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NPR 4500.1
Effective Date: February 24, 2014
Expiration Date: June 24, 2024
Printable Format (PDF)

Subject: Administration of Property in the Custody of Contractors

Responsible Office: Office of Strategic Infrastructure

| TOC | Preface | Chapter1 | Chapter2 | Chapter3 | Chapter4 | Chapter5 | Chapter6 | Chapter7 | Chapter8 | AppendixA | AppendixB | ALL |

Chapter 7. Special Situations

7.1 Progress Payments Contracts

7.1.1 Title Under Progress Payment Contracts While the Government holds absolute title to limited classifications of property under the terms of the Progress Payments clause, at FAR 52.232-16, that title is limited to the value of property acquired allocable to or reasonably charged to the contract. Title is also limited to the duration of the contract. At the conclusion of a fixed-price progress payments contract, any deliverable remains titled to the Government and title to any residual property reverts to the contractor.

7.1.2 Property Administration Under Progress Payment Contracts Property provided exclusively under the Progress Payments clause is not subject to the terms and conditions of FAR Part 45, NFS Part 18-45, and the property clauses. Such property is to be managed in accordance with the Progress Payments clause. Property control shall be in accordance with accounting systems and controls rather than property systems and controls. As such, the property is not subject to PMSAs.

7.1.3 Property Reporting Under Progress Payment Contracts As PMSAs are not applicable to Progress Payments Contracts, PAs and IPOs cannot verify the adequacy of the contractor's systems for recording and managing property under those contracts. PAs and IPOs should only verify reports from those contractors whose property systems are audited due to the issuance of another contract, subject to the Government Property clause, FAR 52.245-1. The IPO should recommend that the Center Deputy Chief Financial Officer request verification of the contractor's cost accounting practices from DCAA or another appropriate Government agency.

7.1.4 Administration When Government Property is Furnished When GP is furnished to a contractor operating under the Progress Payments clause, the IPO shall advise the CO to include the FAR Government Property clause, the Use and Charges clause, and other applicable NFS clauses. GFP stewardship and disposition requirements must be established and monitored when property is provided. GFP is not affected by the progress payments clause, and both property administration and plant clearance shall be accomplished according to NFS 1845.5 and this NPR. The PA shall limit their reviews to GFP.

7.2 Small Business Innovative Research Property

7.2.1 Title Under Small Business Innovative Research Contracts Title to property under Small Business Innovative Research (SBIR) contracts is governed by FAR 52.245-1, Government Property clause. Most SBIR contracts are awarded as fixed-price contracts. As such, the property acquired by the contractor is titled to the contractor, subject to any use of the Progress Payments clause, at FAR 52.232-16 (see section 7.1). Contractors may retain GP under Phase III SBIR contracts when:

a. Property remaining in the custody of a contractor, after delivery and acceptance by the Government, is added to appropriate property systems and is furnished as GP under the award, in accordance with the requirements of FAR 52.245-1; or,

b. Property is accepted by NASA, added to NASA property systems, and loaned to the contractor using NASA property loan procedures; or

c. The contractor requests transfer of title and the CO, working with the Center PDO, provides written determination and findings that:

(1) NASA has no further requirement for the property.

(2) It is more cost effective to leave the property in place than to screen and disposition the property through NASA or delegated disposition activities.

(3) Findings and determinations contain data on disposition costs, e.g., storage, transportation, packing, crating, warehousing, performing any required destruction; and those combined costs exceed the acquisition value of the item.

7.3 Storage of Property Under Contracts

7.3.1 Policy Property may only be stored under contracts for the life of the current contract and only when there is a firm requirement for the present or future use of property under that contract.

7.3.2 Documentation When contractors request authority to store property and a PA has determined that it is no longer required for performance of the instant contract, they should request a determination from the CO that:

a. The replacement value of the item(s) to be stored exceeds the continued costs associated with storage of property;

b. The storage of property is required to support a safety requirement, such as retention of test articles; or,

c. Storage of unique items or items out of production is required to maintain a mission capability. 7.3.3 Storage Beyond Physical Contract Completion As the FAR Government Property clause requires that property no longer required for performance of a contract be reported for disposition and property can no longer be required by a contractor for performance of a complete contract, any requirement for storage beyond the completion date, excepting normal disposition requirements, is likely to exceed the scope of the providing contract. PAs and IPOs should advise the CO of any instance where a contractor reports that they have been required to store property in excess of contract requirements.

7.4 Property Administration for Major Programs

7.4.1 Under major programs, success of property management activities and possibly success of the program itself may require establishing property management organizations or relationships that differ from the typical. When a major contract is anticipated, Center IPOs may determine that a central property management activity responsible for coordination of all property management activities at prime and alternate worksites may be appropriate. At the IPOs discretion he or she may:

a. Assume the role of prime PA or assign a subordinate the responsibility of prime PA for the overall effort.

b. Coordinate with the CO and program officials to establish a contract requirement that a management individual or position be identified within the prime contract to be directly responsible for property management across all locations of the contract, including all subcontractor locations.

(1) Property management should be the principal or sole responsibility of this individual.

(2) This requirement should be clearly established within the Statement of Work or in a special provision.

c. Draft support delegations to DCMA in lieu of standard delegations to specifically define the levels and nature of the support required at prime and alternate locations.

(1) Support delegations shall be forwarded to the Manager, Contract Property Programs, Logistics Division, Office of Strategic Infrastructure, for concurrence prior to issuance.

(2) The Manager, Contract Property Programs shall coordinate, as necessary, the implementation of support delegations with counterparts at cognizant activities.

