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GFP Disposition?? - 13 yr old GFP without a contract since 2015


KOWil77

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We are currently encountering an interesting situation regarding GFP and disposition. We are unsure how to approach this. Quick back story: 

We were a subcontractor to a large prime from 2010 - 2015 and issued GFP from the prime (Laptops, Monitors, similar items, etc.). Once the contract ended, we were instructed by the government to pick up the items for the follow-on contract. Once the items were picked up and stored at our facility, we received a mod from the large prime a couple months later stating the GFP was no longer a part of our subcontract with them and was to be incorporated to the follow-on (I know they had no authority to do this). 

Ultimately, the GFP was never DD250'ed back to the government from the original effort and never officially incorporated as GFP to the follow-on. The GFP is essentially out in limbo not assigned to a contract. You can make the case the GFP is still officially tied to the originally contract with the large prime, but we have reached out multiple times and they have wiped their hands clean of it. The government has also not provided any help and wants nothing to do with this GFP. 

All of the GFP has not been used for 8+years and has been sitting in our warehouse. We are at the point of wanting to dispose of it and have tried all avenues with the government with no success. Is there something we can do or some sort of guidance we can follow to dispose of these items? 

I appreciate any and all feedback. If you need any further information, please let me know. 

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Can you mod the follow-on contract to take accountabilty for the items? That, to me, seems like the correct approach, given the direction from both the government and the prime contractor. One you have established accountability, then you can begin the disposition process.

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The follow-on contract ended in 2018 and we have had the GFP ever since. Essentially the government is tracking (if at all) the GFP is on the original contract with the large prime. There is no official contract where this GFP is placed. 

Is there a clause or ruling that allows of disposal of GFP after a certain time is reached? 

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8 hours ago, KOWil77 said:

I appreciate any and all feedback.

Here is my feedback. 

If I have the scenario correctly your firm as sub received GFP from a prime pursuant to what I will call Contract A.  There was a subsequent contract on which you were also a sub to a different prime on, Contract B.  You call it the "follow-on".  Pursuant to Contract A, the government and the prime for contract A you, as the sub, was informed that the GFP had passed to contract B.  The prime for Contract A modified your Contract A subcontract accordingly removing the GFP.  

 Now with regard to Contract B the GFP has languished and documentation beyond the Contract A modification and some sort of communication from the government nothing has occurred with regard to Contract B or in other words the prime for Contract B nor the government for Contract B has confirmed or otherwise accounted for the GFP as being part of Contract B.

If I have this correct then this is my view of how I would handle the matter. 

I would write a letter to the prime for Contract B that provides the detail of how you believe the GFP was transferred to Contract B.  I would provide the facts of the transfer by providing  documentation to support (modification from Contract A, communication from the government for Contract A, etc).  I would request that the prime for Contract B  provide written instructions as what to do with the GFP.   The letter should provide an expected due date for the instructions.

If such a request falls on deaf ears with the prime for Contract B I would then seek legal counsel with knowledge about GFP and the Federal government to carry the matter further.  

 

 

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17 hours ago, KOWil77 said:

We are currently encountering an interesting situation regarding GFP and disposition. We are unsure how to approach this. Quick back story: 

We were a subcontractor to a large prime from 2010 - 2015 and issued GFP from the prime (Laptops, Monitors, similar items, etc.). Once the contract ended, we were instructed by the government to pick up the items for the follow-on contract. Once the items were picked up and stored at our facility, we received a mod from the large prime a couple months later stating the GFP was no longer a part of our subcontract with them and was to be incorporated to the follow-on (I know they had no authority to do this). 

Ultimately, the GFP was never DD250'ed back to the government from the original effort and never officially incorporated as GFP to the follow-on. The GFP is essentially out in limbo not assigned to a contract. You can make the case the GFP is still officially tied to the originally contract with the large prime, but we have reached out multiple times and they have wiped their hands clean of it. The government has also not provided any help and wants nothing to do with this GFP. 

