J.4 HHS Contracting Guide for Contract of Government Property.docx

HHS Contracting Guide for Contract of Government Property

Attachment J.4 Appendix Q HHS Contracting Guide for Contract of Government Property

RFP # 75FCMC19R0023

Attachment J.04 Appendix Q HHS Contracting Guide for Contract of Government Property

RFP # 75FCMC19R0023

Department of Health & Human Services

January 10, 2019 Page 1 of 45

January 10, 2019 Page 21 of 45

TABLE OF CONTENTS

FOREWORD

Chapter I. Introduction Purpose and Scope of Guide How to Use the Guide Key Players at HHS

Chapter II. Contractor Responsibility and Liability Contractor Responsibility Contractor Liability

Chapter III. Contract Start-Up Authorization Start-Up Inventory Property Control System

Chapter IV. Contract Administration Reporting and Reimbursement for Acquisition Property Identification Annual Inventory Missing, Stolen and Damaged Property Records Personal Property Storage and Movement Trade-ins Excess Property Cannibalization Contamination

Chapter V. Contract Close-Out Final Inventory and Certification Disposition of Property

Chapter VI. Special Considerations On-site Contractors Foreign Governments/ International Organizations Non-profit/ Educational Organizations Vehicles

Chapter VII. Forms and Instructions Standard Form 1428 Inventory Schedule

Glossary

FOREWORD

This guide conveys the policy of the Department of Health and Human Services (HHS) covering the management and control of Government property. This Guide will help you learn the basics of HHS property administration. It provides information needed by contractors to administer government property under a HHS contract or grant to for-profit organizations.

This publication replaces the 1974 edition Control of Property in the Possession of Contractors. It was prepared by the Office of Management and Acquisition, Office of Acquisition and Grants Management, Acquisition and Logistics Research Staff.

We hope this guide provides the information you need. If you have unanswered questions after reading it, please contact your Contract Property Administrator for further questions.

Assistant Secretary for Management and Budget

CHAPTER I: INTRODUCTION PURPOSE AND SCOPE OF THE GUIDE

This Guide outlines the basic policies and procedures for both cost-reimbursement and fixed-price contractors to follow in the management, control and use of government property provided under a HHS contract.

This includes government-furnished property (GFP) as well as contractor-acquired property (CAP). The Guide applies to contract property administration for the management of supplies, materials and both real and personal property that is furnished by the Government or acquired by contractors, including rented or leased items.

When the generic term "property" is used in the For an Alternative Navigation Method. Use Text Links to Navigate. It refers to personal property", other types of property are specifically identified (e.g. buildings, real estate). The Guide complements the Federal Acquisition Regulation (FAR) and is not intended to supersede any FAR requirements as expressed in the contract. The FAR contains the official Federal policies on property used in contracts. Any differences between this guide and the FAR as expressed in the contract, the FAR will take precedence. It is a summary of HHS policies and procedures for contract property administration and therefore may not cover every question you have. If you need further assistance or additional information, contact your Contract Property Administrator.

HOW TO USE THIS GUIDE

To help you locate the information you need, this Guide is structured within a basic framework, as shown in the Table of Contents.

Chapter I contains an overview of the key players at HHS who will be involved in the property aspects of your contract.

Chapter II outlines your responsibilities and liability for government property.

Life Cycle Chapters

Chapters III, IV, V are organized by the life cycle of your contract, beginning with start-up and followed by contract administration and close-out.

Special Consideration Chapters

Chapter VI covers additional features which may or may not apply to your contract. If your contract falls under any of these categories, red the appropriate part of the chapter in addition to the standard life cycle chapters. These special considerations are: On-site contractors, non-profit or educational organizations, foreign governments or international organizations, and government vehicles.

In the remainder of the Guide, you will find forms and instructions, a glossary of property terms, an appendix with condition codes, HHS addresses, and an index. We suggest that you review the glossary to ensure that you understand exactly what is meant by terms such as personal property, nonexpendable property and accountable property.

Use of the index is encouraged as well. For example, if you want to locate information about excess property, the appropriate page numbers are listed under "excess."

KEY PLAYERS AT HHS

The key players at HHS that you will deal with regarding your government property are: the Contract Property Administrator, Project Officer and Contracting Officer. Generally, the Contract Property Administrator monitors, coordinates and manages property requirements. The Project Officer provides technical direction and Interfaces with the Contract Property Administrator about your property requirements, and the Contracting Officer authorizes the transactions.

