7-13.703

7-13.704

7-13.705

7-13.706

Government property clause for commercial cost-reim

bursement contracts. Government property clause for fixed-price type contracts with non-profit institutions. Government property clause for cost reimbursement contracts with non-profit institutions. Government property clause for all contracts under which title vests in the cooperating country.

AUTHORITY: The provisions of this Part 7-13 issued under sec. 621, 75 Stat. 445, as amended; 22 U.S.C. 2381.

SOURCE: The provisions of this Part 7-13 appear at 35 F.R. 7964, May 23, 1970, unless otherwise noted.

property procured or otherwise provided by the contractor for the performance of a contract. Title to Contractor acquired property may vest in either the United States or cooperating government. § 7-13.102

Title to and custody of Government property.

§ 7-13.102-1 Title.

(a) The terms of the Project Agreement negotiated by AID and the Cooperating Country usually provide that title to Contractor-acquired property used in the Cooperating Country will vest in the Cooperating Government. Consequently, contracts entered into pursuant to a Project Agreement will implement its terms.

(b) Title to all Government-furnished property or Contractor-acquired property which is used within the United States will vest in the U.S. Government.

Custody of the Government property is the responsibility of the contractor. It is the policy of the Agency not to hold a contractor responsible for loss of or damage to Government-furnished property caused by certain perils when such property is provided under:

(a) A negotiated, fixed-price contract for which the price is not based on (1) adequate price competition, (2) established catalog or market prices of commercial items sold in substantial quantities to the general public, or (3) prices set by law or regulation; or

(b) A cost-type contract.

§ 7-13.103 Furnishing motor vehicles to A.I.D. contractors.

When it is anticipated that one or more motor vehicles will be required for use by contractor personnel, a determination shall be made as early as possible during contract negotiation as to the feasibility of providing the vehicles as Government-furnished property. Unless there are substantial reasons to the contrary, the vehicles shall be so provided when the following conditions are met:

(a) All costs related to operation of the vehicles are totally allocable to the contract;

(b) 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;

(c) 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 1 year or more; and

(d) Substantial savings can be expected: The required vehicles shall not be provided by the Government unless they will be used exclusively in the performance of the AID contract.

the contract or at such earlier time as may be fixed by the Contracting Officer. Such return is accomplished in accordance with the written instructions of the Contracting Officer. If, however, it is determined by appropriate authority that any Government property is excess to the Agency's needs, other disposition may be made in accordance with applicable statutes, regulations, and manual orders. Subparts 7-13.2-7-13.6 [Reserved] Subpart 7-13.7 Contract Clauses. § 7-13.701 Applicability.

The following clauses shall be used, as appropriate, in any contract for supplies or services (including research and development) which provides for the use of property titled in the United States or Cooperating Government. § 7-13.702-1 Government

property clause for fixed price commercial

contracts.

The following clause shall be used in fixed-price contracts (except those with educational or nonprofit institutions) which are performed in the United States or under which title to Government property vests in the U.S. Government and for which the price is based on (a) adequate price competition, (b) established catalog or market prices of commercial items sold in substantial quantities to the general public, or (c) prices set by law or regulation. GOVERNMENT PROPERTY (FIXED PRICE

COMMERCIAL-UNITED STATES)

(a) Government-Furnished Property. The Government shall deliver to the Contractor, for use in connection with and under the terms of this contract, the property described in the Schedule or specifications as Government-furnished property together with such related data and information as the Contractor may request and as may reasonably be required for the intended use of such property (hereinafter referred to as "Government-furnished property"). The delivery or performance dates for the supplies or services to be furnished by the Contractor under this Contract are based upon the expectation that Government-furnished property suitable for use (except for such property furnished "as is") will be delivered to the Contractor at the times stated in the Schedule or, if not so stated. in sufficient time to enable the Contractor to meet such delivery or performance dates. In the event that Government-furnished property is not delivered to the Contractor

