Other Contract Government Property Related Clauses IND 105 Lesson - - PowerPoint PPT Presentation

Other Contract Government Property Related Clauses IND 105 Lesson 9

Other Contract Government Property and Related Clauses

TLO 9 - Given a Government contract with other property related FAR and DFARS clauses, identify their applicability to the contractor’s Property Management System (PMS). ELOs:

• 1. Recognize other FAR clauses that impact Government Property.
• 2. Identify the FAR and DFARS clauses that must be in the contract when

FAR 52.245-1 is present.

• 3. Associate the contractor business systems, that are relevant to the

contractor's PMS, with their clauses.

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Other GP Clauses That Must Be Included ELO 1

FAR The contracting officer shall insert the clause at 52.245-9, Use and Charges, in solicitations and contracts when the clause at 52.245-1 is included. DFARS (3) Use the clause at 252.245–7001, Tagging, Labeling, and Marking of Government-Furnished Property, in solicitations and contracts that contain the clause at FAR 52.245-1, Government Property. (4) Use the clause at 252.245–7002, Reporting Loss of Government Property, in solicitations and contracts that contain the clause at FAR 52.245–1, Government Property. (5) Use the clause at 252.245-7003, Contractor Property Management System Administration, in solicitations and contracts containing the clause at FAR 52.245-1, Government Property. (6) Use the clause at 252.245–7004, Reporting, Reutilization, and Disposal, in solicitations and contracts that contain the clause at FAR 52.245-1, Government Property. 3

FAR 45.107(c) & DFARS 245.107

FAR 52.245-2 is must have the 52-245-1 when included in the contract.

(b) The contracting officer shall also insert the clause at 52.245-2, Government Property (Installation Operation Services), in fixed-price service contracts to be performed on a Government installation when Government- furnished property will be provided for initial provisioning only and the Government is not responsible for repair or replacement. FAR 52.245-2 Government Property Installation Operations Services (d) Except as provided in this clause, Government property furnished under this contract shall be governed by the Government Property clause of this contract.

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FAR 45.107(b) FAR 52.245-2 (d)

GP Installation Operation Services

ELO 2

Conditions for use – from the Prescription  Only in FIXED-PRICE service contracts  Work is to be performed on a Government installation  When Government furnished property will be provided for initial provisioning only with no warranties regarding suitability for use  The Government is not responsible for repair

• r

replacement.

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FAR 45.107 (b)

GP Installation Operation Services

ELO 2

GP Installation Operation Services

ELO 2

The Government Property listed in paragraph (e) of this clause is furnished to the Contractor in an “as-is, where-is” condition. Since the property is furnished in an “as-is” “where-is” condition the Government has no

• bligation

to restore, rehabilitate, or replace it. The Contractor must bear those costs.

6 X

52.245-2 (a)

GP Installation Operation Services

ELO 2

The Contractor has the opportunity to inspect the Government Property specified in the solicitation.

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52.245-2 (a)

GP Installation Operation Services ELO 2

The Government bears no responsibility for repair or replacement

• f any lost Government property.

If any/all Government Property is lost or when it is no longer usable, the Contractor shall be responsible for replacement of the property at Contractor expense. The Contractor has title to all replacement property and shall be responsible for contract performance.

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52.245-2 (b)

GP Installation Operation Services

ELO 2

Unless the CO determines

• therwise,

the Government abandons all rights & title to unserviceable and scrap property resulting from contract performance. Upon notification to the CO, the Contractor shall remove such property from the Government premises and dispose of it at Contractor expense.

9 Unserviceable

52.245-2 (c)

GP Installation Operation Services

ELO 2

Except as provided in this clause, Government Property furnished under this contract shall be governed by the GP Clause in this contract.

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FAR 52.245-1 Government Property

52.245-2 (d)

GP Installation Operation Services

ELO 2

Government Property provided under this clause: (it must be listed) Note: A list of the Government property provided under this clause must be provided. This list is used to distinguish the property that is furnished without a warranty (“as-is” “where-is”) from that which has a warranty.