All of the GFP has not been used for 8+years and has been sitting in our warehouse. We are at the point of wanting to dispose of it and have tried all avenues with the government with no success. Is there something we can do or some sort of guidance we can follow to dispose of these items? 

I appreciate any and all feedback. If you need any further information, please let me know. 

I would write the government KO of the last contract that you were officially assigned the GFP. Advise them that you intend to  return the equipment and ask them where to bring/send it. Ask them, in the alternative, what should you do with it. Advise them that you aren’t going to continue to store it.

If they say it is a matter between you and the applicable prime (which one?), send a copy of all the correspondence to the prime, copy furnish the government official, tell the prime the same thing and ask the prime the same thing.

But insist on a written response from whomever you correspond with.

Note that any proceeds from a sale sent to the government would be deposited in the Treasury. Based upon my own experiences, don’t necessarily count on much government employee enthusiasm in looking out for the taxpayers first.

After much insistence with the airline company on my part and persistence, American Airlines wrote me a $4200 check for crushing my government laptop in an airport carryon luggage freight elevator malfunction. The baggage handlers over stacked the carryon luggage cart. My computer and several others fell off and were crushed in the elevator door frame.  I endorsed the check payable to the Treasury. Surprised the crap out of our finance and accounting office. They acted like they didn’t know what to do with it. Avoided a “report of survey”, which nobody was interested in doing. (I returned the crushed computer to our IT office and insisted on documentation that i was no longer responsible for it. 

There were other contract experiences where there wasn’t too much interest by others in pursuing (liquidated or other monetary) damages if the funds weren’t going to be directly available to the agencies for other spending purposes. I ignored that indifference.

Be persistent that you aren’t going to keep storing it and demand disposition instructions.

 

 

 

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6 hours ago, joel hoffman said:

I would write the government KO of the last contract that you were officially assigned the GFP. Advise them that you intend to  return the equipment and ask them where to bring/send it. Ask them, in the alternative, what should you do with it. Advise them that you aren’t going to continue to store it.

If they say it is a matter between you and the applicable prime (which one?), send a copy of all the correspondence to the prime, copy furnish the government official, tell the prime the same thing and ask the prime the same thing.

But insist on a written response from whomever you correspond with.

This is the best course of action. @KOWil77  You might also get the government property office involved as well.  I’m sure no one wants to deal with it because of the age and likely zero value of the property.  

It’s a tough issue for the government or prime contractor to deal with for several reasons:

(1)  the government should not have directly contacted you to begin with telling you to pick up the items for the follow-on contract

(2) the lack of proper actions by the government and original prime to account for the property under the first contract

(3) the lack of the second prime resolving the gfp issue at their level

(4) the long time that has passed

(5) many of the responsible individuals all around likely have moved on

(6) the GFP probably is worthless and you might even incur a cost disposing of it

If it were me and my company didn’t have in-house attorneys I wouldn’t spend money to hire one.  Instead I would give anybody a certified letter saying if I didn’t hear back within X days, I interpret it was constructive abandonment pursuant to paragraph (k) of the GFP clause

 

Quote

k)  Abandonment of Government property.

  

(1) The Government shall not abandon sensitive property or termination inventory without the Contractor’s written consent.

(2) The Government, upon notice to the Contractor, may abandon any nonsensitive property in place, at which time all obligations of the Government regarding such property shall cease.

(3) Absent contract terms and conditions to the contrary, the Government may abandon parts removed and replaced from property as a result of normal maintenance actions, or removed from property as a result of the repair, maintenance, overhaul, or modification process.

(4) The Government has no obligation to restore or rehabilitate the Contractor’s premises under any circumstances; however, if Government-furnished property is withdrawn or is unsuitable for the intended use, or if other Government property is substituted, then the equitable adjustment under paragraph (i) of this clause may properly include restoration or rehabilitation costs.

 

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I should have reviewed the entire clause.
I like formerfed’s suggestion to suggest the option of government abandonment of the property in accordance with paragraph (k) of the clause in the contract.

And request (require ) a reply or written confirmation within a reasonable time after receipt of the certified letter (30-45 days?).

