Chapter 01 - Government Property Management

Appendix J - Patents


The contractor shall hold and save the government and its officers, agents, servants, and employees harmless from liability of any nature or kind, including cost and expenses for, or on account of, any patented or unpatented invention, process, article, or appliance manufactured or used in the performance of the contract, including its use by the government, unless otherwise specifically stipulated in the contract documents.

License and/or royalty fees for the use of a process which is authorized by the government on the project must be reasonable, and paid to holder of the patent or his authorized licensee, directly by the government and not by or through the contractor.

If the contractor uses any design, device, or materials covered by letters of patent or copyright, he shall provide for such use by suitable agreement with the owner of such patented or copyright design, device, or material. It is mutually agreed and understood, that, without exception, the con tract prices shall include all royalties or costs arising from the use of such design, device, or materials, in any way involved in the work. The contractor and/or his sureties shall indemnify and save harmless the governr1ent from any and all claims for infringement, by reason of the use of such patented or copyrighted design, device, or materials or any trademark or copyright in connection with work agreed to be performed under this contract, and shall indemnify the government for any cost, expense or damage which it may be obligated to pay by reason of such infringement at any time during the work or after completion of the work.

Appendix I - Examination of Records


The contractor agrees that the contracting officer, the Comptroller General of the United States, or the Secretary of the Interior, or any of their duly authorized agents or representatives, shall, until the expiration of three years after final payment under this contract, have access to and the right to examine any directly pertinent books, documents, papers, and records of the contractor involving transactions related to this contract.

The contractor further agrees to include in all his subcontracts hereunder a provision to the effect that the subcontractor agrees that the contracting officer, the Comptroller General of the United States, or the Secretary of the Interior, or any of their duly authorized agents or representatives, shall, until the expiration of three years after final payment under the subcontract, have access to and the right to examine any directly pertinent book, documents, papers and records of such subcontractor, involving transactions related to this contract.

Appendix G - Clean Air and Water


(a) " Air Act, " as used in this clause, means the Clean Air Act (42 USC 7401 et seq.).

"Clean air standards," as used in this clause, means:

(1) Any enforceable rules, regulations, guidelines, standards, limitations, orders, controls, prohibitions, work practices, or other requirements contained in, issued under, or otherwise adopted under the Air Act or Executive Order 11738;

(2) An applicable implementation plan as described in section 110(d) of the Air Act (42 USC 7410(d));

(3) An approved implementation procedure or plan under section 111(c) or section 111(d) of the Air Act (42 USC 7411(c) or (d)); or

(4) An approved implementation procedure under section 112(d) of the Air Act (42 USC 7412(d)).

"Clean water standards," as used in this clause, means any enforceable limitation, control, condition, prohibition, standard, or other requirement promulgated under the Water Act or contained in a permit issued to a discharger by the Environmental Protection Agency or by a state under an approved program, as authorized by section 402 of the Water Act (33 USC 1342), or by local government to ensure compliance with pretreatment regulations as required by section 307 of the Water Act (33 USC 1317).

"Compliance," as used in this clause, means compliance with:

(1) Clean air or water standards; or

(2) A schedule or plan ordered or approved by a court of competent jurisdiction, the Environmental Protection Agency, or an air or water pollution control agency under the requirements of the Air Act or Water Act and related regulations.

"Facility," as used in this clause, means any building, plant, installation, structure, mine, vessel or other floating craft, location, or site of operations, owned, leased, or supervised by a contractor or subcontractor, used in the performance of a contract or subcontract. When a location or site of operations includes more than one building, plant, installation, or structure, the entire location or site shall be deemed a facility except when the administrator, or a designee, of the Environmental Protection Agency, determines that independent facilities are collocated in one geographical area.

"Water Act," as used in this clause, means Clean Water Act (33 USC 1251) et seq.).

(b) The contractor agrees:

(1) To comply with all the requirements of section 114 of the Clean Air Act (42 USC 7414) and section 308 of the Clean Water Act (33 USC 1318) relating to inspection, monitoring, en try, reports, and information, as well as other requirements specified in section 114 and section 308 of the Air Act and the Water Act, and all regulations and guidelines issued to implement those acts before the award of this contract;

(2) That no portion of the work required by this prime contract will be performed in a facility listed on the Environmental Protection Agency List of Violating Facilities on the date when this contract was awarded unless and until the EP A eliminates the name of the facility from the listing;

(3) To use best efforts to comply with clean air standards and clean water standards at the facility in which the contract is being performed; and

(4) To insert the substance of this clause into any nonexempt subcontract, including this subparagraph (b)(4).

Appendix F - Contract Work Hours and Safety Standards Act - Overtime Compensation


This contract, to the extent that it is of a character specified in the Contract Work Hours and Safety Standards Act (40 USC 327-333), is subject to the following provisions and to all other applicable provisions and exceptions of such Act and the regulations of the Secretary of Labor thereunder.

(a) Overtime Requirements. No contractor or subcontractor contracting for any part of the contract work which may require or involve the employment of laborers' mechanics, apprentices, trainees, watchmen, and guards shall require or permit any laborer, mechanic, apprentice, trainee, watchman, or guard in any work week in which he is employed on such work to work in excess of 8 hours in any calendar day or in excess of 40 hours in such work week on work subject to the provisions of the Contract Work Hours and Safety Standards Act unless such laborer, mechanic, apprentice, trainee, watchman or guard receives compensation at a rate not less than one and one-half times his basic rate of pay for all such hours worked in excess of 8 hours in any calendar day or in excess of 40 hours in such work week, whichever is the greater number of overtime hours.

(b) Violation; Liability for Unpaid Wages; Liquidated Damages. In the event of any violation of the provisions of paragraph (a), the contractor and any subcontractor responsible therefor shall be liable to any affected employee for his unpaid wages. In addition, such contractor and subcontractor shall be liable to the United States for liquidated damages. Such liquidated damages shall be computed with respect to each individual laborer, mechanic, apprentice, trainee, watchman, or guard employed in violation of the provisions of paragraph (a) in the sum of $10 for each calendar day on which such employee was required or permitted to be employed on such work in excess of 8 hours or in excess of his standard work week of 40 hours without payment of the overtime wages required by paragraph (a).

(c) Withholding for Unpaid Wages and Liquidated Damages. The contracting officer may withhold from the government prime contractor, from any moneys payable on account of work performed by the contractor or subcontractor, such sums as may administratively be determined to be necessary to satisfy any liabilities of such contractor or subcontractor for unpaid wages and liquidated damages as provided in the provisions of paragraph (b).

(d) Subcontracts. The contractor shall insert paragraph (a) through (d) of this clause in all subcontracts, and shall require their inclusion in all subcontracts of any tier.

(e) Records. The contractor shall maintain payroll records containing the information specified in 20 CFR 516.2(a). Such records shall be preserved for three years from the completion of the contract.

Appendix E - Davis-Bacon Act


The following clause must be included in all construction contracts which are subject to the Davis-Bacon Act provisions:

(1) Minimum wages. (i) All mechanics and laborers employed or working upon the site of the work, or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project, will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29CFR Part 3)), the full amounts due at time of payment computed at wage rates not less than those contained in the wage determination decision of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics, and the wage determination decision shall be posted by the contractor at the site of the work in a prominent place where it can be easily seen by the workers. For the purpose of this clause, contributions made or costs reasonably anticipated under section 1(b)(2) of the Davis-Bacon Act on behalf of laborers or mechanics are considered wages paid to such laborers or mechanics, subject to the provisions of 29 CFR 5.5(a)(1)(iv). Also for the purpose of this clause, regular contributions made or costs incurred for more than a weekly period under plans, funds, or programs, but, covering the particular weekly period, are deemed to be constructively made or incurred during such weekly period.

