Contractors are authorized and shall be encouraged to return allocable quantities of contractor-acquired property to suppliers for full credit less the supplier's normal restocking charge or 25 percent of cost, which ever is less. Contractors may be reimbursed for reasonable transportation, handling, and restocking charges with respect to the property so returned, but shall not be reimbursed for the cost of the property returned to suppliers in accordance with this section. Under cost-reimbursement type contracts, appropriate adjustments shall be made for previously reimbursed costs. § 18-24.202-3 Cost-reimbursement type

contracts.

Under cost-reimbursement type contracts property purchased or retained by the contractor or returned to suppliers, in accordance with §§ 18-24.2021 and 18-24.202-2, shall not be reported on inventory schedules. Individual transaction approvals shall not be required, but such transactions shall be subject to review on a periodic basis by procurement personnel in coordination with the contract auditor to assure that the Government's interest is fully protected.

§ 18-24.203 Inventory schedules. § 18-24.203-1 Submission of inventory schedules.

(a) Contractor inventory (see § 1824.101-5) shall be reported by the contractor to the procurement office on inventory schedules promptly after it is determined to be excess or at such later time as may be contractually authorized. Inventory schedules of subcontractors shall be processed in accordance with § 18-24.212. Contractor-acquired property purchased or retained pursuant to § 18-24.202 shall not be listed. Partial schedules may be submitted when they cover substantial portions of a particular property classification of excess inventory. Each schedule submitted shall be identified by the contractor as "partial" or "final." Submission shall not be delayed in order to supply complete cost data on items of work in process where data is not readily available.

(b) The contractor may submit machine listings of inventory, provided, that all essential elements of data for preparing inventory schedules as prescribed in this part and as outlined in DD ASPR Form 1115 (NASA Edition), Instructions

in Preparing Inventory Schedules of Contractor Inventory, are included thereon, and an appropriate signed inventory schedule form is submitted as a cover sheet.

(c) With respect to termination inventory reported in accordance with § 18-24.203-2 Government-furnished property and contractor-acquired property shall be grouped separately on the schedule, clearly identified as either Government-furnished or contractoracquired, and subtotals provided for each group.

(d) Thirty copies of each inventory schedule listing serviceable and usable property requiring screening in accordance with this part and five copies of each inventory schedule for property not requiring screening (see § 18-24.205-1 (d)) shall be submitted to the plant clearance officer, unless a different quantity is prescribed by the plant clearance officer.

(e) Industrial Plant Equipment (IPE) (see § 18-13.312) shall be reported on DD Form 1342, DOD Property Record and processed in accordance with B.306-1 or C.306-1.

§ 18-24.203-2 Separate schedules.

(a) Separate sets of schedules shall be submitted on DD Form 542 through 545 series and DD Form 832 for serviceable or usable contractor inventory as follows: (1) Property having a line item acquisition cost of more than $300; and

(2) Property having a line item acquisition cost of $300 or less.

(b) Contractor inventory having a line item acquisition cost of more than $300 shall be grouped separately as follows: (1) Space material and equipment; (2) Electronic material and equipment;

(3) Special test equipment; or

(4) Other serviceable or usable property, excluding special tooling.

(c) Separate sets of schedules shall also be submitted for contractor inventory without regard to acquisition cost as follows:

(1) Serviceable or usable special tooling;

(2) Scrap;

(3) Salvage; or

(4) Property bearing a security classification, regardless of condition or value.

(d) Grouping of property by the contractor shall be subject to the approval of the plant clearance officer.

§ 18–24.203–3 Inventory descriptions.

Inventory schedules submitted in accordance with §§ 18-24.203-1 and 1824.203-2, shall be prepared in accordance with instructions prescribed in this part and as outlined by DD ASPR Form 1115 (NASA Edition), Instructions in Preparing Inventory Schedules of Contractor Inventory. The contractor shall consult the plant clearance officer when in doubt as to the extent of description required. Inventory judged to be salvage shall be described in sufficient detail to reflect salvage potential.

§ 18-24.203-4 Inventory schedule certificate.

When termination inventory is reported on inventory schedules, the prime contractor, or the subcontractor having title to the property, shall execute the Inventory Schedule Certificate. When contractor inventory, other than termination inventory, is reported on inventory schedules, the prime contractor shall execute the Inventory Schedule Certificate, irrespective of the location of the property. The original and three copies or reproducible masters of each inventory schedule shall be signed by an authorized official of the contractor. § 18-24.203-5 Common items.

Except for property, delivery of which has been required by the Government, and except for Government-furnished property, under no circumstances shall the contractor's inventory schedules include any items reasonably usable on other work of the contractor without loss to the contractor (see § 18-15.205-42). § 18-24.203-6 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 becomes reasonably usable on other work of the contractor without loss to him and this fact is know to the contractor, he must purchase or retain such items at cost in accordance with §1824.202, and shall amend his inventory schedules and his claim accordingly. Upon notification to the plant clearance officer, the contractor may similarly purchase or retain at cost any other items of property included in his inventory schedules. Withdrawal of any Government-furnished property included in inventory schedules is subject to written approval by the plant clearance officer.

