GUIDANCE
Contractor's Guide for Control of Government Property

Chapter 5: CONTRACT CLOSE-OUT

FINAL INVENTORY AND CERTIFICATION

At the expiration or termination of the Contract, the Contractor must conduct a final inventory. Employees who conduct inventories should not be the same individuals who maintain the property records.

Inventory Requirements

The final inventory will cover all property items furnished or acquired under the terms of the Contract, including nonexpendable/expendable property items regardless of cost, and supply items and materiel not consumed during contract performance. The amount of accrued lease credits for leased property should be included on the Final Inventory. The Property Administrator should be advised of all unusual circumstances related to the inventory. Failure to provide the prescribed Final Inventory will delay contract close-out and final payment.

The Contractor is required to report the following information on the Final Inventory:

FAA decal number Associated FAA decal numbers

Item description Acquisition cost

Manufacturer's name Condition code

Manufacturer's model number Quantity

Manufacturer's serial number Physical location of item

Certification

Final Inventory must include the following certifications:

"I certify that except for items consumed in the performance of the contract, this inventory includes all materials, supplies and equipment furnished by the Government or acquired by the contractor for the account of the Government under contract number ____________."

"I further certify that all property is in a state free from contamination by any hazardous or toxic substances, and requires no additional clean-up or decontamination efforts."

(Note: Contractors that have no government property in their possession must submit a certification to that effect.)

Follow-on Inventories

When government property under a contract is being transferred to another contract, it is recommended that a joint inventory be requested and conducted. This may effect the transfer of the property, relief of liability for the closing Contractor and receipt by the follow-on contractor.

Government Terminates Contract

If the Government elects to terminate a contract for the convenience of the Government, the requirements for a termination inventory are the same as outlined for a Final Inventory. The termination inventory will be conducted primarily for disposal purposes.

Subcontractor Inventories

Contractors must submit a Consolidated Inventory Report of all government property, to include subcontractor inventory. Subcontractors should report their inventories to the prime Contractor. Subcontractor inventory is reported in the same detail as outlined for prime Contractors. The location of the subcontractor property being reported must be furnished.

DISPOSITION OF PROPERTY

The Property Administrator will provide written instructions for the disposition of property. The Contractor may remove government property from its site only in accordance with these instructions. The Contractor is responsible for the property until final disposition has been completed.

Leased Property

The Contractor must provide notification to the Property Administrator, in writing, at least 45 days prior to a lease arrangement being terminated. The Contractor must report the status of any purchase credits. (Note: This applies to leases due to expire when the contract ends, and to leases that continue after the completion or termination of a contract.) If the lease is expiring, the Government may elect to purchase the item, or if the lease has not expired, the Government may choose to buy out the lease.

Disposal Options

In disposing of the property, the Government may elect to exercise any of the options described below:

If a cost reimbursement-type contract, allow the contractor to buy contractor-acquired items/inventory at 100% of acquisition value;

- Return the items/inventory to the original supplier for credit, less any reasonable restocking charge. (Do not finalize the purchase or return any merchandise without written instructions from the Property Administrator);

- Transfer all or part of the inventory to another contract; for a loan;

- Transfer the inventory to a licensee by means of a Revocable License Agreement

- Have the inventory returned to FAA; or

- Report the inventory as excess.

Other options: The Government may consider, for disposition, to include sale to the public, donation, abandonment, scrapping and destruction. The Property Administrator will provide specific written instructions for the disposal of the property.

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