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• 1. John Deere 216
• 2. Kabota b6100
• 3. Husqvarna 455
• 4. Stihl BR 500
• 5. Weed Eater PE550

52.245-2 (e)

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GP Installation Operation Services

ELO 2

Why must the 52.245-1 be used in conjunction with the 52.245-2?

GP Installation Operation Services

ELO 2

The purpose of this clause is to supplement the 52.245-1 with language that allows the Government

• to benefit from the full life of currently owned assets and;
• eventually rid the Government of the ownership burden of those

items that would normally not be provided by the contractor.

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Examples and Guidance

GAO Base Operations – DoD’s use of Single Contracts for Multiple Support Services https://www.gao.gov/assets/230/225263.pdf#page=27 DoDI 4000.19 Support Agreements http://www.esd.whs.mil/Portals/54/Documents/DD/issuances/dodi/400019p.pdf#page= 23 Base Operation and Support Contracts http://www.dtic.mil/dtic/tr/fulltext/u2/a471883.pdf#page=5

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Use and Charges Clause ELO 2

(b) Use of Government property. The Contractor may use the Government property without charge in the performance of— (1) Contracts with the Government that specifically authorize such use without charge; (2) Subcontracts of any tier under Government prime contracts if the Contracting Officer having cognizance of the prime contract— (i) Approves a subcontract specifically authorizing such use; or (ii) Otherwise authorizes such use in writing; and (3) Other work, if the Contracting Officer specifically authorizes in writing use without charge for such work.

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FAR 52.245-9

Use and Charges Clause, cont.

(c) Rental. If granted written permission by the Contracting Officer, or if it is specifically provided for in the Schedule, the Contractor may use the Government property (except material) for a rental fee for work other than that provided in paragraph (b) of this clause. Authorizing such use of the Government property does not waive any rights of the Government to terminate the Contractor’s right to use the Government property. The rental fee shall be determined in accordance with the following paragraphs.

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FAR 52.245-9

Use and Charges Clause ELO 2

Use and Charges Clause, cont.

(d) General. (1) Rental requests shall be submitted to the Administrative Contracting Officer (ACO), identify the property for which rental is requested, propose a rental period, and compute an estimated rental charge by using the Contractor’s best estimate of rental time in the formulae described in paragraph (e) of this clause. (2) The Contractor shall not use Government property for nongovernmental purposes, including Independent Research and Development, until a rental charge for real property, or estimated rental charge for other property, is agreed upon. Rented property shall be used

• nly on a non-interference basis.

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FAR 52.245-9

Use and Charges Clause ELO 2

Use and Charges Clause, cont.

(e) Rental charge.— (1) Real property and associated fixtures. (i) The Contractor shall obtain, at its expense, a property appraisal from an independent licensed, accredited, or certified appraiser that computes a monthly, daily or hourly rental rate for comparable commercial property. The appraisal may be used to compute rentals under this clause throughout its effective period or, if an effective period is not stated in the appraisal, for one year following the date the appraisal was performed. The Contractor shall submit the appraisal to the ACO at least 30 days prior to the date the property is needed for nongovernmental use. Except as provided in paragraph (e)(1)(iii) of this clause, the ACO shall use the appraisal rental rate to determine a reasonable rental charge.

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FAR 52.245-9

Use and Charges Clause ELO 2

Use and Charges Clause, cont.

(e) Rental charge.—

(ii) Rental charges shall be determined by multiplying the rental time by the appraisal rental rate expressed as a rate per hour. Monthly or daily appraisal rental rates shall be divided by 720 or 24, respectively, to determine an hourly rental rate. (iii) When the ACO believes the appraisal rental rate is unreasonable, the ACO shall promptly notify the Contractor. The parties may agree on an alternative means for computing a reasonable rental charge.

