For small businesses involved in development and manufacturing efforts under government contracts, or those who are pursing research and development involving large scale systems, the government property topic often arises.
In general, government contractors are required to provide all that is necessary to fulfill the scope of work on a government contract. However, under time and materials and cost plus contracts where the acquiring agency has made substantial investment in manufacturing aids, special test equipment or apparatus, title to such items will fall to the government.
Title falls to the contractor on firm, fixed price contracts where the cost is base lined at contract award and is assumed to include all that is required to produce the end item when it was bid.
Government property must be stored separately from contractor property when not in use, identified in the facility inventory system as government owned and have government property tags.
Rent – Free Use of government property accountable under one contract must be requested on a non-interference basis from the owning contracting officer before use on another contact and the using contract must reference the approval.
The government may elect to charge rent for use of government property under commercial or foreign contracts. The process for calculating and paying rent is specified in FAR 52.245-9.
The principal FAR Clauses for government Property are 52.245-1 and 52.245-2. If you are undertaking a contract involving government property please read these FAR Clauses. Within these clauses are requirements for inventory, disposal and disposition of government property.
Government property may be furnished by the acquiring agency with a contract award and may be placed in the care of the contractor. In those cases accountability for the items, together with associated maintenance may be assigned to the contract and reassignment of the property must occur before the contract can be closed out at completion.