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11 hours ago, joel hoffman said:
On 8/14/2023 at 11:42 AM, KOWil77 said:

We are currently encountering an interesting situation regarding GFP and disposition. We are unsure how to approach this. Quick back story: 

We were a subcontractor to a large prime from 2010 - 2015 and issued GFP from the prime (Laptops, Monitors, similar items, etc.). Once the contract ended, we were instructed by the government to pick up the items for the follow-on contract. Once the items were picked up and stored at our facility, we received a mod from the large prime a couple months later stating the GFP was no longer a part of our subcontract with them and was to be incorporated to the follow-on (I know they had no authority to do this). 

Ultimately, the GFP was never DD250'ed back to the government from the original effort and never officially incorporated as GFP to the follow-on. The GFP is essentially out in limbo not assigned to a contract. You can make the case the GFP is still officially tied to the originally contract with the large prime, but we have reached out multiple times and they have wiped their hands clean of it. The government has also not provided any help and wants nothing to do with this GFP. 

All of the GFP has not been used for 8+years and has been sitting in our warehouse. We are at the point of wanting to dispose of it and have tried all avenues with the government with no success. Is there something we can do or some sort of guidance we can follow to dispose of these items? 

I appreciate any and all feedback. If you need any further information, please let me know. 

Expand  

I would write the government KO of the last contract that you were officially assigned the GFP.

 

5 hours ago, formerfed said:

This is the best course of action.

So you both believe there is privity of contract between the government and a sub?  How so?

The subs current contract is with a prime which by the indicated documentation where GFP was to go to the current contract by order of the government and was removed from the previous prime/sub contract by mod. 

The sub has two routes; the previous prime who the OP says refuses to respond, rightly so as the GFP was modified out of their contract, and a current prime.  For the latter I see nothing in the OP about any attempt to contact the current prime.  However reading between the lines the sub took the GFP believing it was applicable to the current prime contract.  Therefore the course based on privity of contract is with the current prime.

Basis for my recommendation to consult with legal counsel is IF the current prime also is silent  the sub then has to make an independent decision that may carry liability.

I also question abandonment without concurrence of the current prime based on assumption that sub took GFP for the current contract.  I suspect a laptop is sensitive property and as such the prime must consent.

 

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1 hour ago, C Culham said:

 

So you both believe there is privity of contract between the government and a sub?  How so?

The subs current contract is with a prime which by the indicated documentation where GFP was to go to the current contract by order of the government and was removed from the previous prime/sub contract by mod. 

The sub has two routes; the previous prime who the OP says refuses to respond, rightly so as the GFP was modified out of their contract, and a current prime.  For the latter I see nothing in the OP about any attempt to contact the current prime.  However reading between the lines the sub took the GFP believing it was applicable to the current prime contract.  Therefore the course based on privity of contract is with the current prime.

Basis for my recommendation to consult with legal counsel is IF the current prime also is silent  the sub then has to make an independent decision that may carry liability.

I also question abandonment without concurrence of the current prime based on assumption that sub took GFP for the current contract.  I suspect a laptop is sensitive property and as such the prime must consent.

 

I never said there was privity  of contract and offered a follow up course of action if that is the governments response. The government apparently already dealt directly with the OP’ company though.

Maybe abandonment won’t work, without Prime concurrence too.  

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Carl, the government got involved when it shouldn’t with this.  
 

Quote

Once thecontract ended, we were instructed by the government to pick up the items for the follow-on contract. Once the items were picked up and stored at our facility, we received a mod from the large prime a couple months later stating the GFP was no longer a part of our subcontract with them and was to be incorporated to the follow-on (I know they had no authority to do this)  

Ultimately, the GFP was never DD250'ed back to the government from the original effort and never officially incorporated as GFP to the follow-on. The GFP is essentially out in limbo not assigned to a contract

Then the OP stated the GFP was never used after the first contract ended.  The second prime never received any official notification either.  Like it or not the government apparently stepped into something they shouldn’t.  