7.5 Foreign Contracts

7.5.1 Treaties and International Agreements FAR 1.405 addresses the special situations that may arise when contracting in foreign countries. It authorizes deviations associated with treaties and executive agreements, unless those agreements are overturned by law after they are issued. IPOs and PAs shall be aware of treaties and executive agreements that could or will affect the management of property under contract.

7.5.2 Deviations Associated With Foreign Contracts When a treaty or international agreement requires deviation from FAR or NFS, that deviation shall be processed in accordance with NFS 1801.471.

a. IPOs must be aware of and shall request copies of all requested and approved FAR and NFS deviations related to property management from the Center procurement office along with the treaties or executive agreements supporting the deviation. Disposition of property involves compliance with regulations outside of FAR and NFS. FMR require that agencies establish guidance for the disposition of property in foreign countries. NASA requirements exist in the NASA Personal Property Disposal Procedural Requirements, NPR 4300.1 and in the NASA Personal Property Disposal Policy, NPD 4300.1. IPOs shall review deviations from FAR for disposition and either recommend changes to ensure compliance with the documents listed above or request appropriate deviation from those documents.

7.5.3 Administration of Property in Foreign Countries IPOs shall recommend delegation of property administration to the DCMA international office responsible for the country in which the contract will be performed. Should the CO decide to retain property administration, they are required to accomplish it in accordance with NFS 1845.503-71 and section 1.4.2 of this NPR.

7.6 Contractors Performing Within NASA Facilities

7.6.1 Contractors performing within NASA Centers and Installations (onsite contractors) are required, by the Installation Accountable Government Property clause at NFS 1852.245-71, to manage and disposition property according to NASA procedural requirements.

7.6.2 Use of NASA Recordkeeping Processes In accordance with NFS 1845.106, movement of property between the Center and contractor locations shall be approved by the CO prior to movement and recorded using appropriate transactions in NASA recordkeeping systems. Such property becomes GFP and is subsequently recorded in contractor systems through disposition or until return to the Government. Records of equipment being used by onsite contractors are to be maintained in NASA recordkeeping systems. Records of onsite supplies shall be maintained within NASA recordkeeping systems to the extent those systems are available.

7.6.3 Use of Contractor Records Systems When the CO or a responsible program foresees possible delays or problems that may be associated with using the NASA recordkeeping systems, particularly in conjunction with using contractor systems to procure supplies and materials:

a. The contractor may maintain the record of material in accordance with NFS 1852.245-71 paragraph (a), Installation Accountable Government Property Clause and the Government Property clause at FAR 52.245-1.

b. To assure continued visibility and availability of all supplies located on NASA installations, the IPO should advise the CO and the program that the contract should contain language requiring transmission of detailed supply data, on a monthly basis, in a format prescribed by the NASA Supply Program Manager, Headquarters Logistics Management Division, to NASA's supply systems.

7.7 Other Instruments

7.7.1 Space Act Agreements Space Act Agreements (SAAs) are issued by NASA's General Counsel and signed by the Center Director under the "other transactions" authority granted in the Space Act, specifically under pt. 20113(e). SAAs are not procurement actions. They are special agreements between NASA and other entities that do not necessarily result in a deliverable product or service for the Agency, nor are SAAs issued for the purpose of conducting research associated with Agency activities. In this manner they differ from contracts, grants, and cooperative agreements. The Space Act requires NASA to disposition property in accordance with the Federal Property and Administrative Service Act (40 U.S.C.). As such, SAAs do not confer authority to transfer title to personal property to SAA partners. They are not used to provide material to Reimbursable SAA partners since, by its very nature, material would be consumed and expended during the execution of the agreement. Property is not provided to partners in SAAs through a contract, grant, or cooperative agreement. Rather, property is loaned under a Center loan document and according to the requirements of NPR 4200.1. IPOs shall support the Center SEMO in the execution of these loan documents by performing PMSAs, as required, at offsite locations to ensure compliance with the terms and conditions of the loan agreement and to provide oversight of the recipient's management controls.

7.7.2 Cooperative Research and Development Agreements Much the same as donations to nonprofit research institutions and educational institutions, Cooperative Research and Development Agreements (CRADAs) are authorized under the Federal Technology Innovation Act (15 U.S.C. 3710(a)). CRADAs provide authority for NASA to provide property to commercial entities in support of research of benefit to the Agency or the Nation as a whole. Current guidelines do not permit transfer of title to property to CRADA recipients. CRADAs are processed as loans, in accordance with NPR 4200.1 procedures. IPOs shall support the center SEMO in the management of property loaned under CRADAs by:

a. Establishing an appropriate schedule for PMSAs for offsite CRADA recipients and performing them in accordance with the risk matrix of this procedural requirement.

b. Assisting in the disposition of property located at CRADA sites. c. Working with the SEMO to determine whether the program and NASA have further need for loaned property which is no longer required by the CRADA recipient.

(1) Work with the Center PDO to determine whether transfer of title or abandonment of the items at the time of disposition is an appropriate course of action. When abandonment is selected, provide a recommendation to the PDO for their review and approval or disapproval; or,

(2) Work with the Center PDO when abandonment is not approved to ensure reporting of the items to the DSPL system for internal, Federal, and donation screening or, when not donated, for sale.

| TOC | Preface | Chapter1 | Chapter2 | Chapter3 | Chapter4 | Chapter5 | Chapter6 | Chapter7 | Chapter8 | AppendixA | AppendixB | ALL |
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