INCORPORATED INTO THE NFS BY PN 04-56
Procurement Information Circular
June 9, 2005
DOCUMENTATION REQUIREMENTS FOR GOVERNMENT-FURNISHED PROPERTY
PURPOSE: This PIC facilitates improved accounting for property furnished to contractors and resolves longstanding issues related to:
--The transfer of existing Government property to contractors;
--The retirement of asset records for property in the custody of contractors when it is no longer required for NASA activities;
--The receipt of residual Government property, when required for other NASA activities, including performance of other contracts; and
--Transfers of property between contracts.
This PIC does not address property transferred from contractors to subcontractors, nor does it address property that contractors use within NASA premises under the NFS clause 1852.245-71, Installation Accountable Government Property. It does not discuss the process for creation and approval of contractor requests for property which must occur prior to this process, nor does it provide authority for the provision of property to contractors.
BACKGROUND: During the Fiscal Year (FY) 2004 financial statement audit, NASA auditors reported that NASA lacks adequate controls to reasonably assure that Property, Plant and Equipment, and Materials held by NASA contractors are presented fairly in the financial statements. NASA is committed to resolving this weakness.
A review of the processes involved with contractor-held Government property demonstrated that records of property (real property, plant equipment, material, special test equipment, special tooling, or agency-peculiar property) NASA furnishes to its contractors are retired at the time of provision. Subsequent transactions affecting NASA owned property are not recorded in NASA’s property management systems. As a result, the value of the current inventory of Government furnished property in the custody of NASA contractors cannot be completely ascertained or accurately reported.
Contractors possess Government property as the result of one of three actions.
--Contractors may acquire property, as a direct cost to the Government, to fulfill the contract’s requirements. When this occurs, the Government owns the property under the terms and conditions of the Government property clause. FAR defines this property as “contractor acquired property”. The Government does not take possession or delivery of these items until they are no longer required for contract performance.
--When NASA property is available for contractor use, the Government may furnish existing Government property in lieu of contractor acquisition. This “Government furnished property” includes existing Government property from any source, including other contractors, agencies, or external entities.
--The Government may take delivery, accept and authorize payment for property, at the contractor’s location, and leave that property in place for further work or use on the contract. This is considered to be property “delivered in place”. As this property is accepted by the Government, it must be treated as Government furnished property when left in the contractor’s custody.
With the exception of property contractors provide to their subcontractors, contractors cannot legally provide Government property to other contractors. Only the Government can provide the Government’s property. Therefore, all existing Government property provided to a contractor, regardless of the source or situation, is considered to be furnished by the Government to the receiving contractor.
The need to maintain accuracy in the Government’s records demands that the Government’s property records reflect all transactions related to the transfer of Government property, including property moving between expired and follow-on contracts with the same contractor and property “delivered in place”. While this guidance imposes new transactions that reflect Government provision and receipt of property, it does not relieve contractors of their recordkeeping and overall property management requirements. Contractors continue to be responsible for maintenance of “stewardship records” regarding Government property while it is in their custody and for reporting changes to the status of that property. Government property administration is still required to assure that property is managed, maintained, secured, used and disposed of properly.
This guidance will also enhance our overall compliance with FAR Part 45 and NFS Part 1845.
GUIDANCE: Contracting officers must list all property furnished to a contractor in the procurement instrument. This includes all property (real property, plant equipment, material, special test equipment, special tooling, or agency-peculiar property) furnished at award, and all property furnished during the period of performance. It includes property:
-- Physically transferred from NASA or from any other entity;
--“Transferred in place” from a prior contract with the same contractor; and
--“Delivered in place” under the requirements of the existing contract.
Documenting the process of furnishing Government property:
Government Furnished Property, including all furnished property from any source, and without regard for acquisition cost, must be listed in the contract. Contracting officers must use NFS clause 1852.245-76, “List of Government Furnished Property” for this purpose. Contracting officers must modify the list to include any property furnished after award.
In addition to the contract language, the transfer of property must be recorded on a “shipping” or “transfer” document such as the DD Form 1149. This requirement includes property that is physically transferred and property that is transferred in place. Centers may use equivalent documents that contain the same information. Contracting Officer’s Technical Representatives are responsible for creation of shipping documents, based on the contractor’s requests, and are considered “shippers” for the purpose of this document. Shippers will segregate items valued over the NASA capitalization threshold (at the time of this writing $100,000) and will request the transfer of these items on separate documents. The transfer documents must be complete and must include the following information for all items with a value greater than $5,000:
-- Description of Property;
-- Property Identification Number;
-- Capital Value (if applicable);
-- Property Classification;
-- Federal Supply Classification;
-- Gaining Contract;
-- Acquisition Date.
Contracting officers will approve these transfers before they occur and will provide copies of the approved shipping or transfer documents to the Center Industrial Property Officer within 15 days of approval. The Center Industrial Property Officer will coordinate processing through the Center logistics office and systems and assure that all transactions are posted to the appropriate property management systems in accordance with NPR 4200.1 and NPR 4200.2 and applicable local procedures.
Regardless of the date of approval,
Documenting the provision of Government property when “delivered in place” at the contractor’s facilities:
When property that would otherwise qualify for control in NASA’s property systems is received and accepted within the contractor’s facilities, and that property is to remain in the contractor’s custody for further work or to be otherwise used in the performance of the contract, the property must be added to the appropriate NASA property system in accordance with NPR 4200.1 and NPR 4200.2. After the items are recorded in the property system, the instructions for documenting the process of furnishing Government property (above) must be followed.
Documenting the return or disposition of property no longer required by the contractor:
FAR requires that contractors report all Government furnished property in excess of their needs for contract performance. This property is referred to as Contractor inventory.
FAR allows contractors to buy back contractor acquired property for the item’s acquisition cost or to return them to suppliers for the item’s acquisition cost less a reasonable restocking fee. FAR also allows for alternate disposition of material scrap. All remaining items must be reported in the same way as Government furnished property.
NASA Centers who require the further use of Contractor inventory will identify the property they require from the contractor’s report and prepare shipping documents listing each of those items. On receipt and acceptance, NASA Centers will record any new contractor acquired property and process transactions to reflect the return of Government furnished property in accordance with the requirements of NPR 4200.1 and NPR 4200.2.
Liability for property in transit and transactions associated with the transfer of property between contractors will occur in accordance with the terms and conditions of the contracts. In all cases, NASA will serve as the shipper to the gaining contractor and will be responsible for resolution of any outbound discrepancies.
EFFECTIVE DATE: This PIC is effective October 1, 2005, and shall remain in effect until cancelled or superseded.
HEADQUARTERS CONTACT: Lou Becker, Contract Management Division, (202) 358-4593, e-mail: firstname.lastname@example.org.
James A. Balinskas
Director, Contract Management Division
DISTRIBUTION: PIC List
 The acquisition value of the property item includes all costs NASA incurred to acquire the property.
 The capital value of the property item is the value used for financial statements purposes. For financial statement purposes only property equal or greater than the capitalization threshold of $100,000 should be included. Therefore, the capital value is the acquisition value and all modifications $100,000 and over.
 Property Classifications include Land, Buildings, Other Structures and Facilities, Leasehold Improvements, Construction in Progress, Plant Equipment, Special Test Equipment, Special Tooling, or Agency-Peculiar property, Material and Work In Process, as defined in the FAR.
 Acquisition Date is the date that the property was originally acquired by NASA. In the absence of this date, substitute the manufacture date.