(ii) The contracting officer shall require that any class of laborers or mechanics, including apprentices and trainees, which is not listed in the wage determination and which is to be employed under the contract, shall be classified or reclassified conformably to the wage determination and a report of the action taken shall be sent by the federal agency to the Secretary of Labor. In the event the interested parties cannot agree on the proper classification or reclassification of a particular class of laborers and mechanics, including apprentices and trainees, to be used, the question accompanied by the recommendation of the contracting officer shall be referred to the Secretary for final determination.

(iii) The contracting officer shall require, whenever the minimum wage rate prescribed in the contract for a class of laborers or mechanics includes a fringe benefit which is not expressed as an hourly wage rate and the contractor is obligated to pay a cash equivalent of such a fringe benefit, an hourly cash equivalent, thereof to be established. In the event the interested parties cannot agree upon a cash equivalent of the fringe benefit, the question, accompanied by the recommendation of the contracting officer, shall be referred to the Secretary of Labor for determination.

(iv) If the contractor does not make payments to a trustee or other third person, he may consider as part of the wages of any laborer or mechanic the amount of any costs reasonably anticipated in providing benefits under a plan or program of a type expressly listed in the wage determination decision of the Secretary of Labor which is a part of this contract:

Provided, however, the Secretary of Labor has found, upon the written request of the contractor, that the applicable standards of the Davis-Bacon Act have been met. The Secretary of Labor my require the contractor to set aside in a separate account assets for the meeting of obligations under the plan or program.

(2) Withholding. The government may withhold or cause to be withheld from the contractor so much of the accrued payments or advances as may be considered necessary to pay laborers and mechanics, including apprentices and trainees, employed by the contractor or any subcontractor on the work the full amount of wages required by the contract. In the event of failure to pay any laborer or mechanic, including any apprentice or trainee, employed or working on the site of the work or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project, all or part of the wages required by the contract, the government may, after written notice to the contractor, sponsor, applicant, or owner, take such action as may be necessary to cause the suspension of any further payment, advance, or guarantee of funds until such violations have ceased.

(3) Payrolls and Basic Records.

(i) Payrolls and basic records relating thereto will be maintained during the course of the work and preserved for a period of three years thereafter for all laborers and mechanics working at the site of the work, or under the United States Housing Act of 1937, or under the Housing Act of 1949, in the construction or development of the project. Such records will contain the name and address of each such employee, his correct classification, rates of pay (including rates of contributions or costs anticipated of the types described in section 1(b)(2) of the Davis-Bacon Act), daily and weekly number of hours worked, deductions made and actual wages paid. Whenever the Secretary of Labor has found under 29 CFR 5.5(a)(1)(iv) that the wages of any laborer or mechanic include the amount of any costs reasonably anticipated in providing benefits under a plan or program described in section 1(b)(2)(B) of the Davis-Bacon Act, the contractor shall maintain records which show that the commitment to provide such benefits is enforceable, that the plan or program is financially responsible, and that the plan or program has been communicated in writing to the laborers or mechanics affected, and records which show the costs anticipated or the actual cost incurred in providing such benefits.

(ii) The contractor will submit weekly a copy of all payrolls to the contracting officer if the agency is a party to the contract, but if the agency is not such a party the contractor will submit the payrolls to the applicant, sponsor, or owner, as the case may be, for transmission to the government. The copy shall be accompanied by a statement signed by the employer or his agent indicating that the payrolls are correct and complete, that the wage rates contained therein are not less than those determined by the Secretary of Labor and that the classifications set forth for each laborer or mechanic conform with the work he performed. A submission of a "Weekly Statement of Compliance" which is required under this contract and the Copeland regulations of the Secretary of Labor (29 CFR, Part 3) and the filing with the initial payroll or any subsequent payroll of a copy of any findings by the Secretary of Labor under 29 CFR 5.5(a)(I)(iv) shall satisfy this requirement. The prime contractor shall be responsible for the submission of copies of payrolls of all subcontractors. The contractor will make the records required under the labor standards clauses of the contract available for inspection by authorized representatives of the government and the Department of Labor, and will permit such representatives to interview employees during working hours on the job. Contractors employing apprentices or trainees under approved programs shall include a notation on the first weekly certified payrolls submitted to the contracting agencies that their employment is pursuant to an approved program and shall identify the program.

(4) Apprentices and Trainees.

(i) Apprentices. Apprentices will be permitted to work at less than the predetermined rate for the work they performed when they are employed and individually registered in a bona fide apprenticeship program registered with the U.S. Depart of Labor, Employment and Training Administration, Bureau of Apprenticeship and Training, or with a state apprenticeship agency recognized by the bureau, or if a person is employed in his first 90 days of probationary employment as an apprentice in such an apprenticeship program, who is not individually registered in the program, but who has been certified by the Bureau of Apprenticeship and Training to be eligible for probationary employment as an apprentice. The allowable ratio of apprentices to journeymen in any craft classification shall not be greater than the ratio permitted to the contractor as to his entire work force under the registered program. Any employee listed on a payroll at an apprentice wage rate, who is not a trainee as defined in subdivision (ii) of this subparagraph or is not registered or otherwise employed as stated above, shall be paid the wage rate determined by the Secretary of Labor for the classification of work he actually performed. The contractor or subcontractor will be required to furnish to the contracting officer or a representative of the Wage-Hour Division of the U.S. Department of Labor written evidence of the registration of his program and apprentices as well as the appropriate ratios and wage rates (expressed in percentages of the journeyman hourly rates), for the area of construction prior to using any apprentices on the contract work. The wage rate paid apprentices shall be not less than the appropriate percentage of journeyman's rate contained in the applicable wage determination.

(ii) Trainees. Except as provided in 29 CFR 5.5 trainees will not be permitted to work at less than the predetermined rate for the work performed unless they are employed pursuant to and individually registered in a program which has received prior approval, evidenced by formal certification, by the U.S. Department of Labor, Employment and Training Administration, Bureau of Apprenticeship and Training. The ratio of trainees to journeymen shall not be greater than permitted under the plan approved by the Bureau of Apprenticeship and Training. Every trainee must be paid at not less than the rate specified in the approved program for his level of progress. Any employee listed on the payroll at a trainee rate who is not registered and participating in a training plan approved by the Bureau of Apprenticeship and Training shall be paid not less than the wage rate determined by the Secretary of Labor for the classification of work he actually performed. The contractor or subcontractor will be required to furnish the contracting officer or a representative of the Wage-Hour Division of the U.S. Department of Labor written evidence of the certification of his program, the registration of the trainees, and the ratios and wage rates prescribed in that program. In the event the Bureau of Apprenticeship and Training withdraws approval of a training program, the contractor will no longer be permitted to utilize trainees at less than the applicable predetermined rate for the work performed until an acceptable program is approved.

(iii) Equal Employment Opportunity. The utilization of apprentices, trainees and journeymen under this part shall be in conformity with the equal employment opportunity requirements of Executive Order 11246, as amended, and 29 CFR Part 30.

(5) Compliance with Copeland Regulations (29 CFR Part 3). The contractor shall comply with the Copeland Regulations (29 CFR Part 3) of the Secretary of Labor which are herein incorporated by reference.

(6) Subcontracts. The contractor will insert in any subcontracts the clauses contained in 29 CFR 5.5(a)(I) through (5) and (7) and also a clause requiring the subcontractors to include these clauses in any lower tier subcontracts which they may enter into, together with a clause requiring this insertion in any further subcontracts that may in turn be made.

(7) Contract Termination. A breach of clauses (1) through (6) may be grounds for termination of the contract.

Additional provisions which must be included are:

(1) Overtime Requirements. No contractor or subcontractor contracting for any part of the contract work which may require or involve the employment of laborers or mechanics shall require or permit any laborer or mechanic in any work week in which he is employed on such work to work in excess of 8 hours in any calendar day or in excess of 40 hours in such work week unless such laborer or mechanic receives compensation at a rate not less than one and one-half times his basic rate of pay for all hours worked in excess of 8 hours in any calendar day or in excess of 40 hours in such work week, as the case may be.

