Consolidation of DoD Government Property Clauses … and then some.

The Roman poet Virgil famously wrote, “I fear the Greeks, even when they bear gifts.” These words were top of mind when reading the Department of Defense’s (DoD) recently issued final rule, finalizing Defense Federal Acquisition Regulation Supplement (DFARS) Case 2020-D029: Consolidation of DoD Government Property Clauses.

The background section of the final rule states the purpose is to, “… consolidate contract clauses related to management and reporting of government property, update references to certain forms that are being incorporated into electronic processes, and update references to applications used to report receipt, shipment, transfer, or loss of government property, or excess government property.” Coincidently, and most interestingly, the DoD also managed to impose some new requirements on contractors.

What the case stated it would do

First things first, what exactly is the new clause consolidating and updating? The new clause, DFARS 252.245-7005 Management and Reporting of Government Property, effective Jan. 22, 2024, consolidates three legacy clauses and removes a fourth. The clauses that it consolidates are DFARS:

• 252.211-7007 Reporting of Government-furnished Property
• 252.245-7002 Reporting Loss of Government Property
• 252.245-7004 Reporting, Reutilization, and Disposal of Government Property

The final rule also removes DFARS 252.245-7001 Tagging, Labeling, and Marking of Government-Furnished Property. The requirements of all four clauses are to be consolidated into the new -7005 clause. Additionally, the DoD updated references to the Plant Clearance Automated Reutilization Screening System (PCARSS) for which a class deviation has existed since late 2021, requiring reporting into the Government Furnished Property (GFP) Module of the Procurement Integrated Enterprise Environment (PIEE) instead of PCARSS.

What the clause added new

Now for the new requirements. The final rule and the resultant DFARS clause impose newly defined time frames for reporting requirements, revises existing reporting requirements and defines a new marking requirement.

Time frames

The new clause imposes a seven-business-day reporting requirement into PIEE for contractors, related to events impacting GFP. As contractors receive GFP, as they disposition GFP, as GFP is transferred between contracts, as GFP is shipped and even as GFP (serially managed) is incorporated into other higher-level components [1], contractors are required to report these events into PIEE within seven days.

Contractors are still required to report losses to PIEE, but the DoD has not gone as far as imposing a time frame on how soon after a loss is determined to be a loss a contractor is required to report to PIEE.

For years, the Federal Acquisition Regulation (FAR) government property requirements imposed by FAR 52.245-1, and cited by the DFARS 252.245-7003, left it up to contractors to design and implement a system of internal controls for the management of government property. FAR 45.103(b) even states that “Agencies will not generally require contractors to establish property management systems that are separate from a contractor’s established procedures, practices, and systems used to account for and manage contractor-owned property.” Historically, it has been up to contractors to design and manage systems to handle government property to include the establishment and prescription of self-imposed time frames.

In our experience, we’ve seen contractors impose three- to seven-business-day requirements for updates of their own records. However, contractors should be aware that the new requirement is from the date a change in status occurs. Meaning, contractors need to ensure that their current procedures allow for enough time to capture events in their own records and report into the PIEE system, all within the new clause’s imposed seven-business-day requirement.

Reporting requirements

The new clause does update and revise some reporting requirements. The table below outlines the past (DFARS 252.211-7007(g)(1)-(3)) versus new (DFARS 252.245-7005(b)) contractor GFP reporting requirements:

New marking requirement

The new clause, at DFARS 252.245-7005(d), requires the contractor to, “assign the Unique Item Identifiers (UII) and mark the reparable items identified as serially managed in the GFP attachment to this contract with an item unique identification (IUID) data matrix, when the technical drawing for the item is accessible to the contractor and includes IUID data matrix location and marking method.” This is an entirely new marking requirement.

UIIs were originally only prescribed via DFARS 252.211-7003 Item Unique Identification and Valuation, where contractors were required to apply a MIL-STD-130 compliant marking to deliveries of new items. This new clause extends that requirement to reparable items [2], only when the contractor can access technical drawings with specific marking locations identified. This is seemingly intended to prevent damage to items when the contractor is not the original equipment manufacturer and may not fully understand implications of applying UIIs to items it did not manufacture. There have previously been disagreements between the government and contractors regarding the application of UII markings to GFP under the DFARS 252.211-7003 clause when it came to reparable items that the contractor did not originally manufacture or have configuration control over. This new clause aims to clear up that confusion.

Now what?

Contrary to the meaning behind Virgil’s original writing, this is not all doom and gloom, but this does create some work for contractors. The clause is not retroactive, so it will only apply to new contracts. Additionally, it does simplify and consolidate the legacy clauses, updates language to reflect DoD’s actual systems and generally reflects DoD’s desire to have more precise and timely reporting on GFP.

However, contractors now must review their policies and procedures to reflect the revised reporting requirements and pay special attention to how the new seven-day reporting time frames impact their current procedures and operations.

As Dante in the Divine Comedy required Virgil as a guide through purgatory and beyond, connect with us if you need help navigating this change and its implications or have other government contracting compliance questions. Now, for tomorrow.

[1] “Serially-managed item” means an item designated by DoD to be uniquely tracked, controlled, or managed in maintenance, repair, and/or supply systems by means of its serial number or unique item identifier.” — DFARS 252.245-7005(a)

[2] “Reparable item” means an item, typically in unserviceable condition, furnished to the contractor for maintenance, repair, modification, or overhaul. — DFARS 252.245-7005(a)