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Pursuant to FAR 52.245-1 (d)(2)(iii), if the Gov't indicates its providing its Government Furnished Property (GFP) in "as-is" condition, doesn't that reverse the risk of loss from the Government (pursuant to 52.245-1 (h)), to the Contractor? If yes, DoD is not supposed to use 52.245-1 Alternate I (per DFAR 245.107(1)(ii)) which Alternate reverses the risk of loss of GFP to the Contractor. Isn't this the same thing as using Alternate I, having the Government declare the GFP in "as-is" condition? 52.245-1 (d)(2)(iii) states:

  • "(iii) The Government may, at its option, furnish property in an "as-is" condition. The Contractor will be given the opportunity to inspect such property prior to the property being provided. In such cases, the Government makes no warranty with respect to the serviceability and/or suitability of the property for contract performance. Any repairs, replacement, and/or refurbishment shall be at the Contractor’s expense."
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36 minutes ago, Guest108830 said:

Pursuant to FAR 52.245-1 (d)(2)(iii), if the Gov't indicates its providing its Government Furnished Property (GFP) in "as-is" condition, doesn't that reverse the risk of loss from the Government (pursuant to 52.245-1 (h)), to the Contractor?

Why do you think that?

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What does the as-is condition have to do with the risk of loss of the item?

See definition of “Loss of Government property” in the clause at 52.245-1: 

“Loss of Government property” means unintended, unforeseen or accidental loss, damage or destruction to Government property that reduces the Government's expected economic benefits of the  property.  Loss of Government property does not include 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 propertyrequiring 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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Perhaps I should be asking the question in a different way. I understand the "repair" and "refurbishment" aspect of (d)(2)(iii). It's the "replacement" aspect that seems to run afoul of para. (h). 

Para. (d)(2)(iii) says, "[a]ny...replacement...shall be at Contractor's expense." The words "any...replacement" is without bounds. This appears to ignore the how and why the replacement became necessary to begin with (i.e., was Contractor negligent?). If accurate, this appears to cut against the grain of para. (h) whereby the Government bears the burden of risk of loss, even if Contractor (and or its subs) were negligent, save for certain limited exceptions.

Any authority / case involving interpretation of the GFP being marked "as-is" and risk of loss would be appreciated. 

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There is ZERO connection between "replacement" in (d)(2)(iii) of FAR 52.245-1 and "loss" in (h)(1) -- ZERO -- you should not try to force a connection.

In (d)(2)(iii), you need to read replacement as having meaning along with "repair" and "refurbishment" -- this means that if any as-is Government-furnished property needs repair, replacement, or refurbishment in order to be used, any of that is at the contractor's expense.  That is why the Contractor will be given the opportunity to inspect the property prior to the property being provided.

In (h), the topic is loss, not usage.  The definition of loss is provided in para. (a) of the clause.

You don't need a case citation -- the text of the clause is sufficient. 

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