CFCM Government Property Management — Questions and Answers
Question 1: Under FAR Part 45, 'Government-Furnished Property' (GFP) is best defined as:
- Property acquired by a contractor using government funds on a cost-reimbursement contract
- Property in the possession of, or acquired directly by, the government and subsequently furnished to a contractor for contract performance (Correct answer)
- Any equipment located at a government facility or military installation
- Property the contractor must deliver to the government at contract completion
Correct answer: Property in the possession of, or acquired directly by, the government and subsequently furnished to a contractor for contract performance
FAR 45.101 defines Government-Furnished Property as property in the possession of, or acquired directly by, the government and then provided to the contractor. This distinguishes GFP from contractor-acquired property (CAP), which is purchased by the contractor using contract funds but title vests in the government.
Question 2: FAR 52.245-1 (Government Property) is the primary clause governing contractor management of government property. Under this clause, the contractor is generally responsible for:
- Purchasing insurance for all government property at the contractor's expense
- Establishing and maintaining a property management system and accounting for all government property in its possession (Correct answer)
- Returning all government property to the government within 30 days of contract award
- Obtaining government approval before using any government property for any purpose
Correct answer: Establishing and maintaining a property management system and accounting for all government property in its possession
FAR 52.245-1 requires contractors to establish and maintain a property management system that provides for proper use, maintenance, inventory, and record-keeping for all government property. The contractor must account for property throughout the contract and notify the government of any loss, damage, or destruction.
Question 3: When government property is lost, damaged, or destroyed while in the contractor's custody, the contractor's financial liability is generally:
- Zero, because the government self-insures all government-furnished property
- Limited to the replacement cost using current market prices
- Based on the fair market value at the time the contract was awarded
- The acquisition cost (or an equitable adjustment) when loss results from the contractor's fault or negligence (Correct answer)
Correct answer: The acquisition cost (or an equitable adjustment) when loss results from the contractor's fault or negligence
Under FAR 45.104, a contractor's liability for loss, damage, or destruction of government property is generally limited to the acquisition cost when the loss results from the contractor's fault or negligence. If the loss occurs without contractor fault, the government typically bears the risk.
Question 4: 'Plant clearance' in the context of government property management refers to:
- Obtaining environmental permits before constructing a new government-owned manufacturing facility
- Clearing contractor employees through a security background investigation before accessing a government plant
- The process of screening, redistributing, or disposing of contractor-held government property after contract completion or termination (Correct answer)
- Transferring ownership of a government plant to a private contractor under a facilities contract
Correct answer: The process of screening, redistributing, or disposing of contractor-held government property after contract completion or termination
Plant clearance is the government process of determining the disposition of government property remaining in a contractor's plant after a contract is completed, terminated, or otherwise concluded. The Plant Clearance Officer (PLCO) oversees screening for reutilization, transfer, donation, or sale of excess property.
Question 5: Under FAR 45.402, which party generally holds title to property acquired by a contractor using funds from a cost-reimbursement contract?
- The contractor, since it made the purchase decision and negotiated the price
- The government, as the entity that ultimately funded the acquisition (Correct answer)
- Title is shared equally between the contractor and the government
- The subcontractor that physically uses the property in performance
Correct answer: The government, as the entity that ultimately funded the acquisition
Under FAR 45.402, title to property acquired by a contractor with government funds (contractor-acquired property on cost-reimbursement contracts) vests in the government. Even though the contractor made the purchase, the government funded it and retains ownership, requiring the contractor to manage it as government property.
Question 6: A contractor's government property management system is subject to review and approval by the administrative contracting officer (ACO). Which of the following would be a finding that could cause the system to be deemed 'inadequate'?
- The contractor uses a computerized tracking system rather than a paper-based ledger
- The contractor conducts annual physical inventories rather than continuous cycle counts
- The contractor cannot demonstrate the location and current status of all government property in its custody (Correct answer)
- The contractor stores government property in a separate area from its own property
Correct answer: The contractor cannot demonstrate the location and current status of all government property in its custody
FAR 52.245-1 and DFARS 245.105 require the contractor's property management system to provide visibility into the location, quantity, condition, and status of all government property at any time. Inability to account for government property is a fundamental deficiency that would render the system inadequate.
CFCM Government Property Management
Under FAR Part 45, 'Government-Furnished Property' (GFP) is best defined as: