45.101  Definitions.

7.  Amend section 45.101 by--

a.  Removing the definition "Acquisition cost";

b.  Adding, in alphabetical order, the definitions "Loss of Government property" and "Production scrap";

c.  Removing the definition "Surplus property"; and

d.  Adding, in alphabetical order, the definition "Unit acquisition cost". The added text reads as follows:

45.101  Definitions.

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Loss of Government property means unintended, unforeseen or accidental loss, damage, or destruction of Government property that reduces the Government's expected economic benefits of the property.  Loss of Government property does not include occurrences such as purposeful destructive testing, obsolescence, normal wear and tear, or manufacturing defects. Loss of Government property includes, but is not limited to--

(1)  Items that cannot be found after a reasonable search;

(2)  Theft;

(3)  Damage resulting in unexpected harm to property requiring repair to restore the item to usable condition; or

(4)  Destruction resulting from incidents that render the item useless for its intended purpose or beyond economical repair.

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Production scrap means unusable material resulting from production, engineering, operations and maintenance, repair, and research and development contract activities. Production scrap may have value when re-melted or reprocessed, e.g., textile and metal clippings, borings, and faulty castings and forgings.

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Unit acquisition cost means--

(1)  For Government-furnished property, the dollar value assigned by the Government and identified in the contract; and

(2)  For contractor-acquired property, the cost derived from the contractor's records that reflect consistently applied generally accepted accounting principles.