This section describes their overall roles in the authorization, administration and oversight of contract property.

The Contract Property Administration is the designated representative of the Contracting Officer and will be referenced in the contract. References in the FAR to the Plant Clearance Officer apply to the Contract Property Administrator at HHS. The Contract Property Administrator administers the contract requirements and obligations related to government property, and is responsible for all property administration functions from acquisition of the property to final disposition.

You should deal directly with the Contract Property Administrator in the administration of your government property. It is the Contract Property Administrator's responsibility to coordinate property issues with the Project Officer and Contracting Officer. Within HHS the Contract Property Administrator is also assigned the responsibility of reviewing and approving property control systems and notifying you when your property control system does not meet HHS requirements; however, the Contract Property Administrator may not obligate government funds, or execute modifications to our contract, or otherwise make changes to your contract.

There are a number of Contract property Administration office locations at HHS: Use of the term "Contract Property Administrator" in this Guide refers to the Contract Property Administrator at the office designated in your contract, and is appointed pursuant to delegated authority.

The Project Officer is an Agency program official who is designated in the contract as the technical representative of the Contracting Officer. Project Officers are trained as required by HHS Acquisition Regulations (HHSAR) and are appointed to administer and monitor contract performance. They are not authorized to obligate government funds or to execute contract modifications. Your Project Officer cannot grant you approval to acquire property with contract funds, nor can the Project Officer authorize you to transfer or dispose of any items.

The Project Officer is responsible for providing a property requirements listing along with a justification to the contracting officer, who coordinates the review, approval and physical transfer of the property with the Contract Property Administrator.

The Contracting Officer is the only HHS official who can authorize you to use government property or acquire property under the contract. The Contracting Officer's authorization will be stated in your contract, modification, or through the use of a Contracting Officer.

CHAPTER II: CONTRACTOR RESPONSIBILITY AND LIABILITY CONTRACTOR RESPONSIBILITY

You must assure that your employees are knowledgeable of your contract and of the FAR, HHSAR, Federal Property Management Regulation (FPMR), and Federal Information Resources Management Regulations (FIRMR) provisions; they should have sufficient training in all areas of contract property administration. The General Services Administration (GSA) and several non-government training institutions offer three to five day courses in the administration of contractor-held property. These courses provide insight into government property administration. Your Contract Property Administrator can give you more specific information on these courses.

Prime Contact

It is your responsibility to designate an individual within your organization as the prime contact for the Contract Property Administrator. Provide the individual's name, address, telephone number and signature at the inception of the contract. In the event that any of this information changes, including your organization's address or the name of the contact person, notify your Contract Property Administrator.

Maintenance of Official Records

Contractors are responsible for maintaining the Government's official property records unless the contract cites the FAR clauses that relieve that responsibility.

Contract Requirements

It is the contractor's responsibility to review the contract clauses and assure that the government property required to accomplish the scope of work is accurately reflected in the contract. The basic contract will include a detailed listing of accountable government property (both real and personal property with an acquisition cost of $1000 or more, with a life expectancy of more than two years and sensitive items regardless of acquisition value). If accountable property is provided without contract authorization, promptly notify your Contracting Officer with a copy to the Contract Property Administrator.

Property Control The contractor is held accountable and responsible for government property, regardless of value, from the time of receipt until the disposal of each item as directed by the Contracting Officer. You are responsible for the control of all GFP and Corrective Action Plan (CAP) upon delivery of the property into your custody.

Acquisitions

Acquisitions of accountable property must be authorized by the Contracting Officer before acquiring the items. Identification of the property will be stated in the basic contract, a subsequent modification or Contracting Officer's Authorization (COA) letter. Accountable property that is listed in work assignments, delivery orders or task orders is not authorized for acquisition or use until it has been authorized.

Decontamination

The contractor is responsible for decontaminating government property which may have been contaminated while in the contractor's possession. When government property is to be transferred, disposed of, or excessed, a certification that property is free from all hazards, including biological, chemical, radioactive, or other health hazardous agents must be sent to the Contract Property Administrator.

