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ROLES AND RESPONSIBILITIES OF CONTRACTING OFFICER For GOVERNMENT PROPERTY. Presented by Dr. Douglas N. Goetz, CPPM , CF Professor of Contract Management Retired – Now Intermittent Defense Acquisition University President, GP Consultants LLC. GOVERNMENT PROPERTY. TOPICAL OUTLINE

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slide1

ROLES AND RESPONSIBILITIES

OF CONTRACTING OFFICER

For GOVERNMENT PROPERTY

Presented by

Dr. Douglas N. Goetz, CPPM, CF

Professor of Contract Management

Retired – Now Intermittent

Defense Acquisition University

President, GP Consultants LLC

government property
GOVERNMENT PROPERTY
  • TOPICAL OUTLINE
    • OVERVIEW OF GOVERNMENT PROPERTY
    • FAR Part 45 and Part 52
      • Policy requirements of FAR Part 45
      • The Government Property Clauses
    • Contracting Officer Requirements
      • Pre-award Responsibilities
      • Post-award Responsibilities
    • Some DO’S and DON’TS from a Contracting Perspective
government property3
GOVERNMENT PROPERTY
  • FAR Part 45 Sets forth Policy and Procedures for Providing Government Property (GP)
    • Definitions peculiar to GP – 45.101
    • Policy on Providing – 45.102
    • Contractor PMS Compliance – 45.105
    • Contract Clauses for GP – 45.107
    • Solicitation & Evaluation Procedures re: GP – 45.2
    • Use and Rental of GP – 45.3
    • Title to GP – 45.4
    • Support Property Administration for GP – 45.5
    • Reporting, Reutilization and Disposal of GP – 45.6
government property4
GOVERNMENT PROPERTY
  • The GP Clauses – Reduced from 19 to 3
    • 52.245-1 GP Clause
      • ALT I: FP for competitive contracts (Full Risk of Loss)
      • ALT II: CR for the conduct of basic or applied research at nonprofit institutions of higher education or nonprofit organizations for scientific research.
    • 52.245-2 GP Installation Operation Services
    • 52.245-9 Use and Charges
so what
SO WHAT?!?!?
  • If contracting actions are done improperly at the beginning of the contract – they will haunt and potentially hurt us through out the performance of the contract.
  • Contracting Officers play a CRITICAL ROLE in the property management for Government property in the possession of Contractors
slide6

CONTRACTING OFFICER

RESPONSIBILITIES PRE-AWARD

determination to provide government property
DETERMINATION TO PROVIDE Government Property
  • Overarching Policy – 45.102
    • Contractors are ordinarily required to furnish ALL PROPERTYNecessary to perform Government contracts

SO WHY IS THERE OVER $150 Billion/1.2 TRILLION worth of GP

in the hands of DEFENSE contractors?

determination to provide government property8
DETERMINATION TO PROVIDE GOVERNMENT PROPERTY
  • FAR 45.102

(b) CONTRACTING OFFICERS SHALL PROVIDE PROPERTY TO CONTRACTORS ONLYWHEN IT IS CLEARLY DEMONSTRATED--

determination to provide gp
DETERMINATION TO PROVIDE GP
  • To be in the Government’s Best Interest;

Examples may include but are not limited to expedited delivery, increased competition, supporting small business, etc.

(2) That the overall benefit to the procurement significantly outweighs the increased cost of administration, including ultimate property disposal;

COs MUST consider the costs to repair GP over its useful life based upon the age and condition of the GP to be potentially furnished, the potential cost to replace lost, damaged or destroyed GP, and the cost associated with the disposition of the GP INCLUDING items such as HAZARDOUS WASTES, EXPLOSIVES, DEMILITARIZATION, etc.

determination to provide gp10
DETERMINATION TO PROVIDE GP

(3) That providing the property does not substantially increase the Government’s risk; and

COs may obtain information from the cognizant PA of the potential contractor’s risk assessment rating as it applies to the management of GP

(4) That Government requirements cannot otherwise be met

For Example, Sole Source procurements, emergency procurements, contingency contracting, etc.

determination to provide gp11
DETERMINATION TO PROVIDE GP
  • Be Careful!!!

45.102 (c) The contractor’s inability or unwillingness to supply its own resources is not a sufficient reason for the furnishing or acquisition of property

Real World:

Contractors

often tell the

Government what

GFP they need.

determination to provide gp12
DETERMINATION TO PROVIDE GP

Yes, I know – it has always been EASY to FURNISH Government Property (GP).

