Block 56. Enter an "X" in the appropriate box to indicate type of disposition. Block 56a. Enter date of disposition or delivery and amount of proceeds realized if disposition was by sale. SECTION V-VALIDATION RECORD Block 57. Enter the signature of the individual(s) authorized to validate the report (e.g., Property Administrator). Appendix C-Control of Property in Possession of Nonprofit Research and Development Contractors SOURCE: The provisions of Appendix C appear at 36 F.R. 15639, Aug. 17, 1971, as amended at 36 F.R. 25134, Dec. 29, 1971 SUBPART 1-INTRODUCTION C.100 Scope of Appendix. This appendix sets forth the basic requirements to be observed by contractors in establishing and maintaining control over Government property provided pursuant to the terms of contracts with the National Aeronautics and Space Administration. To the extent of any inconsistency between this appendix and the terms of the contract under which the Government property is provided, the terms of the contract shall govern. C.101 General. The contractor shall be directly responsible for and accountable for all Government property in accordance with the provisions of the contract, including property provided under such contract which may be in the possession or control of a subcontractor. The contractor shall establish and maintain a system (in accordance with the provisions of this appendix) to control, protect, preserve and maintain all Government property. This system shall be reviewed and, if satisfactory, approved in writing by the assigned property administrator. The contractor shall maintain and make available such records as are required by Subpart 3 of this appendix and must account for all Government property until relieved of responsibility therefor in accordance with procedures set forth in Subpart 2 of this appendix. Liability for loss, damage, or excessive use of property in a given instance will necessarily depend upon all the circumstances surrounding the particular case and must be considered and determined in accordance with the provisions of the contract. The contractor shall furnish all necessary data to substantiate any request for discharge from responsibility. (a) The contractor shall require any of his subcontractors who are provided Government property under the prime contract to comply with the provisions of this appendix. Procedures for assuring subcontractor compliance shall be included in the contractor's approved property control system. In those instances where the property administrator assigned to the contract has requested supporting property administration, the contractor may accept the system approval and continuing surveillance of the supporting property administrator in lieu of performing duplicative actions to assure the subcontractor's compliance with the provisions of this appendix. (b) In the event any portion of the contractor's property control system is found to be inadequate upon review by the property administrator, any necessary corrective action will be accomplished by the contractor prior to approval of the system. When agreement as to adequacy of control and corrective action is not reached between the contractor and the property administrator, the matter will be referred to the contracting officer. (c) Procedures for the control of scrap and salvage shall not be required unless the property administrator determines that the scrap or salvage is substantial in amount and that the Government is not receiving sufficient benefits from the use or disposal thereof. In this event the contractor shall establish a procedure whereby all Government property that can be salvaged shall be returned to Government stock, which procedure shall be subject to the approval of the property administrator. (d) When Government property (excluding misdirected shipments) is disclosed to be in the possession or control of the contractor but not provided in accordance with the provisions of any contract, the contractor will, as promptly as possible, (i) record such property according to the established property control procedure, and (ii) furnish the property administrator with all known circumstances and factual data pertaining to its receipt and a statement as to whether there is a need for retention of such property. For misdirected shipments see C.312. (e) The contractor shall report all Government property in excess of the amounts needed to complete full performance under the contract pursuant to which it was provided, or other existing contracts which authorize the use of such property, as promptly as possible after disclosure of the condition. C.102-1 "Property administrator" means the individual designated by appropriate authority to administer the contract requirements and obligations relative to Government property. He is an authorized representative of the contracting officer. C.102-2 "Government property" means all property owned by or leased to the Government or acquired by the Government under the terms of a contract. Government property includes both Government-furnished property and contractor-acquired property as defined below: (1) "Government-furnished property" is property in the possession of, or acquired directly by, the Government and subsequently delivered or otherwise made available to the contractors; and (ii) "Contractor-acquired property" is property procured or otherwise provided by the contractor for the performance of a contract, title to which is vested in the Government. C.102-3 "Provide," as