If withdrawal occurs after screening has started, the plant clearance officer shall immediately notify the appropriate screening activity.

§ 18-24.203-7 Acceptance of inventory schedules.

(a) Upon receipt of inventory schedules from the contractor, the plant clearance officer shall review the schedules and determine their acceptability. If the schedules are acceptable, the plant clearance officer shall within 15 days execute and transmit to the contractor a DD Form 1637, Notice of Acceptance of Inventory. If any inventory schedule or DD Form 1342 is found to be inadequate, the plant clearance officer shall notify the contractor in writing of the deficiencies within 15 days of the receipt of such schedules. The contractor shall be required to correct or supplement the schedules or DD Form 1342 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 when possible to specific items thereon and shall not necessarily render the entire schedule unacceptable. Should substantial errors develop which were not apparent from termination inventory schedules previously deemed acceptable, the final phase of a plant clearance period shall not commence until corrected schedules have been submitted, unless the plant clearance officer determines that no unwarranted delay in disposal operations was occasioned thereby.

(b) Verification of inventory: When property is reported excess by a contractor it is necessary that the interests of the Government be protected by assuring that property is physically, quantitatively, and technically allocable to the contract in question and cannot reasonably be diverted to other work of the contractor. The plant clearance officer, who is responsible for disposal of contractor inventory, is also responsible for the adequacy of allocability reviews. In carrying out this responsibility, the plant clearance officer shall establish close coordination with and request the assistance of the contract auditor, quality assurance representative, production specialist, price analyst, property administrator, or other qualified personnel, as appropriate, when such assistance is

necessary. It will be the plant clearance officer's responsibility to assure that adequate verification is accomplished to determine that:

(1) Inventory is present at the location indicated;

(2) It is allocable to the modified, completed, or terminated contract or the terminated portion thereof;

(3) Quantity and condition are correctly stated; and

(4) The contractor has endeavored, where practicable, to divert to other work or to return contractor-acquired property to supplier for appropriate credit. Verification may be performed by resident Government personnel prior to the formal submission of inventory schedules to the plant clearance officer. Screening prescribed in § 18-24.205 shall not be withheld after receipt of acceptable inventory schedules pending completion of inventory verification. The results of the verification shall be recorded on DD Form 1642, Inventory Verification Survey, in accordance with instructions for performing inventory verification set forth in § 18-24.302-1. A copy of the completed survey form shall be furnished the appropriate contracting officer. Upon completion of inventory verification, the plant clearance officer shall take immediate action to correct any discrepancies noted, including coordination with the contractor, contracting officer, or property administrator, and screening activities, as appropriate. When a controversy arises with respect to allocability, the contractor shall be required to substantiate his position with appropriate documentation which the plant clearance officer shall evaluate and forward to the contracting officer with his recommendations for decision.

§ 18-24.204 Scrap.

§ 18-24.204-1 General.

Scrap need not be itemized on inventory schedules if (a) the material is physically segregated in the contractor's plant, 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 plant clearance officer to determine whether the property is scrap. Promptly after the submission

The contractor may request the plant clearance officer to make a preinventory scrap determination of inventory considered by the contractor to be without value except as scrap. These preinventory scrap determinations shall be based on onsite surveys and approved, if required, pursuant to § 18-24.211. If the contractor's scrap recommendation is approved, the contractor may make a single descriptive entry on an inventory schedule covering that property and indicating its approximate total cost. If the plant clearance officer determines that any of the property listed by the contractor as scrap is serviceable, usable, or salvable, the contractor shall, in accordance with this determination, submit appropriate inventory schedules. If the determination is made subsequent to the submission of a scrap inventory schedule, the contractor shall be required to submit revised inventory schedules in proper form.

§ 18-24.204-3 Segregation.

Property determined to be scrap shall be segregated by the contractor to the extent necessary to assure the highest net proceeds. In appropriate cases, when approved by the plant clearance officer, these sales may be consolidated with the contractor's sales of scrap generated from his other work and, in such cases, the scrap warranty required by § 1824.204-5 may be waived at the discretion of the plan clearance officer. § 18-24.204-4 Contractor's approved scrap procedure.

(a) When a contractor has an approved scrap procedure, certain property may be routinely disposed of in accord

ance with that procedure and not processed under this part. Production scrap, as defined in § 18-24.101-17, and production spoilage, may be disposed of through the contractor's approved scrap procedure. In addition, worn, broken, mutilated, or otherwise rejected parts excess to overhaul and repair contracts, may be similarly processed with the approval of the plant clearance officer.

(b) A plant clearance case shall not be established nor shall approval in accordance with § 18-24.211 be required for property which is disposed of through the contractor's approved scrap procedure.

