PART 1845
SUBPART 1845.1 GENERAL
1845.102 Policy.
1845.102-70 Procedures.
1845.104 Review and correction of contractors' property control systems.
1845.104-70 Contract property administration by the Government.
1845.106 Government property clauses.
1845.106-70 NASA contract clauses.
1845.106-71 Plant reconversion and plant clearance.
SUBPART 1845.3 PROVIDING GOVERNMENT PROPERTY TO
CONTRACTORS
1845.301 Definitions.
1845.302 Providing facilities.
1845.302-1 Policy.
1845.302-2 Facilities contracts.
1845.302-3 Other contracts.
1845.302-70 Securing approval of facilities projects.
1845.302-71 Acquisition of ADPE.
1845.302-72 Long-term facilities use.
1845.302-73 Determination and findings.
SUBPART 1845.4 CONTRACTOR USE AND RENTAL OF GOVERNMENT PROPERTY
1845.402 Authorizing use of Government production and research property.
1845.403 Rental--Use and Charges clause.
1845.405 Contracts with foreign governments or international organizations.
1845.406 Use of Government production and research property on independent research and development programs.
1845.407 Non-Government use of plant equipment.
SUBPART 1845.5 MANAGEMENT OF GOVERNMENT PROPERTY IN
THE POSSESSION OF CONTRACTORS
1845.501 Definitions.
1845.502 Contractor responsibility.
1845.502-1 Receipts for Government property.
1845.502-70 Government-furnished property.
1845.502-71 Contractor-acquired property.
1845.505 Records and reports of Government property.
1845.505-2 Records of pricing information.
1845.505-14 Reports of Government property.
1845.505-670 Reporting centrally reportable equipment (CRE).
1845.508 Physical inventories.
SUBPART 1845.6 REPORTING, REDISTRIBUTION, AND
DISPOSAL OF CONTRACTOR INVENTORY
1845.604 Restrictions on purchase or retention of contractor inventory.
1845.606 Inventory schedules.
1845.606-1 Submission.
1845.607 Scrap.
1845.607-70 Contractor's approved scrap procedure.
1845.608 Screening of contractor inventory.
1845.608-1 General.
1845.608-6 Waiver of screening requirements.
1845.610 Sale of surplus contractor inventory.
1845.610-2 Exemptions from sale by GSA.
1845.610-3 Proceeds of sale.
1845.610-4 Contractor inventory in foreign countries.
1845.613 Property disposal determinations.
1845.615 Accounting for contractor inventory.
SUBPART 1845.70 NASA EQUIPMENT MANAGEMENT SYSTEM
1845.7001 Policy.
1845.7002 Application.
1845.7003 General.
1845.7004 Interface with NEMS coordinators and technical project office.
1845.7005 Retention of NEMS equipment.
SUBPART 1845.71 FORMS PREPARATION
1845.7101 Instructions for preparing NASA Form 1018.
1845.7101-1 Property classification accounts.
1845.7101-2 Transfers of property.
1845.7101-3 Submission of reports.
1845.7101-4 Report coverage.
1845.7101-5 Exclusions.
1845.7101-6 Space hardware reporting requirements.
1845.7101-7 Completed space hardware.
1845.7101-8 Completed spare parts and components for space hardware.
1845.7101-9 Space hardware work in process.
1845.7101-10 Contractor's privileged financial and business information.
1845.7102 Instructions for preparing DD Form 1342.
1845.7103 Instructions for preparing DD Form 1419.
SUBPART 1845.72 CONTRACT PROPERTY MANAGEMENT
1845.7201 Definitions.
1845.7202 General.
1845.7203 Delegations of property administration and plant clearance.
1845.7204 Retention of property administration and plant clearance.
1845.7205 Functional oversight of property administration and plant clearance.
1845.7206 Responsibilities of property administrators and plant clearance officers.
1845.7206-1 Property administrators.
1845.7206-2 Plant clearance officers.
1845.7207 Initiation of property administration.
1845.7207-1 Control of assignments.
1845.7207-2 Analysis of contract and establishment of contract property
control data files.
1845.7208 Initial evaluation and approval of contractor's property control system.
1845.7208-1 General.
1845.7208-2 Review of procedures.
1845.7208-3 Exit interview with the contractor.
1845.7208-4 Record of system evaluation.
1845.7208-5 Notification of deficiencies.
1845.7208-6 Resolution of differences.
1845.7208-7 Letter of approval.
1845.7209 Property administration during contractor performance.
1845.7209-1 Property administration plan.
1845.7209-2 System surveys: surveillance.
1845.7209-3 System surveys: scheduling and planning.
1845.7209-4 Testing the system.
1845.7209-5 Performing the system survey.
1845.7209-6 System survey summary.
1845.7209-7 Correction of unsatisfactory conditions.
1845.7209-8 Survey case file.
1845.7209-9 Additional administrative responsibilities.
1845.7209-10 Declaration of excess property.
1845.7210 Closure of contracts.
1845.7210-1 Completion or termination.
1845.7210-2 Final review and closing of contracts.
1845.7211 Special subjects.
1845.7211-1 Government property at alternate locations of the prime contractor and subcontractor plants.
1845.7211-2 Loss, damage, or destruction of Government property.
1845.7211-3 Loss, damage, or destruction of Government property while in contractor's possession or control.
1845.7211-4 Financial reports.
1845.7212 Contractor utilization of Government property.
1845.7212-1 Utilization surveys.
1845.7212-2 Records of surveys.
1845.7212-3 Scope of survey.
1845.7213 Statistical sampling.
PART 1845
1845.102 Policy.
(a) One reason for the policy in FAR 45.102 that contractors shall ordinarily furnish all property is that providing Government property (whether Government-furnished or contractor-acquired) increases the Government's administrative burden and requires recordkeeping and personnel. Providing property may dilute the contractor's overall responsibility and weaken guarantees, end-item delivery requirements, and other contract terms. Furnishing property places NASA between the source of the property and the contractor. When NASA assumes responsibility for scheduling delivery of the property, NASA may be responsible for delays.
(b) Nevertheless, sometimes providing Government property to contractors may be essential to contract performance or otherwise advantageous to NASA. For example, furnishing standardized production property and raw materials may be necessary for uniformity of products. Furnishing Government property can reduce the production cycle by eliminating the lead time necessary for the contractor to acquire or fabricate production property. NASA may be able to broaden its competitive base by offering property to firms unable to acquire their own, or by offering production property or critical material not generally available throughout the industry. NASA may lower contract costs by offering
existing Government property or new Government property obtainable at prices lower than those available to the contractor. NASA may also provide Government property to educational or other nonprofit institutions to facilitate scientific research.
(c) NASA has several types of contract property accountability options. The selection of the combination of Government property clauses for a given contract is dependent upon variables such as whether performance is on-site at a NASA installation, contract purpose, and the degree of contractor management independence that is inherent in the statement of work (see 1845.102-70(b)).
1845.102-70 Procedures.
(a) The contracting officer shall, as applicable, include in each solicitation a--
(1) List of any Government property (showing location and condition), including Government-owned tooling, that will be furnished for the performance of the contract and any related special provisions;
(2) Requirement that information be furnished regarding (i) any Government-owned facilities or items of industrial equipment or special tooling requested to be used in performing the contract, (ii) their acquisition cost, (iii) identification of the Government contract under which the property is accountable, (iv) rental provisions, and (v) other
relevant matters;
(3) Requirement that additional facilities that the offeror requests to be provided by the Government be described and identified by classification such as "Land," "Buildings," and "Equipment" (see Subpart 1845.71); and
(4) Requirement that additional special test equipment that the offeror requests to be provided by the Government be described and its intended use, estimated cost, and proposed location be shown.
(b) To ensure the contract property accountability option selected is appropriate for a particular contract and is in consonance with installation resources and policies regarding use of Government property, the contracting officer shall, as part of the solicitation/contract review process, provide a copy of the solicitation/ contract to the installation supply and equipment management officer (SEMO) for review. It shall be the responsibility of the SEMO to provide comments or recommendations to the contracting officer within the review time specified. In circumstances where an award of a contract is contemplated, and a solicitation was not issued (e.g., contracts resulting from broad agency announcements and unsolicited proposals), the contracting officer shall provide a copy of the contract prior to award to the installation SEMO for review and comment. The contracting officer shall provide this opportunity for SEMO review and comment
as a part of the solicitation/contract review process for procurements with an estimated cost over $1,000,000 or for procurements with an estimated cost over $50,000 (1) for work expected to be performed on-site at a NASA installation, or (2) which provide existing government property, or (3) which require contractor acquisition of
1845.104 Review and correction of contractors' property control systems.
(a) When review of the contractor's property control system is not delegated to DOD, the NASA contracting officer or property administrator shall conduct the review as required in Subpart 1845.72.
(b) In each solicitation under which use of Government property is contemplated, the contracting officer shall require the offeror to--
(1) Furnish the date of the last Government review of its property control and accounting system and describe actions taken to correct any deficiencies found;
(2) State that the offeror has reviewed, understands, and can comply with all property management and accounting procedures in the solicitation, FAR Subpart 45.5, and Subparts 1845.5, 1845.70, and 1845.71 of this Regulation; and
(3) State whether the costs associated with subparagraph (2) of this section are included in its cost proposal.
1845.104-70 Contract property administration by the Government.
DOD will conduct contract property administration in accordance with their regulations and procedures and NASA special delegation instructions. When property administration is not delegated to DOD, NASA shall conduct contract property administration in accordance with Subpart 1845.72.
1845.106 Government property clauses.
In addition to the applicable Government property clauses prescribed in FAR 45.106, the contracting officer shall insert the following clause(s) and provision as appropriate.
1845.106-70 NASA contract clauses and solicitation provision.
(a) The contracting officer shall insert the clause at 1852.245-70, Acquisition of Centrally Reportable Equipment, in all solicitations and contracts that include a Government property clause. See 1845.7103 and the clause at 1852.245-70 for
instructions on preparing DD Form 1419.
(b) (1) The contracting officer shall insert the clause at 1852.245-71, Installation-Provided Government Property, in solicitations and contracts when Government property is to be provided to on-site contractors, and the Government will retain accountability for the property. The contracting officer shall identify in the contract Schedule the nature and extent of such property and the installation supply and equipment management officer will make such property available to the contractor on a no-charge-for-use basis. The contracting officer shall also list in the contract the applicable installation property management directives.
(2) Contracting officers may also use the clause if Government property is provided to off-site local support service contractors. In this case, the concurrence of the installation supply and equipment management officer must be obtained and indicated in the procurement request.
(3) To avoid diluting contractor responsibilities when they include separate procurement authority and responsibility, contracting officers may preclude such contractors from utilizing the installation's central receiving facility for receiving
contractor-acquired property. To accomplish this, the contracting officer shall use the clause with its Alternate I. The contracting officer shall review the acquisitions reported by the contractor for their appropriateness, and the supply and equipment management officer shall ensure that records are established.
(4) Contracting officers shall clearly identify in a separate schedule any property provided under a Government property clause but not also subject to the clause at 1852.245-71. The contracting officer shall address any specific maintenance considerations (for example, requiring use of a central calibration facility) elsewhere in the contract.
(c) The contracting officer shall insert the clause at 1852.245-72 , Liability for Government Property Furnished for Repair and Services, in fixed-price solicitations and contracts (except for experimental, developmental, or research work with educational or nonprofit institutions, where no profit is contemplated) for repair, modification, rehabilitation, or other servicing of Government property, if such property is to be furnished to a contractor for that purpose. If (1) a substantial quantity of parts or material will be furnished, (2) a significant amount of scrap will result from the work to be performed, or (3) other Government property will be furnished to or acquired by the contractor, the contract will also contain the appropriate Government property clause (see FAR 45.106) and the contract Schedule shall provide that such property shall be governed by the terms of that clause. When minor repairs are obtained under small purchase procedures, the procedures of this paragraph (c) shall not apply. Contracting officers shall not require additional insurance under the clause at 1852.245-72 unless the circumstances clearly indicate advantages to the Government.
(d) (1) The contracting officer shall insert the clause at 1852.245-73, Financial Reporting of NASA Property in the Custody of Contracts, in all cost reimbursement contracts. It shall be included in all other types of contracts when it is known at the time of award that property will be provided to the contractor or that the contractor will acquire property, title to which will vest in the Government prior to delivery of the contract products. Where all property to be provided is subject to the clause at 1852.245-71, Installation-Provided Government Property (see paragraph (b)) of this section), the clause at 1852.245-73 is not required. Where the clause is not included in contracts at the time of award, if Government property is subsequently provided to a contractor, or the contractor is authorized to acquire property to which the Government takes title, the clause shall be included in the contract at that time.
(2) Paragraph (c) of the clause at 1852.245-73 permits the contracting officer to withhold payments, up to a specified dollar limt, in the event a contractor fails to submit the annual NF 1018 by the due date. This provision reflects the importance to NASA of receiving this financial data on time. Upon receipt, the information is entered into the NASA accounting system and is used in the preparation of agency annual financial statements. Therefore, timely receipt of contractor held property financial data is essential to the process. A concerted effort should be made to obtain NF 1018 reports by the due date before resorting to the payment withholding alternative.
(e) The contracting officer shall insert the clause at 1852.245-74, Contractor Accountable On-Site Government Property, in solicitations and contracts when accountability rests with an on-site contractor. The contracting officer shall obtain approval to use the clause at 1852.245-74 in lieu of the clause at 1852.245-71 from Director, Logistics Management Office (Code JLG), NASA Headquarters. The request for approval shall be written and shall include a determination of costs that will be:
(i) Avoided (e.g., additional costs to the installation's property management systems and staffing) and
(ii) Incurred (e.g., reimbursable costs of the contractor to implement, staff, and operate separate property management systems on-site, and resources needed for performance of, or reimbursement for, property administration) under contractor accountability.