Subcontractor Property

It is the prime contractor's responsibility to hold the subcontractor responsible for reporting any transactions involving government property. Subcontractors are governed by the same requirements as prime contractors for the control of government property.

Contractor Liability

Contractors may be liable for government property in their possession, subject to the terms of the contract. You may be liable when government property is missing, damaged or stolen, or when there is evidence of improper or unreasonable consumption. If approval of your property control system was withheld or withdrawn, or if you fail to correct deficiencies identified by the Contract Property Administrator, the Contracting Officer may require you to accept a higher level of liability for loss of or damage to government property.

CHAPTER III: CONTRACT START-UP

Chapters 3, 4, 5 apply to all contractors (Contract Start-Up, Contract Administration, and Contract Close- Out). Portions of Chapter 6 Special Considerations, may also apply to you.

Authorization

Prior to the start of work, review your contract concerning the authorization of property. Property that is listed in work assignments or task orders is not authorized for acquisition or use until it has been authorized in the contract, modification, or the COA. If government property not listed in the contract is provided to you, notify your Contracting Officer.

Review the detailed listing of property in our contract to assure that the government property required to accomplish the scope of work is accurately reflected in the contract. Be sure to check your contract for the clauses described in this section of the Guide. If any of the clauses described below are included in your contract, refer to the FAR to determine your full requirements, responsibilities and liability for the property.

Maintenance of Official Records

You are responsible for maintaining the official property records unless the contract cites the FAR clauses that relieve you of that responsibility. The clauses are normally cited in Part II, Section I of the contract, and may be incorporated by reference.

Refer also to FAR Part 45.102 and 105.

Residual Property

The residual property clause authorizes use of property from a previous contract contains this clause, be sure that you know exactly what is included in the residual inventory, and that the inventory listing is correct.

Government-furnished property

All accountable government property provided under your contract will be described and/or listed in the contract, including the COA, and amendments/modification. The listing of accountable property items should include an item description (sometimes referred to as expanded nomenclature), manufacturer's name, serial number, model number, and a HHS decal number.

Contractor-Acquired Government Property

If you are authorized to acquire accountable property from a vendor, your contract will include a clause or COA letter that authorizes the transactions. Accountable property that you acquire and change to the contract must be authorized on an individual line item basis in the contract.

Designation of Property Administrator

A reference or clause may be made to your contract to provide the name and office location of your Contract Property Administrator at HHS.

Using Property Under More Than One Contract

Government property is to be used only under the contract for which it is authorized, unless otherwise authorized by the Contracting Officer. If your organization has more than one contract with HHS, the Contracting Officer may authorize use of government property under more than one contract.

Start-Up Inventory

At the start of your contract, you are required to conduct a physical inventory of accountable government property provided to you or acquired with contract funds, as well as any property being leased or rented with contract funds. If your contract is a follow-on make every effort to conduct a joint inventory with the previous contractor. Your start-up inventory may be done concurrently with the transfer from the previous contractor.

Inventory Requirements

The start-up inventory will be a physical inventory. Any discrepancies with the government-furnished listing in the contract should be noted. The inventory must include the following information:

HHS decal number

Manufacturer's name

Manufacturer's model number

Manufacturer's serial number

Record and reconcile your inventory results with the property clause in your contract, and submit the report to your Contract Property Administrator. For overages, shortages or damage, provide a statement of the condition and apparent cause. Include the name of your company's property contact for the Contract Property Administrator. Prime contractors must submit a consolidated inventory report of all government property, to include subcontractor inventory.

Property Control System

Shortly after contract award, the Contract Property Administrator will request a copy of the written procedures for your internal property control system unless HHS already has it. HHS reviews the property control system to determine if it is adequate to assure compliance with government regulations and contract terms, and to assure that the property is adequately protected, maintained, utilized and accounted for. The adequacy of your property control system helps to demonstrate your ability to manage government property.

A contractor with a few employees may not have a need for written procedures for effective management of Government property. In such cases, the Contracts Property Administrator will evaluate the adequacy of the contractor's system on the basis of the contractor's explanation of his controls and observation of the system.

Elements

An acceptable property control system must comply with the FAR. It identifies all types and classes of government property and addresses your policies on the following elements:

Maintenance and calibration

Physical inventory

Identification and records

Storage and movement

Property consumption

Contract completion or termination

The property control system must enable us to locate any item of government property within a reasonable time. Generally, this should not exceed two working days. The system should also provide a complete, current, auditable record of all transactions which the Government may review as frequently as conditions warrant.

