies required to select replacement equipment makes it possible to project the anticipated release date 180 days before the equipment is available for transfer. ADPE should be reported as soon as it is possible to project the release date. The following minimum reporting schedule shall, however, apply.

(1) Government-owned ADPE will be reported upon receipt of notice of complete termination or when it is determined that the property will no longer be needed on the contract. The release date assigned will be the last day of the plant clearance period or 180 days after the property becomes inactive. In the event of changes in release date, revised reports will be submitted.

(2) Leased ADPE, the total cost of which is charged to one or more costreimbursement type contracts, will be reported when it is determined that the property (or a major portion thereof) will no longer be needed on the contracts. In order to preclude unnecessary lease cost, the release date established shall not extend ADPE on rental beyond the date it can be released to the lessor. Prompt reporting of leased ADPE is necessary in order to afford an opportunity to reutilize the property and protect the Government's equity.

(b) With respect to leased equipment, the total cost of which is charged to one or more cost-reimbursement type contracts, a quotation shall be requested from the lessor projecting the reduced price at which the equipment may be purchased based on accumulated rental credits through the anticipated release date. A copy of this quotation should be attached to the Standard Form 120, but submission of the Standard Form 120 should not be delayed pending receipt of this information. If it is not available at that time, it should be provided when received.

(c) The following information will be reported on Standard Form 120:

(1) A complete list of each equipment item, identified by manufacturer's series

and model number, and modifications and attachments applied to each component, including identification number if Government-owned; indicate type of maintenance contract, contractor, and monthly cost;

(2) A separate attachment, showing the time in service for each component, average utilization (hours per month) and average downtime per month for the 12-month period immediately preceding the report (if appropriate, a narrative description of any history of repeated equipment failure shall be included);

(3) A list of compilers and other software packages (such as executive routines), engineering drawings and maintenance manuals available with the

Government-furnished property included in termination inventory, return of which has not been required by the Government, may be disposed of in the same manner as other termination inventory after screening in accordance with the requirements of NASA Management Instruction 4310.1. The contracting officer is required to approve all such dispositions and may specify methods for preparing and routing inventory schedules covering such property.

[33 F.R. 17982, Dec. 4, 1968]

§ 18-8.507 Sale or other disposition of termination inventory.

§ 18-8.507-1 General.

Under the standard termination clauses, the contractor is required to use his best efforts to sell termination inventory, in the manner, at the times, to the extent, and at the prices directed or authorized by the contracting officer, except that the contractor (1) is not required to extend credit to any purchaser, and (2) may purchase or retain at less than cost any items of termination inventory not retained by him at cost. Any property which is included in the con

tractor's inventory schedules, which has not been acquired by the Government under 18-8.505, may be purchased or retained at less than cost by the contractor or sold by the contractor to a third party as provided in § 18-8.507-2 or 18-8507-3 at any time after notification by the contracting officer that screening has been accomplished or will not be required. Any such purchase, retention or sale shall be subject to the approval of the contracting officer, as part of or prior to the final settlement. § 18-8.507-2 Competitive sales.

(a) Except as provided in § 18-8.507-3, termination inventory shall be offered for sale on a competitive basis. Generally three bids shall be obtained, one of which may be submitted by the contractor. However, solicitations shall not be restricted to three bids, unless the circumstances clearly justify such restriction. The property shall be sold to that responsible bidder whose bid is most advantageous to the Government, price and other factors considered, or purchased or retained by the contractor if his bid is most advantageous to the Government: Provided, That the price shall be fair and reasonable in the light of reasonable knowledge or test of the market, due regard being had for current prices for any raw materials or products for which quotations are published, and to the circumstances, nature, condition, quantity, and location of property. Any bid by the contractor shall be submitted in the same manner as and concurrently with other bids. The contractor shall not be entitled to preference in any sale.