(f) The contracting officer shall insert the clause at 1852.245-75, Title to Equipment, in solicitations and contracts where the clause at FAR 52.245-2 (Alternate II) or 52.245-5 (Alternate I) is used. Insert a dollar value not less than $5,000, based on the particular procurement, and identify the property for which vesting of title with the Government is
appropriate.
(g) The contracting officer shall insert the clause at 1852.245-76, List of Government-Furnished Property, in solicitations and contracts if the contractor is to be accountable under the contract for Government property. Insert the name of the Government installation, contractor's plant, or other site(s) where the Government property will be used. Insert a description of the item(s), quantity, acquisition cost, and date the property will be furnished to the contractor.
(h) The contracting officer shall insert the clause at 1852.245-77, List of Installation-Provided Property and Services, in solicitations and contracts that authorize contractor use of on-site Government property and services, such as office space, the cafeteria, or first-aid. Insert the attachment number identifying the equipment to be made available to the contractor. Insert the name of the installation service facilities, such as a library,
computer facility, or health center, that the contractor will be authorized to use. The property and services may be specified, modified, and updated to meet the needs of the particular procurement.
(i) The contracting officer shall insert the provision at 1852.245-79, Use of Government-Owned Property, in all solicitations when Government property may be used by the contractor.
(j) The contracting officer shall insert the clause at 1852.245-80, Use of Government Production and Research Property on a No-Charge Basis, in solicitations and contracts when Government production and research property (facilities, special test equipment, or special tooling) accountable under another contract(s) is authorized for use. Insert
the contract number(s) under which the Government property is accountable.
1845.106-71 Plant reconversion and plant clearance.
The contracting officer must obtain the prior approval of the Associate Administrator for Procurement (Code H) for any solicitation provision or contract clause that would defer negotiation of costs for plant reconversion or plant clearance until after award.
Subpart 1845.3--Providing Government Property to Contractors
1845.301 Definitions.
"Provide," as used in this subpart in such phrases as "Government property provided to the contractor" and "Government-provided property," means either to furnish, as in "Government-furnished property," or to permit to be acquired, as in "contractor-acquired property." See FAR 45.101 for definitions of "contractor-acquired property" and
"Government-furnished property."
"Agency-peculiar property," (see 1845.501).
1845.302 Providing facilities.
1845.302-1 Policy.
(a) The procurement officer is designated to make determinations required under FAR 45.302-1(a)(4) on authorizing the use of Government facilities.
(b) When any of the conditions listed in FAR 45.302-1(d) is met, the requirements of FAR 45.302-1(a)(4) do not apply.
(c) In addition to the exceptions listed in FAR 45.302-1(a), existing NASA-owned facilities (whether contractor acquired or Government furnished) may be retained for the remainder of the contract period and furnished under any follow-on contract for the same effort if the contracting officer determines that to do so would be in the best interest of the Government, provided that:
(1) The facilities are required to accomplish the purpose of the contract;
(2) The resulting contract contains a provision requiring the contractor to replace any of the facilities that reach the end of their useful life during the contract period, or which are beyond economical repair, if the facilities are still needed for contract performance. Such replacements shall be made with contractor-owned facilities. The contract provision shall
also expressly prohibit contractor acquisitions of facility items for the Government, unless specifically authorized by the contract or consent has been obtained in writing from the contracting officer pursuant to FAR 45.302-1(a);
(3) Consideration has been given to any alternative uses by Government personnel within the agency, in consultation with the Industrial Property Officer; and
(4) The contracting officer documents the file with a detailed explanation of the circumstances which make furnishing of the facilities in the best interest of the Government.
1845.302-2 Facilities contracts.
Unless termination would be detrimental to the Government's interests, contracting officers shall terminate facilities contracts when the Government production and research property is no longer required for the performance of Government contracts or subcontracts. Contracting officers shall not grant the contractor the unilateral right to extend the time during which it is entitled to use the property provided under the facilities contract.
1845.302-3 Other contracts.
In addition to the conditions listed in FAR 45.302-3, the contracting officer may also provide facilities to a contractor under a contract other than a facilities contract if the contract is for less than 6 months or provides fewer than 6 items of plant equipment and no other facilities.
1845.302-70 Securing approval of facilities projects.
(a) Pursuant to NMI 7330.1, Delegation of Authority - Approval Authorities for Facility Projects, the contracting officer must approve facilities projects involving leasing, construction, expansion, modification, rehabilitation, repair, or replacement of real property.
(b) The contracting officer's written authorization is required before any change is made in the scope or estimated cost of any facilities project.
1845.302-71 Acquisition of ADPE.
Any contractor proposed acquisition of automatic data processing equipment as defined in the FIRMR shall be--
(a) Submitted on DD Form 1419, or equivalent format, through the contracting officer to the installation's ADPE staff, for screening availability; and
(b) Approved in accordance with the provisions of NASA Handbook 2410.1, Information Processing Resources Management.
1845.302-72 Long-term facilities use.
For procurements in which (a) the proposed contract, exclusive of options, will be for a shorter period than the useful life, for the program, of any required contractor-owned or leased facilities, and (b) the facilities are unlikely to be needed by the contractor for any purpose other than the program effort being contracted for, see 1807.170-1(b)(10)(i).
1845.302-73 Determination and findings.
(a) Procedure. Determination and findings (D&F) required under FAR 45.302-1(a)(4) shall be prepared by the contracting officer and approved by the procurement officer. Prior to approval of the D&F by the procurement officer, concurrence must be obtained from the Director of Administration or equivalent, to ensure that the requiring activity and the installation supply and equipment management officer agree to the use of the Government facilities by the contractor.
D&Fs shall address individual types of facilities to be provided to the contractor. Reference to specific variations in quantities of items to be provided should be included in the D&F if additional requirements are anticipated. A separate D&F is required before adding new types of items or significant changes in quantity. A separate D&F is also required before adding any new work to the contract that requires additional Government facilities.
(b) Format. A sample format follows:
National Aeronautics and Space
Administration
Decision to Provide Government
On the basis of the following findings and determinations, Government-owned facilities may be provided to [insert the name of the contractor] pursuant to the authority of FAR 45.302-1(a)(4).
1. The [insert the name of the contracting activity] and the contractor (have entered)/(proposed to enter) into Contract No. [insert the contract number] . (Include the following information: Type of contract, contract value, and a brief description of the scope of work performed under the contract.)
2. (Justify that Government facilities are needed for performance under the contract. The justification shall demonstrate either (i) that the contract cannot be fulfilled by any other means, or (ii) that it is in the public interest to provide the facilities. It is imperative that the justification be fully substantiated by evidence.)
3. (If the contract effort cannot be fulfilled by any other means, indicate why the contractor cannot provide the facilities. For example, due to financial constraints, the contractor has demonstrated inability to acquire the facilities; or, even though the contractor is willing and financially able to acquire these facilities for its own account, the contractor has stated that time will not permit making arrangements to obtain timely delivery to meet NASA requirements. If timely delivery is the problem, state when the contractor will replace the Government facilities with contractor-owned facilities. Address leadtime, validate the contractor's claims, and state that private financing was sought and either not available or not advantageous to the Government. If private financing was not advantageous to the Government, provide justification. Indicate other alternatives considered and reasons for rejection.)
4. (Give a general description of the types of facilities to be provided and indicate the variation in quantities of items based on functional requirements. Explain how these facilities pertain to the scope of work to be completed. State that the contract cannot be accomplished without the specified facility items being provided. Include an estimate of the value of the facilities and a statement that no facilities items under $10,000 unit cost will be provided unless the contractor is a nonprofit, on-site, or the facilities are only available from the Government.
5. (Indicate whether the property will be accountable under this contract or a separate facilities contract.)
For the reasons set forth above, it is hereby determined that the Government-owned facilities identified herein will be provided to the contractor.
Subpart 1845.4--Contractor use and Rental of Government Property
1845.402 Authorizing use of Government production and research property.
(a) A NASA contracting officer desiring to authorize use of Government production and research property under the cognizance of another contracting officer shall obtain that contracting officer's concurrence. If concurrence is denied, the contracting officer shall raise the matter to a level above that of the cognizant contracting officer.
(b) NASA contracting officers having cognizance over NASA production and research property may authorize its use on contracts of other agencies if such use will not interfere with NASA's primary purpose for the property and will not extend beyond the expected expiration or completion date of the NASA contract.
1845.403 Rental--Use and Charges clause.
The Directors of NASA field installations have been designated (see NMI 5101.24, Delegation of Authority--To Take Actions in Procurement, Grants, Cooperative Agreements, and Related Matters [Various Officials]) to make the determinations required by FAR 45.403(a) on modified rental rates.
1845.405 Contracts with foreign governments or international organizations.
(a) It is NASA's policy to recover a fair share of the cost of Government production and research property if such property is used in performing services or manufacturing articles for foreign countries or for international organizations.
(b) The prior written approval of the Associate Administrator for Procurement (Code H) is required for the use of Government production and research property on work for foreign countries or for international organizations. Before requesting approval, the contracting officer shall obtain the concurrence of the Director, Logistics Management Office (Code JLG), the General Counsel (Code G), and the Director, International Relations Division (Code IR).
(c) Contracting officers shall forward requests for approval to the Associate Administrator for Procurement (Code HK), along with a summary of the circumstances involved, including at least--
(1) The name of the requesting contractor;
(2) The number of the contract under which the equipment is controlled;
(3) A description of the equipment;
(4) The name of the foreign contractor and the relationship of the foreign contractor to its government or to any international organization;
(5) A description of the articles to be manufactured or services to be performed;
(6) A statement that the intended use will not interfere with the current or foreseeable requirements of the United States or require use of the equipment beyond the expected expiration or completion date of the NASA contract;
(7) A statement that the foreign government's placement of the contract directly with the contractor and the use of Government production and research property is consistent with the best interests of the United States;
(8) A statement that such use is legally authorized; and
(9) Any evidence of endorsement by another agency of the U.S. Government based on national security or foreign policy of the United States.
(d) Use, if approved, shall be subject to rent in accordance with FAR 45.403.
1845.406 Use of Government production and research property on independent research and development programs.
Contractors generally will not be authorized to use Government property for independent research and development on a rent-free basis except in unusual circumstances when it has been determined by the contracting officer that--
(a) Such use is clearly in the best interests of the Government (for example, the project can reasonably be expected to be of value in specific Government programs); and
(b) The policy in FAR 45.201 is adhered to in that no competitive advantage will accrue to the contractor through such use.
1845.407 Non-Government use of equipment.
Consistent with the guidelines in FAR 45.407, the following procedures apply to the non-Government use of equipment:
(a) Before authorizing non-Government use exceeding 25 percent, the contracting officer shall obtain the approval of the Associate Administrator for Procurement (Code HK). In addition, non-Government use of machine tools and secondary metal-forming and -cutting machines (Federal Supply Classes 3405, 3408, 3410, 3411-3419, and 3441-3449) exceeding 25 percent requires the concurrence of the Director, Logistics Management Office (Code JLG). Requests for the approval of the Associate Administrator for Procurement (Code HK) shall be submitted at least 6 weeks in advance of the projected use and shall include--
(1) The number of active equipment items involved and their total acquisition cost; and
(2) An itemized listing of active equipment having an acquisition cost of $25,000 or more, showing for each item the nomenclature, year of manufacture, and acquisition cost.
(b) The percentage of Government and non-Government use shall be computed on the basis of time available for use. For this purpose, the contractor's normal work schedule, as represented by scheduled production shift hours, shall be used. All active equipment having a unit acquisition cost of less than $25,000 located at any single plant may be averaged over a quarterly period. Equipment having a unit acquisition cost of $25,000 or more shall be considered on an item-by-item basis.
(c) Approval for non-Government use shall be for a period not exceeding 1 year. Approval for non-Government use in excess of 25 percent shall not be for less than 3 months.
Subpart 1845.5--Management of Government Property
in the Possession of Contractors
1845.501 Definitions.
"Agency-pepculiar property" means personal property unique to NASA aeronautical and space programs and not otherwise included in the categories of property in FAR 45.501. It includes such items as aircraft, space vehicles, engines, similar components, and related support equipment.
"Centrally reportable equipment (CRE)" means plant equipment, special test equipment (including components), special tooling, and non-flight agency-peculiar property (including ground support equipment) (a) generally commercially available and used as a separate item or component of a system, (b) having an acquisition cost of $1,000 or more, and (c) identifiable by a manufacturer and model number.
1845.502 Contractor responsibility.
1845.502-1 Receipts for Government property.
Receipts for Government property shall comply with the instructions for preparing NASA Form 1018, NASA Property in the Custody of Contractors (see 1845.7101).
1845.502-70 Government-furnished property.
All initial Government-furnished property must be described in the contract Schedule or specifications, regardless of property category. Any additional Government-furnished property must be described in a bilateral modification to the contract, with the property categorized and priced. Furthermore, to obtain Government-furnished facilities, the contractor must submit the written statement prescribed by FAR 45.302-1(a)(4). In the event a formal facilities application is also required by the contracting officer, its justification statement on financing will satisfy this requirement.
1845.502-71 Contractor-acquired property.
All contractor-acquired property must be authorized by the contract and is subject to a determination by the contracting officer that it is allocable to the contract and reasonably necessary. The acquisition (and fabrication) of Government property is further subject to the following conditions, depending on category of property:
(a) Facilities.
(1) Prior contracting officer approval, if the facilities are not already described in a contract Schedule as contractor-acquired.
