Government Property and User Responsibility

INTRODUCTION

All personnel who are tasked with acquiring, receiving, handling, or disposing of Government or Customer-owned equipment shall review the following and accomplish the self-test. As Northrop Grumman employees we all have the responsibility to ensure that we are meeting our Customer requirements while reflecting the Values for which our customers have come to expect, including the way we manage their property.

Employees who handle Government or Customer-owned equipment, whether furnished or acquired, are tasked with managing and reporting this equipment in accordance with the contract terms and conditions, Federal Acquisition Regulations and Northrop Grumman Procedures.

The definition of Government Property: Government Property is all property owned by or leased to the Government or acquired by the Government and furnished to the Contractor. This includes equipment that has been procured via purchase order, furnished by the Government, or built in-house.

Categories of Government Property:

Agency Peculiar Property (APP): property that is peculiar to the mission of one agency, e.g., military equipment, aircraft, etc.
Material (GFM or CAM): property that may be consumed into an end item or deliverable, or may be expendable in the performance of the contract, e.g. raw materials, wire, scrap metals, etc.
Facilities (Plant Equipment, Real Property): property used for research, production, testing or development, e.g., commercial off the shelf items (COTS), computers, cable testers, furniture, etc. In most instances, Northrop Grumman is expected to supply this type hardware in the performance of a U.S. Government prime or subcontract and specific contractual language, Contracting Officer or Buyer authorization is required to procure; otherwise costs may be disallowed by the Government or Prime contractor.
Special Test Equipment (STE): single or multipurpose test units engineered, designed or modified to accomplish special purpose testing; generally consist of electrical, mechanical of other assemblies of equipment that are interconnected to become a new functional entity, thereby causing the individual item or items to become interdependent and essential in performing special purpose testing, e.g., test sets, off-the-shelf equipment that has been modified and interconnected with other assemblies to perform special testing.
Special Tooling (ST): tooling or other equipment that has such a specialized nature that without substantial modification their use is limited to the development or production of particular supplies or parts, e.g., dies, fixtures, molds, etc.

Property Ownership based on Contract Type

Normally, title to residual Contractor Acquired Material (CAM) on a FP contract resides with ES unless the contract stipulates otherwise via a special provision. ES Contracts Representatives should not agree to such a clause without due consideration as the business unit would be required to gather the residual material at the end of the contract and return it to the customer. On FPI, contracts, residual CAM belongs to ES although there is an obligation to provide a list of the residual material to the Contracting Officer as part of the Final Price Redetermination, refer to FAR 52.216-6. Residual CAM on Cost Plus and T&M contracts will need to be transferred or disposed via Contracting Officer, Plant Clearance Officer or contract specific direction prior to contract closure as title to this material and/or property vests in the customer.

Primary Government Property Clauses

52.245-2 FP Clause: Title for all categories of property excluding Facilities and STE vests in the contractor unless furnished by or sold to the Government/Customer. Contractor is liable for loss, damage or destruction unless Alternate I (g) clause is included in the contract.
52.245-5 Cost Type/T&M Clause: Title for all categories of property vests in the Government/Customer whether acquired or furnished. Government assumes liability of loss, damage or destruction unless caused by willful misconduct.
52.245-17 Special Tooling Clause: Gives the Government the right to title for all tooling built or acquired against the contract.
52.245-18 Special Test Equipment Clause: Allows for the purchase or manufacture of previously unknown test equipment provided Contracting Officer approval is received.

Control Areas of Government Property

Management
Acquisition
Receiving
Identification
Records

Movement
Storage
Physical Inventory
Reports
Consumption

Utilization
Maintenance
Subcontractor/Offsite Control
Disposition
Contract Property Closeout

User Responsibility

Notify Government Property Administration (GPA) upon receipt of Government/Customer Property.
Protect Government/Customer Property
Ensure property is used only on contract to which it is accountable and/or as authorized.
Promptly report any and all cases of loss, damage, theft or misuse of Government/Customer Property.
Handle all classified property and/or precious metals IAW Security or other specific requirements.
Notify GPA of any movement of Property
Return all idle property to the Government Property Warehouse for storage and/or disposal.
Provide preventive maintenance for items in Northrop Grumman’s possession.

