Overview
This section defines a "high-value item" within the context of government property liability, focusing on expensive end items that require specific risk-allocation considerations.
Key Rules
- Dual-Criteria Requirement: To be classified as a high-value item, an end item must meet both a cost threshold and a formal administrative designation.
- Cost Threshold: The unit cost normally exceeds $100,000.
- Discretionary Designation: The item must be specifically designated as "high-value" by the Contracting Officer.
- Illustrative Examples: Typical items include major systems such as aircraft, missiles, ships, and large-scale communication or computer systems.
Practical Implications
- Risk Allocation: This designation triggers specific FAR clauses that generally limit a contractor's liability for loss or damage to these items, shifting the risk to the government (self-insurance).
- Contract Management: Contractors must ensure that items meeting the cost threshold are formally designated in the contract to benefit from the reduced liability provisions of FAR Subpart 46.8.