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FAR 52.245-9

Use and Charges Clause ELO 2

Use and Charges Clause, cont.

(e) Rental charge.— (iv) The Contractor shall obtain, at its expense, additional property appraisals in the same manner as provided in paragraph (e)(1)(i) if the effective period has expired and the Contractor desires the continued use of property for nongovernmental use. The Contractor may obtain additional appraisals within the effective period of the current appraisal if the market prices decrease substantially.

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FAR 52.245-9

Use and Charges Clause ELO 2

Use and Charges Clause, cont.

(f) Rental payments. (1) Rent is due 60 days following completion of the rental period or as otherwise specified in the contract. The Contractor shall compute the rental due, and furnish records or other supporting data in sufficient detail to permit the ACO to verify the rental time and computation. Payment shall be made by check payable to the Treasurer of the United States and sent to the contract administration office identified in the contract, unless otherwise specified by the Contracting Officer.

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FAR 52.245-9

Use and Charges Clause ELO 2

Use and Charges Clause, cont.

(f) Rental payments. (2) Interest will be charged if payment is not made by the date specified in paragraph (f)(1) of this clause. Interest will accrue at the “Renegotiation Board Interest Rate” (published in the Federal Register semiannually on or about January 1st and July 1st) for the period in which the rent is due. (3) The Government’s acceptance of any rental payment under this clause, in whole or in part, shall not be construed as a waiver or relinquishment of any rights it may have against the Contractor stemming from the Contractor’s unauthorized use of Government property or any other failure to perform this contract according to its terms

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FAR 52.245-9

Use and Charges Clause ELO 2

Use and Charges Clause, cont.

(g) Use revocation. At any time during the rental period the Government may revoke nongovernmental use authorization and require the Contractor, at the Contractor’s expense, to return the property to the Government, restore the property to its pre-rental condition (less normal wear and tear), or both. (h) Unauthorized use. The unauthorized use of Government property can subject a person to fines, imprisonment, or both under 18 U.S.C. 641.

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FAR 52.245-9

Use and Charges Clause ELO 2

Purpose and Application of the Use and Charges Clause Purpose is to prevent:

• Unfair competitive advantage
• Loss of Government Property due to over or unauthorized

use. Application is the responsibility of the Contracting Officer. PA’s should be aware of its purpose and application.

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FAR 52.245-9

Use and Charges Clause ELO 2

52.215-2 Audit and Records – Negotiation

Records retention requirements for contractors

52.232-16 -- Progress Payments & 52.232-32 -- Performance- Based Payments

Fixed-Price contract financing clauses; NOT FAR Part 45 inventory; contractor has FULL RISK of LOSS

52.237-2 -- Protection of Government Buildings, Equipment, and Vegetation

Service Contracts – Contractor reasonable care of existing buildings, equipment, and vegetation on the Government installation

52.244-2 – Subcontracts

If NO APPROVED PURCHASING SYSTEM, Government CONSENT may be required to subcontract (CAP)

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FAR Clauses related to Contract GP ELO 2

FAR Clauses related to Contract GP ELO 2

52.249-2 -- Termination for Convenience Fix Price 52.249-6 -- Termination Cost Reimbursement (Default or Convenience).

Shall submit a complete termination inventory schedule no later than 120 days from the effective date of termination, unless extended in writing by the CO.

Contractor must protect and preserve property in their possession related to the contract which the Government has or may acquire an interest.

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252.245-7001 Tagging, Labeling, and Marking of Government-Furnished Property

The Contractor shall tag, label, or mark Government-furnished property items identified in the contract as subject to serialized item management (serially managed items). The Contractor is not required to tag, label, or mark Government-furnished property previously tagged, labeled, or marked.

252.245-7002 Reporting Loss of Government Property

The Contractor shall use the Defense Contract Management Agency (DCMA) eTools software application for reporting loss of Government property.

