The Department of Defense is proposing a change to the Defense Federal Acquisition Regulation Supplement (DFARS) that would consolidate four existing Government property clauses into a single clause. The requirements of the four clauses are not going away but are being simplified to help both contractors and Government personnel in dealing with the requirements of Government property, in particular Government-Furnished property (GFP).
This proposed change will also officially replace the references to the legacy systems and forms used for reporting Government property throughout the lifecycle. Contractors have been using the Procurement Integrated Enterprise Environment (PIEE) for a few years now to report receipt, transfer, excess, or loss of Government property. PIEE was an improvement over the old PCARSS system, and now with this proposed rule, PIEE should be easier to use.
But back to those clauses: This proposed rule would eliminate four current DFARS property clauses and consolidate the clause requirements into one new DFARS clause. The proposed new DFARS clause would be called 252.245-70XX, Management, and Reporting of Government Property.
Proposed Clauses to be Replaced:
- 211-7007: Reporting of Government-Furnished Property
- 245-7001: Tagging, Labeling, and Marking of Government-Furnished Property
- 245-7002: Reporting Loss of Government Property
- 245-7004: Reporting, Reutilization and Disposal
We will refer to the clauses above with an abbreviated title for simplicity and space. The first two listed, 7007-Reporting and 7001-Tagging, are two of the most confusing (for contractors) and misused (for Government personnel) of all property clauses. Both involve requirements for Government-furnished property and the associated headaches. These clauses go beyond the requirements found in the overarching FAR 52.245-1 Government Property. 7007-Reporting was established in 2007 and has been changed several times since then, adding a degree of confusion each time. Reporting requirements went from only GFP greater than $5K to all GFP no matter the dollar value, but segregated by serially managed versus non-serially managed. We still talk to clients who think they don’t need to track any GFP under $5,000. Remember - there has been no $5K threshold for GFP since 2014. Non-serially managed GFP still must be reported by receipt, and serially managed GFP must be reported and tracked throughout the lifecycle. And – the title to GFP does not depend on the contract type. The Government always has title to GFP.
And then we get into 7001-Tagging – all “serially-managed items” of GFP must be “tagged, labeled or marked.” Seems simple enough, right? The confusion with this clause and with 7007-Reporting comes from how and when they are used in contracts. You would expect to see these clauses inserted together along with FAR 52.245-1. But often, you have 52.245-1 and nothing else, even though GFP is included in the contract. Or, you may have a DFARS clause that instructs the contractor to label all GFP but not the accompanying clause that also gives instruction to report it.
Government property is possibly the least understood DFARS business system by both contractors and Government contracting personnel. Government personnel struggle with which property clauses to include. FAR 52.245-1 is easy to include, but which of the DFARS clauses should go with it? And contractors struggle with all of the DFARS clauses, especially those that deal solely with GFP. Hopefully, this proposed change helps both sides and alleviates some of the confusion of having so many clauses.
Don’t let Government property issues sneak up on you. Make sure you understand the language regarding Government property in your contracts. And don’t be afraid to ask questions – like if you have GFP listed in a contract for use but none of the DFARS clauses relating specifically to GFP are inserted. The Redstone GCI team is here to help with any and all questions related to Government property.
Jonas is a Managing Consultant for Special Projects for Redstone Government Consulting, Inc. Jonas works with the Redstone GCI client base on a variety of issues pertaining to government cost and compliance. His specialty areas include development of compliant cost volumes and proposal pricing, as well as assisting contractors after contract award with program control, financial, cost accounting and audit issues. Jonas works on incurred cost proposals, indirect rate calculation and analysis, proposals and project control issues for Redstone. Professional Experience During his over 20‐year career in the GovCon industry Jonas has worked for both large and small contractors in a variety of roles within program finance, contracts and accounting. A substantial portion of his experience included working with a small business contractor that grew into a $100M+ large business prime contractor. In this role he served in various positions where his responsibility progressed to the Business Operations Manager for the NASA and Army Programs Division. During his career he has also worked as a Controller for a large NASA prime contractor. Jonas has twenty‐plus years’ experience in virtually every aspect of corporate business management. He has extensive proposal experience, specializing in pricing and cost volumes. He has audit experience dealing with DCAA and DCMA. He has extensive experience working with both NASA and DoD government customers in program management and program control, across all contract types. Education Jonas earned a Masters of Business Administration from Nova Southeastern University, and a BSBA in Finance from Athens State University.