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Subpart C-Residual Powers

SOURCE: The provisions of this Subpart C appear at 27 F.R. 4362, May 8, 1962, unless otherwise noted.

§ 1017.300 Scope.

See § 17.300 of this title.

§ 1017.301

Delegations of authority.

Authority to make or approve contracts for sales of Government property, subject to the standards specified in § 1017.302, has been delegated to the Deputy Chief of Staff, Systems and Logistics, and, while he is so acting, to the person acting for the time being as Deputy Chief of Staff, Systems and Logistics, and has been redelegated to the Director, Procurement Management, Office, Deputy Chief of Staff, Systems and Logistics. § 1017.302 Standards for using residual powers.

(a) Sales of Government property pursuant to the delegations of authority described in § 1017.301 will be subject to the limitations in § 17.205-1 of this title and in addition:

(1) Such sales will be based on a finding that it is made in connection with and will facilitate or expedite performance of a specific contract or subcontract for military procurement.

(2) The property sold under this authority must not be obtainable by the contractor or subcontractor without unreasonable delay through commercial sources or through the exercise of other Government sale or property disposal authority, and it must be impracticable to furnish such property as Government property according to Part 13 of this title.

(3) Except as provided in subparagraph (4) of this paragraph, sales under this authority will provide for cash payments; will be made at prices that are fair and reasonable under the circumstances of the case.

(4) Sales of property to be repaid in kind will be made only when the property is needed by the contractor or subcontractor to maintain or expedite the production rate under a contract with the Government, or subcontract thereunder, and only when the contractor or subcontractor has made arrangements to obtain or produce identical articles which can be used to replace the property loaned.

(b) All contracts for sales of Government property made pursuant to this authority will contain a statement of the

facts and circumstances on which the action is based.

(c) This authority does not apply to the disposition of (1) Excess or surplus property, unless and until such property has been withdrawn from such excess or surplus category according to applicable regulations, or (2) property subject to priorities or allocation under the Defense Production Act, except where such transfer is authorized under the aforesaid Defense Production Act or applicable regulations or orders thereunder.

§ 1017.303 Procedures.

All proposals for the exercise of residual powers to make contracts for the sale of Government property will be sent through channels to Hq USAF (AFSPP). [27 F.R. 4362, May 8, 1962, as amended at 31 F.R. 2688, Feb. 12, 1966]

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1030.1 Appendix A-Armed Services Board of Contract Appeals.

1030.2 Appendix B-Manual for control of Government property in possession of contractors.

1030.3 Appendix C-Manual for control of Government property in possession of non-profit research and development contractors.

1030.5 Appendix E-Contract Financing. AUTHORITY: The provisions of this Part 1030 issued under secs. 8012, 2301, 70A Stat. 488, 127; 10 U.S.C. 8012, 2301-2314.

§ 1030.11 Appendix A-Armed Services Board of Contract Appeals.

CROSS REFERENCE: See § 1.314 of this title regarding instructions, provisions, procedures and formats for processing decisions and appeals pursuant to the appropriate Disputes clause in the contract and as set forth in § 7.103-12 of this title and § 1007.4205-8 of this chapter or in an authorized deviation thereto.

[26 F.R. 8314, Sept. 2, 1961]

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§ 1030.2 Appendix B-Manual for control of Government property in possession of contractors.

Part I-Introduction

B-101 Scope of manual. This Appendix implements § 30.2, Appendix B of this title, "Manual for Control of Government Property in the Possession of Contractors," which is hereinafter referred to as the Manual. B-102 Applicability of Manual.

B-102.50 Exceptions. The provisions of the Manual, and this Appendix B, are not applicable in the following instances:

for

(a) Contractor-furnished property which a contractor may be reimbursed as result of redetermination of price, unless transfer of title is specifically agreed to in the redetermination.

(b) Government property furnished, or acquired, under the terms of research and development contracts with educational or other nonprofit organizations, provided such contracts are executed on a nonprofit basis. Such property will be controlled according to the provisions of § 30.3 of this title "Manual for Control of Government Property in Possession of Nonprofit Research and Development Contractors."

(c) Government property furnished under base procurement contracts for repair and return to the shipping organization which are administered by the base procurement activity awarding the contract.

(1) Property shipped for repair and return will be controlled as a suspense item within the military property account from which shipped.

(2) In event parts or materials are furnished, they will be expended from the military account at time of shipment. Copies of shipping documents, indicating accountability terminated, will be furnished to the ACO by the shipping activity.

