Property Management Regulations Regarding Government Furnished Property And Subcontractor Acquired Property

Federal Property Management Regulations 41 CFR 101

Department of Energy Property Management Regulations 41 CFR 109

Albuquerque Property Management Instructions (as of 4/28/98):

109-1.5203 Management of subcontractor-held personal property.

(f) DOE-owned personal property provided to subcontractors, or Cooperative Research and Development Agreement (CRADA) participants, shall be provided as Government-furnished property under the terms and conditions of the subcontract or CRADA (i.e., not loaned). Such terms and conditions shall require subcontractors and CRADA participants who are provided with DOE-owned property under a subcontract or CRADA to:

(1) Assume the risk of, and be responsible for, any loss or destruction of, or damage to, the property while in the subcontractor's/CRADA participant's possession or control, except to the extent the subcontract, with the advance approval of the AL Area Office, relieves the subcontractor from such liability. In the absence of such approval, the subcontract shall contain appropriate provisions requiring the return of the property in as good conditions as when received, except for reasonable wear and tear or for its use in accordance with the subcontract/CRADA;

(2) Promptly investigate and report all cases of loss, damage or destruction of the property in its possession or control as soon as the facts become known;

(3) Ensure the property is used only as authorized by the contract/CRADA; and

(4) Manage and control the property in accordance with the requirements of the FPMR, DOE-PMR, and this ALPMI.

Los Alamos National Property Management Manual
Chapter 9 - Government Furnished Property

1.0 Policies

The term "government furnished property" means government-owned property provided to or acquired by subcontractors in the performance of LANL subcontracts. Examples are property provided to:

• vendors on LANL purchase orders and subcontracts
• affiliates paid by the Laboratory (e.g., consultants)
• organizations with agreements from LANL's Industrial Business Development Program Office (IBD)

Note: The word "subcontract" also stands for IBD agreements in the remainder of this chapter. A "subcontract" is defined as an agreement (other than one involving an employer-employee relationship) entered into by a federal government prime contractor or subcontractor calling for supplies or services required for performance of the contract or subcontract. Government furnished property (GFP) is U.S. government property and may be used for official LANL work only, as specified in the applicable subcontract. Subcontractor acquired property (SAP) is considered GFP once the subcontractor is reimbursed for it by the Laboratory.

Reference:
DOE/UC Contract W-7405-ENG-36 1.1.o

All property numbered equipment items, including sensitive, at a subcontractor's location are tagged and recorded in the property database under the stewardship of the LANL organization that is a party to the subcontract. Property Management (PM) may inspect subcontractors' property records or the premises on which GFP is located at any reasonable time until the completion or termination of the subcontracts.

Subcontractors are financially liable for shortage, loss, damage, or destruction of GFP as soon as it comes into their custody. They must have functioning property systems to control, protect, preserve and maintain GFP. The systems are subject to review by LANL until the completion or termination of the subcontracts.

Subcontractors in possession of government property worth a total acquisition value of $500,000 or more must document their systems in formal property management plans. The plans are approved by PM. The PM may give expedited consideration to subcontractors' property systems approved by other U.S. Government agencies. Subcontractors with amounts of GFP less than $500,000 annually provide PM with information about their property systems and how they control and use GFP.

Subcontractors are responsible for tagging, tracking, inventorying, maintaining, properly using, and disposing of GFP according to LANL policies and federal regulations.

Cross-references:
41 CFR 109-60
2.0 Industrial Business Development

The Industrial Business Development Program Office connects LANL's scientific and technical talent with industry, universities and government. The program supports ensuring national security and strengthening the U. S. economic and energy technology base. Agreements for such efforts are arranged by IBD.

The government considers property furnished under IBD agreements to be the same as property furnished under LANL purchase orders or procurement subcontracts. The property requirements for GFP on LANL subcontracts applies to IBD agreements. Some of the types of IBD agreements that permit GFP are to support the following endeavors:

• technical transfer
• cooperative research and development
• technical assistance

limited-term use of equipment by regional small businesses

3.0 Responsibilities

3.1 Subcontractor

Subcontractors must ensure that GFP is clearly marked as government property. Any property not already marked is to be labeled before use. All property numbered equipment items, including sensitive, must be tagged as described below.

Subcontractors must take adequate measures to safeguard government property against loss, damage, theft, destruction, or unofficial use, as specified in subcontracts and approved property management systems. This includes responsibility for proper maintenance, requiring subcontractors to:

• ensure preventive maintenance
• immediately report to contract administrators and property administrators (PAs) needed major repairs performed and its associated costs
• maintain records showing all maintenance and repair work

3.2 Property Management

Property and inventory records will be maintained that are sufficient to:

• track GFP
• achieve maximum utilization of property
• promptly identify and report excess property
• effectively protect property
• prepare property reports
• account for or return expense items upon completion or termination of the subcontract
  Subcontractors' records contain information similar to that maintained by LANL for on-site equipment and will be made available to LANL upon request.

Subcontractors must complete property system questionnaires and physical inventories as requested by the Property Operations Team of PM. If requested to do so by their respective organizations, PAs may visit subcontractor sites to assist with inventories.

As soon as a GFP item is no longer needed for the subcontracted work, the subcontractor seeks instructions for its disposition. The subcontractor then either returns the property as directed or disposes of it according to instructions obtained from PM by Procurement or IBD.

Procurement and IBD are responsible for including the appropriate property clauses in the LANL 's written subcontracts and for enforcing government property policies and procedures applicable to those subcontracts.

Procurement, through contract administrators, and IBD, through agreement administrators, must notify PM when it awards a subcontract that authorizes furnishing GFP or acquiring SAP. Procurement and IBD will provide PM the documentation pertaining to GFP/SAP. These organizations also are responsible for ensuring that all GFP is recovered or accounted for at the completion or termination of subcontracts.