The following section briefly outlines the major requirements for each element of your property control system.

Acquisition

Items are ordered in accordance with quantities stipulated in the contract. Existing equipment on-hand is screened before submitting requisitions. Correct source is identified (either government-furnished or contractor-acquired).

Receiving

Property received is inspected for discrepancies. Receiving report is prepared and distributed to appropriate offices. Discrepant items are segregated and documented (partial shipments, for example).

Identification and Records

Equipment received is promptly and properly classified and labeled with a HHS property decal. Inventory control and financial records are established and maintained for the property. Basic information is contained in the records, as outlined in the FAR.

Storage and Movement

An adequate system to control movement and location of property is maintained. Property in storage is protected, preserved and inspected to prevent loss, damage and deterioration. Adequate safeguards are provided for securing government property. A first in/first out system is established for stored items, subject to age deterioration and warranty expiration.

Property Consumption

Property is consumed only under contract performance. Stock record system of records is maintained for consumable items.

Utilization

Methods are established to ensure that government property is utilized only for purposes authorized by the contract. Contractual authorization is obtained to use property for other than its original authorized purpose. A system is established to review and identify government property to release when it is no longer required for contract performance. Criteria are established and retention of idle equipment is documented and justified by the program manager.

Maintenance and Calibration

A scheduled maintenance program is established, consisting of a systematic written procedure for servicing and inspecting equipment.

The goal is safe, efficient and economical operation of government equipment.

A program is implemented for the following categories of maintenance: preventive maintenance, routing repair and adjustment emergency repair, and calibration.

A calibration control system is designed for all measuring and test equipment to provide control of the evaluation, calibration, maintenance, repair and use of it.

Records are kept of maintenance and calibration performed, including cost and date.

Maintenance and calibration are performed by technically qualified personnel.

System is capable of identifying high maintenance costs for review; corrective action is taken by management and is documented.

Physical Inventory

Physical inventories are generally conducted at the start of the contract, annually on the anniversary of contract award, fiscal year end, on a special basis if directed by the Government, and within 90 days upon contract completion or termination as specified in the contract.

Inventories should be taken by personnel other than those having custody of the property or maintaining the records unless the contractor's operation is too small to do otherwise.

Inventories are conducted using the "wall-to-wall" approach.

Physical inventory results are promptly reconciled with property records.

Inventory results and discrepancies are promptly reported to the Contract Property Administrator.

Subcontract Administration

Procedures and controls are established to assure that government property in a subcontractor's possession is adequately protected.

Subcontractor is aware of contractual property provisions.

Subcontractor will report loss, damage or destruction of government property to the prime contractor for notification of the Contract Property Administrator.

Reporting

Annual inventory reports are to be provided to the Contract Property Administrator by October 31st each year.

Any loss of or damage to government property is immediately reported to the Contract Property Administrator.

Government property excess to contract requirements is promptly reported to Contract Property Administrator.

Standard Form 1428 Inventory Schedule is submitted for all accountable contractor-acquired and leased property; receipt of GFP is reported to the Contract Property Administrator when the property is received.

Any other reports specified in this Guide or in the contract.

Disposal

Disposition instructions provided by the Contract Property Administrator are carried out as directed in accordance with instructions, the disposal of property is properly documented.

The quantity, condition code and location are reported accurately for property items requiring disposition. A decontamination certification is included in the final inventory report at the conclusion of the contract, unless waived by the Contracting Officer.

Contract Completion or Termination

Residual property is reviewed for appropriate actions (such as decontamination or repair) before transfer or disposal of property.

A full accounting is effected for all government property in possession of the prime contractor and subcontractor. The final inventory report is submitted promptly unless the Contracting Officer specifically approves an extension of time.

Pending issues are resolved, such as inventory adjustments and determinations of liability, before contract closure.

The Contract Property Administrator is notified when all pending actions on property-related issues are completed.

HHS Review of System

Your written system of procedures for property control must be submitted to the Contract Property Administrator for review within 30 days from the date it is requested. The review and approval of a contractor's property control system at a specific site by one agency is binding on all other government departments and agencies, under interagency agreements. However, HHS may impose special property administration requirements to meet Agency needs.