(2) Violations; Liability for Unpaid Wages; Liquidated Damages. In the event of any violation of the clause set forth in subparagraph (1), the contractor and any subcontractor responsible therefor shall be liable to any affected employee for his unpaid wages. In addition, such contractor and subcontractor shall be liable to the United States (in the case of work done under contract for the District of Columbia or a territory, to such District or to such territory), for liquidated damages. Such liquidated damages shall be computed with respect to each individual laborer or mechanic employed in violation of the clause set forth in subparagraph (1), in the sum of $10 for each calendar day on which such employee was required or permitted to work in excess of 8 hours or in excess of the standard work week of 40 hours without payment of the overtime wages required by the clause set forth in subparagraph (1).

(3) Withholding for Unpaid Wages and Liquidated Damages. The government may withhold or cause to be withheld, from any moneys payable on account of work performed by the contractor or subcontractor, such sums as may administratively be determined to be necessary to satisfy any liabilities of such contractor or subcontractor for unpaid wages and liquidated damages as provided in the clause set forth in subparagraph (2).

(4) Subcontracts. The contractor shall insert in any subcontracts the clauses set forth in subparagraphs (1), (2), and (3) of this paragraph and also a clause requiring the subcontractors to include these clauses in any lower tier subcontracts which they may enter into, together with a clause requiring this insertion in any further subcontracts that may in turn be made.

Appendix D - Anti-Kickback Statute


The contractor shall comply with the Copeland "Anti-Kick Back" Act (18 USC 874) as supplemented in Department of Labor Regulations (29 CFR Part 3).

TITLE 18, U.S.C., Section 874:

"874. Kick-Back from public works employees; Whoever by force, intimidation, or threat of procuring dismissal from employment, or by any other manner whatsoever induces any person employed in the construction, prosecution, completion or repair of any public building, public work, or building or work financed in whole or in part by loans or grants from the United States, to give up any part of the compensation to which he is entitled under his contract of employment, shall be fined not more than $5,000.00 or imprisoned not more than five years, or both."

Appendix C - Equal Opportunity


(The following clause is applicable unless this contract is exempt under the rules, regulations, and relevant orders of the Secretary of Labor (41 CFR, ch. 60)).

During the performance of this contract, the contractor agrees as follows:

(a) The contractor will not discriminate against any employee or applicant for employment because of race, color, religion, sex, or national origin. The contractor will take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, color, religion, sex, or national origin. Such action shall include, but not be limited to, the following: employment, upgrading, demotion, or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. The contractor agrees to post in conspicuous places, available to employees and applicants for employment, notices to be provided by the contracting officer setting forth the provisions of this equal opportunity clause.

(b) The con tractor will, in all solicitations or advertisements for employees placed by or on behalf of the contractor, state that all qualified applicants will receive consideration for employment without regard to race, color, religion, sex, or national origin.

(c) The contractor will send to each labor union or representative of workers with which he has a collective bargaining agreement or other contract or understanding, a notice, to be provided by the agency contracting officer, advising the labor union or workers' representative of the contractor's commitments under this equal opportunity clause, and shall post copies of the notice in conspicuous places available to employees and applicants for employment.

(d) The contractor will comply with all provisions of Executive Order No. 11246 of September 24, 1965, as amended by Executive Order No.11375 of October 13, 1967, and of the rules, regulations, and relevant orders of the Secretary of Labor.

(e) The contractor will furnish all information and reports required by Executive Order No.11246 of September 24, 1965, as amended by Executive Order No.11375 of October 13, 1967, and by the rules, regulations, and orders of the Secretary of Labor, or pursuant thereto, and will permit access to his books, records, and accounts by the contracting agency and the Secretary of Labor for purposes of investigation to ascertain compliance with such rules, regulations, and orders.

(f) In the event of the contractor's noncompliance with the Equal Opportunity clause of this contract or with any of the said rules, regulations, orders, this contract may be cancelled, terminated, or suspended, in whole or in part, and the contractor may be declared ineligible for further government contracts in accordance with procedures authorized in Executive Order No. 11246 of September 24, 1965, as amended by Executive Order No.11375 of October 13, 1967; and such other sanctions may be imposed and remedies invoked as provided in Executive Order No. 11246 of September 24, 1965, as amended by Executive Order No.11375 of October 13, 1967, or by rule, regulation, or order of the Secretary of Labor, or as otherwise provided by law.

(g) The contractor will include the provisions of paragraphs (a) through (g) in every subcontract or purchase order unless exempted by rules, regulations, or orders of the Secretary of Labor issued pursuant to section 204 of Executive Order No. 11246 of September 24, 1965, as amended by Executive Order No. 11375 of October 13,1967, so that such provisions will be binding upon each subcontractor or vendor. The contractor will take such action with respect to any subcontract or purchase order as the government may direct as a means of enforcing such provisions, including sanctions for noncompliance; provided, however, that in the event the contractor becomes involved in, or is threatened with, litigation with a subcontractor or vendor as a result of such direction by the contracting agency, the contractor may request the government to enter into such litigation to protect the interests of the government.

Appendix B2 - Termination for Default (Goods and Services)


(1) Default. If the contractor refuses or fails to perform any of the provisions of this contract with such diligence as will ensure its completion within the time specified in this contract, or any extension thereof, otherwise fails to timely satisfy the contract provisions, or commits any other substantial breach of this contract, the procurement officer may notify the contractor in writing of the delay or nonperformance; and if not cured in ten days or any longer time specified in writing by the procurement officers, such officer may terminate the contractor's right to proceed with the contract or such part of the contract as to which there has been delay or a failure to properly perform. In the event of termination in whole or in part the procurement officer may procure similar supplies or services in a manner and upon terms deemed appropriate by the procurement officer. The contractor shall continue performance of the contract to the extent it is not terminated and shall be liable for excess costs incurred in procuring similar goods or services.

(2) Contractor's Duties. Notwithstanding termination of the contract and subject to any directions from the procurement officer, the con tractor shall take timely, reasonable, and necessary action to protect and preserve property in the possession of the contractor in which the government has an interest.

(3) Compensation. Payment for completed supplies delivered and accepted shall be at the contract price. Payment for the protection and preservation of property shall be in an amount agreed upon by the contractor and procurement officer. The government may withhold from amounts due the contractor such sums as the procurement officer deems to be necessary to protect the government against loss because of outstanding liens or claims of former lien holders and to reimburse the government for the excess costs incurred in procuring similar goods and services.

(4) Excuse for Nonperformance or Delayed Performance. Except with respect to defaults of subcontractors, the contractor shall not be in default by reason of any failure in performance of this contract in accordance with its terms (including any failure by the contractor to make progress in the prosecution of the work hereunder which endangers such performance) if the contractor has notified the procurement officer within 15 days after the cause of the delay and the failure arises out of causes such as, acts of God, acts of the public enemy, acts of the government and any other governmental entity in its sovereign or contractual capacity, fires, floods, epidemics, quarantine restrictions, strikes or other labor disputes, freight embargoes, or unusually severe weather. If the failure to perform is caused by the failure of a subcontractor to perform or to make progress, and if such failure arises out of causes similar to those set forth above, the contractor shall not be deemed to be in default, unless the supplies of services to be furnished by the subcontractor were reasonably obtainable from other sources in sufficient time to permit the contractor to meet the contract requirements.

Upon request of the contractor, the procurement officer shall ascertain the facts and extent of such failure, and, if such officer determines that any failure to perform was occasioned by anyone or more of the excusable causes, and that, but for the excusable cause, the contractor's progress and performance would have met the terms of the con tract, the delivery schedule shall be revised accordingly, subject to the rights of the government under the clause entitled "Termination for Convenience".