(3) The ACO will establish such controls as he deems expedient, considering the value of the parts and materials furnished, to insure the proper consumption of articles so furnished and the return of residual quantities of Government-furnished parts and materials and any consequential scrap to the shipping organization.

(d) Government property furnished in connection with the procurement of routine renovating and reconditioning services, such as laundry, dry cleaning, and shoe repair will be controlled as a suspense item within the military property account from which shipped, regardless of organizational level at which the procurement was awarded and will be administered.

(e) Government property, the repair of which may be accomplished through petty cash procedures, within the limitations established for petty cash procurement will be controlled as a suspense item within the military account from which shipped.

(f) Government-furnished cylinders which are delivered to a contractor for refilling and return to the shipping organization

will be controlled as a suspense item within the military property account from which shipped. When refilling contracts provide for Government-furnished valves and valve parts for the repair of cylinders, they will be expended from the military property account at time of shipment. Copies of shipping documents, indicating accountability for such valves and valve parts terminated, will be forwarded by the shipping activity to the contracting officer administering the contract. The ACO will establish such controls as he deems expedient, considering the value of the expended items, to insure the proper consumption of the valves and valve parts furnished and the return of residual quantities thereof and any consequential scrap to the shipping organization.

(1) Exception to the above policy will be made when the refilling contractor has been authorized to retain a bank, or stock, of Government-owned cylinders, in lieu of refilling and returning the identical cylinders delivered by the shipping organization. In such instances, an industrial property account will be established and the Government-owned cylinders delivered to the contractor, as well as Government-furnished valves and valve parts, will be transferred to and controlled thereunder according to the provisions of the Manual.

(g) Government property furnished to contractors under base procurement contracts for construction, repair, rehabilitation, alteration, and maintenance of structures, ground facilities, or utilities at an AF activity, will be controlled and accounted for as provided in AFR 85-5.

(h) AF property furnished to other Governmental agencies for use in connection with procurements under the Economy Act of 1932, as amended (81 U.S.C. 686) will be transferred to and controlled by the using agency according to their established procedures.

B-102.51. Deviations. While the procedures set forth in this Appendix B are considered the minimum necessary for effective surveillance over industrial property control systems established and maintained by AF contractors, it is recognized that exigencies of certain situations or circumstances may require property control procedures other than prescribed. When it is considered impractical to apply the provisions of the Manual and this Appendix B, the property administrator may submit a request for authority to deviate, supported by proper justification, to AFSC (ASXKKI), WPAFB, Ohio, or AFLC (MCPC through MCPKF), as appropriate.

B-103 Definitions.

B-103.18 "Property account". The "property account" will be assigned the same number as the prime contract. Subcontract property accounts will be assigned a number consisting of the prime contract number plus a suffix which will be the number of the subcontractor or purchase order, as assigned by the prime contractor.

B-103.50 Custodial records. "Custodial records" are written memoranda of any description or type, used to control items issued to plant employees from tool cribs, tool rooms, stockrooms, etc., such as requisitions, issue slip receipts, tool checks, stock record books, and the like.

B-103.51 Appointing authority. The term "appointing authority" refers to the authority empowered by delegation to appoint contracting officers, property administrators, and representatives of contracting officers.

B-103.52 Individual item records. As used in the Manual and this Appendix B, are interpreted as records upon which are recorded one unit of an item per record form, as differentiated from record upon which an accumulation of items having identical nomenclature are recorded on one card or

form.

B-103.53 Property records. As used in the Manual and this Appendix B, are interpreted to be all-inclusive of records affecting the status of Government property, and are not restricted to stock records or other forms of an inventory record.

PART II-GENERAL BUSINESS B-202 Designation of property administrator.

The

(a) Designated for each Government contract involving Government property—(1) Representative of contracting officer. property administrator, as representative of the contract administrator, will be designated as set forth in this paragraph. The ACO will not perform the duties of a property administrator without prior approval of Hq AFSC (SCKAP) or Hq AFLC (MCPKF), as appropriate.

(2) Qualifications. It is the responsibility of the cognizant commanders of CMRS and AF procurement activities, empowered through delegation as appointing authorities, to have adequate and qualified individuals appointed as property administrators. In view of the responsibilities accompanying the appointment, individual qualifications should be carefully appraised with respect to the following prerequisites:

(1) Honesty and integrity of character. (ii) Industrial experience in accounting, materials control, inventory methods, or allied functions.

(iii) Evidence of administrative ability and business sagacity.

(iv) Educational level consistent with the duties to be performed.

B-205 Sources from which Government property may be furnished or acquired.