Disapproval of System

If your system does not comply with the FAR or contract requirements, corrections will be required after notification of deficiencies. If you do not correct the deficiencies within the schedule that was agreed upon, the Contract property Administrator will recommend disapproval of your system by the Contracting Officer. Your liability for loss of or damage to government property may increase if approval is withheld or withdrawn.

CHAPTER 4: CONTRACT ADMINISTRATION

Acquiring Property

There are several ways to acquire property. You may obtain GFP through a transfer of property from an HHS office or another contract, or by securing excess property (this requires a special contract authorization). You may be authorized to acquire property by purchasing it from GSA supply sources (requiring a special authorization in your contract) or from a private vendor, or you may be required to lease or rent the property.

Authorization Required

Regardless of how you acquire property, any use of accountable government property under a HHS contract must be authorized in writing by the Contracting Officer.

Unauthorized Property Acquisitions

If you possess accountable GFP or CAP which has been authorized by the Contracting Officer, immediately report details about your possession of the property to your Contracting Officer with a copy to the Contracts Property Administrator.

The Contracting Officer will determine if it is appropriate to allow you to retain any unauthorized property. If the Contracting Officer grants authorization, the acquisition will be ratified and reflected in a contract modification.

Government-Furnished Property

The furnishing of government property will be coordinated by your Contract Property Administrator. You must identify your needs to your contracting Officer who will coordinate with the Project Officer the clear definition of your needs before property is provided will facilitate the authorization process. The transaction must be authorized before property is physically transferred to you. When you receive the property, examine it to see that it will meet your needs and that it is in the proper condition for work performance. If the property does not meet your needs, notify the Contracting Officer Immediately.

Transfer Between Multiple Contracts

If you have more than one contract with HHS and want to have property transferred from one contract to another, coordinate this through your Contracting Officer who will coordinate with the Contract Property Administrator. If the transfer is approved, the Contracting Officer will issue a modification to effect the transfer.

Acquiring Excess Government Property

If you are located near a government installation, you may be able to acquire excess property. This requires the approval of your Contracting Officer to issue a contractor's identification card (GSA Form 2946). If authorized, your Contract Property Administrator will provide catalogs of excess property. Contact your Contract Property Administrator for details about obtaining excess property.

Also, surplus personal property may be donated through State agencies to non-profit tax-exempt activities such as medical institutions, hospitals, schools, universities etc. Refer to FAR Part 45.609 and FPMR 101-44.207

Contract-Acquired Property

Prior to authorizing the acquisition of CAP, there is a justification process and a determination of the method that is in the best interest of the Government. The documentation of this process and the analysis called a property justification, is coordinated by the Contracting Officer with the Project Officer.

Property justifications are required for all leased items, regardless of value. If accountable CAP has been authorized under your contract, the contract will specify whether the property is to be purchased, leased or rented. The FAR and FPMR contain detailed information about procurement requirements; they may assist you in developing adequate procedures.

GSA Supply Sources

GSA and Federal Supply Schedules should always be considered as a first source of supply. If you are authorized to acquire property from a GSA supply source; FEDSTRIP (Federal Standard Requisitioning and Issue Procedures) or Customer Supply Centers, contract clause, modification or letter of authorization from your Contracting Officer is required to authorize use of these supply sources.

FEDSTRIP and Customer Supply Centers

FEDSTRIP and Customer Supply Centers are operated by GSA to serve the retail needs of federal agencies. Cost-reimbursement contractors may also use these sources if authorized FEDSTRIP is used for ordering large quantities of items while Customer Supply Centers are intended for small quantity orders.

If you are interested in using these first supply sources, contact your Contract Property Administrator for details.

Reporting and Reimbursement for Acquisitions

Prime contractors must submit consolidated reports that include subcontractor acquisitions. Subcontractor acquisitions are subject to the same reporting and justification requirements as prime contractors for acquiring property under the contract. The prime contractor coordinates subcontractor transactions, subcontractors do not deal directly with the Contract Property Administrator, except for subcontractors to the Small Business Administration.

Receipt of Contractor-Acquired Property

Immediately upon receipt of accountable property items, report the acquisitions on Standard Form 1428 Inventory Schedule. Submit the completed Standard Form 1428 Inventory Schedule to your Contract Property Administrator (a copy of the form must also be attached to your reimbursement voucher). Specific instructions for completion of Standard Form 1428 Inventory Schedule are located in Chapter VII of this Guide.