We say, “It’s cheaper if we provide GFP!”

We need to consider ALL of the variables associated with furnishing GFP!

As we are trying to REDUCE, to maximum extent practicable, the furnishing of GP!

So, ya’ gotta think about it!!!

co determination to provide gp
CO DETERMINATION TO PROVIDE GP

Providing Government Furnished Property must be a conscious deliberate well thought out ACQUISITION PLANNING

Decision!

There are Natural Consequences.

inclusion of gfp listings in the solicitation
INCLUSION OF GFP LISTINGSin the Solicitation
  • OK, so the CO has decided to provide GFP
    • You must include a LISTING(s), of that PROPOSED GFP including the following Data:

(1) The name, part number and description, manufacturer, model number, and National Stock Number (if needed for additional item identification tracking and/or disposition);

(2) Quantity/unit of measure;

(3) Unit acquisition cost;

(4) Unique-Item Identifier or equivalent (if available and necessary for individual item tracking); and

(5) A statement as to whether the property is to be furnished in an “as-is” condition and instructions for physical inspection.

ahhhh but there is more co requests of offerors
Ahhhh – but there is MORE…CO REQUESTS OF OFFERORS
  • TWO ITEMS:
    • INFORMATION RELATED TO GP ALREADY IN THE OFFEROR’S POSSESSION
    • PROPERTY MANAGEMENT PLAN
co requests of offerors 45 201 c
CO REQUESTS OF OFFERORS45.201(c)
  • CO shall REQUIRE Contractors to Submit the following information with their offers—

(1) A list or description of all Government property that the offeror or its subcontractors propose to use on a rent-free basis. The list shall identify the accountable contract under which the property is held and the authorization for its use (from the contracting officer having cognizance of the property);

(2) The dates during which the property will be available for use (including the first, last, and all intervening months) and, for any property that will be used concurrently in performing two or more contracts, the amounts of the respective uses in sufficient detail to support prorating the rent;

(3) The amount of rent that would otherwise be charged in accordance with FAR 52.245-9, Use and Charges; and

offeror is required to submit their property management plan 45 201 c 4
OFFEROR IS REQUIRED TO SUBMIT THEIR PROPERTY MANAGEMENT PLAN45.201(c)(4)
  • CO is required to ask the Contractor for a Property Management Plan (PMP)
    • Note – The FAR Part 45 rewrite should have created a solicitation provision. We’re working on it now.
  • PMPs are to be Executive Level Documents where the contractor BRIEFLY describes its Property Management Processes
what may be in a pmp
WHAT MAY BE IN A PMP
  • Offeror may discuss:
    • Status of current Property Management System
    • Voluntary Consensus Standards (VCS) in place or proposed for use
    • Industry Leading Practices (ILP) in place or proposed for use
    • Other performance indicators, Metrics, Audit Results, etc.
what should the co do with the pmp
WHAT SHOULD THE CO DO WITH THE PMP?
  • Evaluate it for adequacy in terms of managing GP while in the Contractor’s possession
    • Past Performance Indicator
  • REAL WORLD APPLICATION
    • Use the Services of the Government Property Administrator cognizant of that contractor/offeror (Generally DCMA – but may be others)
eliminating competitive advantage
Eliminating Competitive Advantage
  • For Fixed Price Contracts
    • Use a Rental Equivalent Evaluation Factor (REEF)
      • Computed through the Use and Charges Clause
      • Reduce Offer by REEF when comparing Contracting WITH GP versus WITHOUT
  • For Cost Reimbursement type
    • Sorta’ a moot point
inclusion of the correct clauses 45 107
INCLUSION of the CORRECT CLAUSES45.107
  • Where there is GP under a contract -- CO MUSTUSE BOTH:
    • FAR 52.245-1 and FAR 52.245-9
      • Government Property Clause and
      • Use and Charges Clause
    • BUT/EXCEPT!!!
      • No GP clauses required for property repair contracts/purchase orders with GP below the Simplified Acquisition Threshold
clausal variations
CLAUSAL VARIATIONS
  • FULL RISK OF LOSS
    • MUST USE THE ALT I to FAR 52.245-1
    • For COMPETITIVE FP Contracts
      • When No Cost or Pricing Data is Required
  • WITH NON-PROFIT ENTITIES
    • MUST USE THE ALT II to FAR 52.245-1
      • Provides Vesting of TITLE to Contractor Acquired Property in the Non-Profit
funding for actions
FUNDING FOR ACTIONS
  • When the Equitable Adjustment portion of the GP Clause is activated
    • When GFP is:
      • Not suitable for use
      • Not delivered in a Timely basis
      • Decreased
    • When GFP requires repair beyond NORMAL Maintenance
funding for actions25
FUNDING FOR ACTIONS
  • Funding for replacing LOST, DAMAGED, DESTROYED, or STOLEN Government Property.
    • Yes, contractors DO damage GP!

