Overview
This section outlines the mandatory procedures and conditions for moving Government property between contracts, ensuring that such transfers are justified by operational needs and officially documented.
Key Rules
- Firm Requirement: Property can only be transferred if there is a demonstrated, specific need for that property under the gaining contract.
- Formal Documentation: Every transfer must be legally formalized through contract modifications to both the losing and gaining contracts.
- Change in Status: Once a transfer is complete, the property is classified as Government-furnished property (GFP) under the gaining contract, regardless of its previous status.
- Warranty Limitation: If a contractor transfers Contractor-Acquired Property (CAP) to another of their own contracts, the Government does not provide the standard warranties for "suitability of use" or "timely delivery."
Practical Implications
- Administrative Burden: Contracting Officers and Property Administrators must ensure bilateral or unilateral modifications are executed for both affected contracts to maintain an accurate chain of custody and liability.
- Risk Allocation: Contractors cannot hold the Government liable for the condition or late delivery of property that they themselves previously acquired or fabricated, preventing the contractor from shifting performance risks back to the Government during the transfer process.