(5) Erroneous Termination for Default. If, after notice of termination of the contractor's right to proceed under the provisions of this clause, it is determined for any reason that the contractor was not in default under the provisions of this clause, the rights and obligations of the parties shall, if the contract contains a clause providing for termination for convenience, be the same as if the notice of termination had been issued pursuant to such clause.

(6) Additional Rights and Remedies. The rights and remedies provided in this clause are in addition to any other rights and remedies provided by law or under this contract.

Appendix B1 - Termination for Default (Construction)


If the con tractor re fuses or fails to prosecute the work, or any separable part thereof, with such diligence as will insure its completion within the time specified in this contract, or any extension thereof, or fails to complete said work within such time, the government may, by written notice to the contractor, terminate his right to proceed with the work or such part of the work as to which there has been delay. In such event the government may take over the work and prosecute the same to completion, by contract or otherwise, and may take possession of and utilize in completing the work such materials, appliances, and plant as may be on the site of the work and necessary therefor. Whether or not the contractor's right to proceed with the work is terminated, he and his sureties shall be liable for any damage to the government resulting from his refusal or failure to complete the work within the specified time.

If the government so terminates the contractor's right to proceed, the resulting damage will consist of the fixed and agreed liquidated damages if stipulated elsewhere in this contract until such reasonable time as may be required for final completion of the work together with any increased costs occasioned the government in completing the work.

If the government does not so terminate the contractor's right to proceed, the resulting damage will consist of the fixed and agreed liquidated damages if stipulated elsewhere in this contract until the work is completed or accepted.

The contractor's right to proceed shall not be so terminated nor the contractor charged with resulting damage if:

(1) The delay in the completion of the work arises from causes other than normal weather

beyond the control and without the fault or negligence of the contractor, including but not restricted to, acts of God, acts of the public enemy, acts of the government in either its sovereign or contractual capacity, acts of another contractor to the government in the performance of a contract with the government, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, unusually severe weather for American Samoa taking into consideration that approximately 200 inches of rainfall annually is normal, or delays of subcontractors or suppliers arising from causes other than normal weather beyond the control and without the fault or negligence of both the contractor and such subcontractors or suppliers;

(2) The contractor, within 10 days from the beginning of any such delay notifies the contracting officer in writing of the cause of delay.

The contracting officer shall ascertain the facts and the extent of the delay and extend the time for completing the work when, in his judgment, the findings of fact justify such an extension, and his findings of facts shall be final and conclusive on the parties, subject only to appeal.

If, after notice of termination of the contractor's right to proceed under the provisions of this section, it is determined for any reason that the contractor was not in default under the provisions of this section, the rights and obligations of the parties shall be the same as if a notice of termination for convenience had been issued.

The rights and remedies of the government provided in this section are in addition to any other rights and remedies provided by law or under this contract.

Appendix A - Termination for Convenience


(a) The government may terminate performance of work under this contract in whole or, from time to time, in part if the contracting officer determines that a termination is in the government's interest. The contracting officer shall terminate by delivering to the contractor a notice of termination specifying the extent of termination and the effective date.

(b) After receipt of a notice of termination, and except as directed by the contracting officer, the contractor shall immediately proceed with the following obligations, regardless of any delay in determining or adjusting any amounts due under this clause:

(1) Stop work as specified in the notice;

(2) Place no further subcontracts or orders (referred to as subcontracts in this clause) for materials, services, or facilities, except as necessary to complete the continued portion of the contract:

(3) Terminate all subcontracts to the extent they relate to the work terminated;

(4) Assign to the government, as directed by the contracting officer, all right, title, and interest of the contractor under the subcontracts terminated, in which case the government shall have the right to settle or to pay any termination settlement proposal arising out of those terminations;

(5) With approval or ratification to the extent required by the contracting officer, settle all outstanding liabilities and termination settlement proposals arising from the termination of subcontracts; the approval or ratification will be final for purposes of this clause;

(6) As directed by the contracting officer, transfer title and deliver to the government (i) the fabricated or unfabricated parts, work in process, completed work, supplies, and other material produced or acquired for the work terminated, and (ii) the completed or partially completed plans, drawings, information, and other property that, if the contract had been completed, would be required to be furnished to the government;

(7) Complete performance of the work not terminated;

(8) Take any action that may be necessary, or that the contracting officer may direct, for the protection and preservation of the property related to this contract that is in the possession of the contractor and in which the government has or may acquire an interest;

(9) Use its best efforts to sell, as directed or authorized by the contracting officer, any property of the types referred to in subparagraph (6) of this subsection; provided, however, that the contractor (i) is not required to extend credit to any purchaser and (ii) may acquire the property under the conditions prescribed by, and at prices approved by, the contracting officer. The proceeds of any transfer or disposition will be applied to reduce any payments to be made by the government under this contract, credited to the price or cost of the work, or paid in any other manner directed by the contracting officer.

(c) The contractor shall submit to the contracting officer a list, certified as to quantity and quality, of termination inventory not previously disposed of, excluding items authorized for disposition by the contracting officer. The contractor may request the government to remove those items or enter into an agreement for their storage. Within 15 days, the government will accept title to those items and remove them or enter into a storage agreement. The contracting officer may verity the list upon removal of the items, or if stored, within 45 days from submission of the list, and shall correct the list, as necessary, before final settlement.

(d) After termination, the contractor shall submit a final termination settlement proposal to the contracting officer in the form and with the certifications prescribed by the contracting officer. The contractor shall submit the proposal promptly, but no later than 1 year from the effective date of termination, unless extended in writing by the contracting officer upon written request of the contractor within this l-year period. However, if the contracting officer determines that the facts justify it, a termination settlement proposal may be received and acted on after 1 year or any extension. If the contractor fails to submit the proposal within the time allowed, the contracting officer may determine, on the basis of information available, the amount, if any, due the contractor because of the termination and shall pay the amount determined.

(e) Subject to paragraph (d) of this appendix, the contractor and the contracting officer may agree upon the whole or any part of the amount to be paid because of the termination. The amount may include a reasonable allowance for profit on work done. However, the agreed amount, whether under this paragraph (e) may not exceed the total contract price as reduced by

(1) the amount of payments previously made and

(2) the contract price of work not terminated.

10.0101 Authority.


The authority for exercising control and management of government property in the ASG is vested in the director of material management. Section 4.1002 ASCA constitutes the basis for the issuance of the manual codified in this chapter and for all actions by the director in matters relating to the management and control of public property.

10.0102 Purpose.


The purpose of this chapter is to prescribe adequate and uniform procedures throughout the ASG for accounting for all equipment, materials, and supplies under the jurisdiction of the department of material management. Compliance with the basic req uirements established in this chapter will ensure that proper records of all personal property are maintained and that such property is protected, preserved, and used only for official purposes.

10.0103 Director of material management duties.


(a) The director of material management shall manage and control government property and shall have authority over the disposition and use of such property, including inventorying and establishing forms and procedures for sale, ren tal, or other disposition o f such property.

(b) The director of material management shall list all real estate belonging to or under lease to the government, showing the agency controlling, location, metes and bounds, cost when acquired, persons to whom leased, and other details.

10.0104 Accountable officers-Department and agency head responsibility.


All property acquired by the government will be charged to an accountable officer. The safeguarding of property and maintenance of proper records thereof shall be considered a primary responsibility of these officers. It is the responsibility of the head of each department or agency to make certain that public property under his custody and control is properly utilized and protected against damage or loss.

10.0105 Property management officers.


The head of a department or agency may designate an officer or employee of his department or agency to perform the functions prescribed. The officer or employee so designated, as responsible for supervising the property management program of his department, shall be the property management officer, regardless of his payroll designation or any other title or function assigned to him.

10.0106 Transaction code.


For describing the type or nature of a transaction, including the acquisition or disposition of fixed assets, by means of a numerical code, the following transaction code has been developed and prescribed, and will be shown on reports submitted to the director of material management:

Acquisition

01 -Purchase

02 -Construction

03 -Transfer in

04 -Donation

05 -Omission (erroneously omitted from previous inventory)

06 -Judicial process

07 -Acquisition not otherwise classified

Disposition

11 -Sale

12 -Transfer out

13 -Destruction

14 -Disposition not otherwise classified.

10.0107 Definitions.


Subject to additional or more detailed definitions in the Accounting Manual of the department of administrative services, and unless the context otherwise requires:

(1) "building" means any structure erected aboveground, together with its appurtenances, the principal purpose of which is for sheltering persons or property. The term also includes but is not limited to schools, libraries, offices, warehouses, clinics, hospitals, homes, and housing units;

(2) "capitalization" ("to capitalize") means the assignment of a dollar value to property for the purpose of reflecting such value on property accountability records and general ledger asset accounts;

(3) "capitalized property" means property which has been entered on the records as an investment or asset and includes "nonexpendable property" which, for management and/or accounting purposes, is to be carried as capital assets until disposed of in accordance with law;

(4) "construction work in progress" means the cost of construction work undertaken and being performed but not yet completed and accepted;

(5) "equipment" (including machinery) means an article of personal property which is complete in itself, is of durable nature with an expected service life of 1 year or more, and does not ordinarily lose its identity or become a component part of another article when put into use. The term includes but is not necessarily limited to machinery; heavy-duty tools; trucks; cars; office, school, and household furniture and furnishings; or any durable item required to equip an individual or activity to do a job;

(6) "expendable" means those categories or specific items of personal property which have been classified for property control and/or cost accounting purposes as expendable and the cost or appraised value thereof is to be charged as an expense when received or issued, depending upon cost accounting system applied. The value of quantities of expendable items held in stores or redistribution centers pending issue is recorded as an asset;

(7) "improvements other than buildings" means and includes all improvements and attachments to the land such as roads, walkways, playgrounds, and lighting facilities and fixtures;

(8) "land" means all parts of the earth's surface owned by the government, regardless of the purpose and/or use. Land held under lease is not owned and should be omitted from the account;

(9) "maintenance" refers to the routine recurring work required to keep property in substantially original condition. It may include replacement of minor constituent parts, materials, or supplies;

(10) "materials and supplies" means and refers to all items necessary for the equipping, maintenance, repair, operation, and support of governmental activities and services;

(11) "nonexpendable" means those categories or specific items of personal property which, for property management and/or accounting purposes, are to be carried as capital assets of a department, bureau, or activity until disposed of by transfer, sale, or otherwise;

(12) "personal property" means all property other than land and buildings. Items in this category are classified as "expendable" and "nonexpendable " property.

10.0108 Receiving-Acknowledging Responsibility and records.


Certain basic principles are involved in the receiving of government property and shall be observed when assigning the responsibilities of this function. These principles include:

(1) acknowledging receipt. The individual who signs the receiving report is certifying that the property listed thereon has been received, and his signature serves as the basis for the expenditure of government funds. All incoming shipments shall be physically counted and inspected to insure that the quantity ordered has been delivered and that articles received meet the specifications. Any defects or damages to the property shall be noted at the time of inspection. Articles which require technical identification or inspection shall be examined by the receiving individual in conjunction with other qualified personnel;

(2) establishing initial responsibility. The property management officer or individual acting in that capacity assumes responsibility for all personal property received at the time the equipment or supplies are accepted and the receiving report is executed. The property management officer shall be responsible for the identification of all nonexpendable personal property acquired by the agency in accordance with the provisions of this chapter;

(3) establishing accountability. The accountable officer, the head of the department or agency shall establish prescribed accountability records for all property acquired or entrusted to him immediately upon receipt of documents evidencing the receipt of such property.

10.0109 Receiving-Receiving report.


All departments will formally document the receipt of all personal property, whether such property is acquired from commercial sources, doni1ted, recovered, or obtained by transfer from another government agency.

(1) Property received shall be recorded on a receiving report to provide a document of entry to the records and accounts and to substantiate the disbursement voucher. Appropriate receiving documents shall be prepared as soon as possible after receipt of the property.

(2) Special handling shall be given receiving reports involving time discounts.

(3) Receiving Report, GAS form MT /MGT 32 (see Appendix I) shall be used for the purpose of carrying out the provisions of this section.

10.0110 Identification markings Required -Means.


All government property classified as nonexpendable, except as exempted elsewhere in this chapter, shall be permanently marked to identify it as government owned. Markings may be accomplished by any means which will produce permanency and which will be most adaptable to. the particular type of property.

10.0111 Identification markings-Unmarkable apparatus-Large items.


(a) Very small, delicate, or precision apparatus, which cannot be marked in a permanent manner without damage to the equipment, is exempt from any requirement for marking or numbering. The number assigned to such equipment, however, shall be recorded on the property cards established for the equipment.

(b) The larger, or more significant items of nonexpendable property, including but not limited to office furniture and ship equipment, shall be marked with the property number assigned thereto.

10.0112 Identification markings-Property numbers.


Each item or group of items of nonexpendable property shall be assigned an identifying property number by the head of the division of property, department of material management. Decimal suffixes may be added to the property number in. order to specifically identify individual items as may be determined. The numbers assigned shall be entered on the property records for the item.

10.0113 Identification markings-Motor vehicles.


All motor vehicles of the ASG, except those exempted elsewhere in this chapter, shall bear special markings and identification consisting of the following:

(1) "For Official Use Only";

(2) ASG decalcomania;

(3) Identification plates; i.e., plates with numbers prefixed by letters, indicating user, department or office.

10.0114 Identification markings-Removal before disposition.


When property is sold or otherwise permanently removed from government service, all identification markings which indicate that the property was previously owned by the government shall be removed prior to disposition.

10.0115 Classification-Responsibility.


(a) It is the responsibility of each department, bureau, and/or agency to classify items of property as expendable or nonexpendable within the meaning of these terms as defined in this chapter and in the ASG Accounting Manual.

(b) Nonexpendable property should be further classified to indicate whether it should generally be capitalized, noncapitalized, or considered with materials and supplies for physical and financial control purposes. The division of property, department of material management will, in cooperation with all departments, classify all personal property in accordance with the provisions of this chapter to ensure. uniformity at all organizational levels.

10.0116 Classification-Guidelines.


In making the determination as to proper classification of the various items of nonexpendable property, consideration will be given to such factors as acquisition cost, expected useful life, use, susceptibility to personal uses, cost of possible accountability and/or responsibility records compared with cost of possible increased losses if such records are not maintained, as well as any other factors which may have a bearing on the classification. It will be necessary to use good judgment in applying these factors to individual items since the classification placed on an item will, to a great extent, determine the type of inventory control and accounting records to be maintained therefor.

(a) As a general rule, any single item of equipment costing more than $100 should be capitalized. Classification of any given item of equipment should be consistent; however, in cases where a portion of the inventory of the item is acquired at a cost of $100 or less and a portion at a cost of over $100, the entire stock of a given item should be accounted for as either capitalized or noncapitalized equipment, as the case may be.

(b) Examples of nonexpendable property items which fall under the capitalized equipment classification are: motor vehicles, office machines, surveying instruments, and similar major items of equipment which have a long expected service life and generally represent a major investment in personal property.