(2) Submission of DD Form 1419, DOD Industrial Plant Requisition, or equivalent format, and return of Certificate of Nonavailability if the facilities qualify as centrally reportable equipment (CRE).
(3) Submission of the written statement prescribed by FAR 45.302-1(a)(4).
(b) Special test equipment.
(1) Contracting officer approval 30 days in advance if the equipment is not identified in the invitation for bids (in sealed bidding) or contract (in negotiated procurements).
(2) Submission of DD Form 1419, or equivalent format, and return of Certificate of Nonavailability if the equipment (or any component) qualifies as CRE.
(c) Special tooling.
(1) If the contract contains a Subcontracts clause, advance notification to the contracting officer and contracting officer consent if required by that clause.
(2) If the contract is a fixed-price contract, submission of the list to the contracting officer within 60 days after delivery of the first production end items (or later as prescribed by the contracting officer), unless the tooling is already identified in the solicitation.
(3) Submission of DD Form 1419 or equivalent format and return of Certificate of Nonavailability if the tooling (or any component) qualifies as CRE.
(d) Material. If the contract contains a Subcontracts clause, advance notification to the contracting officer and contracting officer consent if required by that clause.
(e) Agency-Peculiar Property.
(1) If the contract contains a Subcontracts clause, advance notification to the contracting officer and contracting officer consent if required by that clause.
(2) Submission of DD Form 1419, or equivalent format, and return of Certificate of Nonavailability if the property (or any component) qualifies as CRE.
1845.505 Records and reports of Government property.
1845.505-2 Records of pricing information.
If DD Form 250's are used by a NASA installation as invoices or DD 250's or other shipping/delivery documents are used for property receiving purposes, unit prices must be shown for each item of Government property included on the forms.
1845.505-14 Reports of Government property.
When required by the contract, the contractor shall submit a report of NASA Property in the Custody of Contractors, NASA Form 1018, in accordance with the instructions on the form, in subpart 1845.71, and the contract clause at 1852.245-73. Contractor property control systems shall distinguish between Government furnished and contractor acquired property classification shown in FAR 45.505-14(a)(1) through (5).
1845.505-670 Reporting centrally reportable equipment (CRE).
(a) NASA-furnished or contractor-acquired CRE as defined in 1845.501 shall be reported to the NASA Equipment Management System (NEMS). The contractor shall initially report all unreported items in its possession and subsequently shall report items to NEMS (1) at the time of receipt and acceptance of accountability, (2) when major changes occur in the data initially submitted to NASA, and (3) when the equipment is no longer required for or actively being used in pursuit of NASA programs or projects. Reporting shall be accomplished by completing Section I of DD Form 1342, DOD Property Record (see 1845.7102), or by other means acceptable to the contracting officer, provided DD Form 1342-equivalent data elements are furnished. The data furnished when the equipment is reported pursuant to (3) above shall include the equipment's current condition code. Reportable data shall be forwarded through the contracting officer of the cognizant NASA installation within 15 working days after the event that created the need for their preparation and shall be marked "FOR NEMS".
(b) The forms prepared for components shall be clearly marked "COMPONENT".
(c) Each year, the industrial property officer shall provide the contractor a list of NEMS data bank records as of June 30th for that contractor. The contractor shall verify the list or provide the necessary corrections.
1845.508 Physical inventories.
NASA contractors shall reconcile inventories described in FAR 45.508 with the official property records and submit reports to the property administrator within 30 days after inventory completion. The contractor shall investigate all losses of property and discoveries of unrecorded property to determine the (a) causes of the discrepancy and (b) actions needed to prevent its recurrence.
Subpart 1845.6--Reporting, Redistribution, and
Disposal of Contractor Inventory
1845.604 Restrictions on purchase or retention of contractor inventory.
(a) No contractor may sell contractor inventory to persons known by it to be NASA or DOD personnel who have been engaged in administering or terminating NASA contracts.
(b) (1) The contractor's or subcontractor's authority to approve sale, purchase, or retention at less than cost by a subcontractor, and the subcontractor's authority to sell, purchase, or retain at less than cost contractor inventory with the approval of the contractor or next higher-tier subcontractor does not include authority to approve--
(i) A sale by a subcontractor to contractor or the next higher-tier subcontractor or to an affiliate of the contractor or of either subcontractor; or
(ii) A sale, purchase, or retention at less than cost by a subcontractor affiliated with the contractor or next higher-tier subcontractor.
(2) Each excluded sale, purchase, or retention requires the written approval of the plant clearance officer.
1845.606-1 Submission.
See 1845.505-6 for special instructions on intra-agency screening of centrally reportable equipment (CRE).
1845.607-70 Contractor's approved scrap procedure.
(a) When a contractor has an approved scrap procedure, certain property may be
routinely disposed of in accordance with that procedure and not processed under this subpart.
(b) A plant clearance case shall not be established for property disposed of through the contractor's approved scrap procedure.
(c) The plant clearance officer shall review the contractor's scrap and salvage procedure, particularly regarding sales, before its approval by the property administrator. The plant clearance officer shall ensure that the procedure contains adequate requirements for inspecting and examining items to be disposed as scrap. When the contractor's procedure does not require physical segregation of Government-owned scrap from contractor-owned scrap and separate disposal, care shall be exercised to assure that a contract change that generates a large quantity of property does not result in an inequitable return to the Government. In such a case, the property administrator shall make a determination 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 FAR Part 45 and this NASA FAR Supplement.
(e) Silver, gold, platinum, palladium, rhodium, iridium, osmium, and ruthenium; scrap bearing such metals; and items containing recoverable quantities of them shall be reported to the Defense Reutilization and Marketing Service, DRMS-R, Federal Center, Battle Creek, MI 49017-3092, for instructions regarding disposition.
1845.608 Screening of contractor inventory.
1845.608-1 General.
NEMS Coordinators are the focal points at NASA installations for intra-agency screening of centrally reportable equipment (see 1845.505-670). Property Disposal Officers (PDO's) are the focal points at NASA installations for intra-agency screening of all other contractor inventory. NEMS Coordinators/PDO's shall acknowledge receipt of inventory schedules within 30 days and simultaneously provide the plant clearance officer a NASA screening completion/release date. Screening shall be accomplished in accordance with NASA Handbooks 4200.1 and 4300.1.
1845.608-6 Waiver of screening requirements.
The Director, Logistics Management Office (Code JLG), has been designated to authorize exceptions to screening requirements.
1845.610 Sale of surplus contractor inventory.
1845.610-2 Exemptions from sale by GSA.
Letters seeking exemptions from GSA-conducted sales shall be directed to the Director, Logistics Management Office (Code JLG).
1845.610-3 Proceeds of sale.
When payments are due the contractor under the contract, and unless the contract provides otherwise, the Government Property clause requires that the proceeds of any sale, purchase, or retention be (a) credited to the Government as part of the settlement agreement, (b) otherwise credited to the price or cost of the work covered by the contract, or (c) applied in the manner directed by the contracting officer. The plant clearance officer shall maintain an open suspense record until he or she has verified that credit has been applied, unless another Government representative has specifically assumed this responsibility.
1845.610-4 Contractor inventory in foreign countries.
Foreign disposals shall be accomplished in accordance with NASA Handbook 4300.1.
1845.613 Property disposal determinations.
Determinations to abandon or destroy NASA contractor inventory shall be referred to the installation PDO for subsequent review by the Property Disposal Review Board under NASA Handbook 4300.1.
1845.615 Accounting for contractor inventory.
In addition to the distribution requirements for Standard Form 1424, Inventory Disposal Report, a copy of the form shall be provided to the NASA installation Industrial Property Officer or PDO.
Subpart 1845.70--NASA Equipment Management System
1845.7001 Policy.
In accordance with the policies in FAR Part 8, new equipment shall not be designed, developed, or procured unless it is determined that the requirement cannot be satisfied with items already available. Accordingly, before acquisition by an installation or the issuance of an authorization to a contractor to acquire new centrally reportable equipment (see 1845.501), the NASA Equipment Management System (NEMS) shall be screened and a certificate of non-availability issued by the cognizant installation NEMS Reutilization Coordinator, attesting to the non-availability of existing Government-owned equipment to satisfy the requirement.
1845.7002 Application.
The NEMS requirements apply to all NASA acquisitions under which equipment reportable to NEMS is acquired either by NASA or by a NASA contractor for use in the performance of NASA work.
1845.7003 General.
NEMS is an agencywide accountability and control system that includes basic information for reutilization of equipment valued at $500 or more held by NASA installations or $1,000 or more held by NASA contractors. General-purpose or standard items of commercial manufacture are registered in NEMS.
1845.7004 Interface with NEMS coordinators and technical project office.
NASA contracting officers with contracts subject to NEMS shall maintain close interface with the installation NEMS Reutilization Coordinator and the technical project office in (a) the conduct of contractor reporting to the NEMS, (b) the screening of NEMS records before authorizing contractors to acquire equipment, (c) the reporting and processing of equipment no longer required for NASA programs or projects, and (d) all other matters pertaining to compliance with the property provisions of NASA contracts.
1845.7005 Retention of NEMS equipment.
The contracting officer may authorize retention of NEMS equipment, provided the contractor requests approval in writing concurrently with reporting to NEMS under the provisions of 1845.505-670 and provided the equipment is being (a) held for approved future NASA programs and projects identified to a specific requirement or (b) used on other Government work as approved by the contracting officer. Approval for the use of equipment on other Government work shall not exceed 6 months beyond its use on NASA work unless loan of the equipment under an interagency agreement has been arranged or action has been initiated for transfer of the equipment to the using agency and appropriate time is allowed for completing the transfer.
Subpart 1845.71--Forms Preparation
1845.7101 Instructions for preparing NASA Form 1018.
This section provides guidance in the preparation of NASA Form 1018 (see Subpart 1853.3), which is required of all contractors that have been furnished, or have acquired, Government-owned property under the terms of their contract. This report provides information for NASA financial statements and property management; accuracy and timeliness of the report are, therefore, very important. Contractors shall retain documents which support the data reported on NF 1018 in accordance with FAR subpart 4.7, Contractor Record Retention. Classifications of property, related costs to be reported, and reporting requirements are set forth in this subpart.
1845.7101-1 Property Classification.
(a) Contractors shall report costs in the classifications required on NF 1018, as described in this section. For Land, Buildings, Other Structures and Facilities, and Leasehold Improvements, contractors shall report the amount for all items with a unit cost of $5,000 or more and a useful life of 2 years or more. For Plant Equipment, Special Tooling, Special Test Equipment and Agency-Peculiar Property, contractors shall separately report--
(1) the amount for all items with a unit cost of $5,000 or more and a useful life of 2 years or more, and
(2) all items under $5,000, regardless of useful life.
(b) Contractors shall report the amount for all Materials, regardless of unit cost.
(c) Land. Includes costs of land, improvements to land, and associated costs incidental to acquiring and preparing land for use, for example; appraisal fees, clearing costs, drainage, grading, landscaping, plats and surveys, removal and relocation of the property of others as part of a land purchase, removal or destruction of structures or facilities purchased but not used, and legal expenses.
(d) Buildings. Includes costs of buildings, improvements to buildings, and fixed equipment required for the operation of a building which is permanently attached to and a part of the building and cannot be removed without cutting into the walls, ceilings, or floors. Examples of fixed equipment required for the functioning of a building include plumbing, heating and lighting equipment, elevators, central air conditioning systems, and built-in safes and vaults.
(e) Other structures and facilities. Includes costs of acquisitions and improvements of structures and facilities other than buildings; for example, airfield pavements, harbor and port facilities, power production facilities and distribution systems, reclamation and irrigation facilities, flood control and navigation aids, utility systems (heating, sewage, water and electrical) when they serve several buildings or structures, communication systems, traffic aids, roads and bridges, railroads, monuments and memorials, and nonstructural improvements, such as sidewalks, parking areas, and fences.
(f) Leasehold improvements. Includes costs of improvements to leased buildings, structures, and facilities, as well as easements and right-of-way, where NASA is the lessee or the cost is charged to a NASA contract.
(g) Equipment. Includes costs of commercially available personal property for use in manufacturing supplies, performing services, or any general or administrative purpose.; for example, machine tools, furniture, vehicles, computers, accessory or auxiliary items, and test equipment.
(h) Construction in Progress. Includes costs for work in process for the construction of Buildings, Other Structures and Facilities, and Leasehold Improvements to which NASA has title.
(i) Special Tooling. Includes costs of equipment and manufacturing aids (and components and replacements of these items) that 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, or to the performance of particular services. Examples include jigs, dies, fixtures, molds, patterns, taps and gauges.
(j) Special Test Equipment. Includes costs of equipment used to accomplish special purpose testing in performing a contract, and items or assemblies of equipment.
(k) Material. Includes costs of NASA owned property held in inventory that may become a part of an end item or be expended in performing a contract. Examples include raw and processed material, parts, assemblies, small tools and supplies. Does not include material that is part of work in process.
(l) Agency-Peculiar Property. Includes actual or estimated costs of completed items, systems and subsystems, spare parts and components unique to NASA aeronautical and space programs. Examples include aircraft, engines, satellites, instruments, rockets, prototypes and mock-ups. The amount of property, title to which vests in the Government as a result of progress payments to fixed price subcontractors, shall be included to reflect the pro rata cost of undelivered agency-peculiar property.
(m) Contract Work-in-Process . Includes the costs of all work-in-process and excludes the costs of completed items reported in other categories.
1845.7101-2 Transfers of property.
The procedures in this section apply to all types of transfers. Only Government installations may furnish Government property to a contractor. Therefore, procurement, property, and financial organizations at NASA Centers must effect all transfers of accountability, although physical shipment and receipt of property may be made directly by contractors. Such transfers include shipments between contractors of the same installation, contractors of different installations, a contractor of one installation to another installation, an installation to a contractor of another installation, and a contractor to another Government agency or its contractor. So that NASA may properly control and account for transfers, they shall be adequately documented. The procedures described in this section shall be followed in all cases, to provide an administrative and audit trail, even if property is physically shipped directly from one contractor to another. Property shipped between September 1 and September 30, inclusively, shall be reported by the shipping contractor, regardless of the method of shipment, unless written evidence of receipt at destination has been received. Property provided under fixed price repair contracts remains accountable to the cognizant NASA Center and is not reportable on NF 1018; property provided for repair under a cost-reimbursement contract, however, is accountable to the contractor and reportable on NF 1018.
(a) Approval and Notification. The contractor must obtain the approval of the contracting officer or designee for transfers of property before shipment. Each shipping document must contain contract numbers, shipping references, property classifications in which the items are recorded, unit prices, and any other appropriate identifying or descriptive data. Unit prices shall be obtained from records maintained pursuant to FAR part 45 and part 1845 of this chapter. Shipping contractors shall furnish a copy of the shipping document to the cognizant property administrator. Shipping and receiving contractors shall promptly notify the financial management office of the NASA Center responsible for their respective contracts when accountability for Government property is transferred to, or received from, other contracts, contractors, NASA Centers or Government agencies. Copies of shipping or receiving documents will suffice as notification in most instances.
(b) Reclassification. If property is transferred to another contract or contractor, the receiving contractor shall record the property in the same property classification and amount appearing on the shipping document. For example, when a contractor receives an item from another contractor that is identified on the shipping document as equipment, but that the recipient intends to incorporate into special test equipment, the recipient shall first record the item in the equipment account and subsequently reclassify it as special test equipment. Reclassification of equipment, special tooling, special test equipment, or agency-peculiar property requires prior approval of the contracting officer or a designee.
(c) Incomplete documentation. If contractors receive transfer documents having insufficient detail to properly record the transfer (e.g., omission of property classification, unit prices, etc.) they shall request the omitted data directly from the shipping contractor or through the property administrator as provided in FAR 45.505-2.
1845.7101-3 Computing costs of fabricated special tooling, special test equipment, agency-peculiar property and contract work in process.
(a) Costs shall be computed in accordance with accepted accounting principles, be reasonably accurate, and be the product of any one or a combination of, the following:
(1) Abstracts of cost data from contractor property or financial records.
(2) Computations based on engineering and financial data.
(3) Estimates based on NASA Form 533 reports.
(4) Formula procedures (e.g., using a 50 percent factor for work in process items, on the basis of updated Standard Form 1411 estimates or the contractors approved estimating and pricing system).
(5) Other approved methods.
(b) Contractors shall report costs using records that are part of the prescribed property or financial control system as provided in this section. Fabrication costs shall be based on approved systems or procedures and shall include all direct and indirect costs of fabricating Government property.
(c) The contractor shall redetermine the costs of items returned for modification or rehabilitation.
(d) The computation of work in process shall include the costs of associated systems, subsystems, and spare parts and components furnished or acquired and charged to work in process pending incorporation into a finished item. These types of items make up what is sometimes called production inventory and include programmed extra units to cover replacement during the fabrication process (production spares). Also included are deliverable items on which the contractor or a subcontractor has begun work, and materials that have been issued from inventory.
1845.7101-4 Type of deletion.
Contractors shall report the types of deletions from contract property records as described in this section.
(a) Adjusted. Changes in the deletion amounts, if any, that result from mathematical errors in the previous report.
(b) Lost, Damaged or Destroyed. Deletion amounts as a result of relief from responsibility under FAR 45.503 granted during the reporting period.
(c) Transferred in Place. Deletion amounts that result from a transfer of property to a follow-on contract with the same contractor.
(d) Transferred to Center Accountability. Deletion amounts that result from transfer of accountability to the NASA Center responsible for the contract, whether or not the items are physically moved.
(e) Transferred to Another NASA Center. Deletion amounts caused by transfer of accountability to a NASA Center other than the one responsible for the contract, whether or not the items are physically moved.
(f) Transferred to Another Government Agency. Deletion amounts that result from transfer of property to another Government agency.
(g) Purchased at Cost/Returned for Credit. Deletion amounts due to contractor purchase or retention of contractor acquired property as provided in FAR 45.605-1; or to contractor returns to suppliers under FAR 45.605-2.
(h) Disposal Through Plant Clearance Process. Deletions other than transfers; i.e., donations to eligible recipients, sold at less than cost, or abandoned/directed destruction.
1845.7101-5 Contractor's privileged financial and business information.
If a transfer of property between contractors will involve disclosing costs of a proprietary nature, the contractor shall furnish unit prices only on those copies of the shipping documents that are sent to the shipping and receiving NASA installations. Transfer of the property to the receiving contractor shall be on a no-cost basis.
1845.7102 Instructions for preparing DD Form 1342.
The instructions in this section shall be used in the preparation of DD Form 1342, DOD Property Record, to report newly acquired equipment, items not previously reported, major changes in the data initially submitted, or equipment no longer required for or actively being used in the pursuit of NASA programs or projects. Use of DD Form 1342 is not mandatory if the same information is provided in an alternative format. Only one initial report is required. In-use items shall be reported initially to the NASA Equipment Management System (NEMS) through the contracting officer (see 1845.505-670) by use of this form by checking "Active" and "Initial" in Block 1. Identify idle items being initially reported by checking "Idle" and "Initial" in Block 1.
Block 1. Check appropriate boxes to indicate "Active" or "Idle" report and that the report is an "Initial" or "Changed" report.
Block 2. Enter the Julian date of preparation of the form. The first character is the last digit of the current calendar year, and the next three characters are the Julian date of the year.
Block 3. Enter the Identification Number/Government Tag Number as recorded on the identification plate affixed to the equipment.
Block 4. Not applicable.
Block 5. Enter the first four digits of the National Stock Number, if known.
Block 6. Indicate in dollars (omit any symbols, decimal points, commas, etc.) the acquisition cost used for property accounting purposes. This acquisition cost is the price of the basic item plus any accessories and auxilliary equipment procured and delivered with it. If the initial acquisition cost data are not available, use an estimated acquisition cost (based on known costs at the time of manufacture of the same or similar equipment), price lists for the period involved, or the best available price from other sources in NASA or DOD that will achieve conformity of prices for like items of equipment.
Block 7. Not applicable.
Block 8. Enter the last two digits of the year the item was manufactured. If the actual year of manufacture cannot be determined, estimate the date and place an "E" immediately preceding the entry.
Blocks 9-13. Not applicable.
Block 14. Enter the name of the manufacturer of the equipment being reported. Do not use a distributor's or vendor's name. Enter "Unknown" when the manufacturer is not known.
Block 15. This is a five-digit numerical code identifying the manufacturer, obtained from Cataloging Handbook H4-1.
Block 16. a. Enter the manufacturer's model, style, or catalog number for the equipment being reported. Always use the model number, if available. Style number is next in preference. When the manufacturer does not assign a model, style, or catalog number, enter "None".
b. When unable to locate a model number, refer to the manufacturer's brochure or purchase order. If the model number is obtained from other than the equipment, indicate the source in "Remarks," Block 54.
Block 17. Enter the serial number taken from the equipment. If a serial number is not assigned to the item, enter "None".
Blocks 18 -21 Not applicable.
Block 22. Enter Certificate of Non-availability number from Block 41, DD Form 1419 or other screening document.
Block 23. Not applicable.
Block 24. Not applicable.
Block 25. Enter the complete contract number under which the contractor is accountable for the item. This normally will be a facility contract number. Otherwise, enter the procurement contract number.
Block 26. Enter the complete description of the item.
Block 27. Not applicable.
Block 28. Enter the NASA installation or company name, street address, city, state, and zip code of the physical location of the equipment. If the physical location is a subcontractor's plant, enter the name of the prime contractor above the subcontractor's name. Do not use the office address if different from the plant address. If no street address exists, enter "No street address".
Blocks 28a and 29. Not applicable.
Section II-Inspection Record. Not applicable, except for Block 52, which should be completed when reporting (in accordance with 1845.505-670) that an item is no longer required for or actively being used in pursuit of NASA programs or projects.
Section III-Remarks. Not applicable.
Section IV-Disposition Record. Not applicable.
Section V-Validation Record. Not applicable.
1845.7103 Instructions for preparing DD Form 1419.
(a) The contractor shall enter the essential information covering Sections I and II before submission of DD Form 1419, DOD Industrial Plant Equipment Requisition, to the NEMS Coordinator. The NEMS Coordinator shall review each submission for completeness and authenticity. Incomplete or invalid requests shall be returned for correction. The original and two copies of the approved DD Form 1419, or equivalent format, may be forwarded to Defense Industrial Plant Equipment Center (DIPEC) for screening of inventories. Upon completion of the screening process, DIPEC will annotate the results of the screening in Section IV or V. Certification of nonavailability when cited in Section V is evidence that screening has been accomplished by NASA/DIPEC. DIPEC will return the original and one copy of the request to the NEMS Coordinator of the cognizant NASA installation indicated in Section III.
(b) When a suitable item is allocated in Section IV, inspection of the equipment is recommended. Notification of acceptance or rejection of the item offered must reach NASA/DIPEC within 30 days after allocation. A copy of the DD Form 1419, or equivalent format, will serve as the clearance document to inspect the equipment at the storage site. Note acceptance or rejection of the item, without inspection or after inspection in Section VI. If the item is acceptable, execute Section VII. Cite the NASA appropriation symbol where applicable in Section VII. In either instance, acceptance or rejection, the NEMS Coordinator shall return the original of the DD Form 1419, or equivalent format, to DIPEC when items have been offered by DIPEC.
(c) The NEMS Coordinator shall assign a requisition number to each DD Form 1419, or equivalent format request. If DIPEC will be screened, the NEMS Coordinator shall code each number assigned for automatic data processing by DIPEC. The NEMS Coordinator shall also identify the requiring installation and provide a serial number and date of submission for subsequent reference. The NEMS Coordinator shall begin the requisition number with the appropriate installation FEDSTRIP/MILSTRIP Activity Address Code.
(d) Next will be a four-digit entry comprised of the last digit of the current calendar year and the Julian date of the year. For instance, February 4, 1969, would be written as 9035. The last entry will be a four-digit number from 0001 to 9999 to sequentially number requisition forms prepared on the same date. For example, the ninth requisition prepared on February 1, 1969, would be 9032-0009, preceded by the FEDSTRIP/ MILSTRIP Activity Address Code. When submitting subsequent DD Forms 1419, or equivalent format, related to the item requested, the NEMS Coordinator shall use the same requisition number and add the alpha code to the end of the requisition number to indicate a second or third action on the basic request. Alpha "A" would indicate a second request, "B" a third, etc. In this manner, all actions, correspondence, etc., relative to a given request can be identified at all levels of processing by the use of the requisition
number.
(e) Detailed directions for completing the DD Form 1419 follow. When DIPEC listed equipment is not being requested, the contractor may elect to provide the required data in an equivalent format, which complies with these directions.
Item Description. To ensure adequate screening, the item description must be complete. For single-purpose equipment or general-purpose equipment with special features, requests must contain detailed descriptive data as to size and capacities, setting forth special operating features or particular operations required to be performed by the item.
Block 1. Not applicable.
Block 2. Enter the manufacturer's name and Federal Supply Code for manufacturer (Cataloging Handbook H4-1) of the item requested.
Block 2a. Enter the manufacturer's model, style, or catalog number assigned to the equipment being requisitioned. Always use the model number, if available. The style number is the next preference. Enter "None" in this block if the model, style or catalog number is not known.
Block 3. Enter the four-digit Federal Supply Class (FSC).
Block 4. Not applicable.
Block 5. Self-explanatory.
Block 6. Place an "X" in the applicable block to indicate whether you desire to physically inspect the item before acceptance.
Block 7. Self-explanatory.
Block 8. Enter the complete description of the item. Continue the description in Block 51 if additional space is needed.
Block 9. Enter the contractor's name, street address, city, state, and zip code from which the requisition is being initiated. The address should be the one to which inquiries of a technical nature will be referred. Specify the telephone number of an individual who will respond to inquiries concerning the request.
Blocks 10 and 10a. Enter the contract number or document number and the date of the document authorizing acquisition of the items shown in Section I. This normally will be a facility contract number. Otherwise, it should be a purchase order or procurement request number.
Block 11. Not applicable.
Block 12. Disregard the "Military" block. Show the NASA contract number and program for which the item is to be used.
Block 13. Enter the specific function to be performed by the equipment. When applicable, enter the tolerances, capacities, specifications, etc., that the equipment must satisfy.
Block 14. Determine The date the item must be installed to meet production requirements. From this date deduct the estimated number of days required for installation. Enter the adjusted date in this block.
Block 15. Enter the date by which NASA must issue a Certificate of Nonavailability. Determine the date by subtracting the procurement lead time and 30 days administive lead time from the date shown in Block 14.
Block 16. Enter the Defense Priority and Allocations System (DPAS) rating assigned to the contract or anticipated purchase order, if applicable.
Block 17. Place an "X" in the appropriate box. If for replacement, identify the item being replaced and the reason for replacement.
Block 18. Place an "X" in the appropriate box. Show the appropriation symbol if the answer is "yes."
Block 19. Not applicable.
