| GUIDANCE |
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Contractor's Guide for Control of
Government Property
Chapter 3: CONTRACT START-UP Chapters 3 - 5 apply to all contractors (Contract Start-Up, Contract Administration, and Contract Close-Out). Portions of Chapter 6, Special Considerations, may also apply. Prior to the start of work, review the Contract concerning the authorization of property. Property that is listed in work assignments or task orders is not authorized for acquisition or use, until it has been authorized in the Contract, subsequent modification, or other Contracting Officer's Authorization (COA). If government property not listed in the Contract is provided to you, notify your Contracting Officer in writing, with a copy of such notification to the Property Administrator. Review the detailed listing of property in the Contract to assure that the government property required to accomplish the scope of work is accurately reflected in the contract. (Note: Be sure to check your contract for the clauses described in this section of the Guide). If any of the clauses described below are included in the Contract, refer to the AMS or FAR (whichever is applicable) to determine your full requirements, responsibilities and liability for the property. Maintenance of Official Records The Contractor is responsible for maintaining the official property records unless the Contract cites the AMS/FAR clauses that relieve the Contractor of that responsibility. (Note: Refer also to AMS 3.10.3-10 and FAR Part 45.102 and 105, as appropriate.) Residual Property The residual property under a Multicontract Cost and Material Control system authorizes use of property from a previous contract. If the Contract contains this clause, the Contractor should verify exactly what is included in the residual inventory, and the inventory listing is correct. Government-furnished property All accountable government property provided under the Contract will be described and/or listed in the contract, including the Contracting Officer’s Authorization (COA). The listing of accountable property items should include an item description (sometimes referred to as expanded nomenclature), manufacturer's name, serial number, model number, a FAA decal number and acquisition cost. Contractor-Acquired Government Property If the Contractor is authorized to acquire accountable property from a vendor, the Contract will include a clause or COA letter that authorizes the transactions. Accountable property that the Contractor acquires and charges to the Contract, must be authorized on an individual line item basis in the contract. Designation of Property Administrator A clause may be added to your contract to provide the name and office location of the designated Property Administrator, on the Contract. Using Property Under More than One Contract Government property is to be used, under the Contract, only for which it is specified, unless otherwise authorized by the Contracting Officer. If the Contractor's organization has more than one contract with FAA, the Contracting Officer may authorize use of government property under more than one contract. The Contractor is required to conduct a physical inventory of accountable government property, provided to you or acquired with contract funds, as well as any property being leased or rented with contract funds at the start of the Contract. If the Contract is a follow-on, make every effort to conduct a joint inventory with the previous contractor. The start-up inventory may be done concurrently with the transfer from the previous contractor. Inventory Requirements The start-up inventory will be a physical inventory. Any discrepancies with the government-furnished listing in the Contract should be noted. The inventory must include the following information: FAA decal number Item description Manufacturer's name Condition code Manufacturer's model number Acquisition date Manufacturer's serial number Acquisition cost Record and reconcile inventory results with the Property Clause in the
Contract, and submit the report to the designated Property Administrator, in the
form of an Inventory Schedule. For overages, shortages or damages, a statement
of the condition and apparent cause must be furnished. The name of the
Contractor’s Property Custodian or prime contact for Property Administrator must
be furnished. The Contractor must submit a Consolidated Inventory Report of all
government property, to include subcontractor inventory. FAA requires an updated
Inventory Schedule or Report on a monthly basis, unless otherwise
specified. Shortly after contract award, the Property Administrator will request a copy of the written procedures for the Contractor’s Property Control System, unless FAA already has it on file. FAA will review the Property Control System to determine if it is adequate to assure compliance with government regulations and contract terms, and to assure that the property is adequately protected, maintained, utilized and accounted for. The adequacy of the Property Control System will assist in demonstrating the Contractor’s ability to manage government property. A contractor with fewer than twenty-five (25) employees, including subcontractors, may not have a need for written procedures for effective management of Government property. In such cases, the Property Administrator will evaluate the adequacy of the Contractor's system, on the basis of the contractor's explanation of controls and observable actions. The Property Administrator may accept Property Control System approvals from other federal agencies (i.e., DCAS, Defense, etc.). Elements An acceptable Property Control System must comply with the AMS or FAR, as applicable. The Property Control System must identify all types and classes of government property and addresses your policies on the following elements: Acquisition Maintenance and calibration Receiving Physical inventory Identification and records Subcontract administration Storage and movement Reporting Property consumption Disposal Utilization Contract completion or termination