(b) Bids shall be solicited sufficiently in advance of the opening of bids to allow bidders an adequate opportunity to prepare and submit their bids. The contracting officer shall furnish the contractor from available records and bidders lists the names of prospective purchasers. Bids shall be solicited from the original suppliers and those prospective bidders designated by the contracting officer. Bids shall be solicited by any one of the methods set forth below: Provided, That when deemed necessary by the contractor to assure full and free competition, more than one method may be used: And provided further, That where the original acquisition cost of serviceable material available for sale at any one time and location is $25,000

or more, in addition to any other method of solicitation used, the sale shall also be advertised in a newspaper of general circulation as provided in (4) of this paragraph:

(1) A notice of the proposed sale may be mailed or delivered to all prospective bidders; if this method is used, the bidders list shall include all responsible prospective purchasers known to the contractor and located in the general area in which the property is located;

(2) A notice of the proposed sale may be displayed at appropriate public places;

(3) A notice of the proposed sale may be published in appropriate trade journals or magazines;

(4) A notice of the proposed sale may be published in a newspaper of general circulation in the locality in which the property is located; or

(5) Where the amount or value of the property is not large enough to warrant preparation of a formal notice of the proposed sale, or other special circumstances are present, invitations to bid may, with the contracting officer's approval, be issued orally, by telephone, or by other informal media, so long as the element of competition is maintained, and each such sale is fully documented.

use in educational or research pursuits without obtaining competitive bids. Prices under which such equipment is transferred shall be negotiated between the contractor and the contracting officer.

(c) Sales, purchases, and retentions under (a) or (b), of this section shall be at prices which are fair and reasonable, and not less than the proceeds that could reasonably be expected to be obtained if the property were offered for competitive sale.

§ 18-8.507-4 Proceeds of sale.

Unless otherwise provided in the contract, the proceeds of any sale, purchase or retention shall be credited to the Government as part of the settlement agreement, or otherwise credited to the price or cost of the work covered by the contract, or paid in such manner as the contracting officer may direct.

§ 18-8.507-5 Applicability of antitrust laws.

(a) When any termination inventory which has or may cost the Government $3 million or more is to be sold or otherwise disposed of to private interests, the National Aeronautics and Space Administration is required to promptly notify the Attorney General and the Administrator of General Services of the proposed disposal and the probable terms or conditions thereof, and await advice from the Attorney General as to whether, so far as he can determine, the proposed disposition would tend to create or maintain a situation inconsistent with the antitrust laws.

(b) Pursuant to the paragraph (a) of this section, when property with a total acquisition cost of $3 million or more is offered for sale by a competitive bid, a provision comparable to the following statement shall be included in the invitation for bids:

If, under this invitation, a bidder is the successful bidder on property with a total acquisition cost of $3 million or more, the award shall be subject to a determination by the Attorney General that the award will not be inconsistent with the antitrust laws.

(c) In a negotiated sale of property with a total acquisition cost of $3 million or more, the prospective purchaser shall be informed that final consummation of the sale is subject to a determination by the Attorney General that the sale would not be inconsistent with the antitrust laws.

(d) The contracting officer shall, after ascertaining the prospective purchaser, forward the following information, in triplicate, to the Office of Administration, NASA Headquarters (Code BD):

(1) With respect to the prospective purchaser

(i) Full name and address;

(ii) If a corporation, State and date of incorporation;

(iii) If a partnership, name and address of partners, and date when organized;

(iv) Name and address of affiliates, if any;

(v) Nature of business (products produced or handled);

(vi) Geographical area of operations; (vii) Dollar sales volume for latest calendar or fiscal year;

(viii) Net worth; and

(ix) Intended use of property.
(2) Other data—

(1) Location and brief description of the property covered by the proposed disposition;

(ii) Acquisition cost to the Government of the property;

(iii) If the property is scrap, the tonnage;

(iv) If the proposed disposition is by competitive bids, the invitation number, the number of bids solicited, and the number of bids received; and

(v) If the proposed disposition is by negotiation, the extent of competition obtained, and the amount to be paid by and other consideration to be received from, the prospective purchaser for the property.

(e) The Office of Administration, NASA Headquarters, shall forward the information received to the Attorney General, Department of Justice, Attention: Antitrust Division; and the Administrator of General Services. The Attorney General has agreed to advise both the Administrator of General Services and the Administrator, NASA, within a reasonable period of time, in no event to exceed 60 days after receipt of such information whether, so far as he can determine, the proposed disposition would tend to create or maintain a situation inconsistent with the antitrust laws. Before consummating the sale, the contracting officer shall await notification from the Office of Administration, NASA Headquarters, that the Attorney General has determined that the sale is not inconsistent with the antitrust laws.