by such time or times, the Contracting Officer shall, upon timely written request made by the Contractor, make a determination of the delay, if any, occasioned the Contractor thereby, and shall equitably adjust the delivery or performance dates or the contract price, or both, and any other contractual provision affected by any such delay, in accordance with the procedures provided for in the clause of this Contract entitled "Changes". Except for Government-furnished property furnished "as is", in the event the Government-furnishd property is received by the Contractor in a condition not suitable for the intended use, the Contractor shall, upon receipt thereof, notify the Contracting Officer of such fact and, as directed by the Contracting Officer, either (1) return such property at the Government's expense or otherwise dispose of the property, or (ii) effect repairs or modifications. Upon the completion of (i) or (ii) above, the Contracting Officer upon written request of the Contractor, shall equitably adjust the delivery or performance dates or the contract price, or both, and any other contractual provision affected by the rejection or disposition, or the repair or modification, in accordance with the procedures provided for in the clause of this Contract entitled "Changes". The foregoing provisions for adjustments are exclusive and the Government shall not be liable to suit for breach of contract by reason of any delay in delivery of Governmentfurnished property or delivery of such property in a condition not suitable for its intended use.

(1) By notice in writing, the Contracting Officer may (1) decrease the property provided by the Government under this Contract, or (ii) substitute other Governmentowned property for property to be provided by the Government, or to be acquired by the Contractor for the Government, under this Contract. The Contractor shall promptly take such action as the Contracting Officer may direct with respect to the removal and shipping of property covered by such notice.

(2) In the event of any decrease in or substitution of property pursuant to subparagraph (1) above, or any withdrawal of authority to use property provided under any other contract or lease, which property the Government had agreed in the Schedule to make available for the performance of this Contract, the Contracting Officer, upon the written request of the Contractor (or, if the substitution of property causes a decrease in the cost of performance, on his own initiative), shall equitably adjust such contractual provisions as may be affected by the decrease, substitution, or withdrawal, in accordance with the procedures provided for in the "Changes" clause of this Contract. (c) Title.

Title to all property furnished by the Government shall remain in the Government. In

order to define the obligations of the parties under this clause, title to each item acquired by the Contractor pursuant to this Contract shall pass to and vest in the Government upon purchase. All Governmentfurnished property, together with all property acquired by the Contractor title to which vests in the U.S. Government under this paragraph, is subject to the provisions of this clause and is hereinafter collectively referred to as "Government Property". Title to Government property shall not be affected by the incorporation or attachment thereof to any property not owned by the Government, nor shall such Government property, or any part thereof, be or become a fixture or lose its identity as personalty by reason of affixation to any realty.

(d) Use of Government Property.

The Government property shall, unless otherwise provided herein or approved by the Contracting Officer, be used only for the performance of this Contract.

(e) Maintenance and Repair of Government Property.

The Contractor shall maintain and administer in accordance with sound business practice a program for the maintenance, repair, protection, and preservation of Government property so as to assure its full availability and usefulness for the performance of this Contract. The Contractor shall take all reasonable steps to comply with all appropriate directions or instructions which the Contracting Officer may prescribe as reasonably necessary for the protection of the Government property.

The Contractor shall submit, for the review and written approval of the Contracting Officer, a records system for property control and a program for orderly maintenance of Government property.

(1) Property Control-The property control system shall include but not be limited to the following:

(1) Identification of each item of Government property acquired or furnished under the Contract, by a serially controlled identification number and by description of item. Each item must be clearly marked "Property of U.S. Government".

(ii) The price of each item of property acquired or furnished under the Contract.

(iii) The location of each item of property acquired or furnished under the Contract.

(iv) A record of any usable components which are permanently removed from items of Government property as a result of modification or otherwise.

(v) A record of disposition of each item acquired or furnished under the Contract. (vi) Date of order and receipt of any item acquired or furnished under the Contract.