Blocks 20 and 21. In addition to the official's title and signature, type the signing official's name, office symbol or name, and telephone number plus extension. The company representative who prepares and submits the requirement to the cognizant NASA certifying office should sign.
Block 22. Self-explanatory.
Block 23. The contracting officer of the NASA installation having jurisdiction over the contract shall certify the need for the item. However, the NEMS Coordinator may certify the need for NASA in-house requirements.
Block 23a. Not applicable.
Block 23b. Enter the name and address of the installation certifying the requirement.
Block 23c. This block is for signature of the property administrator or contracting officer at plant level.
Block 23d. Self-explanatory.
Block 23e. This block is for the signature of NASA installation official certifying the requirement.
Section III.
This section is for the NEMS Coordinator's certification of the requirement to DIPEC, when applicable.
Blocks 24 -27. Self-explanatory.
Section IV.
To be completed by DIPEC (a copy is used for admittance to storage site for inspection of property).
Section V.
DIPEC or the NEMS Coordinator shall complete this section if equipment is unavailable.
Blocks 42- 45 The requesting official signing Section II, Block 20, shall
complete Section VI and shall list reasons for non-acceptance in Section VIII, Remarks, or on a separate document attached to the DD Form 1419.
Block 46. Enter the complete name,street address, city, state, and zip code of the contractor or installation to which the item is to be shipped. Indicate railhead and truck delivery points when other than the address named.
Blocks 47 and 48. Self-explanatory.
Blocks 49a and b. Ensure that NASA appropriation symbols are included with the work order number.
Block 49c. Enter the NASA appropriation symbol chargeable for any special work ordered (e.g., rebuild, repair, or accessory replacement).
Block 49d. Enter the NASA installation and office symbol for the organization that will make payment for transportation and packing, crating, and handling.
Block 51. This block can be used to expand or explain entries made in Blocks 1 through 50. When requisitioning equipment from excess listings, identify the issuing office, list number, date, control number, and item number assigned to the equipment.
Subpart 1845.72--Contract Property Management
1845.7201 Definitions.
"Category," as used in this subpart, means a major segment of a contractor's property control system (e.g., acquisition, receiving, records, storage and movement, consumption, utilization, maintenance, physical inventories, subcontractor control, or disposition).
"Characteristic," as used in this subpart, means a segment of a functional area subject to analysis or review. Characteristics are classified as Class I, subject to statistical sampling, and Class II, subject to judgment or observation techniques.
"Lot," as used in this subpart, means an aggregation of documents, records, articles, or actions selected for review because of common characteristics. For evaluation of the lot, all characteristics for which a lot is tested must be common to all units within the lot.
"Supporting responsibility," as used in this subpart, relates to the assignment of a subcontract, or a portion of a prime contract being performed at a secondary location of the prime contractor, to a property administrator other than the individual assigned to the prime location.
"Property control system," as used in this subpart, identifies a contractor's internal management program encompassing the protection of, preservation of, accounting for, and control of property from its acquisition through disposition.
1845.7202 General.
This subpart describes major elements of the NASA Contract Property Management Program. It provides guidance to NASA installation personnel responsible for NASA contract property (NASA personal property in the possession of contractors). It applies to all NASA installation personnel charged with this responsibility, including industrial property officers and specialists, property administrators, and plant clearance officers. It also provides detailed procedures for property administration. The NASA Contract Property Management Program includes the following three major elements:
(a) Performance of property administration and plant clearance by DOD under delegations from NASA, pursuant to 1842.101.
(b) Performance of property administration and plant clearance by NASA under certain situations, pursuant to 1842.203.
(c) Maintenance of property administration and plant clearance functional oversight, regardless of delegations, pursuant to 1842.175.
1845.7203 Delegations of property administration and plant clearance.
When delegated to DOD, property administration and plant clearance are performed in accordance with DOD's regulations and procedures, as amended by the NASA Letter of Contract Administration Delegation, Special Instructions on Property Administration and Plant Clearance. These Special Instructions are developed by NASA Headquarters, Logistics Management Office, Code JLG, and are available from that office upon request. The contracting officer shall issue the Special Instructions with delegations whenever Government property will be involved. Additional or more tailored property instructions are not proscribed but must be coordinated with Code JLG before issuance.
1845.7204 Retention of property administration and plant clearance.
NASA may occasionally retain the property administration and plant clearance function, such as for contract work performed at the installation awarding the contract and not subject to the clause at 1852.245-71, Installation-Provided Government Property. In these cases, property administration shall be performed in accordance with Subparts 1845.2 through 1845.7, and plant clearance shall be performed in accordance with FAR Subpart 45.6 and Subpart 1845.6. Under the clause at 1852.245-71, property administration and plant clearance are neither delegated nor retained; they are simply not required because the property is treated as installation rather than contract property.
1845.7205 Functional oversight of property administration and plant clearance.
NASA contracting officers retain functional management responsibility for their contracts. Utilization of the contract administration services of another Government agency in no way relieves NASA contracting officers of their ultimate responsibility for the proper and effective management of contracts. The functional management responsibility for contract property is outlined below. Beyond individual contracting officers, each NASA installation has designated an
industrial property officer to manage and coordinate property matters among the various contracting officers, technical officials, contractor officials, and delegated property administrators and plant clearance officers. Generally, that individual is responsible for the entire contract property management function outlined below; the installation is responsible for the entire function regardless of how it is organized and distributed. The responsibilities are as follows:
(a) Provide a focal point for all management of contract property, including Government property (Government-furnished and contractor-acquired) provided to universities as well as to industry.
(b) Provide guidance to contracting and other personnel on the NASA property provisions.
(c) To the extent feasible, review property provisions of procurement plans, solicitations, contracts, and modifications for potential problems. Propose changes as necessary.
(d) To the extent feasible, participate in pre-award surveys/post-award orientations when significant amounts of Government property will be involved.
(e) Ensure that vesting-of-title determinations are made and documented pursuant to FAR 35.014(b).
(f) Maintain effective communications with delegated property administrators and plant clearance officers to keep fully informed about contractor performance and progress on any property control problems.
(1) Obtain and review property control system survey summaries for all contracts for which property administration has been delegated. Advise Headquarters Code JLG of any severe or continuing problems.
(2) Provide property administrators copies of all pertinent contract property documentation.
(g) Work with the NASA Equipment Management System (NEMS) Coordinator and contracting officers to ensure contractor reporting to and screening of NEMS.
(1) Monitor contractors' performance in submitting DD Form 1419's or equivalent request format before acquiring centrally reportable equipment (CRE) and in submitting DD Form 1342's or equivalent report format after receiving CRE.
(2) Ensure that an annual NEMS verification is performed in accordance with 1845.505-670(c) and NHB 4200.1, paragraph 4.406b.
(h) Review and analyze NASA Form 1018's, Reports of Government-Owned/Contractor-Held Property.
(1) Ensure an annual comparison of 1018's with NEMS in accordance with NHB 4200.1, paragraph 4.406c, to detect possible over/under reporting to NEMS and possible failure to screen NEMS.
(2) Check new disparities disclosed under subparagraph (1) above with the appropriate property administrator and document the results.
(i) Negotiate, or ensure the negotiation of, facilities contracts when required by FAR 45.302 and 1845.302. Advise Headquarters Code JLG annually of new and completed facilities contracts.
(j) Review property administrators' approvals of relief of responsibility for lost, damaged, and destroyed property and question any excessive or repetitive approvals.
(k) When appropriate, make recommendations to source and performance evaluation boards regarding property management and award fee criteria and evaluations regarding property management.
(l) Monitor plant clearance status to preclude delays in contract closeout.
(m) Maintain contract property files for all transactions and correspondence associated with each contract. Upon receipt of Standard Form 1424, Inventory Disposal Report, and DD Form 1593, Contract Administration Completion Record, or equivalents, merge all property records for the contract and forward for inclusion with the official completed file.
(n) Perform on-site property administration and plant clearance when they are not delegated to DOD and the property is not subject to the clause at 1852.245-71. (The remainder of this subpart provides detailed guidance on such property administration).
1845.7206 Responsibilities of property administrators and plant clearance officers.
1845.7206-1 Property administrators.
(a) When property administration is not delegated to DOD, the property administrator shall evaluate the contractor's management and control of Government property and ascertain whether the contractor is effectively complying with the contract provisions. The property administrator's responsibilities include--
(1) Developing and applying a system survey program for each contractor under the property administrator's cognizance;
(2) Evaluating the contractor's property control system and approving or recommending disapproval;
(3) Advising the contracting officer of any (i) contractor noncompliance with approved procedures and (ii) other significant problems the property administrator cannot resolve, and recommending appropriate action, which may include disapproval of the contractor's property control system;
(4) Resolving property administration matters as necessary with the contractor's management, personnel from Government procurement and logistics activities, and representatives of the NASA Office of the Inspector General, of the Defense Contract Audit Agency (DCAA), and of other Government agencies; and
(5) Recognizing the functions of other Government personnel having cognizance of Government property and obtaining their assistance when required. (These functions include, but are not limited to, contract audit, quality assurance, engineering, pricing, and other technical areas. Assistance and advice on matters involving analyses of the contractor's books and accounting records and on any other audit matters deemed appropriate shall be obtained from the cognizant auditor.)
(b) The participation of property administrators (or other Government industrial property personnel) in pre-award surveys/post-award orientations is required whenever significant amounts of Government property will be involved, in order to reveal and resolve property management problems early in the procurement cycle.
1845.7206-2 Plant clearance officers.
When plant clearance is not delegated to DOD, NASA plant clearance officers shall be responsible for--
(a) Providing the contractor with instructions and advice regarding the proper preparation of inventory schedules;
(b) Accepting or rejecting inventory schedules and DD Form 1342;
(c) Conducting or arranging for inventory verification;
(d) Initiating prescribed screening and effecting resulting actions;
(e) Final plant clearance of contractor inventory;
(f) Pre-inventory scrap determinations, as appropriate;
(g) Evaluating the adequacy of the contractor's procedures for property disposal;
(h) Determining the method of disposal;
(i) Surveillance of any contractor-conducted sales;
(j) Accounting for all contractor inventory reported by the contractor;
(k) Advising and assisting, as appropriate, the contractor, the supply and equipment management officer, other Federal agencies, and higher headquarters in all actions relating to the proper and timely disposal of contractor inventory;
(l) Approving the method of sale, evaluating bids, and approving sale prices for any contractor-conducted sales;
(m) Recommending the reasonableness of selling expenses related to any contractor-conducted sales;
(n) Securing antitrust clearance, as required; and
(o) Advising the contracting officer on all property disposal matters.
1845.7207 Initiation of property administration.
1845.7207-1 Control of assignments.
(a) The procurement officer or a designee shall establish and maintain a Contract Assignment Control Register for each contractor, showing the--
(1) Contractor's name and address;
(2) Contract number;
(3) Type of contract;
(4) Date of assignment of the property administrator and his or her name; and
(5) Date of completion or termination of the contract, or transfer of the property administrator.
(b) Property reported received at a contractor's plant without contractual coverage shall be recorded in a suspense file, pending investigation and resolution by the property administrator.
1845.7207-2 Analysis of contract and establishment of contract property control data files.
(a) The property administrator shall analyze each contract providing for Government property to estimate the property administration effort to be applied. The analysis shall be sufficient to establish the management controls necessary for ensuring compliance with contract requirements and development of a suitable system survey program.
(b) The property administrator shall establish Property Summary Data Record containing--
(1) The contractor's name and address, and the contract number;
(2) The type of contract, modifications (including change orders), and special or nonstandard clauses pertaining to Government property;
(3) The date of final review and date of execution and transmittal of the DD Form 1593 or equivalent;
(4) Supporting property administration assignments; and
(5) Name(s) of the property administrator(s) and date(s) of tenure.
(c) (1) The property administrator shall establish a Contract Property Control Data File, which shall include as a minimum--
(i) The Property Summary Data Record;
(ii) A copy of the contract or provisions pertinent to property administration, and comparable data regarding any subcontracts involving Government property;
(iii) The record of initial review, evaluation, and approval of the contractor's property control system; and, if applicable, the record of withdrawal of approval and basis for it, reinstatement of approval, and deviations granted;
(iv) A record of visits and property system surveys performed, including appropriate work papers, deficiencies disclosed, and corrective actions taken;
(v) Contractor's receipts for Government property, when required;
(vi) The record of final review and execution of the property administrator's statement of closure of the contract property account;
(vii) Other pertinent correspondence and documents, including, as applicable, inventory adjustments, investigations, recommendations, and determinations;
(viii) Records concerning supporting property administration delegations; assist actions involving special reviews; and other applicable reviews at subcontractor's plants;
(ix) Records of inspection and audits performed by other activities; and
(x) Reports relating to Government property prepared by the contractor pursuant to the contract.
(2) When more than one contract is involved at one contractor location, records relating to more than one contract shall be transferred to a contractor's General File, and the Property Summary Data Record shall be so annotated.
1845.7208 Initial evaluation and approval of contractor's property control system.
1845.7208-1 General.
Normally, the initial contact by the contract administration office with a contractor is through a postaward orientation. When a conference is held for this purpose, the property administrator shall ensure suitable discussion of property administration requirements and responsibilities. When a conference is not held, the property administrator, upon assignment of a contract, shall forward a letter to the contractor--
(a) Inviting attention to the contractor's responsibilities regarding Government property under the contract, including any specialized controls, and the extent of the contractor's liability for loss, damage, or destruction of Government property during any period in which the contractor's property control system does not have the written approval of the property administrator;
(b) Requesting the name of the contractor's representatives to contact for review and discussion of the proposed property control system; and
(c) Requesting that policies, instructions, and procedures necessary for fully implementing the property control system be available for evaluation.