The OP should ask the government where the official property records state the GFP is located.  Apparently the first prime thinks they aren’t responsible, the second prime feels the same, and the sub has no idea.  The ball is in the governments court at this point.  It’s Government Furnished Property so where does the government say it’s furnished to? 

It has sat for eight years with no direction or action by the government including contractual with the second prime.  That seems like abandonment to me. 

 Everyone can debate this but the GFP is worthless at this point.  So why waste time, energy, and money?  

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3 hours ago, joel hoffman said:

I never said there was privity  of contract

By your very suggestion you did.  If I were the CO I wouldn't respond to a sub at the most, at least I would tell the sub to contact their prime.

 

3 hours ago, formerfed said:

Carl, the government got involved when it shouldn’t with this.  

So what?  The subbdid what the government told them to do at that is what counts.

 

3 hours ago, formerfed said:

Then the OP stated the GFP was never used after the first contract ended.

So what? They assumed the property for the follow on.  Use does not constitute their acceptance of the order to move the GFP, they moved it.

 

3 hours ago, formerfed said:

The second prime never received any official notification either.  

How do you know this?  The OP is silent on this.

 

3 hours ago, formerfed said:

Like it or not the government apparently stepped into something they shouldn’t.  

Constructive or cardinal change that the subbshould ask the second prime to pursue on their behalf.  They should not go directly to the government for all the reasonsvI stated or implied.

 

3 hours ago, formerfed said:

The ball is in the governments court at this point.

No it is not in it is the the subs.  The sub took action on the request of the government and the first prime.  Right, wrong, or indifferent they are holding the property.  It is their responsibility to determine what to do with it based on their assumption of the property for the second/follow on contract.

 

3 hours ago, formerfed said:

So why waste time, energy, and money?  

So they can prove due diligence to protect their liability and culpability.

THERE IS NO PRIVITY OF CONTRACT BETWEEN THE SUB AND THE GOVERNMENT.  THEY NEED TO RECTIFY THEIR ACTIONS BASED ON THEIR PRIME NOT THE GOVERNMENT.

 

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Carl, both primes are apparently unwilling to engage. The sub has the GFP. The governments owns the GFP.

I’d ask the government if they want it back. If yes, I’d return it. If no, the government should say so. If the government says to deal with the prime (it already has) , then the next step is to do the same thing with the prime.

The sub just wants to get rid of it.

If it is documented that nobody will take it , the sub could do what a marine air conditioning company (Marvair) did with their spare parts inventory after Dometic acquired them a few years ago.

The company loaded every spare A/C part into a semi-trailer and dumped it off on a Dometic loading dock one weekend when nobody was there. No parts lists or other documentation…

I know that from first hand conversation with the Dometic Parts manager when I needed a new control board for my still under warranty boat A/C unit.

That would be a bit drastic. But I can understand the OP’s frustration with the other parties.

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Carl, the OP said

Quote

Ultimately, the GFP was never DD250'ed back to the government from the original effort and never officially incorporated as GFP to thefollow-on.

The first prime thinks they are clear and the follow-on prime apparently doesn’t have anything from the government or they would have it in the subcontract.

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30 minutes ago, formerfed said:

Carl, the OP said

The first prime thinks they are clear and the follow-on prime apparently doesn’t have anything from the government or they would have it in the subcontract.

So what?  Again the sub needs a prime to carry their issue to the government.  The first prime will not respond.  The second prime is their avenue.  If they too want to be silent then the sub needs an expert (legal counsel) to help chart next steps.  Or as you suggest roll the dice and hope nobody comes a knocking.

To borrow a phrase "The Wall" of privity is well settled and breaking through it is difficult.  The sub errored early on and now has a challenge based on relationships, if any, with primes to solve.  

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Carl, it’s good for sake of this discussion to go back to what both Joel and I recommended.  That’s sending a letter to the contracting officer, the first prime, and the second and ask what to do with the GFP. If I didn’t hear back, I would send the certified letter giving them reasonable time such as the 30-45 days Joel suggested.  Again if no responses I would consider abandoned by the government and dispose of it.