252.245-7004 Reporting, Reutilization, and Disposal

Unless disposition instructions are otherwise included in this contract, the Contractor shall complete SF 1428, Inventory Schedule B, within the Plant Clearance Automated Reutilization Screening System (PCARSS).

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DFARS Clauses Related to GP ELO 2

252.211-7007 Reporting of Government-Furnished Property

• Applies to all GF "serially managed" and non serially managed

property

• Must initially report to the registry all GFP acquired
• Update IUID Registry for changes in status, mark, custody, condition

code, or disposition to include consumption or transfer to a follow-on contract. Exception: Contractor does not need to report to the IUID Registry transactions reported to DCMA eTools (Property Loss & PCARSS)

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DFARS Clauses Related to GP ELO 2

252.211-7003 Item Identification and Valuation UNIQUE IDENTIFICATION by GP VALUE 252.211-7006 Passive Radio Frequency Identification A related form of IDENTIFICATION a contractor may be required to provide 252.223-7007 Safeguarding Sensitive Conventional Arms, Ammunition, and Explosives. The requirements of DoD 5100.76-M apply to the following items of AA&E being developed, produced, manufactured, or purchased for the Government, or provided to the Contractor as Government-furnished property under this contract

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DFARS Clauses Related to GP ELO 2

Business System Clauses ELO 3

As prescribed in 242.7001, use the following clause: CONTRACTOR BUSINESS SYSTEMS (FEB 2012) 252.242-7005 Contractor Business Systems (a) This clause only applies to covered contracts that are subject to the Cost Accounting Standards under 41 U.S.C. chapter 15, as implemented in regulations found at 48 CFR 9903.201-1 (see the FAR Appendix). (b) Definitions. As used in this clause— “Acceptable contractor business systems” means contractor business systems that comply with the terms and conditions of the applicable business system clauses listed in the definition of "contractor business systems" in this clause (see next slide).

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DFARS 252.242- 7005

• Define Acceptable Contractor Business Systems & Significant

Deficiency

• Identifies the six (6) Business Systems
• Provides the Contractors requirement to establish and maintain an

acceptable business system

• Outlines the Contractor, functional specialist and Contracting officer’s

requirements for the Corrective Action Process for significant deficiencies

• Provides direction and requirements for the CO to make a

determination of significance/non-significance during the initial determination process

• Identifies the requirements for the CO when disapproving a PMS and

executing payment withholds for significant determinations

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DFARS 252.242- 7005

Business System Clauses ELO 3

Business System Clauses ELO 3

“Contractor Business Systems” means

• 1. 252.245-7003 Contractor Property Management System Administration
• 2. 252.242-7004 Material Management and Accounting systems (MMAS)
• 3. 252.244-7001 Purchasing systems
• 4. 252.242-7006 Accounting systems
• 5. 252.215-7002 Estimating systems
• 6. 252.234-7002 Earned Value Management systems (EVMS)

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DFARS 252.242- 7005

Contractor Property Management System Administration

(b) Contractor shall establish and maintain an acceptable property management system. Failure to maintain an acceptable property management system, as defined in this clause, may result in disapproval of the system by the Contracting Officer and/or withholding of payments. (c) System criteria. The Contractor’s property management system shall be in accordance with paragraph (f) of the contract clause at Federal Acquisition Regulation 52.245-1.

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DFARS 252.245- 7003

Business System Clauses ELO 3

Material Management and Accounting System

(a) Definitions. As used in this clause— (1) “Material management and accounting system (MMAS)” means the Contractor's system or systems for planning, controlling, and accounting for the acquisition, use, issuing, and disposition of material. Material management and accounting systems may be manual or automated. They may be stand-alone systems or they may be integrated with planning, engineering, estimating, purchasing, inventory, accounting, or other systems.