used in the context of such phrases as "Government property provided to the contractor" and "Government-provided property," means either to furnish, as in "Government-furnished property," or to acquire, as in "contractoracquired property." C.102-4 "Government material" means Government property which may be incorporated into or attached to an end item to be delivered under a contract or which may be consumed in the performance of a contract. It includes, but is not limited to, raw and processed materials, parts, components, assemblies and small tools and supplies. C.102-5. "Special tooling" means all jigs, dies, fixtures, molds, patterns, taps, gauges, other equipment and manufacturing aids, and replacement thereof, which are of such a specialized nature that, without substantial modification or alteration, their use is limited to the development or production of particular supplies or parts thereof, or the performance of particular services. The term includes all components of such items, but does not include: (i) Consumable property; (ii) Special test equipment; or (iii) Buildings, nonseverable structures (except foundations and similar improvements necessary for the installation of special tooling), general or special machine tools, or similar capital items. C.102-6 "Special test" equipment means electrical, electronic, hydraulic, pneumatic, mechanical or other items or assemblies of equipment, which are of such a specialized nature that, without modification or alteration, the use of such items (if they are to be used separately) or assemblies is limited to testing in the development or production of particular supplies or parts thereof, or in the performance of particular services. The term "special test equipment" includes all components of any assemblies of such equipment, but does not include: (i) Consumable property; (ii) Special tooling; or (iii) Buildings, nonseverable structures (except foundations and similar improvements necessary for the installation of special test equipment), general or special machine tools, or similar capital items. C.102-7 "Facilities" means industrial property (other than material, special tooling, space property, and special test equipment) for production, maintenance, research, development, or test, including real property and rights therein, buildings, structures, improvements and plant equipment. C.102-8 "Real property," for purposes of accounting classification, means (i) land and rights therein; (ii) ground improvements; (iii) utility distribution systems; (iv) buildings; (v) structures; and (vi) leasehold improvements. It excludes foundations and other work necessary for the installa C.102-10 "Plant equipment" means personal property of a capital nature (consisting of equipment, machine tools, test equipment, furniture, vehicles, and accessory and auxiliary items, but excluding special tooling and special test equipment) used or capable of use in the manufacture of supplies or in the performance of services or for any administrative or general plant purpose. (For financial reporting purposes see NASA Form 1018 Instructions.) C.102-11 "Industrial Plant Equipment (IPE)" means that part of plant equipment with an acquisition cost of $1,000 or more which is listed in § 18–13.312. C.102-12 "Minor plant equipment" means an item of plant equipment having an acquisition cost of less than $200. C.102-13 "Accessory item" means an item which facilitates or enhances the operation of plant equipment but which is not essential for its operation, such as remote control devices. C.102-14 "Auxiliary item” means an item without which the basic unit of plant equipment cannot operate, such as motors for pumps and machine tools. C.102-15 "Salvage" means property which because of its worn, damaged, deteriorated, or incomplete condition, or specialized nature, has no reasonable prospect of sale or use as serviceable property without major repairs or alterations, but which has some value in excess of its scrap value. C.102-16 "Scrap" means property that has no reasonable prospect of being sold except for the recovery value of its basic material content. C.102-17 "Custodial records" means written memorandum or identifying checks of any description or type used to control items issued from tool cribs, tool rooms, stockrooms, etc., such as requisitions, issue hand receipts, tool checks, stock record books, etc. C.102-18 "Individual item record" means a separate card form, or document utilized to account for one item of property. C.102-19 "Stock record" means a perpetual inventory form of record which shows, by nomenclature, the quantities received and issued and the balances on hand. C.102-20 "Discrepancies incident to shipment" means all deficiencies incident to the shipment of Government property to or from a contractor's facility whereby differences exist between the property purported to have been shipped and the property actually received. Such deficiencies include, but are not limited to, loss, damage, destruction, improper status, and condition coding, error in identity of classification, and improper consignment. C.102-21 "Space property" means personal property which is peculiar to aeronautical and space programs of NASA, and is not otherwise included in the categories of property set forth in § 18-13.101-4, 18-13.101-5, 855 18-13.101-6 and 18–13.101-8. It includes such items as aircraft, engines, space vehicles, and other similar components, and related support equipment furnished for