Under different circumstances, I would persist in getting greater action out of the parties.  But in this case it appears nobody cares for probably the reasons I cited above.  The GFP is worthless.  Someone can’t even give old desktops and monitors to charity because they don’t want it. 

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In this situation, so what if there is no “privity of contract” between the government and the sub? The sub is telling the government and the two primes what happened, that it is still storing the stuff, neither prime contractor is responding to it, and does the government want it back or not?

The government can acknowledge the situation - bearing in mind that it had a hand in creating it…

If it wants it back, it could direct whatever prime it thinks is applicable to have it returned. I’d copy furnish the poor sub. 

It’s no wonder to me that DoD flunks the GAO or IG criteria every year for accountability of government property. 

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24 minutes ago, formerfed said:

Carl, it’s good for sake of this discussion

We are beating a dead horse but for sake of a clear discussion I offer this.

On 8/15/2023 at 3:49 AM, joel hoffman said:

I would write the government KO of the last contract that you were officially assigned the GFP.

Joel said this to which your responded with a link to Joel's post.

21 hours ago, formerfed said:

This is the best course of action.

"That" sir is not sending a letter to the primes by my read.  It is trying to bust The Wall of privity.

28 minutes ago, formerfed said:

 The GFP is worthless.

  I am not so easy to make such a dismissal without specifics.   Laptops!!!!!!  Neither you or I know what they might hold with regard to ability to access government systems, personal identity information and so on. 

I do agree that if nobody cares (2 primes and one or two government entities) then I would most likely destroy the items and move on.  But I dang sure would cover all my bases as to my efforts regarding contacts and my actions in destroying in a manner that prevents any use.  Donating in my view is out of the question.

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Sorry to bring this thread up again but I realized a key question about the subject wasn’t answered.  Is there a contract even that currently addresses the GFP? 

The thread title alludes to it.  The original prime contract ended in 2015.  The government instructed the sub to pick up the GFP for the follow-on contract.  The prime sent a mod to the sub saying the GFP is no longer part of their contract.  Since eight years have lapsed, the government may have closed out that contract.  Then the OP states the second prime never included it in their contract with them.  Apparently the GFP was never used in the follow-on contact.

It may there’s nothing involving the now sitting GFP as part of any contract.  Maybe the sub acted at the governments direction and it’s an informal commitment occurred depending upon who provided the direction and the exact details.  

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Has anyone read FAR 45.600?

Back in the 90's when DoD was down-selecting a lot of multiple-source programs like Tomahawk, I had to deal with 20+ years of GFP piled up in McDonnell Douglas GFP cages when we selected Hughes as the sole supplier.

There was a checkoff process that began with the plant clearance officer which ended many times with the government abandoning the GFP in place, at which point M-D auctioned it off to the general public (and let a guy named "Snake" leave the auction with a bunch of aircraft-grade aluminum billets that he never paid for.  You'd think they would naturally keep an eye on a guy named "Snake" but apparently not. It was in Florida after all. lol).  Then we negotiated with Hughes Aircraft over the value of the remaining GFP that they could use on their Tomahawk production line. 

After reading 45.600, I would suggest you catalog your GFP and submit it to the prime for disposition, cc:ing the CO on the original contract.  Personally, I wouldn't worry too much about privity at this point because whatever the prime/sub scenario is, you have GFP you are accountable for. 

Not to be too discouraging, but my Tomahawk negotiation took 2 years to complete.

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29 minutes ago, REA'n Maker said:

I wouldn't worry too much about privity at this point because whatever the prime/sub scenario is, you have GFP you are accountable for. 

The sub may be accountable to the prime for the property, but the prime is accountable to the government.  I agree with your suggestion concerning the disposition of the property.  At this point, it may not be government property if the government has abandoned it.

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24 minutes ago, Retreadfed said:

The sub may be accountable to the prime for the property, but the prime is accountable to the government.  

Yeah but remember the government told the sub to take the property and the prime sent a mod to the sub saying the property is no longer part of their subcontract.  
 

It would be interesting to hear the governments position and what their records show where the equipment is.  I also wouldn’t be surprised if the primes contract with the government is closed out after eight years.

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