Paragraph 13-504 13-505 13-506 Residual Value to the Government of Special Tooling and Special Test Equipment....... Additional Evaluation Factors...... Solicitations-Description of Evaluation Procedure 13-605 13-606 Retention of Special Tooling and Special Test Equipment.......... 13-801 13-802 13-803 Part 8-Administrative Practices Appointment of Property Administrator Assignment of Contracts for Property Administration. SECTION XIII GOVERNMENT PROPERTY 13-000 Scope of Section. This Section sets forth the policies of the Department of Defense with respect to providing property for use by contractors in connection with procurement by the Departments and references applicable contract clauses for contracts other than facilities contracts. (For facilities contract clauses, see Section VII, Part 7.) This Section does not apply to the lease of property to contractors under 10 U.S.C. 2667 or other leasing authorities, except as to non-Government use of industrial plant equipment under 13-405 or to property to which the Government has acquired a lien for title solely as a result of partial, advance or progress payments. GOVERNMENT PROPERTY Part 1-General 13-101 Definitions. As used in this Section, the following terms have the meaning stated below. Additional definitions applicable to property administration are set forth in Appendices B and C. 13-101.1 Property includes all property, both real and personal. For the purpose of this Section, it consists of five separate categories—material, special tooling, special test equipment, military property, and facilities. 13-101.2 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: (i) Government-furnished property is property in the possession of, or acquired directly by, the Government and subsequently delivered or otherwise made available to the contractor; 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. 13-101.3 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 "contractor-acquired property." 13-101.4 Material means property which may be incorporated into or attached to an end item to be delivered under a contract or which may be consumed or expended in the performance of a contract. It includes, but is not limited to, raw and processed material, parts, components, assemblies, and small tools and supplies which may be consumed in normal use in the performance of a contract. 13-101.5 Special tooling means all jigs, dies, fixtures, molds, patterns, taps, gauges, other equipment and manufacturing aids, and replacements thereof, which are of such a specialized nature that, without substantial modification or alteration, their use is limited to the development or production or particular supplies or parts thereof, or the performance of particular services. The term includes all components of such items, but does not include: (i) material (ii) special test equipment; or (iii) buildings, and nonseverable structures (except foundations and similar improvements necessary for the installation of special tooling), general or special machine tools, or similar capital items. 13-101.6 Special test equipment means either single or multipurpose integrated test units engineered, designed, fabricated, or modified to accomplish special purpose testing in the performance of the contract. Such testing units comprise electrical, electronic, hydraulic, pneumatic, mechanical, or other items or assemblies of equipment, that are mechanically, electrically, or electronically interconnected so as to become a new functional entity, causing the individual item or items to become interdependent and essential in the performance of special purpose testing in the development or production of particular supplies or services. The term “special test equipment” does not include: GOVERNMENT PROPERTY (i) material; (ii) special tooling; (iii) buildings and nonseverable structures (except foundations and similar improvements necessary for the installation of special test equipment); and (iv) plant equipment items used for general plant testing purposes. 13-101.7 Military property means personal property peculiar to military operations which is under the cognizance of a military inventory control point. It includes weapons systems, components thereof, and related support equipment, but does not include items which are consumed in the performance of a procurement contract or incorporated in the end items produced under a contract (see "material" in 13-101.4). 13-101.8 Facilities means industrial property (other than material, special tooling, military property, and special test equipment) for production, maintenance, research, development, or test, including real property and rights therein, buildings, structures, improvements, and plant equipment (see B-102.10). 13-101.9 Government production and research property means: (i) Government-owned facilities, (ii) Government-owned special test equipment, and (iii) special tooling to which the Government has title or the right to acquire title. 13-101.10 Nonseverable, when related to Government production and research property, means that such property cannot be removed after erection or installation without substantial loss of value or damage thereto, or to the premises where installed. 13-101.11 Facilities contract means a contract under which Government facilities, and occasionally special tooling and special test equipment, are provided to a contractor or a subcontractor by the Government for use in connection with the performance of a separate contract or contracts for supplies or services. 13-101.12 Facilities project means an undertaking by the Government to provide facilities to a contractor for the performance of a Government contract or subcontract or to modernize or replace facilities for the same purpose. 13-101.13 Nonprofit organization means any corporation, foundation, trust, or institution operated for scientific, 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. 13-102 Responsibility and Liability for Government Property. 13-102.1 Prime Contractors. It is the policy of the Department of Defense not to hold a contractor responsible for loss of or damage to Government property caused by certain perils when such Government property is provided under: (i) a facilities contract; (ii) a negotiated, fixed-price type procurement contract 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 (see 3-807.1 (b)) or (C) prices set by law or regulation; or (iii) a cost-type procurement contract. GOVERNMENT PROPERTY 13-102.2 Subcontractors. (a) If Government property is provided to a subcontractor directly by the Government, 13-102.1 shall apply. (b) If Government property is provided to a subcontractor by a prime contractor, the latter shall be required to hold the subcontractor liable for any loss of or damage to such property; provided, however that if the prime contract falls under either 13-102.1(ii) or (iii), the prime contractor may, with the prior approval of the contracting officer: (i) include in any cost-reimbursement type subcontract thereunder provisions similar to those contained in paragraph (g) of the clause in 7-203.21; and (ii) include in any fixed-price subcontract meeting the criteria set forth in 13-102.1(ii) a provision similar to that contained in 7-104.24(c). Contracting officers shall, prior to approving the inclusion of the provisions referred to above in any subcontract, balance the need for the protection and care of Government property against the cost thereof. A prime contractor who provides Government property to a subcontractor shall not be relieved of any responsibility to the Government that he may have under the terms of his con tract. 13-103 Furnishing Military Property. (a) Military property may be furnished to contractors when necessary for use as a standard or model, for testing the contractors' end item where suitable commercial equipment is not available, to establish equipment compatibility, or for similar reasons. (b) Military property may be furnished to contractors under a facilities contract, a supply or service contract, or a special bailment contract. Each contract under which such property is furnished shall provide that: (i) each item of the property be identified by its Federal Item Identification Number and Government nomenclature; (ii) the property be accounted for under that contract; and (iii) upon its completion or termination, the contractor shall request and comply with disposition instructions from the contracting officer. 13-104 Profits and Fees. No fee is to be provided or allowed a facilities contractor under a facilities contract. Where Government production and research property is provided under facilities contracts, profit or fee (plus or minus) shall be considered in the negotiation of the related separate contract or contracts for supplies or services, consistent with the profit guidelines established in 3-808. 13-105 Use for or by Contractors of Test Facilities Owned and Operated by the Government. The on-site use for or by contractors of existing Governmentowned test facilities located at installations owned and operated by the Government may be authorized in connection with the performance of Government contracts only when: (i) there is no commercial test capability adequate for the testing needs, or (ii) substantial cost savings will result from use of the Governmentowned test facilities. Whenever any such use is authorized, adequate consideration comparable to commercial charges, if any, shall be obtained under any affected contract. |