use as a standard or model, to establish equipment compatibility, or for such other similar reasons as may be determined by the contracting officer. C.102-22 "Property account" means the official records of Government property provided to a contractor by NASA, which are established and maintained under the provisions of this appendix. Separate property accounts will be maintained either on an individual contract basis or contractor basis. C.102-23 "Nonprofit organization” means any corporation, foundation, trust or institution operated for scientific, or educational or medical purposes, not organized for profit, no part of the net earnings of which inures to the benefit of any private shareholder or individual. C.103 Segregation ΟΤ Commingling of Government Property and Contractor's Property. Ordinarily, Government property, particularly material, should be segregated and kept physically separate from contractorowned property at all times. However, when advantageous to the Government and consistent with the contractor's authority to use such property, the property may be commingled: (a) When the Government property is special tooling, special test equipment, or plant equipment which is clearly identified and recorded as Government property; (b) When (i) scrap of a uniform nature is produced from both Government-owned and contractor-owned materials and physical segregation is impracticable, (ii) scrap produced from Government-owned materials is so insignificant in consideration of the cost of segregation and control; C.104 Audit of Property Control System. The contractor's Government property control system shall be audited by the Government as frequently as conditions warrant. Any such audit or audits may take place at any time during the performance of the contract, upon completion or termination of the contract, or at any time thereafter, during the period the contractor is required to retain such records. The contractor shall make all such records, including correspondence related thereto, available to the auditors. C.105 Administration of Space Property. Due to the special nature of space property the contract under which it is provided generally will contain specific requirements for maintenance and control. Moreover, the following conditions shall be observed: (1) Each item of the property shall be identified by its Federal Item Identification Number and Government nomenclature; and (ii) upon the completion or termination of the contract the contractor shall request and comply with disposition instructions from the Contracting Officer. To the extent specified in the contract the provisions of this appendix, with respect to all Government property, shall apply to space property. SUBPART 2-CONTRACTOR'S RESPONSIBILITY C.200 Scope of Subpart. This subpart covers to the extent not otherwise provided in the contract, (1) the duties and responsibilities of the contractor with respect to Government property, (ii) the obligations of the contractor with respect to the control of Government property, both physically and administratively, and (iii) the liability of the contractor for Government property lost, damaged, destroyed, or for which the contractor is otherwise unable to account. C.201 Assumption of Responsibility. A contractor shall be responsible for all Government property in his possession or control in accordance with the terms of the contract, including property provided under such contract which may be in the possession or control of a subcontractor. Sources from which Government property may be furnished or acquired are as follows: (a) NASA Installation or Other Contractor's Plants. Government property may be shipped to a contractor from NASA installations, other Government installations, or plants of NASA or other Government agency contractors. For the purpose of this appendix, the contractor shall become responsible for such property upon delivery of the property into his custody or control. The shipping activity shall furnish the contractor with copies of documents necessary to permit the contractor's property records to accurately reflect the transaction. (b) Direct Purchase by the Contractor. Direct purchases shall be subject to a determination by the NASA Contracting Officer that the items are allocable to the contract involved and are reasonably necessary therefor. For purposes of property control within the scope of this appendix, it shall be considered that property purchased by the contractor for which reimbursement is to be requested, becomes Government property upon its receipt by the contractor. This provision shall not be deemed to alter or modify contractual provisions relating to passage of title. (c) Withdrawal From Contractor-Owned Stores. For purposes of property control, within the scope of this appendix, property withdrawn from contractor-owned stores, for direct charge to the contract, shall be considered Government property at the time of approval of the claim for reimbursement, or at the time of issuance for use of such property for the performance of the contract, whichever is earlier. (d) Contract Provisions, Terminations, Contract Changes. Pursuant to specific contractual provisions or as a result of termination of a contract, or change orders issued under a contract, the Government may acquire title to property. For purposes of property control, such property shall, unless oth erwise provided by the contract, be considered Government property upon acceptance of title by the