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LucyQ

Definition FAR 52.245-1

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Can "Material" as defined by FAR 52.245-1 be actual money? Money is property which can be expended.

“Material” means property that may be consumed or expended during the performance of a contract, component parts of a higher assembly, or items that lose their individual identity through incorporation into an end item. Material does not include equipment, special tooling, special test equipment or real property.

If we're looking for our contract to give us money without using progress payments can it not be done as GFM?

 

I found evidence of something similar being done on a Hill AFB contract http://www.hill.af.mil/shared/media/document/AFD-120119-037.pdf

 

Under Section H they included  "CONTRACTOR UTILIZATION OF PUBLIC-PRIVATE PARTNERING AS GOVERNMENT-FURNISHED SUPPLIES/SERVICES (April 2010)" (Pg 7-8) which states that,  "When proposals for TOs include utilization of public partner-provided resources, a copy of the public partner’s price and availability (P&A) shall be provided in the TO proposal. The Government will review the agreement, and if approved, will fund the DoD source directly as a Government-Furnished Supply or Service (GFS/S). Upon award, the implementation agreement between the public partner and the DESP III prime contractor will be incorporated into the TO as the basis for which the Government will provide the GFS/S. However, the dollars for resources provided by a public partner shall be separately identified within the agreement and will be added to the DESP III prime contractor’s proposed price as part of the price evaluation process for the specific TO." 

 

Now, I tried to look up Government Furnished Supply or Service (GFS/S) because I had never heard of it and I honestly couldn't find much. So I assumed since it was in Section H that it was Hill's interpretation of a GFM.

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If the purpose of the contract is to produce cigarettes rolled with hundred-dollar bills, and the Government is going to provide a supply of C-notes for the contractor to use in producing the cigarettes, then YES, the hundred-dollar bills will be material as defined in the clause at FAR 52.245-1, Government Property.

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FAR 45.101 defines "property" as "tangible property." Banknotes and coins are tangible things, but the broader term money does not always refer to tangible things.  

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As a slight defense - 

There is a law that requires that we 100% pre-pay military depots for their work. We received a small business set aside, FAR based contract, which would require us to to use a USC Title 10 agreement with the military depot. The initial costs could end up being a significant portion of our annual revenue AND the CO still doesn't want to allow costs that we only have to pay because of a federal law. 

One must get creative. 

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LucyQ, what is in the FAR has very little to do with your relationship with the prime.  If you want something from the prime ask for it.  In your case, you want the prime to give (sic) you money.  I assume you are not really looking for a gift from the prime, but are looking for financing for the subcontract.  If the prime is willing to provide you with that financing, be creative and see what the two of you can negotiate.  You are not limited to the types of government provided financing identified in the FAR.  Also, the financing provided by the prime does not have to be the same type of financing the prime is receiving from the government, if any.

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LucyQ,

Your company would have been far better served by asking the question about financing before the contract between your company and the prime contractor Government was finalized.  But even now, retreadfed gives good advice -- regardless of what or when the contracting officer pays the prime contractor, your company and the prime contractor can work out almost whatever arrangement you want to.

Edited by ji20874
Original posting changed to show that the original poster is a prime contractor, not a subcontractor.

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The answer to your question is No, you cannot receive money from  your prime under the guise of GFM.  GFM is material that is incorporated into the end product during the manufacturing process.  If your prime wants to furnish some money to you, what stands in the way of their doing it?  Why try to construct some kind of flimsy artifice?

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Just now, Retreadfed said:

LucyQ, what is in the FAR has very little to do with your relationship with the prime.  If you want something from the prime ask for it.  In your case, you want the prime to give (sic) you money.  I assume you are not really looking for a gift from the prime, but are looking for financing for the subcontract.  If the prime is willing to provide you with that financing, be creative and see what the two of you can negotiate.  You are not limited to the types of government provided financing identified in the FAR.  Also, the financing provided by the prime does not have to be the same type of financing the prime is receiving from the government, if any.

We are the prime. We are looking to finance our military depot which is our subcontractor due to a Partnership Agreement. 

Unfortunately, our subcontractor is technically government so we have to pay everything upfront because of federal law. Still, our CO doesn't want to allow costs for work that hasn't been completed and which the ACO can't issue a CAR to. Which puts a this small business in a very difficult position. 

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LucyQ, I am confused.  In your original post you stated you wanted your prime to give you money, indicating that you were a subcontractor.  In your latest post, you say you received a set-aside contract, indicating you are a prime contractor.  Can you clarify what the facts are and from whom you wish to receive the money?

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Just now, Vern Edwards said:

I think LucyQ has misinterpreted the passage that she quoted.

It's possible, but I promise not on purpose. 

 

The passage I quoted is within an IDIQ contract in Section H. The authority of them to put it there is something I guessed at but feel free to correct me. 

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2 minutes ago, Retreadfed said:

LucyQ, I am confused.  In your original post you stated you wanted your prime to give you money, indicating that you were a subcontractor.  In your latest post, you say you received a set-aside contract, indicating you are a prime contractor.  Can you clarify what the facts are and from whom you wish to receive the money?

Darn you're right. We are the prime. I meant, "if we're looking for our contract".

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1 minute ago, LucyQ said:

It's possible, but I promise not on purpose. 

 

The passage I quoted is within an IDIQ contract in Section H. The authority of them to put it there is something I guessed at but feel free to correct me. 

You  presented the situation as being similar to yours, so there was an implication that some money was being furnished through some means other than normal financing terms, whereas, as I read it, the government would fund the public partner separately, and furnish the work product to the prime as GFS/S.  No money goes to or through the prime for the public partner efforts.

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I think the GFS/S mentioned in the passage quoted by LucyQ is not money, but supplies and services furnished by the government partner in a publc/private partnership. I think the funds provided directly are funds provided to the government office doing the work.

I cannot imagine any government finance office going along with treating government funding to a contractor as government-furnished material.

This thread has been a ridiculous wild goose chase. 

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