(c) Examples of nonexpendable property items which will generally fall under the noncapitalized equipment classification are: small hand tools, and similar relatively low-cost minor items of equipment which are frequently worn out after a comparatively short period of service

(d) Due to a high rate of breakage in service, a normally short service life, or an insignificant value, certain items of property nonexpendable by definition may, at the discretion of the director of material management, be administratively classified as expendable and treated as such in all respects. Examples of items which may be considered as expendable are glassware, tinware, brushes, drill bits, file baskets, pencil sharpeners, and like items which, in the opinion of the director of material management, do not warrant the same measure of control and attention as do those composing the capitalized and noncapitalized classifications.

10.0117 Records generally.


(a) Fiscal Accounting Records. The value of nonexpendable property acquired and disposed of shall be recorded in the records and accounts prescribed in this chapter and as determined by the director of administrative services as defined

in the Accounting Manual.

(b) Accountability Records. Accountability records shall be established and maintained to cover nonexpendable property as prescribed in this section.

(c) Capitalized Equipment. The general ledger control account for capitalized property shall be supported by detailed property records to adequately identify the units of equipment, the costs of which are charged to equipment accounts; provided a permanent record of the acquisition and disposition of all capitalized property; and provide information needed for inventory control and management purposes. This record will generally be known as the nonexpendable property accountability record, but may be supplemented by such other accountability or property records as may be necessary or desirable for property management purposes. These records shall be subject to both internal and external audit and all entries made therein must be adequately supported by valid acquisition and disposal doc4ments.

(d) Noncapitalized Equipment. The use of accountability records for noncapitalized equipment is not required by this title; but, rather, their use is discretionary with the head of each department, bureau, or agency.

10.0118 Transfer of accountability.


When an accountable officer is to be relieved of accountability, the incoming accountable officer shall be required to accept, formally, full responsibility and accountability for all government-owned property involved in the transfer of accountability. This may be accomplished in either of 2 ways:

(a) An itemized list of property of all classes may be compiled from the property records, showing, as a minimum, the quantity and adequate description of the items involved.

(1) Receipt of the property shall be acknowledged thereon by the incoming accountable officer, after such verification and inventory as the incoming officer deems necessary to 10.0122 Liability and accountability-relief provisions-Scope. Sections 10.0122 and 10.0123 set forth basic requirements for the appointment of boards surveyor other authorities to

(1) investigate circumstance$ surrounding lost, stolen, damaged, and unserviceable property and

(2) report findings and make recommendations for the fixing of or the relief from personal liability for damaged or missing property. Sections 10.0122 and 10.0123 also provides for review of the actions of boards of survey by the property division, department of material management, and for the director of material management to make the final determination as to financial liability and disposition of the property.

10.0123 Relief from accountability.


An accountable officer may be relieved of accountability for property by the following methods:

(1) Transfer of accountability to another accountable officer;

(2) Transfer of available property to another accountable officer within the department and/or transfer of excess property to other governmental agencies;

(3) Sale of property under conditions and limitations authorized by current laws and regulations;

(4) Authorized condemnation and destruction, abandonment, or donation of property;

(5) Loss, including theft and accidental destruction of property, when documented by an approved report of surveyor certificate of loss.

10.0124 Survey and report-Required when.


Survey action and a report of survey, GAS form MT/MGT 31, illustrated in Appendix 3, are required to authorize and/or document the following property transaction and circumstances:

(1) Loss of property exceeding $100 in original cost. Losses of $100 and less shall be subject to report of survey procedures if not documented by a certificate of loss as provided in 10.0126;

(2) Condemnation for salvage, reduction to scrap, destruction and abandonment of property regardless of circumstances;

(3) Donation to public bodies;

(4) Property damage exceeding $100 in value, except damage resulting from motor vehicle accidents which are investigated and reported as provided in existing law and regulations. Damages of $100 and less shall also be subject to report of survey procedures if not documented by a certificate of loss as provided in 10.0126;

(5) Any circumstance, except motor vehicle accidents, in which there is a possibility of a claim against the government in connection with the administration, care, and use of its property.

10.0125 Disposal not requiring survey.


Survey action is not required to authorize the following type of property disposals, all of which are otherwise authorized and amply documented:

(1) Transfer of available and excess property to any other governmental activity;

(2) Sale on nonreportable property after circularization as available;

(3) Sale of surplus property. However, in cases involving reportable property, the sale thereof may not be made until after release by the department of material management;

(4) Sale of scrap material;

(5) Donation of surplus property for educational, public health, and civil defense purposes;

(6) Sale or exchange of personal property where the exchange allowance or proceeds of sale are to be applied against the purchase price of replacement items.

10.0126 Certificate of loss or damage.


A certificate of loss or damage (see Appendix 10) may be used in lieu of a report of survey to document losses of or damages to property, provided the total amount of the loss or extent of the damage to all items contained in the certificate does not exceed $100 and possible claims against the government are not involved.

10.0127 Survey authority.


When survey action is required as prescribed in this chapter, and as may be directed by the head of the property division, department of material management, it shall be conducted by the authorities set out in 10.0128 and 10.0129.

10.0128 Survey board.


(a) Authority for survey boards is found at 4.0302 ASCA.

(b) Boards of survey, consisting of not less than 3 members, shall be appointed by the Governor. In case of property to be surveyed, neither the accountable officer nor the responsible employee for such property shall be a member of the board of survey. A standing board may be appointed to act on all cases or the board may be selected on a case-by-case basis.

(c) Special boards of survey shall be appointed by the Governor.

10.0129 Survey review authority.


Authority to approve or disapprove reports of survey and certificates of loss vested in the Lieutenant Governor of American Samoa.

10.0130 Survey board investigation Findings and liability-Scrapping.


Boards of survey shall fully investigate matters submitted to them. They will call for all evidence obtainable and will not limit inquiries to evidence or statements presented by

parties in interest. They will examine and verify all evidence presented and available, and make recommendations consistent with the circumstances and findings disclosed by such examination.

(a) In the case of damaged property, the board of surveyor traveling survey officers will usually recommend that the employee be relieved of financial liability unless its findings disclose that:

(1) the property involved was being used for other than official purposes; or

(2) the employee failed to exercise reasonable precautions with regard to the care, use, and custody of the property in the particular circumstances. Inexpert use of property in carrying out official business resulting in damage will not usually justify holding the employee financially liable.

(b) In the case of missing property where the employee is able to show when and under what circumstances the property was lost, the board of survey will usually make its recommendations concerning financial liability by following criteria similar to that for damaged property. Where the employee is unable to produce missing property and is unable to explain meaningfully the circumstances under which it disappeared, the board will usually be concerned with the question as to whether the employee had or should have had adequate control over the custody of the property. If the nature of the property or the circumstances of the employee's holding it were such that custody and control were unimpaired, the board would understandably be reluctant to recommend that the employee be relieved of financial liability.

(c) Boards of survey should carefully examine property being surveyed. Where the board finds that the property has further usefulness, either as is or after justifiable repairs or reconditioning, it may recommend that the property be continued in service.

(d) Where final board of survey action directs that the destruction or reduction to scrap of property, such disposition shall be witnessed by at least I member of the survey board and an inspector of the property division, department of material management.

10.0131 Liability question separability-Loss valuation-Survey action deferral.


Boards of survey's action in determining whether to hold an employee financially liable for damaged or missing property entrusted to him should be taken apart from and without prejudice to whatever action of a personnel nature may be appropriate. The question of financial liability must be kept separate from such questions as the appropriateness of retraining, transferring, reprimanding, suspending, dismissing, or even commending the employee.

(a) When an employee is found liable for property loss or damage by board of survey action, or when he voluntarily accepts liability, it shall be the responsibility of the accountable officer to establish the government's claim against the employee. Restitution should be sought to the extent of the government's loss. In the case of damaged property, the government's loss will usually be

(1) the cost of necessary repairs or

(2) the estimated market value after, as compared with before, the damage occurred. In the case of missing property, the measure of the government's loss should be the appraised value based on the last known condition of the property.