(c) The contractor's scrap and salvage procedures, particularly the sales aspects thereof, shall be reviewed by the plant clearance officer prior to its approval by the property administrator. The plant clearance officer shall assure that the procedure contains adequate requirements for inspection and examination of items to be disposed as scrap. When the contractor's approved scrap procedure does not require physical segregation and disposition of Governmentowned from contractor-owned scrap, care shall be exercised to assure that a contract change, which generates a large quantity of property, does not result in an inequitable return to the Government. In these cases, a determination shall be made as to whether separate disposition of Government scrap would be appropriate.

(d) Scrap, other than that disposed of through the contractor's approved scrap procedure, shall be reported on appropriate inventory schedules for disposition in accordance with the provisions of this part.

§ 18-24.204-5 Scrap warranty.

(a) If contractor inventory is sold as scrap, including sale to the holding contractor, a scrap warranty in the form outlined in DD Form 1639, Scrap Warranty, shall be included as a special condition of sale, unless the requirement is waived pursuant to paragraph (d) of this section.

(b) The scrap warranty may be released on behalf of the Government by the contracting officer (TCO for termination inventory), 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 not less than that which the material could reasonably be expected to bring if it were sold at a fair and reasonable price 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. Upon tender of this warranty to the Government, the seller shall be released by the Government from liability under his own warranty.

(d) The scrap warranty requirement may be waived by the plant clearance officer in circumstances described in § 1824.204-3 and whenever it can be clearly established that such a waiver would not adversely affect the Government's interest. A written justification supporting the waiver shall be prepared and placed in the case file.

§ 18-24.205 Screening of contractor inventory.

(a) To promote maximum utilization within the Government, serviceable or usable property included in the contractor's inventory schedules shall be screened prior to disposition by donation or sale. The plant clearance officer shall arrange, in such a manner as to avoid interruption of the contractor's operations, for physical inspection of such property at the contractor's plant if requested by prospective transferees. All transfers of property within NASA or other agencies of the Government shall be without reimbursement. Costs incident to transfers, including packing, crating, preparation for shipment, loading and transportation, which are not the responsibility of the contractor, shall be borne by the transferee. § 18-24.205-2

Procedure.

(a) The contracting officer will submit approved termination inventory schedules and excess property listings, as fur

nished by the contractor, to the plant clearance officer for appropriate redistribution or utilization.

(b) Plant clearance officers will forward copies of termination inventory schedules and excess property listings to the installation technical personnel associated with the contract on which the property was generated. To eliminate unnecessary redistribution and utilization actions, the technical personnel will be requested to review the property listings and inventory schedules and advise the plant clearance officer on the feasibility of further use of the property by NASA or other Government agency.

(c) Based upon the determination of the contracting officer and the advice of the technical personnel, the plant clearance officer will initiate action with regard to transfer to other contractors, redistribution or utilization of the property as follows:

(1) Property which is considered to be excess by the contracting officer and technical personnel to other contract requirements will be subject to review by the plant clearance officer for possible utilization at the installation, screening by NASA installations, or reporting to the General Services Administration.

(2) The extent of screening the excess property throughout NASA will be determined by the plant clearance officer. Line items having an acquisition cost of less than $300 need not be screened by NASA installations unless the plant clearance officer determines it is to the best interest of NASA to do so.

(3) To insure prompt screening throughout NASA the following limitations generally will apply:

(i) Screening by contracting officer and technical personnel associated with the contract-5 days,

(ii) Screening within the installation having contract jurisdiction-5 days,

(iii) Screening by all other NASA installations-20 days.

(d) During the NASA screening period, the plant clearance officer will comply with and process any properly executed shipping instructions issued by other NASA installations.

(e) Compliance with shipping instructions will be accomplished in the order in which the requests are received.

(f) In the event such property is not available after receipt of shipping instructions, the installation issuing such instructions will be notified immediately by the plant clearance officer, giving reasons for nonavailability.

(g) Upon the expiration of the final NASA screening period, excess property reportable to the General Services Administration will be reported ir. accordance with the provisions of Subchapter H, Part 101-43 of the Federal Property Management Regulations.

(h) Shipping instructions received on excess property reported to the General Services Administration for screening will be processed in accordance with the provisions of Subchapter H, Part 101-43 of the Federal Property Management Regulations.

§ 18-24.205-4 Special screening procedures.

(a) General. For the special categories of property identified in this section, standard screening requirements in § 1824.205 are superseded or modified by the procedure set forth for each category.

(b) Standard components of special test equipment. (1) Contractors reporting special test equipment for disposal which contain standard, general or multipurpose components will adequately describe the composite unit to clearly reflect its capability and will further list and describe, in sufficient detail to permit screening all such standard components which can be economically removed and reused.

(2) In the event the contractor has a continuing requirement for the standard components to meet other approved special test equipment or facilities requirements, he shall annotate the DD Form 545 to indicate his requirement for such standard components. Screening shall be accomplished in accordance with § 1824.205-2 and the screening activity shall be requested to advise whether they shall have a requirement for the composite unit or any of the standard components which have not been annotated as being required by the contractor. If the composite unit is not required by NASA the contractor shall have first priority for those standard components which have