OSU PRO 905: Property in the Hands of Subcontractors

Purpose

To properly account for the equipment in the hands of subcontractors.

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Background Information

Subcontracts are predicated on the prime award, and a copy of the prime award is always attached to the subcontract agreement.  The terms of the prime award flow down to the subcontractor.  However, such terms are not automatic in the area of federally owned property.

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Policy

A subcontractor must have an approved property system, including procedures for the care and maintenance of equipment, in order to receive federally owned equipment.  The subcontractor is required to adequately care for and maintain such property (as required by federal regulations per OMB Circular A-110 or FAR 45.510) and assure that it is used only as authorized by the contract.  Equipment reports must be submitted to OSU for referral to the sponsoring agency, as required by the prime award and\or at contract closeout.

The Contract Office must give prior approval for the acquisition of equipment not specified in the subcontract where title will vest with the federal government.  A subcontractor will assume full risk for loss, damage or destruction of federal property in the subcontractor's possession or control except to the extent that the subcontract, with the advance approval of the Contracts Office, relieves the subcontractor from such liability, per FAR 52.245-4.  If there are unusual property requirements, they will be stated in a special conditions attachment to the subcontract. These will include title restrictions and reporting requirements.

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