(b) In any instance involving property irregularities subject to the provisions of this chapter, final board of survey action should be deferred until completion of action by the director of material management.

10.0132 Appeal of liability finding.


An employee held liable for damaged or missing property by action of a board of survey shall have the right to appeal to the appropriate reviewing authority. It is desirable that such appeals be made through the usual channels.

10.0133 Theft or damage reporting.


Thefts or damages to government property shall be reported simultaneously to the property division, department of material management and to the attorney general, department of legal affairs. Copies of such reports shall be used as pertinent attachments to reports of survey.

10.0134 Fixed asset classes-Designated.


(a) The fixed assets of the ASG are divided into the following 6 classes: I. Land; 2. Buildings; 3. Other structures and facilities; 4. Equipment under unit control; 5. Equipment under collective control; 6. Work in progress.

(b) The numbers appearing at the left in subsection (a) of this section are for identification purposes and constitute the first digit of each class in the property identification that appears in 10.0112.

10.0135 Fixed asset classes-l. Land.


1. Land: This classification includes all land owned by the government of American Samoa, regardless of method of acquisition It does not include any buildings or structures on the land.

10.0136 Fixed asset classes-2. Buildings.


2. Buildings: This classification includes permanent buildings which mayor may not be connected with other structures by passageways. In addition to the building itself, it includes plumbing, heating, ventilating, sanitary, mechanical, electrical work, lockers, and cabinets which are made a part of the building.

10.0137 Fixed asset classes-3. Other structures and facilities.


3. Other structures and facilities: This classification consists of nonexpendable items accounted for as a single unit or entity. It must meet 1 or more of the following conditions:

(1) The cost of the individual piece of equipment is $100 or more;

(2) It has a serial or model number given it by the manufacturer;

(3) Replacement policy for the equipment is determined by such pertinent factors as the relationship of the maintenance cost of the acquisition cost of the unit and the observation required of the individual performance or characteristics of the unit.

10.0138 Fixed asset c1asses-5. Equipment under collective control.


5. Equipment under collective control:

(a) This classification applies to equipment that is accounted for as a group rather than as single units. The individual piece of equipment loses its identity as such and is one of a group. For this purpose, the equipment must be the same with respect to function, material, shape, and size.

(b) Equipment under collective control must meet 1 or more of the following conditions:

(1) The cost of each item in the group must be less than $100;

(2) It has no serial or model number given it by the manufacturer;

(3) The relationship of maintenance cost to the acquisition cost of the equipment and the observance of its performance are not pertinent factors in determining replacement policy.

10.0139 Fixed asset classes-6. Work in progress.


6. Work in progress: This classification will apply to construction projects which have been started but not completed and accepted. Temporary records will be maintained to support the value of the work in place as reported. The department of administrative services will be required to furnish a copy of each paid partial payment voucher in order that the property

records may be in accord with that of the department of administrative services. On the satisfactory completion of the project and its acceptance by the ASG, the total cost of the completed project will be added to the appropriate inventory account.

10.0140 Storage-Scope and purpose of provisions.


This section through 10.0143 prescribe basic requirements for the storage of equipment, materials, and supplies acquired by the ASG. This section through 10.0143 will not attempt to cover every conceivable condition or problem that will arise in connection with the storage of various commodities. With a reasonable exercise of judgment, as well as a reference to reputable and recognized standards, and compliance with safety techniques and standards of the division of fire, department of public safety, these provisions will enable and assist each department to achieve the desired objectives.

10.0141 Storage-Objectives.


Storage objectives include such factors as maximum utilization of space consistent with adequate care and protection of property; positive item identification; effective conservation of time, labor, and equipment; and the rapid, easy movement of property from the storage area to the point of use or consumption. Storage methods and procedures vary according to the amount and type of available space, labor, equipment, and the quantity and type of property stored. The basic objectives set forth in 10.0142 and 10.0143 are recommended as guides in planning and storage of personal property.

10.0142 Storage-Arrangement and accessibility.


Orderly arrangement is essential to efficient operation of storehouses. All items, whether stored in bins, bays, in bulk or in original containers should be so arranged that nomenclature and quantity may be readily determined. Efficient storage demands the maximum utilization of space with a minimum amount of labor. Where practical, labor should be conserved by use of modern materials handling equipment and storage aids. Fast-moving items should be stored in convenient locations from which they can be issued with minimum handling. Stock of individual items or classes of items should be segregated to facilitate handling, and inventorying.

(a) Protection. Types of property should be stored according to the kind of protection required. Protection requirements will vary greatly with the types of commodities stocked. All items must be protected from fire and theft. Certain items require protection from dampness, heat, and hazardous characteristics, and are stored separate from other stocks. These factors, as well as maximum protection of property against all causes of deterioration or destruction, must be considered in selecting proper storage locations.

(b) Rotation. Stock rotation is based on the general storage principle of "first in, first out". The fact that many items, for example, perishables, foodstuffs, medicines, paints, chemicals, etc., are subject to deterioration or infestation, requires that the oldest stock be issued first.

10.0143 Storage-Facilities.


Adequate storage facilities shall be provided at each location to ensure the proper safeguarding of all government property. Facilities required will vary largely between the projects and other activities of the various departments and agencies. Actual requirements will depend upon such factors as volume of property to be handled, characteristics of commodities to be stored, and nature of the operations.

(a) Indoor. Indoor storage areas should be arranged to obtain proper stock protection and

maximum utilization of space within established floor load capacities, but should be subject to flexibility to provide for periodic changes in specific space requirements. Employees engaged in storehouse and storage operations must be instructed in safety and fire protection regulations pertaining to these operations. The division of fire is charged with the responsibility of periodically inspecting warehouses and for instructing employees therein in the techniques of fire prevention and protection.

(b) Outdoor. Storage yards for items not requiring covered protection shall be protected by locked fenced enclosures to the extent necessary to protect the government's interest. Outside storage areas shall be prominently posted to clearly indicate that the property stored therein is government property. Entrance to such areas should be restricted to authorized personnel only.

10.0144 General ledger control account-Charging to projects benefitted.


The value of stores property acquired and disposed of shall be recorded in a general ledger control account for stores where the volume of work or other factors necessitate the establishment of a stores account. Unless otherwise directed by the head of each bureau or office, acquisitions of stores property described in the following subsections need not be recorded in a general ledger control account, but may be charged directly to the project benefitted:

(1) Materials and supplies purchased for immediate application on a specific project or job;

(2) Materials and supplies purchased for single purposes, such as those procured against a bill of materials for a specific construction project, even though such materials may be stored for future use, consumption, or installation. In such cases, however, card records showing quantity and descriptive information of the items involved shall be maintained to the extent necessary to ensure proper management and control of such inventories.

10.0145 Card records-Use.


The general ledger control account for stores shall be supported by detailed card records to adequately identify the units of property, the costs of which are charged to the stores account, provide a permanent record of the acquisition and disposition of all stores items, and provide information needed for inventory control and management purposes. These records shall be subject to both internal and external audit, and all entries made therein must be adequately supported by valid acquisition and disposal documents.

10.0146 Card records-Forms.


Property record cards and stock cards (see appendices 7, 10 and 14) or a modification thereof, shall be used for the purpose of carrying out the provisions of 12.0344 and 12.0345.

10.0147 Reconciliation of records.


The total value of stores recorded on the stock card records shall be compared with the balance shown in the general ledger control accounts for stores at least once each year. Any differences disclosed as a result of this comparison shall be reconciled and adjusted in accordance with sound accounting practices and as necessary to bring the subsidiary records and control account monetary balances into complete agreement. The value of all property recorded on the property record cards shall be compared with the balance shown in the general ledger control account. Differences, if any, shall be reconciled.