B-205.1 Military installations or other contractors' plants.

(a) Exception to the policy cited in § 1013.102 of this subchapter has been authorized by the Director of Procurement and Production, Hq USAF, when it is determined that the shipment of any item of government property to a contractor, when not specifically provided for in a contract, is in the

best interests of the Air Force. Shipments anticipated under such authority are for the purpose of inspection, test, calibration, modification, replacement, and/or repair, at no cost to the Government. Government property may be furnished under this exception only with prior approval of DCS/Procurement and Production, Hq AFSC, or the Director of Procurement and Production, Hq AFLC, as appropriate. The Chief, Property and Plant Clearance Division (SCKAP) and the Chief, Field Operations Branch (MCPKF) have been designated as respective representatives for granting such approval. Accordingly, when it is desired, for any reason, to furnish government property to a contractor where there is no specific contractual provision, activities under the jurisdiction of AFSC or OAR will submit requests for authorization to AFSC (SCKAP). Activities under the jurisdiction of AFLC and other major commands (AFSC excluded) will forward requests to AFLC (MCPKF). The following procedures will be followed with respect to each request submitted:

(1) Each requesting activity (the AF organization having possession, control or jurisdiction of the property) is responsible for determining whether shipment of the property to the contractor will be in the best interests of the Government after consideration of all factors involved.

(2) The requesting activity will first negotiate arrangements with the contractor regarding conditions for shipment, and the control and return of the property. Such arrangements should reflect specific agreement regarding the following: (1) The quantity and description of the property to be shipped (in usual cases when specific quantities cannot be stated at the outset, an agreed upon maximum quantity limitation will be established), (ii) if quantities of property are to be sent to the manufacturer in a series of shipments an agreed upon schedule of such shipments will be established, (iii) the exact nature and extent of work to be performed, (iv) an agreed upon date for the completion of the work and return of the property to the Government, and (v) the controls to be maintained by the contractor as anticipated by the Manual.

(3) Requests for authorization submitted according to above instructions will be written and will contain complete and detailed data as to urgency and nature of the desired shipment together with terms and conditions of shipment as set forth in (a) (2) of this paragraph.

(4) The appropriate activity (SCKAP or MCPKF) will review each request for shipment of government property to a contractor without contractual coverage, and after consideration of the justification, will recommend approval or disapproval to the approving activity, or will itself approve or disapprove if authorized to do so according to (a) of this paragraph. If the request is approved, the requesting activity will be advised of the authorization and will be fur

nished the data and information required in connection with the notations listed in subdivisions (1) to (v) of this subparagraph to be included in the shipping instructions and which the shipping activity will enter on the shipping documents:

(1) The industrial property account number to which the shipment is to be made.

(11) A statement that the property is shipped (for test, modification, etc.) at no cost to the Government under authority (exception control number).

(111) Instructions to provide for the return shipment of the property upon completion of the work performed under the authorization, including disposition instructions for any residue which may not be in condition for return.

(iv) An indication of the agreed upon completion date of the work for which the property was furnished.

(v) A statement that the property will be controlled by the contractor according to the Manual, Appendix B, or Appendix C, as applicable.

(5) A copy of the authorization will be furnished to the property administrator having cognizance of the contractor to whom the shipment is to be made.

(6) The property administrator designated by the cognizant AF representative will be responsible for the adequacy of controls that are exercised over the property by the contractor. In this connection, he will establish administrative record of each authorized transaction. The records related to each authorized transaction will be periodically reviewed to verify that the contractor's work is completed in reasonable approximation to the time limits agreed upon and that the property is correctly returned or otherwise properly disposed of.

(7) If question arises as to liability of the contractor for the loss, damage, or destruction of any property while in the possession of a contractor under the authorization issued according to subparagraph (4) of this paragraph, the Chief CMD, TSO, or AFPR will be advised and requested to assign an ACO to evaluate the circumstances and make determination as to liability, if any, of the contractor.