Government. (e) Advance, Progress, or Partial Payments. Pursuant to the terms of a contract, the Government may acquire a lien or title to property upon the making of advance, progress, or partial payments to the contractor. Property to which the Government has acquired a lien or title solely as a result of advance, progress, or partial payments shall not be subject to the provisions of this appendix. C.201-1 Evidence of Receipt of Government Property. The contractor shall furnish written receipts for all, or specific classes of Government-provided property only in those instances where such action is determined by the property administrator to be essential for maintenance of minimum acceptable property controls. Where such evidence of receipt is required for contractor-acquired property, it shall be provided by the contractor not later than the time he submits his application for payment (public voucher) for the property. In the instance of Governmentfurnished property, the required receipt shall be provided by the contractor immediately upon receipt of the property. C.201-2 Discrepancies Incident to Shipment. (a) Government-Furnished Property. When overages, shortages, or damages are discovered upon receipt of Government-furnished property, the contractor shali provide a statement of the condition and the apparent causes in accordance with procedures approved by the property administrator pursuant to C.201. When the quantity or description of property received by a contractor differs from the quantity or description denoted as shipped on the shipping document, only that quantity, or property, actually received will be recorded on the official records of the contractor. (b) Contractor-Acquired Property. The contractor shall take all actions necessary in adjustment of shortages, overages, or damages contracting officer, Government property for which the Government has received consideration. (c) Sale of Property. For Government property sold pursuant to instructions of the plant clearance officer; Provided, That, the proceeds of such sale shall have been received by or credited to the Government; (d) Shipment of Government Property From a Contractor's Plant. When Government property is shipped from the contractor's plant (except when shipment is to a subcontractor or other location of the contractor) pursuant to the instructions of the plant clearance officer or the property administrator; (e) Determination by the Contracting Officer. For Government property which is lost, damaged, destroyed, or consumed in excess of that normally anticipated in a manufacturing or processing operation, and for which the contracting officer has determined the extent of liability, if any, of the contractor: Provided, That: (i) Such determination is furnished to the contractor in writing; (ii) The Government has been reimbursed where required by the determination; and (iii) Proper disposition of property rendered unserviceable by damage has been accomplished, and appropriate cross-reference is recorded on the determination as to the shipping documents or other documents evidencing disposal. C.203 Contractor's Liability. (a) Subject to the terms of the contract, the contractor may be liable when shortages of Government property are disclosed or when Government property is lost, damaged, or destroyed, or when there is evidence of unreasonable use or consumption of Government property as measured by the allowance provided for by the terms of the contract, the bill of materials, or other appropriate criteria. (b) The contractor shall report all cases of loss, damage, or destruction of Government property in his possession or control soon to the property administrator as in shipment of contractor-acquired property from a vendor or supplier; except in those instances wherein the shipment has moved via Government bill of lading and carrier liability is indicated. In the latter event, the contractor shall report the instance in accordance with C.201-2(a) above. C.202 Relief From Responsibility. Subject to specific instructions of the contracting officer, and unless otherwise provided for in the contract, the contractor shall be relieved of his property control responsibility for Government property by the following: (a) Consumption of Property in the Performance of the Contract. To the extent that the property administrator shall determine that property has been consumed or expended for proper purposes and in reasonable amounts in the performance of the contract; (b) Retention by the Contractor. When the contractor retains, with the approval of the as such facts become known or when requested by the property administrator. The report shall contain all factual data as to the circumstances surrounding such loss, damage, or destruction. A similar report shall be furnished when completed products or end items are lost, damaged, or destroyed while such property is in the possession or control of the contractor. (c) The contractor shall require any of his subcontractors having Government property in their possession or control which is accountable under the contract to report to him all instances of loss, damage, o1 destruction of such Government property. Further procedure shall be in accordance with that prescribed in (a) and (b) above SUBPART 3-RECORDS OF GOVERNMENT PROPERTY C.300 Scope of Subpart. This subpart establishes minimum requirements for records to be established and maintained by the contractor for Government property in his possession of