Accountable property is nonexpendable personal property with an acquisition cost of $1000 or more, and with a useful life of two years or more and sensitive items (regardless of acquisition value. All accountable property items acquired under your contract must be reported on Standard Form 1428 Inventory Schedule, including such commodities as components, accessories, improvements and add-ons that exceed the accountable threshold as well as leased or rented items. Be sure to report design, labor and/or transportation costs, if applicable. These costs are included in the acquisition cost of the item in the Agency's records.

Discrepancies in Shipments If you discover an overage, shortage or damage upon receipt of CAP, take whatever action are necessary directly with the vendor or the supplier.

Receipt of Government-Furnished Property

When you receive accountable GFP, notify your Contract Property Administrator by letter immediately upon receipt of the property; this applies to unauthorized as well as authorized government property. If an HHS Property Transfer document is forwarded to you for signature, sign it and return it to your Contract Property Administrator. If you send a letter, include the decal number, acquisition cost, item description, model number, serial number, condition code, and physical location of the property.

Remember prime contractors report to the Contract Property Administrator all transfers to subcontractors.

If your Contract Property Administrator forwards an HHS Transfer Form for your signature, verify that all information recorded on the form is correct. Remember to check the condition of the property and ensure that it will meet the requirements of the work to be performed. If there are any discrepancies with the form, sign it where indicated and return it to your Contract Property Administrator.

Discrepancies in Shipments

If you discover an overage, shortage or damage upon receipt of GFP, or if property is unusable for any reason, provide a statement of the condition and apparent cause to the Contract Property Administrator. If necessary, file the appropriate claim forms with the shipping company.

Leased Property

The acquisition of leased property must also be reported on Standard Form 1428 Inventor Schedule if the acquisition cost of the leased item would exceed the accountable threshold (see Glossary) and if the lease term exceeds two months. Chapter VII in this Guide contains details about the specific information that is reported.

Notify your Contracting Officer with a copy to the Contract Property Administrator at least 45 days before termination of a lease arrangement, whether due to the expiration of the actual lease or the termination/expiration of your contract. Also advise the Contracting Officer of any credits toward purchase of the item. The advance notice to HHS will allow the Government to decide whether to purchase the item or return it upon lease expiration, or to buy out the lease if it has not expired.

Subcontractor Acquisitions

Accountable items acquired by a subcontractor are reported by the prime contractor to the Contract Property Administrator on Standard Form 1428 Inventory Schedule. Reimbursement to a subcontractor is coordinated and processed by the prime contractor; prime contractors are reimbursed by HHS for authorized subcontractor acquisitions. HHS communicates directly with the prime contractor only, except for contracts with the Small Business Administration under its 8(a) program.

Receipt of Component Parts

Component parts or other items acquired for addition to a piece of property that has already been reported and decaled, must be reported on Standard Form 1428 Inventory Schedule if the component's price exceeds the accountable threshold. State the HHS decal number of the main unit and indicate that the components will be added to that piece of property. Also record any entry for such costs as design, labor and transportation, if applicable, these costs are added to the acquisition value of the item.

Fabricating Equipment

If equipment, components or additional items are acquired individually and then assembled into one main unit, report the acquisition of accountable items individually as they are purchased. Include a statement on Standard Form 1428 Inventory Schedule that one major unit is being constructed. When the item has been completed, notify the Contract Property Administrator, and state this on your Standard Form 1428 Inventory Schedule.

Records

If the construction of prototype or special research equipment is authorized by the contract, report the costs for design and labor along with the value of the components to include equipment, material and supplies.

Special test equipment fabricated from materials that are government property are recorded as government-owned immediately upon fabrication. If equipment is fabricate from materials that are contractor-owned, the completed item is recorded as government property when title passes to the Government.

Installed Property

Before installing government equipment at your site, you must obtain authorization from your Contracting Officer, and a modification or authorizing letter must be issued. Before installing the property, consider how the property can be removed at contract completion. It is suggested that you discuss this with your Project Officer. Provide your Contracting Officer with a detailed report on the cost of removal and restoration, as well as a planned disposal method. Include labor costs for installation and/or set-up, and transportation costs in the total cost.