1845.7208-2 Review of procedures.
(a) Following assignment of an initial contract, the property administrator shall review the contractor's proposed property control system procedures to determine--
(1) Inadequate or questionable areas in the proposed procedures for compliance with NASA contract requirements;
(2) Essential controls not provided by the proposed procedures;
(3) Areas in the proposed procedures requiring physical observation or verification; and
(4) Subcontractors, or secondary locations of prime contract performance, and the need for physical observation or verification of property controls at those locations.
(b) It is normal industry practice to provide for property control by means of written procedures that communicate company standards, techniques, and instructions to operational personnel for uniform application. However, a contractor with few employees may not need written procedures for effective management of Government property. In such cases, the property administrator shall evaluate the adequacy of the contractor's system on the basis of the contractor's explanation of its controls and observation of their application, and shall prepare a brief description of the procedures for inclusion in the Contract Property Control Data File. In the latter instance, the contractor's signature shall be obtained signifying concurrence with the property administrator's written description.
(c) The contractor's plant shall be visited to determine that the contractor's operation of the system provides adequate controls for the Government property to be furnished or acquired.
(d) The means of obtaining the information necessary for approving the contractor's property control system is a matter for the property administrator's judgment. Test examinations and verification in specific categories may be necessary to ensure the reliability of the final evaluation and permit conclusions as to the acceptability of controls for all categories and the system as a whole.
(e) The property administrator shall examine the contractor's procedures to determine whether they meet the contractual requirements for property control. The property administrator shall test and analyze the contractor's system, noting or commenting on the acceptability of the procedures in preparing the record of system evaluation (see 1845.7208-4).
(f) If the contractor's property control system has previously been approved and a new contract requires the expansion of existing or the establishment of additional controls, the property administrator should normally limit the review to the new requirements. If the system is adequate, the property administrator shall record this fact on the Property Summary Data Record for the contract. Notification to the contractor is not required. However, if the property administrator determines that the contractor's property control system does not adequately meet the new contract requirements, the property administrator shall annotate the Property Summary Data Record for the contract involved appropriately and notify the contractor in writing of the required changes.
(g) In reviewing the contractor's property control system, the property administrator shall consider the provisions of 1845.505-14 and ensure that the contractor's system provides for maintaining financial data and furnishing required reports within the time limits specified.
1845.7208-3 Exit interview with the contractor.
Upon completing the review, the property administrator shall hold an exit interview with the contractor to discuss any category in which the controls or procedures were found inadequate and shall advise where corrective action is required before an approval of the system can be granted. When the contractor is willing to correct a deficiency or questionable practice immediately, the documentation supporting the property administrator's findings and conclusions shall include a
statement to this effect. The contracting officer responsible for the predominant value of NASA property at the facility shall attend the exit interview with the contractor if major deficiencies exist in the property control system, past deficiencies remain uncorrected, or the value of the personal property involved exceeds $1,000,000.
1845.7208-4 Record of system evaluation.
Upon completing the evaluation of the contractor's system, the property administrator shall prepare a written summary of findings to support approval of the system or any requirement for corrective action before approval. A report of visit or other documentation may be utilized if the participating contractor and Government personnel are listed, actions taken are adequately described, and the property administrator's determination is clearly stated.
1845.7208-5 Notification of deficiencies.
If deficiencies have been found, the property administrator shall prepare a letter to the contractor for signature by the contracting officer, listing them and noting any agreement by the contractor to correct them. The contractor shall respond within 30 days, providing the precise action to be taken and the time required to correct each deficiency.
1845.7208-6 Resolution of differences.
If the contractor's response is unsatisfactory, the contracting officer, along with the property administrator, shall meet with the contractor in an effort to arrive at a mutually satisfactory corrective program. The contractor shall be requested to confirm in writing any new commitments arising from this meeting. If the contractor fails to correct deficiencies in its
property control system within a reasonable period, the contracting officer shall refer the matter by memorandum to appropriate levels of management within the NASA installation and Headquarters staff offices, depending on the criticality of the problem involved. The memorandum shall include--
(a) A specific, concise, and documented statement of the problem;
(b) A statement of the contractor's position; and
1845.7208-7 Letter of approval.
(a) Approval of a contractor's property control system shall be conditioned upon a joint determination, by the property administrator and the contracting officer that no deficiencies exist in the property control system or that only minor deficiencies exist and the contractor has agreed to correct them.
(b) If the contractor's property control system is acceptable, the property administrator shall advise the contractor in writing. However, if the approval was preceded by correspondence between the contracting officer and the contractor (1845.7208-5 and -6), the property administrator shall reference it in the approval and advise the contractor that the corrective action taken or planned is acceptable. A copy of the letter of approval shall be sent to the contracting officer.
(c) If the contract involves Government property at subcontractor plants or prime contractor secondary locations, or both, and the controls for it are determined adequate, the approval shall be expanded to include the procedures governing Government property at those locations.
1845.7209 Property administration during contractor performance.
1845.7209-1 Property administration plan.
(a) The property administrator shall develop a property administration plan for each contractor's plant, covering the property control system utilized on Government contracts. The plan shall provide for surveys and shall be augmented to cover responsibilities imposed by new contracts, changing conditions, or marginal performance. If approval of the contractor's system is unduly delayed at inception of the contract by the contractor's failure to provide an acceptable system, or is withdrawn because of unsatisfactory conditions disclosed after approval, the property administration plan shall be expanded as necessary to reasonably ensure that loss, damage, or destruction of Government property is disclosed in a timely manner. Special attention shall be given to reasonably ensuring that any loss, damage, or destruction occurring during a period when a contractor's system is not approved is identified before approval or reapproval.
(b) The property administrator must exercise judgment in developing the plan and in determining which categories (see Table 1845-1) of the contractor's property control system warrant examination. Dollar amounts and volume of activity, types of property, complexity of the contractor's system, risk to the Government, and previous experience regarding the adequacy of the contractor's controls are factors determining the extent and scope of the system survey plan.
CATEGORIES, FUNCTIONAL AREAS, CHARACTERISTICS
(This is not an exclusive list and may be modified as necessary.)
Category 1
Acquisition. The process of acquiring Government property either through requisition or transfer from Government sources or through purchase, including purchases from the contractor's stores.
a. Functional Area: Government-furnished property.
I (1) Item is contractually authorized.
I (2) Requesting document is properly prepared and processed.
I (3) Quantity requested is reasonable but not available in existing stocks at the plant site for use on the requiring contract.
I (4) Requests are controlled until items are received or requirement cancelled. Status file is maintained.
II (5) Requests are submitted in a timely manner to minimize use of emergency priorities.
b. Functional Area: Contractor-acquired property.
I (1) Item is contractually authorized.
I (2) Quantity ordered is reasonable but not available in existing stocks at the plant site for use on the requiring contract.
I (3) Purchase order distribution, cancellation, and change are properly controlled.
I (4) Item description, contract number, and price, are reflected in purchase order.
II (5) Consent or approval by the contracting officer is obtained as required.
Category 2
Receiving. The process of Government property initially entering into a contractor's custody.
Functional Area: Receiving process.
I (1) Receiving report adequately describes item and shows count and condition. If quantity, condition, or description differs from that shown on inbound shipping document, proper adjustment document is prepared and property administrator is
notified.
I (2) Receiving report is promptly and properly prepared and controlled, and distribution includes copy to property accounting organization.
I (3) Item received is properly classified (e.g., special tooling).
I (4) Item is properly identified and marked during the receiving process.
II (5) Returnable and reusable containers are properly controlled and accounted for.
II (6) Misdirected shipments are adequately controlled pending receipt of disposition instructions.
Category 3
Records. The official accounting and subsidiary records maintained by a contractor to show status and to control all Government property furnished to or acquired by it.
a. Functional Area: Inventory control (real and personal property).
I (1) Accounting record conforms to FAR and NASA FAR Supplement requirements and is accurate.
I (2) Documentation in support of accounting entries is sufficient.
I (3) Accounting entries are made without undue delay.
I (4) Stock levels and reorder points are reflected on record, are reasonably sound, and are consistent with the contract.
I (5) Accounting records are closed by means of proper accounting entry, adequately supported by documentation.
I (6) Locator system is adequate and accurate.
b. Functional Area: Fabrication records.
I (1) Records of items fabricated conform to FAR requirements and are accurate.
I (2) Documentation in support of accounting entries is sufficient.
c. Functional Area: Receipt and issue file.
I Records of items conform to FAR and NASA FAR Supplement requirements and are accurate.
d. Functional Area: Custodial records.
I (1) Custodial record is adequate and accurate.
I (2) Records are properly closed.
e. Functional Area: Scrap and salvage records.
I (1) Scrap and salvage records are adequate and accurate.
I (2) Items reclaimed during salvage operations are properly classified.
I (3) Documentation in support of record is adequate.
I (4) Records are properly closed.
f. Functional Area: Multicontract cost and material control system.
I (1) Records conform to FAR requirements and are accurate.
I (2) Documentation in support of record is adequate.
I (3) Accounting entries are made promptly.
I (4) Records are properly closed.
Category 4
Storage and movement. The process of storing and moving all types of Government property includes movement from one point to another for any purpose and protection during movement and storage.
a. Functional Area: Warehousing.
II (1) Housekeeping is adequate.
II (2) Government property is segregated from contractor property.
II (3) Adequate protection of Government property, including hazardous material, precious metals, sensitive items, etc., is provided.
II (4) Measures for corrosion prevention, age control, etc., are adequate.
b. Functional Area: Internal and external movements.
II (1) Item is moved under proper authority, supported by issue slip, shipping ticket, location change order, etc.
II (2) Adequate protection is provided during movement, such as packing, covering, skidding, proper handling equipment and techniques, and safety precautions.
II (3) Loss or damage occurring during movement is reported to the property administrator.
Category 5
Consumption. The process of incorporating Government-owned property into an end item or otherwise consuming it in performance of a contract.
a. Functional Area: Reasonableness of consumption.
I (1) Quantities consumed are reasonable when compared to bill of material, material requirement lists, established scrap rates, etc.
II (2) Serially numbered or selectively matched items are incorporated in appropriate end item.
b. Functional Area: Conservation.
II (1) Excesses are promptly returned to stores and recorded.
II (2) Where appropriate, maximum use is made of repair and salvage procedures in lieu of using new items.
II (3) Where appropriate, a first-in, first-out (FIFO) system is employed with respect to "dated" items.
Category 6
Utilization. The process of utilizing plant equipment, special tooling, special test equipment, material, and space property for the purpose for which furnished or acquired.
a. Functional Area: Plant equipment, special tooling, special test equipment.
I (1) Item is used for purpose authorized by contract (not diverted to other use).
I (2) Degree of utilization justifies retention.
b. Functional Area: Material and space property.
I (1) Item is used for purpose authorized (not diverted to other use).
I (2) Degree of utilization justifies retention of stock on hand.
Category 7
Maintenance. The process of providing the amount of care necessary to obtain a high quality of production and the most useful life of Government property.
a. Functional Area: Preventive and corrective maintenance.
I (1) Item is scheduled for periodic maintenance (including technical order compliance).
I (2) Maintenance is performed according to schedule.
I (3) Records of normal maintenance and corrective actions are adequate and accurate.
b. Functional Area: Capital-type rehabilitation (includes real property).
I (1) Inspection is scheduled to determine need for major repair, replacement, or other rehabilitation .
II (2) Inspection is performed as scheduled and results are reported.
II (3) Rehabilitation is accomplished when authorized.
II (4) Records of major repair, replacement, or other rehabilitation, including cost, are adequate and accurate.
Category 8
Physical inventories. The process of physically inventorying Government property and comparing it to records of the property (includes locating and counting, tagging or marking, describing, recording, and reporting results to the property administrator).
a. Functional Area: Performance.
II (1) Periodic physical inventories are performed.
II (2) Physical inventories are performed upon termination or completion of contract unless waived by property administrator.
I (3) Inventoried property is appropriately tagged or marked.
I (4) Inventory count is accurate.
II (5) Inventory procedures provide that personnel who perform inventory are not those who maintain the property records or have custody of the property, unless the contractor's operation is so small as to make this impracticable.
II (6) Results of inventories are reported to property administrator within 30 days.
b. Functional Area: Reconciliation and adjustment.
II (1) Each instance of loss and discovery of unrecorded property is investigated.
II (2) Causes are determined for above discrepancies.
II (3) Actions necessary to prevent recurrence are determined and taken for above discrepancies.
II (4) Adjustments to records (other than for property losses) are made within 30 days.
II (5) Adjustments to records for property losses are made within 30 days of contracting officer's or property administrator's notification of relief of responsibility or other determination.
Category 9
Subcontract control. The process of prime contractor control over subcontractors with respect to Government property.
a. Functional Area: Prime contractor controls.
I (1) Subcontract reflects adequate instructions with respect to subcontractor responsibilities.
I (2) Records of Government property in possession of subcontractors conform to FAR and NASA FAR Supplement requirements.
I (3) Adequate documentation supports accounting entries.
II (4) Prime contractor's surveillance over Government property in possession of subcontractors is adequate.
b. Functional Area: Subcontractor control. If the prime contractor has designated the subcontractor's records and controls as the official contract records and controls of Government property in the subcontractor's possession, or if adequacy of controls cannot be determined by review of the prime contractor's control, the subcontactor's property control system shall be evaluated in the same manner as that of a prime contractor, in accordance with procedures and
criteria set forth in this Subpart 1845.72.
Category 10
Disposition. The process of requesting disposition instructions and effecting disposal of Government property.
a. Functional Area: Disclosure of excess.
I (1) Excess items are screened for use on other contracts before declaration as excess.