Consequences of Mishandling Government/Customer Property

Reduced Contract Award Fee
Disapproval of Property System by the Government
Increased NG Liability in the event of Loss, Damage or Destruction of property.
Work Stoppage
Contract Termination by Default
Reduction in New Business
Employee Termination

TEST YOURSELF

1) The Customer’s representative has just delivered a piece of equipment to you without any paperwork. Can you go ahead and use it on any NG Contracts with the Government, after all, it is “Government-owned”?

2) You have a schedule to keep and you really need to use a cable tester to test some equipment you’re working on. After all, the cable tester has been sitting around for the past 4 years and you really think the owning contract is closed. Should you ask Program Manager, Bob, if you can use it for a couple of months with the promise that you’ll return it to its original location?

3) There’s been another leak in the roof and it looks like a piece of Customer property in Joan’s lab may have been drenched. Should you report the possible damage to GPA?

4) You’ve had a very hectic day, it’s 5 PM and you just want to go home. As you’re leaving, Program Manager, Joe, asks you to ship a Government owned computer to an off-site location. Since it’s late in the day can you take the computer to Federal Express and ship it?

5) You’ve been tasked with cleaning out Lab XYZ in preparation for the upcoming ISO audit. You notice a cabinet marked “Government-owned Boards” which contains boards that appear to be in poor condition. Since they appear to be scrap, should you confirm that the boards are actually scrap material then gather the boards and contact the cognizant GPA who will make the necessary arrangements to have the property sent to the site Government Storage and Disposal Area (Warehouse)?

6) You are the Property custodian for Program ABC, which is a Cost Plus contract. You notice that within the past few weeks you’ve been receiving a significant amount of equipment and placing it throughout the lab without identifying ownership. You don’t think it is Government Property because it hasn’t been sold off yet. Should you have Capital Asset labels put on the equipment?

7) Francine needs you to deliver a spectrum analyzer that came in as GFE to another building within the complex. This needs to happen immediately. Since the timing is critical, can you put the spectrum analyzer in your car and move it immediately to impress Francine?

8) You are the Contracts Representative on the Lively Program. The period of performance has come to an end and the Customer is requesting that the Contract be closed and certified. After checking with GPA to ensure that all Government and Customer owned equipment has been property disposed of you can go ahead and close the contract.

9) You are working on a high priority Cost Plus (DoD) program that requires you to initiate Purchase Orders to buy some commercial off the shelf items (COTS), test equipment and three laptop computers. Should you order what you think you need to meet schedule?

10) You’re rushing to catch your connecting flight. Once you get to your final destination, you notice you’ve left your GPS Antenna that’s Government owned in the hotel. As soon as possible, should you contact GPA for clarification, assistance and/or instructions?

Correct Answers

1. No. You should contact Government Property Administration (GPA) for advice and clarification.
2. No. Equipment can only be used on the Contract for which is was acquired unless authorized in the Contract or written authorization has been received by the Customer.
3. Yes. All reports of loss, damage or destruction must be promptly report to the GPA.
4. No. You should contact the GPA. All government property being shipped must be accompanied by the appropriate shipping documentation.
5. Yes. Idle or excess Government Property must be sent to the Government Property Warehouse for disposal.
6. No. On Cost-type and Time and Material (T&M) Contracts, equipment is considered Government owned, refer to 52.245.5 Title provisions.
7. No. All movement of Government Property between facilities must be coordinated through GPA.
8. Yes. After ensuring that all charging is complete and that all equipment has been disposed of correctly you can close the contract.
9. No. Before you procure any COTS, STE commodities and/or computer equipment you should get Customer Approval and/or it should be delineated in the Bill of Material, Contract and/or Statement or Work.
10. Yes. All reports of loss or potential loss must be reported to GPA promptly.