control. C.301 General. (a) It is the Government's policy to rely upon contractor property control records and to designate and use such records as the official contract records unless an exception has been authorized due to special circumstances. The contractor shall establish and maintain adequate control records, either manual or mechanized, in accordance with the requirements of this appendix for all Government property provided under a contract, including property provided under such contract as may be in the possession or control of a subcontractor. When the subcontractor has a property control system approved by the Government for Government property provided under the subcontractor's own prime contracts, the contractor will utilize records created and maintained in accordance with such approved system unless otherwise directed by the property administrator. (b) The contractor's property control system shall provide financial data for Government-owned property in the contractor's possession or control. The system shall be subject to internal control standards and be supported by property records for such property in the manner described in this Subpart 3. (c) The official records shall be kept in such condition that at any stage of completion of the work under a contract the status of Government property can be readily ascertained. (d) Separate property records for each contract are desirable but a consolidated property record may be maintained; provided, that the consolidated record provides the information set forth in this subpart. (e) Special tooling and special test equipment fabricated from materials which are the property of the Government will be appropriately recorded as Government-owned special tooling or special test equipment immediately upon fabrication. Special tooling and special test equipment fabricated from materials which are the property of the contractor will be appropriately recorded as Government property at the time title passes to the Government. (f) Property records of the same type which would have been established for components if acquired separately shall be established for such usable components which are permanently removed from items of Government property, as a result of modification, or otherwise. (g) The contractor's property control system shall contain an adequate locator system or techniques to permit the location of any item of Government property within a reasonable period of time after request therefor. C.302 Pricing. Except as provided in C.302-1, the contractor's property control system shali contain the unit price for each item of Government property recorded therein. It is a recognized practice of many contractors to record the unit price of property on other than the quantitative inventory record, thus requiring the use of supplementary records to ascertain unit prices. Under such circumstances, the supplementary records containing such information shall be identified and recognized as a portion of the official property records. C.302-1 Contractor-Acquired and Contractor-Fabricated Property. Except for items fabricated for research and development purposes by the contractor, the unit price of contractor-acquired and contractor-fabricated property shall be determined in accordance with the system established by the contractor in conformance with sound accounting principles and consistently applied. Generally, it is desired that separate unit prices be applied to items of special tooling and special test equipment fabricated or acquired by the contractor. However, if the contractor's accounting system is acceptable, and if the maintenance of detailed cost records results in excessive accounting cost or is otherwise impracticable considering all circumstances, group pricing may be used for special tooling and special test equipment. Group pricing may also be used for workin-process in accordance with the contractor's acceptable cost accounting system. Processed material, fabricated parts, components, assemblies, etc., charged to the contractor's work-in-process inventory, including items in temporary storage while awaiting processing, may be considered as workin-process for the purpose of compliance with this requirement. Nothing in the foregoing lessens the requirement for quantitative property controls for special tooling. special test equipment, and work-in-process necessary for the proper protection of the Government's interest. C.302-2 Government-Furnished Property. The unit price of Government-furnished property shall be determined by the Government and furnished to the contractor. Transportation and installation costs will not be considered as part of the unit price for this purpose. Normally, the unit price of Government-furnished property will be provided on the document covering shipment of the property to the contractor. In event the unit price is not provided on the document, action will be taken through the property administrator to obtain the information. C.303 Records of Material. All Government material furnished to the contractor, as well as other material to which title has passed to the Government by reason of allocation from contractor-owned stores or purchase by the contractor for direct charge to a Government contract or otherwise, shall be recorded in accordance with the contractor's property control system, as follows: (a) Material Issued Directly Upon Receipt. (1) Fixed-Price Contracts. In the case of Government-furnished material which is is |