The official property control records shall be kept in such condition that at any stage of completion of the work under this Contract, the status of property acquired or furnished under this Contract may be readily ascertained. A report of current status

of all items of property acquired or furnished under the Contract shall be submitted yearly concurrently with the annual report.

(2) Maintenance Program-The Contractor's maintenance program shall be such as to provide for, consistent with sound industrial practice and the terms of the Contract: (1) Disclosure of need for and the performance of preventive maintenance, (11) disclosure and reporting of need for capital type rehabilitation, and (iii) recording of work accomplished under the program. (A) Preventive Maintenance-Preventive maintenance is maintenance generally performed on a regularly scheduled basis to prevent the occurrence of defects and to detect and correct minor defects before they result in serious consequences.

(B) Records of Maintenance-The Contractor's maintenance program shall provide for records sufficient to disclose the maintenance actions performed and deficiencies discovered as a result of inspections.

A report of status of maintenance of Government property shall be submitted annually concurrently with the annual report. (f) Risk of Loss.

Unless otherwise provided in this Contract, the Contractor assumes the risk of, and shall be responsible for, any loss of or damage to Government property provided under this Contract upon its delivery to him or upon passage of title thereto to the U.S. Government, except for reasonable wear and tear and except to the extent that such property is consumed in the performance of this Contract.

(g) Access.

The Government, and any persons designated by it, shall at all reasonable times have access to the premises wherein any Government property is located, for the purpose of inspecting the Government property.

(h) Final Accounting and Disposition of Government Property.

Upon the completion of this Contract, or at such earlier dates as may be fixed by the Contracting Officer, the Contractor shall submit, in a form acceptable to the Contracting Officer, inventory schedules covering all items of Government property not consumed in the performance of this Contract or not theretofore delivered to the Government, and shall prepare, deliver or make such other disposal of the Government property, as may be directed or authorized by the Contracting Officer.

(1) Communications.

All communications issued pursuant to this clause shall be in writing.

§ 7-13.702-2 Clause for certain commercial negotiated fixed-price

contracts.

In negotiated fixed-price contracts for which the price is not based on (a) adequate price competition, (b) established

catalog or market prices of commercial items sold in substantial quantities to the general public, or (c) prices set by law or regulation, substitute the following for Paragraph (f) of the clause in § 7-13.702-1:

(f) Risk of Loss.

(1) Except for loss, destruction, or damage resulting from a failure of the Contractor due to willful misconduct or lack of good faith of any of the Contractor's managerial personnel as defined herein, to maintain and administer the program for the maintenance, repair, protection, and preservation of the Government property as required by paragraph (e) hereof, and except as specifically provided in the clause or clauses of this Contract designated in the Schedule, the Contractor shall not be liable for loss destruction of or damage to the Government property provided under this Contract: (1) Caused by any peril while the property is in transit off the Contractor's premises;

or

or

(11) Caused by any of the following perils while the property is on the Contractor's or subcontractor's premises, or on any other premises where such property may properly be located, or by removal therefrom because of any of the following perils:

(A) Fire; lightning, windstorm, cyclone, tornado, hail, explosion; riot, riot attending a strike, civil commotion, vandalism and malicious mischief; sabotage; aircraft or objects falling therefrom; vehicles running on land or tracks, excluding vehicles owned or operated by the Contractor or any agent or employee of the Contractor; smoke; sprinkler leakage; earthquake or volcanic eruption; flood, meaning thereby rising of a body of water; nuclear reaction, nuclear radiation or radioactive contamination; hostile or warlike action, including action in hindering, combating, or defending against an actual, impending or expected attack by any government or sovereign power (de jure or de facto), or by any authority using military, naval, or air forces; or by an agent of any such government, power, authority, or forces;

or

(B) Other peril, of a type not listed above, if such other peril is customarily covered by insurance (or by a reserve for self-insurance) in accordance with the normal practice of the Contractor, or the prevailing practice in the industry in which the Contractor is engaged with respect to similar property in the same general locale.