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Business System Clauses ELO 3

DFARS 252.242- 7004

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Business System Clauses ELO 3

DFARS 252.242- 7004

(d) System criteria. The MMAS shall have adequate internal controls to ensure system and data integrity, and shall--

(1) Have an adequate system description including policies, procedures, and

• perating instructions that comply with the FAR and Defense FAR Supplement;

(2) Ensure that costs of purchased and fabricated material charged or allocated to a contract are based on valid time-phased requirements as impacted by minimum/economic order quantity restrictions.

(3) Provide a mechanism to identify, report, and resolve system control weaknesses and manual override. Systems should identify operational exceptions, such as excess/residual inventory, as soon as known;

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Business System Clauses ELO 3

DFARS 252.242- 7004

MMAS Criteria cont.

(4) Provide audit trails and maintain records (manual and those in machine- readable form) necessary to evaluate system logic and to verify through transaction testing that the system is operating as desired; (5) Establish and maintain adequate levels of record accuracy, and include reconciliation of recorded inventory quantities to physical inventory by part number on a periodic basis. A 95 percent accuracy level is desirable. If systems have an accuracy level below 95 percent, the Contractor shall provide adequate evidence that—

(i) There is no material harm to the Government due to lower accuracy levels; and (ii) The cost to meet the accuracy goal is excessive in relation to the impact on the Government;

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Business System Clauses ELO 3

DFARS 252.242- 7004

MMAS Criteria cont.

(6) Provide detailed descriptions of circumstances that will result in manual

• r system generated transfers of parts;

(7) Maintain a consistent, equitable, and unbiased logic for costing of material transactions (8) Controls for allocations and common inventory counts

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Business System Clauses ELO 3

DFARS 252.242- 7004

MMAS Criteria cont.

(9) Adequate controls to ensure physically commingled inventories (CAP) do not compromise requirements. Government –furnished material shall not be - (i) Physically commingled with other material (ii) Used on commercial work (10) Contractor is subject to periodic internal reviews to ensure compliance with established policies and procedures.

Contractor Cost Estimating System

(a) Definitions “Estimating system” means the Contractor's policies, procedures, and practices for budgeting and planning controls, and generating estimates of costs and other data included in proposals submitted to customers in the expectation of receiving contract awards.

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DFARS 252.215- 7002

Business System Clauses ELO 3

Contractor Cost Estimating System Requirements

Estimating system includes the Contractor's—

(1) Organizational structure; (2) Established lines of authority, duties, and responsibilities; (3) Internal controls and managerial reviews; (4) Flow of work, coordination, and communication; and (5) Budgeting, planning, estimating methods, techniques, accumulation of historical costs, and other analyses used to generate cost estimates.

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DFARS 252.215- 7002

Business System Clauses ELO 3

Contractor Cost Estimating System Requirements

Outcomes where Contractors Estimating Systems can have an impact on Government Property:

• Acquisition
• Records
• Subcontract Control
• Relief of Liability
• Property Closeout

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DFARS 252.215- 7002

Business System Clauses ELO 3

Accounting systems

(2) “Accounting system” means the Contractor’s system or systems for accounting methods, procedures, and controls established to gather, record, classify, analyze, summarize, interpret, and present accurate and timely financial data for reporting in compliance with applicable laws, regulations, and management decisions, and may include subsystems for specific areas such as indirect and other direct costs, compensation, billing, labor, and general information technology.

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Business System Clauses ELO 3

DFARS 252.242- 7006

Accounting systems

(c) System criteria. The Contractor’s accounting system shall provide for— (2) Proper segregation of direct costs from indirect costs; (3) Identification and accumulation of direct costs by contract; (16) Billings that can be reconciled to the cost accounts for both current and cumulative amounts claimed and comply with contract terms; (17) Adequate, reliable data for use in pricing follow-on acquisitions

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Business System Clauses ELO 3

DFARS 252.242- 7006

Outcomes where Contractors Accounting Systems can have an impact on Government Property:

• Acquisition
• Records
• Subcontract Control
• Relief of Liability
• Consumption
• Property Closeout

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Business System Clauses ELO 3

DFARS 252.242- 7006

Contractor Purchasing System Administration

“Purchasing system” means the Contractor’s system or systems for purchasing and subcontracting, including make-or-buy decisions, the selection of vendors, analysis of quoted prices, negotiation of prices with vendors, placing and administering of orders, and expediting delivery of materials.

