[Code of Federal Regulations]
[Title 48, Volume 3]
[Revised as of October 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 48CFR245.604]

[Page 339]
 
            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM
 
                    CHAPTER 2--DEPARTMENT OF DEFENSE
 
PART 245--GOVERNMENT PROPERTY--Table of Contents
 
  Subpart 245.6--Reporting, Redistribution, and Disposal of Contractor 
                                Inventory
 
Sec. 245.604  Restrictions on purchase or retention of contractor inventory.

    (1) Contractors authorized to sell inventory may not knowingly sell 
the inventory to any person or that person's agent, employee, or 
household member if that person--
    (i) Is a civilian employee of the DoD or the U.S. Coast Guard; or
    (ii) Is a member of the armed forces of the United States, including 
the Coast Guard; and
    (iii) Has any functional or supervisory responsibilities for or 
within the Defense Reutilization and Marketing Program, or for the 
disposal of contractor inventory.
    (2)(i) A contractor's authority to approve a subcontractor's sale, 
purchase, or retention at less than cost, and the subcontractor's 
authority to sell, purchase, or retain at less than cost if approved by 
a higher-tier contractor, does not include authority to approve--
    (A) A sale by a subcontractor to the next-higher tier contractor or 
to an affiliate of such contractor or of the subcontractor; or
    (B) A sale, purchase, or retention at less than cost, by a 
subcontractor affiliated with the next higher-tier contractor.
    (ii) The written approval of the plant clearance officer is required 
for each excluded sale, purchase, or retention at less than cost.
    (3) Demilitarization. The contractor shall demilitarize contractor 
inventory possessing offensive or defense characteristics, and not 
required within the DoD, in accordance with Defense Demilitarization 
Manual, DoD 4160.21-M-1. In unusual cases the plant clearance officer 
may authorize the purchaser to perform the demilitarization; however, 
the purchaser shall not be granted such authorization if the inventory 
is dangerous.
    (4) Classified inventory. Classified contractor inventory shall be 
disposed of in accordance with applicable security regulations or as 
directed by the contracting officer.
    (5) Dangerous inventory. Contractor inventory dangerous to public 
health or safety shall not be donated or otherwise disposed of unless 
rendered innocuous or until adequate safeguards have been provided.