10.0148 Issuing-Authorized employees.


To ensure that property will not be issued indiscriminately, the official having administrative jurisdiction of the property should designate

in writing an essential number of employees to whom materials and supplies may be issued and/or to whom responsibility for equipment may be assigned.

10.0149 Issuing-Documentation and receipts Transfers.


All issues of property shall be adequately documented and -a receipt obtained at the time the property is removed from the storehouse or other storage area.

(a) Transfer of property, GAS form MT/MGT 20 (see Appendix 4) or a modification thereof may be used for the purpose of documenting transfers of property between offices or departments.

(b) Issues from supply warehouses are handled by stub requisitions, GAS form 107 (see Appendix 13).

10.0150 Sale-Governing provisions-Public notice.


(a) Contracts for the sale of government property are entered into by virtue of the provisions of this chapter and as may be specifically and expressly provided by law.

(b) Property offered for sale will be brought to the attention of the buying public by direct mail, posting in public places, and by both free publicity and paid advertising in newspapers, on radio, and on television. The amount of paid advertising should be commensurate with the type and value of the property being sold.

10.0151 Sale publicity.


Every effort will be made to obtain maximum free publicity for sales from local newspapers, radio and television stations. Postal authorities will be contacted and requested to display posters and sale offerings on post office bulletin boards.

10.0152 Descriptions of property Bid deposit-Award criteria.


(a) Invitation for bids, announcements and public notices, offering property for sale, will contain a full and complete description of the property, its location, condition and life span, and method of sale, whether by sealed bids, negotiation, or auction or spot bid.

(b) Description of vehicular items, such as but not limited to automobiles, station wagons, ambulances, motor trucks, tractor trucks, and buses, will include the following: make of vehicle, year, series or model, manufacturer's serial number, type of vehicle and kind of body, number of cylinders, number of wheels driving, if other than standard, and manufacturer-rated capacity.

(c) Extremely important to the description of any property offered for sale is the portrayal of its true condition. Exact degrees of condition are matters of wide interpretation based on technical knowledge and individual opinion. The terminology contained in this chapter will govern. Some indication of the general condition of the property should be included if at all possible so that the bidder may have a basis upon which to estimate its value for future use. Condition codes should not be used in the description as these might prove quite meaningless to prospective bidders

(d) Awards normally will be made to the highest responsible and responsive bidder. In the event no awards are made for an item even though bids are received, the reasons for not making an award will be entered on the record of the sale.

(e) When a bidder has not met the bid deposit requirement, as provided for in the invitations of bid, such bid normally will be considered nonresponsive, except under any of the following situations:

(1) The bid deposit is less than the amount required by the invitation to bid by an inconsequential amount and the rejection of the bid would not be in the best interest of the government;

(2) Only 1 bid has been received and it is considered to be adequate, and the bidder agrees to submit the required deposit;

(3) A bidder submits a bid deposit which is insufficient to cover all of the items for which he is in line for award. He should be awarded those items for which the bid deposit would have been adequate had only those items been bid upon; provided, however, that such a partial award is not inconsistent with either the bid as submitted by the bidder or the terms and conditions of the invitations, such as all-or-none bid qualification.

(1) In determining which of several items should be awarded, the greatest possible return to the government shall be the prime factor.

10.0153 Bid opening and abstract-Unit-basis bidding.


(a) The official designated as the bid opening officer shall decide when the time set for bid opening has arrived and shall so declare to those present. All bids received prior to the time set for opening shall then be publicly opened and, when practicable, read aloud to the persons present, and be recorded. The official abstract of bids will contain as a minimum the following information:

(1) Number of prospective bidders solicited;

(2) Number of bids received;

(3) Number of awards made;

(4) Item number for which no award is made and the reason thereof;

(5) Item number and statement of reasons for any award other than to highest bidder;

(6) Information regarding whether a bid is submitted subject to condition, reservation, or qualification in any respect.

(b) When bids are solicited on a unit basis, bidders will insert their unit prices and total prices in the space provided for each item. In the event the bidder quotes a total price on an item but fails to quote a unit price, the government will determine the unit price by dividing the total price quoted by the quantity of the item set out in the invitation to bid. The unit price so determined will be used for the purpose of bid evaluation, award, and all phases of administration.

10.0154 Bid examination.


(a) Examination of bids by interested persons shall be permitted during business hours if it does not unduly interfere with the conduct of government business.

(b) Before making an award, the sales contract officer (the deputy division of property or his designee) shall carefully examine the highest bid received to assure that:

(1) the bid is accompanied by the full amount of the required deposit, individual bid deposit bond, or reference to an annual bid deposit bond number;

(2) there are no qualifications which would compromise the position of the government; and

(3) the bid represents a fair price to the government and is commensurate with the market value of the property offered, but in no case less than the scrap value.

10.0155 Bid rejection-Abstract certification.


(a) Bids may be rejected by the sales contract officer when bid prices offered are below the current market appraisals and the prices offered are not considered reasonable, and/or when it appears that there was a collusive attempt by bidders to hold down prices.

(b) For each item which is withdrawn prior to bid opening and for each item for which there is no award made, entry will be made on the abstract of bids.

(c) Although the abstract of bids is public information at all times after completion of the public opening of bids, the successful bidder for each item is not designated until the item has been circled and the abstract or document attached to the abstract has been certified as

follows by the sales contract officer:

"I have made the awards or rejected the bids as indicated on this abstract, and the same countersigned by the Director of Material Management."

10.0156 Accounting of bid and sale proceeds.


Bid deposits and proceeds from sales shall, if not otherwise provided by law, be deposited in the Central Warehouse Fund, and authorized refunds, such as cash bid deposits and any overpayments, will be remitted therefrom.

10.0157 Sales contracts-Notice of award Storage charges.


(a) The sales contract and notice of award shall be issued as promptly as possible after review and shall specify the final date or dates for payment and removal of the property.

(b) In the event a purchaser fails to remove all property awarded within the specified removal period, the same shall be stored and daily storage charges thereon shall accrue at the rate of $25.

(c) In all instances when storage charges are assessed, payment will be made by the purchaser prior to the removal of the property unless otherwise authorized.

10.0158 Sales contract default-Failure to pay for or remove property.


(a) When a purchaser fails to pay for or remove property or otherwise performed as required by the terms and conditions of sale he is considered to be in default; the consequences of this failure to properly perform his obligation under the contract may result in contract termination.

(b) A termination for default for failure to pay and remove property form shall be issued for nonpayment or for nonremoval of property awarded. Ordinarily the purchaser will be allowed 20 days in which to cure the default on sales contract, including auction sales or spot bid.

(c) The notice of default will advise the purchaser that in the event the default is cured prior to the expiration of the cure period, he will be required to pay any accrued storage charges for the period commencing with the day following the removal date specified in the award. The purchaser will also be notified in the notice of default that in the event the default is not cured within the prescribed period, he will lose all right, title, and interest in the property and that, upon expiration of the period prescribed for curing the default, a sum equal to 50% of the purchase price wi11 be retained or collected by the government as liquidated damages.

10.0159 Auction.


(a) At the hour, day, and location previously announced, the sale contracting officer will open the proceedings with an announcement concerning the conduct of the sale. A11 items will be offered item by item, in sequence, as they appear in the invitation and/or the public notice.

(b) As each item is sold, the same should be forthwith recorded in an auction sale item record with pertinent information preprinted thereon. As a minimum, the same should show the hour, day, and location of the auction sale, the sale contracting officer and other officials and clerks of the department of material management, the name and address of the bidder and the amount bid. The successful bidder should be immediately informed with respect to his obligation. Notices of award of contract will be mailed or otherwise furnished to the purchaser as soon as practicable after the sale.

(c) In the event time permits, "no bid" or "rejected bid" -passed -items may be reoffered during the progress of the sale and may again be reoffered before the close of the sale, when deemed advisable and specific announcement is made to that effect at the time the item is passed.

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