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Business System Clauses ELO 3

DFARS 252.244- 7001

Contractor Purchasing System Administration

(c) System criteria. The Contractor’s purchasing system shall—

(1) Have an adequate system description including policies, procedures, and purchasing practices that comply with the Federal Acquisition Regulation (FAR) and the Defense Federal Acquisition Regulation Supplement (DFARS); (2) Ensure that all applicable purchase orders and subcontracts contain all flowdown clauses, including terms and conditions and any other clauses needed to carry out the requirements of the prime contract;

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Business System Clauses ELO 3

DFARS 252.244- 7001

Contractor Purchasing System Administration

(c) System criteria. The Contractor’s purchasing system shall—

(3) Maintain an organization plan that establishes clear lines of authority and responsibility; (4) Ensure all purchase orders are based on authorized requisitions and include a complete and accurate history of purchase transactions to support vendor selected, price paid, and document the subcontract/purchase order files which are subject to Government review; (5) Establish and maintain adequate documentation to provide a complete and accurate history of purchase transactions to support vendors selected and prices paid;

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Business System Clauses ELO 3

DFARS 252.244- 7001

Contractor Purchasing System Administration

(c) System criteria. The Contractor’s purchasing system shall—

(16) Notify the Government of the award of all subcontracts that contain the FAR and DFARS flowdown clauses that allow for Government audit of those subcontracts, and ensure the performance of audits of those subcontracts; (19) Establish and maintain policies and procedures to ensure purchase

• rders and subcontracts contain mandatory and applicable flowdown clauses,

as required by the FAR and DFARS, including terms and conditions required by the prime contract and any clauses required to carry out the requirements

• f the prime contract,…

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Business System Clauses ELO 3

DFARS 252.244- 7001

Outcomes where Contractors Purchasing System can have an impact on Government Property:

• Acquisition
• Records
• Subcontract Control
• Relief of Liability
• Property Closeout

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Business System Clauses ELO 3

DFARS 252.244- 7001

Earned Value Management systems (EVMS)

“Earned value management system” means an earned value management system that complies with the earned value management system guidelines in the ANSI/EIA-748. EVMS is a project management technique for measuring project performance and progress in an objective manner for the purpose of providing accurate forecasts of project performance and cost problems. Although EVMS is one of the business systems it does not effect Property Management Systems.

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Business System Clauses ELO 3

DFARS 252.234- 7002

GP Related Clauses

RELATED FAR & DFARS CLAUSES

– 52.215-2 Audit and Records -- Negotiation – 52.237-2 -- Protection of Government Buildings, Equipment, and Vegetation – 52.244-2 -- Subcontracts – 52.249-2 -- Termination for Convenience of the Government – 52.249-6 -- Termination Cost Reimbursement (Default or Convenience). – 252.211-7003 Item Identification and Valuation – 252.211-7006 Passive Radio Frequency Identification – 252.211-7007 Reporting of Government-Furnished Property – 252.242-7004 Material Management and Accounting System – 252.242-7005 Contractor Business Systems – 252.244-7001 Contractor Purchasing System Administration – 252.245-7001 Tagging, Labeling, and Marking of Government-Furnished Property

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Other Contract Government Property and Related Clauses

TLO 9 - Given a Government contract with other property related FAR and DFARS clauses, identify their applicability to the contractor’s Property Management System (PMS). ELOs:

• 1. Recognize other FAR clauses that impact Government Property.
• 2. Identify the FAR and DFARS clauses that must be in the contract when

FAR 52.245-1 is present.

• 3. Associate the contractor business systems, that are relevant to the

contractor's PMS, with their clauses.

52