I (2) Items determined excess are promptly reported.
I (3) Declaration as excess is complete and accurate.
I (4) Item was allocable to contract from which declared excess.
I (1) There is proper authority for disposition.
I (2) Item was disposed of within a reasonable time after authority was received.
I (3) Identification tag is removed from item prior to disposal, when appropriate.
I (4) Documentation of disposition is complete and reflects authority, disposal action, and date of disposal and is posted to record.
I (5) When appropriate, proceeds have been credited to the Government.
1845.7209-2 System surveys: surveillance.
The property administrator shall conduct a complete system survey annually to obtain thorough knowledge of the contractor's efficiency and system of property control. Completion of a system survey involving complex property control systems may require detailed tests and evaluations over an extended period of time. If deficiencies in physical control or records are disclosed, the property administrator must (a) ensure that the contractor takes corrective action and (b) evaluate its effectiveness. In such instances, test and evaluation of any one category shall be completed as expeditiously as possible, and the working papers and analysis shall be retained for consideration and incorporation into the summary and survey case file.
1845.7209-3 System surveys: scheduling and planning.
(a) At the beginning of each calendar year, the property administrator shall prepare a schedule showing the names of the contractors and the dates on which each system survey is to be initiated and completed.
(b) Before initiating any system survey, the property administrator shall establish a survey plan providing, as a minimum--
(1) Identification and listing of the categories, functional areas, and characteristics to be evaluated (see Table 1845-1);
(2) Evaluation of approved property control procedures applicable to the categories to be examined, and noting of any portions of them that should be reviewed with operating personnel for possible updating (if a functional area of the property control system is not covered by procedures, no attempt should be made to survey that area at that time, but that area should be recorded as unsatisfactory and action taken to correct the condition); and
(3) Directions for preparing work papers necessary to document the file.
1845.7209-4 Testing the system.
In conducting tests of the contractor's property control system, the following factors should be considered to assure adequate coverage of requirements peculiar to particular classes of property and functional areas:
(a) Materials. Materials should be considered as bulk quantities, as contrasted to individual items. Examinations should be directed to--
(1) Tracing inbound transportation units from (i) bills of lading or other transportation documents to receiving reports, in order to verify the receiving reports and to ensure that proper action is taken on shortages, damages, and other discrepancies, and (ii) stock records to assure that the receipts were accurately posted;
(2) Abstracting nomenclature and balance data from stock records and making physical counts to determine accuracy of the stock records;
(3) Tracing posting of credits to (i) stock records (by date, reference number, and quantity) and (ii) issue documents, in order to assure accuracy of the postings and validity of the documents (signature by authorized individual and indication of reasons for issue or point of delivery, or both, to indicate proper contract use); and
(4) Determining, to the extent practicable at the point of receipt and use, whether undue quantities are issued, charged to cost, and held on the plant floor rather than being held under better security in stores.
(b) Custodial items. Issues shall be traced from stores records to tool cribs, office stock rooms, uniform rooms, and the like, to determine whether they are taken into account as part of a sound control system. It should be determined that issues to contractor personnel are covered by tool chits, uniform slips, or other mechanisms to ensure return, or ability to locate items to be returned, ensuring that new items are not issued without return of worn-out items or that suitable explanation is provided.
(c) End items. General techniques for surveying materials are applicable to end items placed in storage pending shipment. Examination shall include tracing from Government acceptance records of the contractor's claims for reimbursement to physical quantities on hand and quantities on validated shipping documents.
(d) Plant equipment costing less than $5,000. If summary stock records are used for this class of property, examination using the "bulk quantities" approach in paragraph (a) above is applicable but shall also cover--
(1) Identification if required pursuant to FAR 45.505-5 (any identification numbers shall be physically verified); and
(2) Location as prescribed in FAR 45.505(g), creating need for physical verification of presence or absence of the property in the location shown by the location record.
(e) Plant equipment costing $5,000 or more. Testing on an item-by-item basis is usually required to achieve desired results. Determinations demanding special attention include whether--
(1) Government screening and approval requirements are observed;
(2) Classification of property is accurate, both at time of requisition or purchase and at time of receipt, through the use of Cataloging Handbooks H2-1, H2-2, and H2-3;
(3) An item is actually applied to the requirement for which acquired, and, if deviation is made, that any necessary notice and Government approval have been obtained;
(4) Receiving documentation is complete and accurate, indicating assignment of identification number, treatment of accessory and auxiliary equipment as required, and the DD Form 1342 (DoD Property Record), or equivalent format, is prepared and processed when required by 1845.505-670;
(5) From physical inspection of the property, the equipment records are accurate, including location and classification as to use (examination shall be conducted from property to records and from records to property); and
(6) Disposition is initiated as required if equipment is no longer required at the plant (examination shall include the adequacy of the procedure for preparing and submitting DD Form 1342 (Property Record), or equivalent format, where specified, propriety of authority for shipment, and proper accounting for accessory and auxiliary equipment).
(f) Special test equipment. The examination of special test equipment shall be essentially the same as for plant equipment costing $5,000 or more, except for recognizing the greater complexity of assemblies classified as single items and the possible need for assistance and advice of engineering personnel. Examinations shall include tracing of individual components into the assembly to assure a clear trail, particularly with respect to general purpose test equipment components, and propriety of disposition of components upon disassembly.
(g) Special tooling. Testing for plant equipment, as in paragraphs (d) and (e) above, may be used as a guide to establish the method and sampling for special tooling. When option as to title to special tooling is involved under terms of the contract (see the clause at FAR 52.245-17, Special Tooling), examination need only be sufficient to comply with the request of the contracting officer.
(h) Real property. After initial turnover of real property to a contractor, tests and examinations normally shall be directed to work orders of the contractor and documentation from Government sources as to additions and other capital improvements or disposals or capital decreases.
(i) Scrap and salvage. Tests relating to scrap and salvage may be similar to those for materials as outlined in paragraph (a) above. However, special attention should be given to--
(1) Tracing from credit entries on materials records (showing turn-in to scrap) to corresponding debits to scrap records;
(2) Determining from analysis of consumption of materials over a given period that the quantities indicated as being scrapped or spoiled are matched with comparable receipts in the scrap and salvage accounts; and
(3) Determining that, when conversions of units of property to pounds of scrap or from estimated to scale weights or to other units of measure are made, the formula for the conversion is shown on the document affected or is readily available in the approved contractor procedure.
(j) Analyzing consumption of materials. It shall be determined by both physical examination and analysis of records that quantities consumed are for proper purposes and in reasonable amounts. In analyzing consumption of component parts or other production materials, unit allowance (equalling amount required per end-item plus normal spoilage) for each line item of materials may be available in the contract, bill of materials, blueprints, or shop drawings of items fabricated, or in cost computations supporting the end-item price. If such unit allowance information is not available, technical personnel may be consulted as to whether quantities consumed are within accepted industry standards.
(k) Testing of physical inventories. The property administrator has the option of conducting tests of the contractor's physical inventories either during the performance of the inventory or subsequent to its completion. In either event, tests shall evidence physical counts of selected items without knowledge of record balances, verification of the entries on count slips, comparisons with records, preparation of documents necessary to any adjustments required, approval of adjustments, and the referral of lists of adjustments to the property administrator pursuant to FAR 45.508-2.
(l) Examination of maintenance program. The property administrator shall trace the actions scheduled to determine whether they have been performed and that the actions stated by the contractor's procedures have been included. Also, records of the maintenance or repair shop or the contractor's purchase orders shall be examined as to causes of breakdowns of equipment to determine whether they were the result of inadequate preventive or routine maintenance.
1845.7209-5 Performing the system survey.
In performing the system survey, the property administrator shall follow the procedures in paragraphs (a) through (e) below.
(a) (1) The lot size shall be estimated. Insofar as possible, lots selected shall consist of all the following current operations of the contractor:
(i) Those transactions (excepting disposition transactions) that have occurred during the last 90 days preceding the date of sampling and the documents recording those actions. (If no transactions have taken place during the last 90 days, samples will be taken from transactions going back to the last system survey.)
(ii) Articles in the possession or control of the contractor at that time.
(iii) Dispositions occurring since the last survey was made.
(2) The lot should encompass the maximum number of units possible within a functional area. For example, transactions pertaining to special tooling, special test equipment, and plant equipment may be combined into a single lot and sampled for their common characteristics. Characteristics not common to units sampled shall be extracted for evaluation as a part of a separate lot.
(b) Sample sizes and statistical sampling techniques shall be in accordance with 1845.7213.
(c) After the examinations are performed and the findings recorded, the findings shall be analyzed and the conclusions and recommendations recorded. Decisions as to satisfactory or unsatisfactory conditions shall be made for each lot at the functional area level.
(d) If any category is found unsatisfactory during a survey, the property administrator shall determine the effects upon the complete system. All other applicable categories shall be surveyed to identify other defects and the extent of defectiveness in the overall system.
(e) The property administrator shall discuss problems disclosed during the survey with the contractor's personnel as they are noted, or during the exit interviews, and shall strive to resolve differences informally. Resolved problem areas shall be reported in the record of system evaluation, with the notation that they have been corrected.
1845.7209-6 System survey summary.
(a) The property administrator shall prepare a formal record at the conclusion of each system survey in the format set forth below:
(1) Introduction: contractor's name and address, period of survey, and types of property involved.
(2) Method used: explain method of performing the survey.
(3) Conclusions: state conclusions reached (if unsatisfactory categories, functional areas, or characteristics are found, identify the defects found).
(4) Action required: state any actions necessary to correct unsatisfactory conditions.
(b) The property administrator shall forward a summary of the system survey to the contractor, advising of any unsatisfactory conditions and requesting the contractor to correct them within the time limitations agreed to during the exit interview. The property administrator shall also advise the contractor in this letter that failure to correct the unsatisfactory conditions may result in disapproval of its property control system. A copy of the summary shall also be retained in a survey case file, and whenever unsatisfactory conditions have been disclosed, a copy of the summary shall be provided to the administrative contracting officer. When conditions dictate (e.g., indication of significant noncompliance with contract requirements or other continued failures jeopardizing the interest of the Government), the purchasing office and the pre-award survey monitor shall also be advised in writing.
1845.7209-7 Correction of unsatisfactory conditions.
If unsatisfactory conditions are disclosed, the property administrator shall ensure that corrective action is taken. If the contractor fails to take corrective action or to respond to the letter forwarded as prescribed in 18 45.7209-6 above, the property administrator shall proceed in accordance with 1845.7208-6 and FAR 45.104(c).
1845.7209-8 Survey case file.
The property administrator shall establish a case file for each system survey, containing the survey plan, work papers, and summary. The case file shall be maintained in the Contract Property Control Data File or the general file which the property administrator maintains for matters pertaining to that contractor.
1845.7209-9 Additional administrative responsibilities.
The initial review, evaluation, and subsequent visits should give the property administrator a reasonable indication of future workload with each contractor. Loss, damage, destruction, or excessive consumption of Government property demand the property administrator's significant and prompt attention, particularly when the contractor's system is not approved.
1845.7209-10 Declaration of excess property.
A problem often disclosed by systems surveys is the failure of a contractor to report Government property not needed in performance of the contract (excess). The property administrator shall fully document and report any such finding to the administrative contracting officer. After a report of excess received from a contractor has been referred to the plant clearance officer for screening and ultimate disposition, the property administrator shall ensure prompt disposition. For centrally reportable plant equipment, the property administrator shall--
(a) Assure the preparation and submission of individual reports (DD Form 1342 or equivalent) required of the contractor;
(b) Verify to permit certifications required by the forms; and
(c) Transmit the report to the NASA Industrial Property Officer.
1845.7210 Closure of contracts.
1845.7210-1 Completion or termination.
Upon completion or termination of a contract, the property administrator shall--
(a) Monitor the actions of the contractor in returning excess Government property not referred to the plant clearance officer; and
(b) Advise the cognizant plant clearance officer as to the existence at a contractor's plant of residual property requiring disposal.
1845.7210-2 Final review and closing of contracts.
(a) When informed that disposition of Government property under a contract has been completed, the property administrator shall perform a final review and sign a determination that--
(1) Disposition of Government property has been properly accomplished and documented;
(2) Adjustment documents, including any request of the contractor for relief from responsibility, have been processed to completion;
(3) Proceeds from disposals or other property transactions, including adjustments, have been properly credited to the contract or paid to the Government as directed by the contracting officer;
(4) All questions as to title to property fabricated or acquired under the contract have been resolved and appropriately documented; and
(5) The contract property control record file is complete and ready for retirement.
(b) When final review pursuant to paragraph (a) above reveals that such action is proper, the property administrator shall accomplish and sign a DD Form 1593, Contract Administration Completion Record, or equivalent.
(c) The executed DD Form 1593 shall be forwarded to the contracting officer, the Property Summary Data Record shall be so annotated, and the contracting officer shall include it in the contract file.
1845.7211-1 Government property at alternate locations of the prime contractor and subcontractor plants.
(a) Government property provided to a prime contractor may be located at other plants of the prime contractor or at subcontractor locations. The prime contractor is accountable and responsible to the Government for this property.
(b) A Government proty administrator cognizant of the location of the property shall normally be designated to (1) perform required surveys of the property control system and (2) exercise surveillance over the property as a supporting responsibility.
(c) If the property administrator determines that supporting property administration is required, he or she shall write the cognizant contract administration office asking that a property administrator be assigned. The request for supporting property administration shall include--
(1) The name and address of the prime contractor;
(2) The prime contract number;
(3) The name and address of the alternate location of the prime contractor, or of the subcontractor where the property will be located;
(4) A listing of the property being furnished, or, if property is being acquired locally, a statement to this effect; and
(5) A copy of the subcontract or other document under which the property will be furnished or acquired.