(b) The power to authorize shipment of UR and QCDRs (Quality Control Deficiency Reports) Exhibits to contractors for evaluation and study at no cost to the Government, without benefit of contractual coverage, has been extended to the commanders of CMRS, AFCMD, AMAS, APRFE, and APRE with power of redelegation to and through the director of logistics support management or the director of quality control as appropriate to the minimum level of authority set forth in the following: (1) The authority to approve the release of engineering UR EXhibits under the Quick Engineering Fix Program may be delegated to AFPRS and BARS listed, and for products specified, in TO 00-35D-54; (2) the authority to approve the release of engineering exhibits other than

described in paragraph (a) and this paragraph, as applicable, will be vested in the chief and deputy chief of the appropriate logistics support management division; and (3) the authority to approve the release of procurement quality control UR Exhibits may be delegated to the chief and deputy chief of the quality control division of the AFPROS, TSOs, CMDS, and AF field procurement offices not directly under the jurisdiction of a CMD, except as may be otherwise designated in AFLCM 74–1; and (4) the authority to approve the release of QCDR EXhibits will be vested in the AF representative. The use of the extended authority will require administrative review by the AMA, APRFE, or APRE director of logistics support management, or director of quality control as appropriate, for justification and sufficiency of all requests for release of UR EXhibits to a contractor; adherence to the requirements contained herein; and inclusion of record of shipment or other disposition of the exhibits in the materiel improvement project (MIP) file.

(1) Requests to release UR and QCDR exhibits for shipment will be submitted to the appropriate authority designated in this paragraph.

(2) All releases and shipments of UR and QCDR exhibits under this authority will reference the AFLC MIP number or QCDR serial number, as appropriate, for identification and control. Shipping instructions will provide for transfer of accountability to the appropriate industrial property account. (3) A copy of each authorization will be forwarded to the CMD, TSO, AFPRO, APO, or Air Logistic Office (ALO), marked for the attention of the chief, industrial property division.

(4) Distribution of shipping documents will provide for a copy to be furnished for inclusion in the MIP file maintained by the authorizing activity or for the QCDR information file of the AFLC, AMA, as appropriate.

(5) Control of the exhibit while in the possession and custody of a manufacturer will be according to § 30.2 of this title and this Appendix B. See paragraph (a)(7) of this section for liability in connection with loss, damage, or destruction.

(6) The AF quality control representative of the CMD, TSO, or AFPRO assigned quality control cognizance over the prime equipment manufacturer's facility will be responsible for the following actions upon completion of evaluation and study of the UR or QCDR exhibit by the contractor:

(1) Determine condition of the exhibit; i.e., reparable or nonreparable.

(ii) Ascertain whether the contractor is willing to replace or repair the exhibit at no cost to the Government, and if so, authorize such action. (NOTE: This authority to permit the repair or replacement of UR and QCDR exhibits is limited to the exhibit only and does not extend to any other Government property which may be affected by the product deficiency.)

(111) Advise the assigned property administrator of the property to be returned, or otherwise disposed of, and condition of same.

(7) Upon receipt of instructions from the quality control representative, the property administrator will advise the contractor as to disposition according to the following:

(1) If the condition is nonreparable warranting local disposition, the manufacturer will be advised to accomplish disposition pursuant to locally approved procedure.

(11) If the condition of the exhibit is serviceable, it will be shipped to the appropriate inventory manager. Exhibits in reparable condition will be shipped to the applicable depot repair according to designation and instructions contained in TO 00-25-11.

(8) Under no circumstances will an exhibit be released without appropriate authorization and identification to the AFLC MIP number or QCDR serial number.

(9) When a manufacturer states willingness to repair, modify, or replace Government-owned items in excess of that furnished as exhibit at no cost to the Government, a written statement of the contractor's willingness will be obtained and forwarded as attachment to the report furnished to the activity establishing the MIP. In the case where the exhibit or Government-owned items are in connection with QCDR evaluations, the statement of contractor's willingness will be furnished the appropriate AFLC item manager AMA as designated in TO 0025-115. Subsequent shipment of such property to the manufacturer will be subject to the following.

(1) For items other than GFAE, the activity establishing the MIP will notify the appropriate item manager, furnishing the contractor's statement of willingness to repair, modify, rework, or replace at no cost to the Government. Upon receiving the notification, the item manager will determine quantity of items to be returned to the manufacturer and secure authorization from the authority cited in subparagraph (10) of this paragraph, prior to shipment or instruction to holding activities to ship.

(ii) In the case of GFAE exhibits originating at a contractor's plant, notification will be made to AFSC (ASWGM). Upon receipt of notification, ASWGM will determine quantity of items to be returned to the manufacturer and secure authorization from SCKAP according to paragraph (a) of this section prior to issuing shipping instructions to the holding activity.

(iii) In the case of QCDR exhibits, upon receiving the notification, the item manager will determine quantity of items to be returned to the manufacturer and secure authorization from the authority cited in subparagraph (10) of this paragraph, prior to shipment or instruction to holding activities to ship.

(10) The power to authorize shipment of Government-owned property to a manufacturer for repair, modification, rework, or re

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