Reimbursement for Acquisitions

Contractors generally submit SF-1034 and/or SF-1035, Public Voucher for Purchases and Services Other than Personal (New Window), for reimbursement of costs incurred under contract performance. You must itemize acquisitions under the "personal Property/Equipment" category of your voucher and not simply list them as "Other Direct Costs". The Contract Property Administrator receives a copy of your voucher from the HHS paying office and checks voucher entries to ensure that property acquisitions are reported under the proper category.

Attach Copy of Standard Form 1428 Inventory Schedule

The original Standard Form 1428 Inventory Schedule is submitted to your Contract Property Administrator. A copy of the form must be attached to your voucher to support reimbursement claims. If you submit a voucher including costs for accountable personal property items, but fail to attach a copy of the Standard Form 1428 Inventory Schedule payment for the personal property items may be suspended by the Contracting Officer.

Invoice Preparation If you have questions about voucher/invoice preparation and processing related to personal property, please contact your Contract Property Administrator. Any other questions about vouchers should be directed to the paying office designated in your contract.

Property Identification

This section describes requirements for decals, sensitive items, precious metals, and special test equipment.

Decals

Decals are identifying tags designed by HHS to identify Agency property and to display the specific number assigned to a particular item or to identify a specific class of property. HHS has a variety of decals to identify property classifications:

Bar code decals identify accountable property.

For other than accountable property, a decal that states "Property if U.S. HHS" may be furnished, if requested.

Blank paper decals maybe provided for components or other add-ons (the HHS decal number of the main unit is written on the decal and affixed to the component).

Decals may be furnished for leased items (the decal number is preceded by the letter "L or R").

Metal decals may be requested for property that is expose to the environment.

If you are provided GFP without affixed decals, contact your Contract Property Administrator in writing to request the decals. Your Contract Property Administrator will furnish decals for accountable CAP. The HHS decal numbers should be referenced in your correspondence.

Items that Cannot be Decaled

Some property items cannot be decaled. These include submersible items and those subject to chemical exposure and weather conditions. You may request metal decals for property that is exposed to the environment. Other items cannot be decaled because the decal will not adhere to that particular type of surface (pumps, some typewriters, for example). In these cases, make every effort to indelibly mark the item by painting or etching the decal number on it. Items that cannot be decaled or otherwise marked with the decal number, such as platinum crucibles, are subject to additional controls. One option for recording the decal numbers is to attach the decal to your copy of Standard Form 1428 Inventory Schedule that shows receipt of the item Stock cards can also be used, recording detailed information about the item, and attaching the decal to the stock card.

Sensitive Items

Sensitive Items are property items that are highly desirable an easily converted to personal use. Special efforts must be made to control and protect sensitive items. Sensitive items classified as accountable property, and must be reported on Standard Form 1428 Inventory Schedule if you need assistance in identifying sensitive items, contact your Contract Property Administrator for more information. Sensitive items are listed in Appendix C. Signature receipts are required to establish individual accountability for all sensitive items regardless of value.

Precious Metals

When authorized precious metals can be acquired directly or indirectly, as government-furnished or contractor-acquired personal property. Precious metals such as platinum, used in the composition of crucibles or evaporating dishes, for example, are commodities requiring sensitive item accountability as well as classification as precious metals. Keep records of the amount of precious metal comprising the commodity.

Some precious metals, such as gold and silver, may exist within the boards and wiring of computer and laboratory instruments. Maintain a record of this information to assure appropriate recovery if out-right disposal is considered.

Recovery of Precious Metals

The recovery of precious metals must be reported annually to your Contract Property Administrator, report the amount recovered and the methods of recovery. Contractors that consistently use photographic services, for example, must develop a program for the recovery of silver. Contractors should contact the Contract Property Administrator who will contact the regional GSA Federal Supply Service or the Defense Logistics Agency (DLA) serving the area for assistance. (NOTE: October 12, 2006--- the GSA Federal Supply Service (FSS) is being merged with the Federal Technology Service (FTS) into the Federal Acquisition Service (FAS). As more is known about the structure of the new FAS, the instruction found here will be updated).

The contracting Officer will approve a credit to the contract when the silver is properly disposed of at a profit.