(d) Concurrent with the action cited in paragraph (c) above, the property administrator shall ascertain whether the prime contractor will perform the necessary reviews and surveillance with the contractor's own personnel, or elect to rely upon the system approval and continuing surveillance by a supporting property administrator of the property control system at the alternate location or subcontractor plant. If the prime contractor advises that it will accept the findings of a
supporting property administrator, a statement in writing to that effect shall be obtained. If the prime contractor does not so elect, it shall be required to perform the requisite reviews and surveillance and document its actions and findings.
(e) If a single item or limited quantities of property will be located at an alternate location or subcontractor plant, the property administrator may determine that supporting property administration is unnecessary, provided--
(1) The prime contractor's records adequately reflect the location and use of the property;
(2) The nature of the property is such that the possibility of its use for unauthorized purposes is unlikely; and
(3) The nature of the property is such that a program of preventive maintenance is not required.
(f) When supporting property administration will not be requested, the services of a property administrator in the contract administration office cognizant of the site where the property is located may be requested on an occasional basis for special reviews or such other support as may be necessary. Repeated requests for assistance indicate a requirement for requesting supporting property administration.
1845.7211-2 Loss, damage, or destruction of Government property.
(a) Normally, contract provisions provide for assumption of risk of loss, damage, or destruction of Government property as described below:
(1) Sealed-bid and certain negotiated fixed-price contracts provide that the contractor assumes the risk for all Government property provided under the contract (see the clause at FAR 52.245-2, Government Property (Fixed-Price Contracts)).
(2) Other negotiated fixed-price contracts provide that the contractor assumes the risk for all Government property provided under the contract, with the exceptions set forth in the clause at FAR 52.245-2, Alternate I and Alternate II.
(3) Cost-reimbursement contracts (see the clause at FAR 52.245-5, Government Property (Cost-Reimbursement, Time-and-Material, or Labor-Hour Contracts)) provide that the Government assumes the risk for all Government property provided under the contract when there is no willful misconduct or lack of good faith of any of the contractor's managerial personnel as defined in the contract.
(4) There are certain events for which the Government does not assume the risk of loss, damage, or destruction of Government property, such as risks the contract expressly requires the contractor to insure against. Therefore, before reaching a conclusion or making a determination, the contracting officer shall obtain property administrator review of the contract clause and shall obtain advice from appropriate legal counsel on questions of legal meaning or intent.
(5) "Willful misconduct" may involve any intentional or deliberate act or failure to act causing, or resulting in, loss, damage, or destruction of Government property.
(6) "Lack of good faith" may involve gross neglect or disregard of the terms of the contract or of appropriate directions of the contracting officer or the contracting officer's authorized representatives. Examples of lack of good faith may be demonstrated by the failure of the contractor's managerial personnel to establish and maintain proper training and supervision of employees and proper application of controls in compliance with instructions issued by authorized Government personnel.
(b) If part of the contractor's system is found to be unsatisfactory, the property administrator shall increase surveillance of that part to prevent, to the extent possible, any loss, damage, or destruction of Government property. The property administrator shall give special attention to reasonably ensuring that any loss, damage, or destruction occurring during a period when a contractor's system is not approved is identified before approval or reinstatement of approval.
1845.7211-3 Loss, damage, or destruction of Government property while in contractor's possession or control.
(a) The property administrator shall require the contractor to report any loss, damage, or destruction of Government property in its possession or control (including property in the possession or control of subcontractors) as soon as it becomes known.
(b) When physical inventories, consumption analyses, or other actions disclose (1) consumption of Government property considered unreasonable by the property administrator or (2) loss, damage, or destruction of Government property not reported by the contractor, the property administrator shall prepare a statement of the items and amount involved. This statement shall be furnished to the contractor for investigation and submission of a written report to the property administrator relative to the incidents reported.
(c) The contractor's reports referenced in paragraphs (a) and (b) above shall contain factual data as to the circumstances surrounding the loss, damage, destruction, or excessive consumption, including--
(1) The contractor's name and the contract number;
(2) A description of items lost, damaged, destroyed, or unreasonably consumed;
(3) The cost of property lost, damaged, destroyed, or unreasonably consumed and cost of repairs in instances of damage (in event actual cost is not known, use reasonable estimate);
(4) The date, time (if pertinent), and cause or origin of the loss, damage, destruction, or consumption;
(5) Known interests in any commingled property of which the Government property lost, damaged, destroyed, or unreasonably consumed is (or was) a part;
(6) Insurance, if any, covering the Government property or any part or interest in any commingled property;
(7) Actions taken by the contractor to prevent further loss, damage, destruction, or unreasonable consumption and to prevent repetition of similar incidents; and
(8) Other facts or circumstances relevant to determining liability and responsibility for repair or replacement.
(d) The property administrator shall investigate the incit to the degree required to reach a valid and supportable conclusion as to (1) the contractor's liability for the loss, damage, destruction, or unreasonable consumption under the terms of the contract, and (2) the course of action required to conclude the adjustment action. When required, the assistance of the quality assurance representative, industrial specialist, insurance officer, legal counsel, or other technician will be secured. When the contractor acknowledges liability, the property administrator shall forward a copy of the credit memorandum or other adjusting document to the administrative contracting officer and auditor, if appropriate, to assure proper credit. If analysis of contract provisions and circumstances establishes that the loss, damage, destruction, or consumption constitutes a risk assumed by the Government, the property administrator shall so advise the contractor in writing, thereby relieving the contractor of responsibility for the property. A copy of the documentation and notification to the contractor shall be retained in the Contract Property Control Data File for the contract.
(e) (1) If the property administrator concludes that the contractor is liable for the loss, damage, destruction, or unreasonable consumption of Government property, he or she shall forward the complete file with conclusions and recommendations to the contracting officer for review and determination. The file shall contain--
(i) A statement of facts as supported by investigation;
(ii) Recommendations as to the contractor's liability and its amount;
(iii) Recommendations as to action to be taken with regard to third party liability, if appropriate;
(iv) Requirements for disposition, repair, or replacement of damaged property; and
(v) Other pertinent comments.
(2) A copy of the contracting officer's determination shall be furnished to the contractor and the property administrator, and a copy shall be retained in the contracting officer's files. The property administrator's copy shall be filed in the Contract Property Control Data File for the contract when all pertinent actions, such as compensation to the Government or repair or replacement of the property, have been completed.
1845.7211-4 Financial reports.
The property administrator is responsible for obtaining financial reports as prescribed in 1845.505-14 for all contracts assigned to him or her. Reports shall be accumulated, reviewed and distributed as required. Contractors are required to submit separate reports on each contract that contains the property reporting clause (see 1852.245-73) except as noted in 1845.7101-4(c).
1845.7212 Contractor utilization of Government property.
1845.7212-1 Utilization surveys.
(a) The property administrator is responsible for ensuring that the contractor has effective procedures for evaluating Government property utilization. However, when necessary, the contract administration office shall provide specialists qualified to perform the technical portion of utilization surveys to assist the property administrator in determining the adequacy of these procedures.
(b) Upon assignment of an initial contract under which Government-owned plant equipment in particular will be provided to a contractor, the property administrator shall ensure that the contractor has established effective procedures and techniques for controlling its utilization. The property administrator, with the assistance of technical specialists, if necessary, shall evaluate these procedures. A record of the evaluation shall be prepared and become a part of the property administration file. If the procedures are determined inadequate, the record shall identify the deficiencies and the corrective actions necessary. If the deficiencies are not corrected by the contractor, the property administrator shall promptly refer the matter to the contracting officer.
(c) The property administrator shall perform annual surveys of the contractor's procedures related to utilization of Government-owned plant equipment. At contractor facilities having a substantial quantity of plant equipment, the surveys should normally be conducted on a continual basis, reviewing equipment utilization records and physically observing a group of preselected
items during each portion of the survey. Surveys shall be conducted to the degree determined necessary, considering the findings of prior surveys and the contractor's performance history in identifying and declaring equipment excess to authorized requirements. The contractor shall be required to justify, by specific Government programs, the retention of all Government-owned plant equipment. The property administrator shall make maximum use of contractor's machine
loading data, order boards, production planning records, machine time records, and other production control methods.
(d) The property administrator shall conduct a special survey when a significant change occurs in the contractor's production schedules, such as a termination, completion of a contract, or a major adjustment in a program. Special surveys may be limited to a given department, activity, or division of a contractor's operation.
(e) In the absence of adequate justification for retention, the contractor shall identify and report Government-owned plant equipment in accordance with FAR 45.502(g) and FAR 45.509-2(b)(4). Items that are part of approved inactive package plants or standby lines are exempted from utilization surveys. The contracting officer shall ascertain periodically whether existing authorizations for standby or lay-away requirements are current.
1845.7212-2 Records of surveys.
The property administrator shall prepare a record incorporating written findings, conclusions, and recommendations at the conclusion of each survey. If appropriate, the property administrator's record may be limited to a statement expressing concurrence with the reports of other specialists. The property administrator shall retain one copy of each record in the property administration file.
1845.7212-3 Scope of survey.
The property administrator shall consider and use as appropriate the following in preparing for, conducting, and recording the results of the plant equipment utilization surveys:
(a) Identification of contracts under which plant equipment was furnished or acquired.
(b) Number and dollar value of plant equipment items in contractor's possession.
(c) Adequacy of equipment use records.
(d) Identification of contracts for which use of plant equipment is authorized.
(e) Other authorized use (Government or commercial) of the plant equipment, whether required approvals have been obtained, and whether rental payment is required.
(f) Planned machine loadings, including performance of a physical review of selected plant equipment items.
(g) Whether contractor-owned equipment of like function is loaded before loading Government-owned plant equipment.
(h) Items reported by quality assurance representatives or other personnel to be in a questionable use and utilization status.
(i) Items of plant equipment that may be made available for other use by combining the work of two or more machines on a single machine with low utilization rate. In such case the survey record should indicate the date the DD Form 1342, DoD Property Record or equivalent format, was forwardto the NASA contracting officer.
1845.7213 Statistical sampling.
(a) General. Statistical sampling supports, but does not replace, the property administrator's judgment. It is used to evaluate and determine the performance level for each functional area and category within each property control system. The lot to be examined for defects should encompass the maximum possible number of line items of property, records and documents. All items in the lot must have common characteristics and the same control elements of the property
control system must apply or more than one lot will be necessary. Items selected for sampling may be used to examine characteristics of more than one category (i.e., items selected under records may be used to examine characteristics of acquisition, stock control, storage and movement, maintenance, physical inventory, utilization, and consumption).
(b) Use of statistical sampling plans. The Government's risk shall not exceed 10 percent excepting any slight variations due to changes in lot sizes. Table 1845-2 contains sampling plans for use in achieving a confidence level of 90 percent, i.e., there is 90 percent confidence of rejecting lots having 10 percent or more defectives. The sample sizes to be examined may be determined from either Table 1845-2A or B.
(c) Random number table.
(1) Use of a table of random numbers is a common technique for drawing a sample. (A table is available from the NASA Headquarters Logistics Management Office (Code JLG).) However randomization techniques may be applied provided they are defined beforehand in the property administration survey plan and exhibit clear protection against bias. In any event, the number of items in the lot must not be overestimated to avoid selection of random numbers greater than
the lot. For example, if the lot is 9,000, only numbers lower than 9,001 shall be selected. Using a random table to draw a random sample requires the following four steps:
(i) First step. A pattern must be established between the numbers in the table and items in the lot to be sampled. It is possible to use the whole random number or any portion thereof. For instance, the number 18,967 may appear in the table. If the lot size is more than 99 but less than 1,000, a three digit number is required and either the first three digits (189) or the last three (967) may be used. If the lot size is more than 999 but less than 10,000, a four digit number is required and either the first four digits (1,896) or the last four (8,967) may be used. Once this pattern has been established, it must be consistently used throughout the sample selection process.
(ii) Second step. A procedure for selecting the numbers from the table must be selected. Any systematic path for going through the table, if the path is clear and does not cross over or reuse any number previously used, is acceptable. It is possible to proceed across rows, down columns, diagonally, clockwise, counter-clockwise, or in some combinations of these methods; however, it is usually desirable to choose a simple pattern and go down columns or across rows.
(iii) Third step. The starting point in the table shall be selected at random. The most used method is to open the table of random numbers to any page and to use the number indicated by an arbitrarily placed pencil point.
(iv) Fourth step. Beginning at the starting point and proceeding through the table as planned in the second step, record the numbers found in succession in the table, using all or part of the number as planned in the first step. Duplicate numbers shall be skipped. The selection process shall be continued until the required sample size is drawn.
(2) Numbers taken from the random table shall be arranged and recorded in numerical order. If the units of the lot to be examined are already consecutively numbered, the units having the numbers corresponding to those taken from the random table become the sample units. Otherwise, the sample units shall be found by counting to the numbers taken from the random table.
Lot Size Size Satisfactory Unsatisfactory
Continue of Defects in of Defects in
Accept if Reject if with Sample 2 Samples 1 and Samples 1 and 2
Lot Sample Defects in Defects in if Defects in Sample 2 Equals or is Equals or
Range Size 1 Sample 1 Are Sample 1 Are Sample 1 Are Size 2 Less Than Exceeds
151-400 32 0 4 1, 2, or 3 32 3 4
401-10,000 34 0 4 1, 2, or 3 34 3 4
10,001-35,000 40 0 5 1, 2, 3, or 4 40 4 5
35,001-100,000 46 0 6 1, 2, 3, 4, or 5 46 5 6