What is Government property?
Government property is defined in FAR 45 and means all property owned or leased by the Government. Government property includes both Government-furnished property (GFP) and contractor-acquired property (CAP). Government property includes material, equipment, special tooling, special test equipment, and real property. Government property does not include intellectual property and software.
Government Furnished Property (GFP)
GFP is property in the possession of or acquired by the Government and subsequently furnished to the Contractor for performance of a contract. It consists of both equipment and material (GFE & GFM) and includes items like spares and property furnished for repair, maintenance, overhaul, or modification. It can be items taken or requisitioned from Government inventory or purchased by the Government specifically to be provided on a contract.
GFP also includes CAP if the CAP is a deliverable under a cost contract that has been accepted by the Government for continued use under that contract or a future contract.
Contractor Acquired Property (CAP)
CAP is property purchased or fabricated by a contractor for us on a contract to which the Government has title, but has not performed receipt and acceptance. CAP is generated on Cost Type and Time and Material contracts where the Government has title to property that is fabricated or purchased for use on the contract.
CAP becomes Government property on a Cost Type/T&M contract when it hits your receiving dock, not when it is sold off or delivered.
Do you need an approved system?
If FAR 52.245-1 is in your contracts, you need a system that meets the requirements defined in that clause, though no specific software, system, or approval is required.
“The Contractor shall have a system of internal controls to manage (control, use, preserve, protect, repair, and maintain) Government property in its possession. The system shall be adequate to satisfy the requirements of this clause. In doing so, the Contractor shall initiate and maintain the processes, systems, procedures, records, and methodologies necessary for effective and efficient control of Government property. The Contractor shall disclose any significant changes to its property management system to the Property Administrator prior to implementation of the changes. The Contractor may employ customary commercial practices, voluntary consensus standards, or industry-leading practices and standards that provide effective and efficient Government property management that are necessary and appropriate for the performance of this contract (except where inconsistent with law or regulation).”
Note that DCMA may review your system and provide a recommendation to the CO to issue a letter of approval. Having the formal approval alleviates the need for duplicate reviews of your system by multiple customers – the letter is your ticket to avoid a system review or audit with every contract.
What are the basic elements of an approved system?
As with any system, it’s not about the software or hardware, but the procedures, controls, reports, and evidence of testing, training, and updating the system. Yes, there are some specific requirements about receipt, marking, and inventory, though, as noted above, the use of commercial or industry practices is acceptable. Say what you do, do what you say, and have evidence to prove it.
Who is your Government Property Administrator?
Block 7 of a contract will show the administering agency who typically reviews your system. DCMA may review your system, however they only make recommendations. Systems are approved by the CO or their designee.
- FAR 52.245-1 Government Property
- FAR 45.107 Contract clauses
- DFARS 245.103-70 Furnishing Governement-furnished property to contractors
- DFARS 245.103-72 Government-furnished property attachments to solicitations and awards
- DFARS 245.103-73 Contracting Office Responsibitilities
- DFARS 245.107 Contract clauses
Do you need help evaluating your system or determining if you need a system? If so, let’s talk!
Contact us today to discuss your Government property management system needs.