PM reviews and approves subcontractors' property management systems, provides LANL bar code tags to PAs for SAP, monitors GFP use and control, and determines final disposition of property. The Property Operations Team maintains GFP records and tracks GFP until its proper disposition is achieved.

3.3 Requester

The requester is the LANL individual who represents his or her organization to accomplish the subcontracted work. LANL requesters cooperate with Procurement and PM in discharging their responsibilities; they must inform the Property Operations Team of PM of the appropriate use and requested disposition of GFP.

4.0 Procedures

4.1 Acquisition and Receipt

The subcontractor acquires SAP through their normal purchasing procedures. After receiving the items, subcontractors send invoices listing the purchased items to LANL for reimbursement.
The invoices should list each item purchased, including the item's:

• manufacturer's name
• model number
• serial number
• acquisition cost

4.3 Provision

Property Accounting initiates the procedure for off-site property deliveries. Government owned property is provided to subcontractors using Shipping Requests prepared and signed by PAs. SMs must list the appropriate contract number.

If equipment had to be purchased by LANL to fulfill its responsibility under the contract, PAs list the pertinent purchase order number. SRs must be signed by the contract administrator and the requester. The PA is responsible for updating the property's location in the property database. For property numbered items, Property Accounting updates the status subaccount, transaction document, and date fields in the property database.

4.4 Segregation of Property

Property also may be paid for directly by LANL but delivered directly to the subcontractor. GFP shall be segregated from subcontractor owned property unless:

• the subcontractor is an educational institution with a research and development contract
• the subcontract specifically allows commingling the property or
• segregation would materially hinder the progress of the work because of the quantities involved, lack of space, costs caused by additional handling, etc.

Except for educational institutions, commingling must be approved in advance by the requester. The subcontractor writes a memo explaining why commingling is requested and sends it to the requester. If the requester approves, he or she signs it and returns the original to the subcontractor. Copies are provided to the PA, PM, and Procurement.

4.5 Inventories

All subcontractors must conduct annual inventories of their property numbered items of GFP and any other items so designated by the Laboratory. The Disposition Team sends a Property Report Form (contact C&D at disposition@lanl.gov for a copy) that must be completed and returned within 30 days.

The Property Report lists all property numbered items in the possession of the subcontractor, including the following information:

• property number
• property description (manufacturer's name and item's model number)
  • serial number
  • acquisition date
  • location
  • condition
  • unit cost
  • quantity
  • total cost
  • indicates if any items are idle, under-used or unneeded
  • includes the date the physical inventory was completed

PM compares the completed report to records in the property database. It notifies the subcontractor by memo of any discrepancies and works with the subcontractor to reconcile them according to LANL policies and the terms of the contract.

In lieu of this property report procedure, GFP may be physically inventoried by the custodial organization's PA.

4.6 Closing a Subcontract

When the tasks in a subcontract are nearing completion or the subcontract is terminated, Procurement begins the closure process. It notifies in writing the subcontractor, the Property Operations Team, and the requester.

Unless stipulated otherwise in the subcontract, the subcontractor must provide on a Property Report provided by PM a list of GFP still in its possession, including expense items. It also must explain in a memo how expense items provided but not on the list or previously returned were used. PM compares the list and memo to its records and resolves any discrepancies jointly with the subcontractor, Procurement, and the requester.

The requester suggests through Procurement the final disposition of the property. It may be retained by the subcontractor as partial payment, returned to the organization, transferred to another subcontract, excessed, or retired according to LANL policy.

PM decides the final disposition. It issues instructions to Procurement, which sends them to the subcontractor and oversees their accomplishment in cooperation with the organizational PA. The Property Operations Team of PM does not close its file until all government property is accounted for.

Los Alamos National Property Management Manual
Chapter 1 - General Property Policies (excerpts)

6.3 Property Marking

All government-owned equipment and materials will be marked as U. S. Government property unless it is impractical to mark them or marking is not required by regulation.

6.4 Property Numbers and Record keeping

Property items categorized as equipment or sensitive equipment will be identified by means of barcode labels displaying a unique property number ("tags"). These categories are defined as follows:

Sensitive items (see Sensitive Item List below)
·are easily converted to personal use or sold for cash
·are more susceptible to theft than other property
·have no minimum acquisition cost threshold
·have the potential for maintaining their integrity (i.e., not expendable due to use)

6.5 Sensitive Item List (no minimum dollar levels apply to any item on the list)

Cameras - digital, still, TV, movie, and video (Except disposable, Polaroid, close-up, oscilloscope, x-ray, surveillance, photo macro-graphic, and photo micrographic)
Firearms
Personal Computers - includes work stations and desktop, server, laptop, notebook, and hand-held PCs
Printers
Radios, two-way
Recorders video, tape, video cassette (VCR), dictation machines, digital, compact audio disc (CD), digital video disc (DVD), and digital
Scanners, computer
Telephones cellular and mobile only

6.6 Equipment

Equipment items

• do not meet the definition for sensitive items
• have initial acquisition or fabrication costs of $5000 or more
• have the potential for maintaining their integrity(i.e., are not expendable due to use)

Los Alamos National Property Management Manual
Chapter 2 - Acquisition (excerpts)

4.1 Policy

Property will be labeled "U.S. Government Property - Los Alamos," if possible.
Labels must be placed on surfaces that are readily visible to a user and not likely to be damaged or obscured.

5.1 Off-Site Policy

Property-numbered LANL items received at off-site locations must be identified with a LANL barcode label.

Los Alamos National Property Management Manual
Chapter 11 - High Risk Property (excerpts from)