Overview
This section outlines the general policies and responsibilities of government agencies regarding the management, utilization, and oversight of Government property held by contractors. It emphasizes the use of industry standards, the elimination of competitive advantages, and the efficient reuse of existing assets.
Key Rules
- Standards Adoption: Agencies must encourage contractors to use voluntary consensus standards and industry-leading practices for property management rather than unique government requirements.
- Competitive Fairness: Agencies are required to minimize any unfair competitive advantage a contractor might gain by having access to Government property.
- Asset Optimization: Contractors must prioritize using property already in their possession for contract performance and maximize the reutilization of inventory.
- Retention Justification: Contractors must justify keeping any Government property not actively needed for contract performance or declare it as excess.
- System Integration: Agencies generally should not require contractors to create property management systems that are separate from their established commercial procedures and systems.
- Rental Charges: Appropriate rent must be charged if Government property is authorized for use on a basis that is not rent-free.
Practical Implications
- Contractors can often utilize their existing commercial inventory and tracking systems to satisfy FAR requirements, reducing the administrative burden of maintaining "government-only" accounting processes.
- Contractors should expect regular "right-sizing" pressure from the government, as they are prohibited from hoarding idle equipment and must return or transfer assets that are no longer essential to the current scope of work.