C. Sales of Surplus Property

Comment: In reference to 245.604-3, Sale of surplus property, a respondent suggested that risk-based techniques be used. For example, high value items should be treated differently, according to the respondent, from items with little potential for proceeds.

DoD Response: The language at 245.604-3(1) has been clarified to ensure that plant clearance officers consider the market potential of items prior to authorizing surplus sales and determine the best value sales approach.

Comment: A respondent recommended that 252.245-70XX(c), be changed to read "net proceeds." The respondent cited the Federal Property Administration Act of 1949, which states that a portion of the proceeds goes to the "cost of the work." The respondent also claimed that paragraph (c) conflicts with FAR 31.201-5 and ASTM International standard 2279-09, Establishing the Guiding Principles of Property Management (costs of sales may outweigh the return).

DoD response: The respondent's recommendation implies that contractors are entitled to a share of sales proceeds to cover the contractor costs of conducting the sale. There is no basis for such policy or for otherwise directly reimbursing a contractor for costs incurred in conducting surplus property sales. Such action is a normal part of contractor responsibilities under the clause at FAR 52.245-1(b)(2). FAR 31.201-5 pertains to income, rebates, allowances, or other credits made to allowable costs. Because surplus property sales are a normal part of a contractor's property management responsibilities under the clause at FAR 52.245-1(b)(2) and are typically provided by the contractor as an overhead function, FAR 31.201-5 has no application here. ASTM International standard 2279-09 is not germane to the issue of proper deposit of sales proceeds received under surplus sales.

Comment: A respondent recommended that a certification statement or a standard form providing the terms and conditions of the sale between the Government and buyer be provided at 252.245-70XX(e). The respondent also asked what the expectation is here.

DoD Response: The language exists today in 245.604. As indicated in the proposed rule, 245.604 has been updated and the language moved to the final rule clause at 252.245.70XX. Its requirements are an important policy safeguard to ensure the integrity of the surplus sales process.

Comment: A respondent requested that the language at 252.245-70XX(l)(2) be changed as follows, "(t)he Contractor shall solicit a sufficient number of bidders to obtain adequate competition and use informal invitations for bid unless the plant clearance officer approves use of formal bid procedures."

DoD Response: The language, which has been revised and relocated to 252.245-7004(j)(4), specifies that informal bid procedures shall be used unless the plant clearance officer directs otherwise.

Comment: A respondent recommended that formal sales be considered a part of the Contract Data Requirements List (CDRL).

DoD Response: There is no basis for such policy. Including this on the CDRL would make the Government liable for directly reimbursing a contractor for costs incurred in conducting surplus property sales.

However, such expenses are a normal part of contractor responsibilities under FAR 52.245-1(b)(2) and are not subject to direct reimbursement.

Comment: A respondent recommended removing the dollar threshold at 252.245-70XX(l)(6) and requiring the plant clearance officer, not the contractor, to send the sales notice to FedBizOps.

DoD Response: The plant clearance officer, not the contractor, is the appropriate sender of the sales notice; therefore, the requirement has been deleted. A more general requirement on the use of FedBizOps has been included in the DFARS companion resource, Procedures, Guidance, and Information (PGI) for the plant clearance officer.

Comment: A respondent recommended changing the second sentence of 252.245-70XX(e)(9)(7) to, "(b)id openings will be submitted to the plant clearance officer, either electronically or manually, two copies of the bid abstract."

DoD Response: The language has been revised and relocated to paragraph (j)(8) of 252.245-7004, and clarifies that the contractor shall provide two copies of the bid abstract to the plant clearance officer.

Comment: A respondent recommended deleting the phrase "(f)orwarded to the plant clearance officer" from 252.245-70XX(c), Proceeds from sale of surplus inventory.

DoD Response: The language at 252.245-7004(c) has been clarified to require proceeds to be forwarded to the contracting officer or plant clearance officer, credited to the Government through a settlement agreement, credited to the contract, applied to the contract as directed by the contracting officer, or forwarded to the plant clearance officer unless otherwise provided for in the contract.

Comment: In reference to 252.245-70XX (l), a respondent asked if plant clearance officers must draw up and provide terms and conditions for the contractor to use on surplus sales. The respondent also requested that terms and conditions be included in this clause.

DoD Response: Contractors are required to use Government-provided sales terms and conditions. This is not a new requirement. DCMA is leading an effort to revise and update the sales terms and conditions found today at 245.7309. Once completed, and in coordination with the Services, the sales terms and conditions will be incorporated into the DFARS. It should be noted that sales terms and conditions specific to demilitarization, mutilation, and destruction will remain within the clause at 252.245-7004 due to the general sensitivity of demilitarization, mutilation, and destruction actions.