The Property Control System must enable the Contractor to locate any item of government property within a reasonable time. Generally, this should not exceed two working days. The system should also provide a complete, current, auditable record of all transactions, which the Government may review as frequently as conditions warrant. The following section briefly outlines the major requirements for each element of your property control system. Acquisition - Items ordered in accordance with quantities specified in the contract. - Existing equipment on-hand is screened before submitting requisitions. - Correct source identified (either GFP or CAP). Receiving - Property received inspected for discrepancies. - Receiving report prepared and distributed to appropriate offices. - Discrepant items segregated and documented. Identification and Records - Equipment received promptly and properly classified and labeled with a FAA property decal. - Inventory control and financial records established and maintained for the property. - Basic information contained in the records, as outlined in the AMS or FAR. Storage and Movement - An adequate system to control movement and location of property maintained. - Property in storage, protected, preserved and inspected to prevent loss, damage and deterioration. - Adequate safeguards are provided for securing government property. - A first in/first out system (FIFO) established for stored items, subject to
age Property Consumption - Property consumed only under contract performance. - Stock Record System maintained for consumable items. Utilization - Methods established to ensure that government property utilized only for purposes authorized by the Contract. - Contractual authorization obtained to use property for other than its original authorized purpose. - A system established to review and identify government property for release, when it is no longer required for contract performance. - Criteria established for retention of idle equipment, is documented and justified by the program management. Maintenance and Calibration - A scheduled maintenance program established, consisting of a systematic written procedure for servicing and inspecting equipment (Note: The goal is safe, efficient and economical operation of government equipment). - A program implemented for the following categories of maintenance: preventive maintenance, routine repair and adjustment, emergency repair, and calibration. - A calibration control system designed for all measuring and test equipment to provide control of the evaluation, calibration, maintenance, repair and use. - Records of maintenance and calibration maintained, including cost and date. - Maintenance and calibration performed by technically qualified personnel. - System capable of identifying high maintenance costs for review; corrective actions taken by management and appropriately documented. Physical Inventory - Physical inventories conducted at the start of the Contract, annually on the Anniversary of Contract Award, fiscal year end, on a special basis, if directed by the Government, and within 90 days upon contract completion or termination, as specified in the contract. - Inventories taken by personnel other than those having custody of the property or responsibility for maintaining the records. - Inventories conducted using the "floor-to-records" approach. - Physical inventory results promptly reconciled with property records. - Inventory results and discrepancies promptly reported to the Property Administrator. Subcontract Administration - Procedures and controls established to assure that government property, in a subcontractor's possession, adequately protected. - Subcontractor aware of applicable property terms and conditions. - Reports of loss, damage or destruction of government property to the prime Contractor, for notification to the Property Administrator. Reporting - Annual or monthly Inventory Reports (as applicable) provided to the Property Administrator, by August 30 for annual and/or the last day of each month as appropriate. - Loss of or damage to government property timely reported to the Property Administrator. - Government property excess to contract requirements is promptly reported to the Property Administrator. - Property data submitted, in format as set forth in Chapter 7, for all accountable Government Furnished, Contractor-Acquired and leased property. FAA Material Requisition/Issue/Receipt Form 4650-12 used to transfer any GFP/CAP. Receipt of GFP reported on FAA Form 4650-12 and promptly returned to the Property Administrator. - Other Reports specified in the Contract. Disposal - Disposition instructions, provided by the Property Administrator, implemented as directed. - The disposal of property properly documented, in accordance with instructions. - The quantity, condition code and location of items requiring disposition accurately reported. - A decontamination certification included in the Final Inventory Report, at
the expiration of the contract, unless waived by the Contracting
Officer. Contract Completion or Termination - Residual property reviewed, for appropriate actions (such as decontamination or repair) before transfer or disposal of property. - Full accounting effected for all government property in possession of the Contractor and subcontractors. Final Inventory Report timely submitted. - Pending issues (i.e. such as inventory adjustments and determinations of liability) timely resolved prior to contract close-out. - The Property Administrator notified when all pending actions on property-related issues are completed. FAA Review of System The Contractor’s PCS procedures for property control must be submitted to the Property Administrator for review within 30 days from the date it is requested. The review and approval of a Contractor's Property Control System, at a specific facility by one agency, may be binding on other government departments and agencies, under interagency agreements. FAA may impose special property administration requirements to meet Agency needs. Disapproval of System If the Contractor’s PCS does not comply with the AMS or FAR, as applicable, or specific contract requirements, corrections will be required, after notification of deficiencies. If the Contractor does not correct the deficiencies, the Property Administrator may recommend disapproval of your system by the Contracting Officer. Liability for loss of or damage to government property may increase if approval is withheld or withdrawn. | Back | Table
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