Special Test Equipment and Components

Special test equipment authorized as GFP or CAP under the contract will be marked with a serial number and the HHS decal number. If it is not feasible to mark the equipment, report this to the Contract Property Administrator. Special test equipment components valued as $1,000 or more and incorporated in a manner that makes removal and re-utilization feasible and economical, must also be marked.

Property identification should be legible, permanent, conspicuous and temper-proof, consisting of serial number and decal number. Remember: off-the-shelf testing equipment is not classified as special test equipment (see Glossary).

Annual Inventory

A physical inventory of accountable government property must be conducted by September 30th and submitted by October 31st of each year. Your inventory must include accountable government property items acquired, furnished, rented and/or leased under the contract. Employees who conduct inventories should not be the same individuals who maintain the property records. Following the physical inventory, prepare an inventory report and submit it to your Contract Property Administrator and Contracting Officer.

Include all accountable government property in your possession, even if it has not been authorized by the Contracting Officer. Remember software (commercially leased) has been classified by HHS as sensitive and is subject to reporting requirements.

The minimum information that must be recorded follows:

HHS decal number

Associated HHS decal numbers

Manufacturer's name Item description Manufacturer’s model number Acquisition Date

Manufacturer's serial number

Actual cost of item Subcontractor Inventory

Prime contractors must submit a consolidated report of all accountable government property under the contract, to include subcontractor inventory. Subcontractors should report their inventories to the prime contractor.

Certification

Your final inventory report must include a certification that all items are required for continued contract performance and are free from contamination. Property that is no longer usable or required must be reported and identified as such.

Reconciliation of Inventory

Reconcile your inventory with your property records. If you discover overages or shortages, report them in your cover letter and submit back-up documentation, described in the following paragraphs to initiate the appropriate actions.

Overage Procedures

For overages your Contract Property Administrator will notify your Contracting Officer. You will be contacted and asked to provide information about how you acquired the property and to justify your continued need for it. Your Project Officer may initiate the property justification process if your retention of the item is approved by the Contracting Officer.

Shortage Procedures

First, attempt to locate the item. If you have property at more than one site, check your other locations. If you cannot find the item, submit a statement explaining all related circumstances, including the actions you have taken to try to locate the property. In your letter, you may request relief of accountability for the item. If you suspect the item was stolen, report this immediately to the local police. The Missing, Stolen and Damaged Property section of the Guide outlines the required content of your statement.

Missing Stolen and Damaged Property

Promptly notify the Contract Property Administrator of any loss, damage to, or destruction of government property in your possession or control, or in the possession or control of a subcontractor. You are required to investigate the circumstances of each incident and ensure that measures are taken to prevent recurrence. You must respect all known facts and circumstances of the case to include the following information.

Description of item(s) missing, stolen, damaged, or unreasonably consumed to include condition of the item before it was missing/stolen:

HHS decal number (if applicable)

Manufacturer's name and model number

Date the item was last inventoried Cost of item and projected cost of repairs, for damaged property

The last time the item was physically seen

The names of the individuals who used the item

The names of individuals who had access to the item

The name of the individual who discovered it was missing The date and time the item was first discovered missing

The actions taken to try to locate the item

Previous similar occurrences and measures taken to prevent future occurrences

Other facts or circumstances relevant to determination of liability and responsibility for repair or replacement

Any loss due to theft or suspected theft must be reported immediately to the local police and the Federal Bureau of Investigation (FBI). Check the U. S. Government listings in your telephone directory for the phone number. Send a copy of the police report to the Contract Property Administrator. The Contracting Officer will determine your liability for losses.

Records

Your Property records must identify all types and classes of government property (expendable supplies, materials, nonexpendable personal property/equipment and real property). The records must be safeguarded from tampering and/or destruction. Separate property records should be maintained for each contract.

Personal Property

Your personal property records must ensure that the following areas of property administration are covered:

Acquisition Maintenance and calibration

Receiving Physical Inventory

Identification/records Subcontract administration

Storage and movement Reporting Property consumption Disposal Utilization Contract Completion Audit Records Your records should provide a complete, current, auditable record of all transactions. They must be accessible to authorized government personnel; your records are subject to review by the Government as conditions warrant. Compliance reviews may take place at any reasonable time during contract performance, completion, termination, or any time during the period you are required to retain such records.