And, in most

Cases, the

Government

Acts as a

Self Insurer/

INSURANCE

COSTS

funding for actions26
FUNDING FOR ACTIONS
  • FUNDING DISPOSAL ACTIONS
    • Including:
      • DEMILITARIZATION
      • DISPOSAL OF HAZARDOUS WASTES
    • NOTE: Contractors are ALREADY REQUIRED by the contract to “prepare for shipment and deliver FOB Origin.”
      • Anything AFTER THIS is the Government’s Responsibility.
  • FUNDING FOR STORAGE
    • “What are you going to do with that GP when the Contract is complete?”
post award co issues
POST AWARD CO ISSUES

WHAT THE ACO

(Sometimes/Often in coordination with the PCO)

needs to know

and do regarding GP!

post award co responsibilities
POST AWARD CO RESPONSIBILITIES
  • FAR PART 42 Discusses the Contract Administration Delegation:
    • 42.302(a)(26) through (30)

PCO

ACO

42 302 a 26 through 30
42.302(a)(26) through (30)

(26) Perform property administration (see Part 45).

(27) [Reserved]

(28) Perform necessary screening, redistribution, and disposal of contractor inventory.

(29) Issue contract modifications requiring the contractor to provide packing, crating, and handling services on excess Government property. When the ACO determines it to be in the Government’s interests, the services may be secured from a contractor other than the contractor in possession of the property.

42 302 a 26 through 3030
42.302(a)(26) through (30)

(30) When contractors request Government property—

(i) Evaluate the contractor’s requests for Government property and for changes to existing Government property and provide appropriate recommendations to the contracting officer;

(ii) Ensure required screening of Government property before acquisition by the contractor;

(iii) Approve use of Government property on a noninterference basis in accordance with the clause at 52.245-9, Use and Charges;

(iv) Ensure payment by the contractor of any rental due; and

(v) Ensure reporting of items no longer needed for Government production.

embedded within far 42
EMBEDDED WITHIN FAR 42…

ALL of the ACTIONS within FAR PART 45 that require the CO’s AUTHORITY!

And there are a bunch!

post award co responsibilities32
POST AWARD CO RESPONSIBILITIES
  • A QUICK LISTING of RESPONSIBILITIES
    • Equitable Adjustments
    • PMS Actions
    • Liability Actions
    • Maintenance Funding Actions
    • Modification of Contracts for Changing GP
    • Modification of Contracts for Authorizing USE
    • Collection of Rent
aco responsibilities
ACO Responsibilities
  • Equitable Adjustment
    • IAW 52.245-1(d) “Government Furnished Property” and
    • 52.245-1(i) “Equitable Adjustment”

FOR:

      • GFP Not Suitable for Use,
      • Late Delivery,
      • Decrease, or
      • Repair (Beyond normal Maintenance)
aco responsibilities34
ACO Responsibilities
  • PMS Actions
    • Correction of the contractor’s PMS
      • FAR 45.105
      • Request the contractor to correct any deficiencies in their PMS.
      • Failure may result in revocation of the Government’s Assumption of Risk or other Remedies
aco responsibilities35
ACO Responsibilities
  • Liability Actions
    • ONE RESPONSIBILITY & TWO AUTHORITIES
      • FUND for the REPAIR/REPLACEMENT of GP that was LDD&T (PCO/ACO both involved)
      • REVOKE the Government’s Assumption of Risk (FAR 45.104 and 52.245-1(h)(iii)
      • “HOLD” the contractor Liable for the Loss, Damage, Destruction or Theft of GP
        • In accordance with the Terms and Conditions of the contract.
        • Full versus Limited Risk of Loss
aco responsibilities36
ACO Responsibilities
  • Maintenance Funding Actions
    • 52.245-1(f)(1)(ix)
    • Contractor is responsible for “Normal” maintenance costs.
    • Government is responsible for “Capital” type Rehabilitation
      • PCO/ACO both involved
aco responsibilities37
ACO Responsibilities
  • Modification of Contract for Changing GP
    • Transfer of Accountability FAR 45.106
    • MODS to BOTH Losing and Gaining Contracts
      • PCO/ACO Both Involved
  • Modification of Contract when EXISTING GP in Contractor’s possession needs to be Modified
aco responsibilities38
ACO Responsibilities
  • Modification of Contracts for Authorizing USE (Post Award Utilization Requests)
    • Contractor authorized to USE GP on the instant contract
    • Any other use requires AUTHORIZATION to BOTH
      • ACCOUNTABLE Contract
      • Requesting USING Contract
aco responsibilities39
ACO Responsibilities
  • Collection of Rent
    • FAR 52.245-9
    • Must be Authorized by the CO to USE
    • Rental Requests Submitted to the ACO
    • ACO Verifies Rental Computation
    • ACO Collects Rent payable to the “Treasurer of the United States”