The perils as set forth in (1) and (11) above are hereinafter called "excepted perils".

If the Contractor transfers Government property to the possession and control of a subcontractor, the transfer shall not affect the liability of the Contractor for loss or destruction of or damage to the property as set forth above. However, the Contractor

shall require the subcontractor to assume the risk of, and be responsible for, any loss or destruction of or damage to the property while in the latter's possession or control, except to the extent that the subcontract, with the prior approval of the Contracting Officer, provides for the relief of the contractor from such liability. In the absence of such approval, the subcontract shall contain appropriate provisions requiring the return of all Government property in as good condition as when received, except for reasonable wear and tear or for the utilization of the property in accordance with the provisions of the prime contract.

The term "Contractor's managerial personnel" as used herein means the Contractor's directors, officers, and any of his managers, superintendents, or other equivalent representatives who have supervision or direction of:

(1) All or substantially all of the Contractor's business;

(ii) All or substantially all of the Contractor's operation at any one plant or separate location at which the Contract is being performed; or

(iii) A separate and complete major industrial operation in connection with the performance of this Contract.

(2) The Contractor represents that he is not including in the price hereunder, and agrees that he will not hereafter include in any price to the Government, any charge or reserve for insurance (including any selfinsurance funds or reserve) covering loss or destruction of or damage to the Government property caused by any excepted peril.

(3) Upon the happening of loss or destruction of or damage to any Government property caused by an excepted peril, the Contractor shall notify the Contracting Officer thereof, shall take all reasonable steps to protect the Government property from further damage, separate the damaged and undamaged Government property, put all the Government property in the best possible order, and furnish to the Contracting Officer a statement of:

(1) The lost, destroyed, and damaged Government property;

(11) The time and origin of the loss, destruction, or damage;

(iii) All known interests in commingled property of which the Government property is a part; and

(iv) The insurance, if any, covering any part of or interest in such commingled property.

The Contractor shall be entitled to an equitable adjustment in the contract price for the expenditures made by him in performing his obligations under this Subparagraph (3), in accordance with the procedures provided for in the "Changes" clause of this Contract.

(4) With the approval of the Contracting Officer after loss or destruction of or damage to Government property, and subject to such conditions and limitations as may be imposed by the Contracting Officer, the Contractor may, in order to minimize the loss to the Government or in order to permit resumption of business or the like, sell for the account of the Government any item of Government property which has been damaged beyond practicable repair, or which is so commingled or combined with property of others, including the Contractor, that separation is impracticable.

(5) Except the extent of any loss or destruction of or damage to Government property for which the Contractor is relieved of liability under the foregoing provisions of this clause, and except for reasonable wear and tear of depreciation, or the utilization of the Government property in accordance with the provisions of this Contract, the Contractor assumes the risk of, and shall be responsible for, any loss or destruction of or damage to the Government property, and such property (other than that which is permitted to be sold) shall be returned to the Government in as good condition as when received by the Contractor in connection with this Contract, or as repaired under Paragraph (e) above.

(6) In the event the Contractor is reimbursed or compensated for any loss or destruction of or damage to the Government property, caused by an excepted peril, he shall equitably reimburse the Government. The Contractor shall do nothing to prejudice the Government's rights to recover against third parties for any such loss, destruction or damage and, upon the request of the Contracting Officer, shall at the Government's expense, furnish to the Government all reasonable assistance and cooperation (including the prosecution of suit and the execution of instruments of assignment in favor of the Government) in obtaining recovery. In addition, where a subcontractor has not been relieved from liability for any loss or destruction of or damage to the Government property, the Contractor shall enforce the liability of the subcontractor for such loss or destruction of or damage to the Government property for the benefit of the

Government.

§ 7-13.703 Government property clause for commercial cost-reimbursement contracts.

For cost reimbursement contracts with commercial organizations which are to be performed in the United States or under which title to Government property vests in the U.S. Government, sub

66-091-72- -7