Overview
This section establishes that the Government maintains ownership of all property it provides to a contractor and specifies that leased items furnished by the Government are subject to standard government property clauses.
Key Rules
- Retention of Title: The Government retains legal title to all Government-furnished property (GFP) throughout the life of the contract.
- Disposal Requirement: Title only transfers or ceases when the property is disposed of through specific methods authorized by law or regulation.
- Leased Property: Property leased by the Government and provided to a contractor is formally classified as GFP and is governed by FAR clause 52.245-1.
Practical Implications
- Contractors must maintain rigorous accounting and tracking systems for GFP, as they have no ownership rights and cannot dispose of the property without explicit Government authorization.
- Contractors are held to the same liability and reporting standards for leased equipment provided by the Government as they are for Government-owned assets.