(Not the ACO) (sorry… small attempt at humor)

aco responsibilities40
ACO Responsibilities
  • FUND FOR DISPOSAL OF GP
    • Contractor, for GP, is required to:
      • PREPARE FOR SHIPMENT
      • DELIVER FOB Point
    • Government MAY have to Pay for the Disposal of GP That May:
      • Be Hazardous
      • Require Demilitarization
      • Exceed Contractually Authorized PROCESSING TIME (120 Days) (Yes, the Government may have to PAY!)
some do s and don ts for contracting professionals
Some DO’S and DON’TS for Contracting Professionals
  • DO have the Program Manager or Requiring Activity Provide JUSTIFICATION to Support the Providing of GP
    • FAR 45.102 (b)(1) & (2) & (3) and (4)
some do s and don ts for contracting officers
Some DO’S and DON’TS for Contracting Officers
  • DON’T agree to furnish Government Property unless you meet the policy requirements of FAR 45.102
    • And DOCUMENT the ACTION
    • This is a “MONETARY” Decision ($$$)
  • DO Ensure the PROPER LISTING of GFP
    • Furnished WITH Government Warranties
    • Furnished “AS IS”
    • Furnished under FAR 52.245-2
      • As is, where is, no warranties

THREE

POTENTIAL

LISTS of GFP

some do s and don ts for contracting officers43
Some DO’S and DON’TS for Contracting Officers
  • DO Ensure That The GP Clause Is In The Contract (When Applicable)
  • DON’T Direct The Contractor To Acquire Property For The Government That May Normally Be The Contractor’s Responsibility (FAR Part 31 and CAS Issue)
  • DO Mod The Contract When Adding Or Decreasing GP
some do s and don ts for contracting officers44
Some DO’S and DON’TS for Contracting Officers
  • DON’T Ask The Contractor To “Ship In Place” Without Establishing Contractual Accountability (Due To Liability Issues)
  • When On Base Or Installation DO Specify DRMO Use Versus GP Clause Disposition Process.
some do s and don ts for contracting officers45
Some DO’S and DON’TS for Contracting Officers
  • DON’T “GIVE” GP To The Contractor at Contract Completion Because Your Contract No Longer Needs It…
    • Violation Of Law (Federal Property And Administrative Services Act Of 1949)
  • DON’T Abandon GP To The Contractor When The Contractor Is Performing On A Government Base Or Installation.
some do s and don ts for contracting officers46
Some DO’S and DON’TS for Contracting Officers
  • DON’T Direct The Contractor To Retain GP After Contract Completion Because They “MAY” Be Awarded Another Government Contract.
  • Do Contact the Appropriate Government Property Administrator If You Have Technical Questions About GP in the contractor’s possession!
so what have we covered
So… What have we covered?
  • OVERVIEW OF GOVERNMENT PROPERTY
  • FAR Part 45 and Part 52
    • Policy requirements of FAR Part 45
    • The Government Property Clauses
  • Contracting Officer Requirements
    • Pre-award Responsibilities
    • Post-award Responsibilities
  • Some DO’S and DON’TS from a Contracting Perspective
thank you
Thank you!

Dr. Douglas N. Goetz, CPPM, CF

OLD DAU PROFESSOR

Recently Retired – now Rehired.

President of the newly incorporated GP Associates.

Chief cook and bottle washer at Home, responsible for all “honeydue” requirements – though my wife has told me to stay out of HER house!

233 N. Maple Ave

Fairborn, OH 45324

GPDOCTOR@ATT.NET

1- 888-576-0200