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Title 41 Part 109-1

Title 41 → Subtitle C → Chapter 109 → Subchapter A → Part 109-1

Electronic Code of Federal Regulations e-CFR

Title 41 Part 109-1

e-CFR data is current as of September 18, 2018

Title 41Subtitle CChapter 109Subchapter A → Part 109-1


Title 41: Public Contracts and Property Management


PART 109-1—INTRODUCTION


Contents

Subpart 109-1.1—Regulation System

§109-1.100-50   Scope of subpart.

This subpart sets forth the Department of Energy (DOE) Property Management Regulations (DOE-PMR) which establish uniform DOE property management policies, regulations, and procedures that implement and supplement the Federal Property Management Regulations/Federal Management Regulation. Property management statutory authorities that are unique to the Department (e.g., section 161g of the Atomic Energy Act of 1954 (42 U.S.C. 2201(g)) and section 3155 of the National Defense Authorization Act for Fiscal Year 1994 (42 U.S.C. 72741)) are not addressed in these regulations.

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§109-1.100-51   Definitions and acronyms.

(a) Definitions. As used in this chapter, the terms personal property and property are synonymous. In addition, the following definitions apply:

Accountable Personal Property includes nonexpendable personal property whose expected useful life is two years or longer and whose acquisition value, as determined by the agency, warrants tracking in the agency's property records, including capitalized and sensitive personal property. 41 CFR 102-35.20.

Administratively controlled items means personal property controlled at the discretion of individual DOE offices, but for which there is no DOE requirement to maintain formal records.

Cannibalization means to remove serviceable parts from one item of equipment in order to install them on another item of equipment (48 CFR Subpart 45.101).

Capitalized Personal Property includes property that is entered on the agency's general ledger records as a major investment or asset. An agency must determine its capitalization thresholds as discussed in Financial Accounting Standard Advisory Board (FASAB) Statement of Federal Financial Accounting Standards No. 6, 41 CFR 102-35.20; DOE Financial Management Handbook.

Controlled Unclassified Information (CUI) means the Unclassified information that is controlled within DOE because its release could cause damage. CUI within DOE encompasses Official Use Only (OUO) and Unclassified Nuclear Information (UCNI). OUO includes information such as Personally Identifiable Information, Export Controlled Information, proprietary information, and other information not covered by other DOE directives. CUI is governed by Executive Order 13556 and is a developing Government-wide policy, Controlled Unclassified Information, which will mandate uniform standards for the control of unclassified information within the Government.

Designated contractors means those on-site DOE contractors to which the DOE-PMR is made applicable when included as a contractual requirement. The contractors to which these regulations may be made applicable include management and operating (M&O) contractors, environmental management, and other major prime contractors located at DOE sites.

Direct operations means operations conducted by DOE personnel.

Disposal means the process of reutilizing, transferring, donating, selling, abandoning, destroying, or other disposition of Government-owned personal property.

Dual-Use List means nuclear-related material, equipment, and related technology as described in the Nuclear Suppliers Group Dual-Use List as published in International Atomic Energy Agency Information Circular (INFCIRC) 254 Part 2 and as implemented by the Department of Commerce in the U.S. Export Administration Regulations (15 CFR part 774).

Equipment means a tangible asset that is functionally complete for its intended purpose, durable, nonexpendable, and needed for the performance of a contract. Equipment is not intended for sale, and does not ordinarily lose its identity or become a component part of another article when put into use (48 CFR Subpart 45.101).

Especially designed or prepared property means equipment and material designed or prepared especially for use in the nuclear fuel cycle and described in the Nuclear Suppliers Group Trigger List as published in International Atomic Energy Agency INFCIRC 254 Part 1 and as implemented by the Nuclear Regulatory Commission in 10 CFR part 110.

Excess Property means property that is no longer required to carry out the Department of Energy's needs, but for purposes of this regulation, such property has not been reported to the General Services Administration as excess property under 41 CFR 102-36.35.

Export controlled information means unclassified U.S. Government information under DOE cognizance that, if proposed for export by the private sector, would require a U.S. Department of Commerce or U.S. Department of State validated license, or a DOE authorization for export, and which, if given uncontrolled release, could reasonably be expected to adversely affect U.S. national security or nuclear nonproliferation objectives.

Export controlled property means property the export of which is subject to licensing by the U.S. Department of Commerce, the U.S. Department of State, the U.S. Nuclear Regulatory Commission, or authorized by the U.S. Department of Energy.

Hazardous personal property means property that is deemed a hazardous material, chemical substance or mixture, or hazardous waste under the Hazardous Materials Transportation Act (HMTA) (49 U.S.C. 5101), the Resource Conservation and Recovery Act (RCRA) (42 U.S.C. 6901-6981), or the Toxic Substances Control Act (TSCA) (15 U.S.C. 2601-2609). 41 CFR 102-36.40.

High risk personal property means property that, because of its potential impact on public health and safety, the environment, national security interests, or proliferation concerns, must be controlled, and disposed of in other than the routine manner. The categories of high risk property are automatic data processing equipment, especially designed or prepared property, export controlled information, export controlled property, hazardous property, nuclear weapon components or weapon-like components, proliferation sensitive property, radioactive property, special nuclear material, and unclassified controlled nuclear information.

Information Technology. (i) With respect to an executive agency means any equipment or interconnected system or subsystem of equipment, used in the automatic acquisition, storage, analysis, evaluation, manipulation, management, movement, control, display, switching, interchange, transmission, or reception of data or information by the executive agency, if the equipment is used by the executive agency directly or is used by a contractor under a contract with the executive agency that requires the use—

(A) Of that equipment; or

(B) Of that equipment to a significant extent in the performance of a service or the furnishing of a product;

(ii) Includes computers, ancillary equipment (including imaging peripherals, input, output, and storage devices necessary for security and surveillance), peripheral equipment designed to be controlled by the central processing unit of a computer, software, firmware and similar procedures, services (including support services), and related resources; but

(iii) Does not include any equipment acquired by a federal contractor incidental to a federal contract. 40 U.S.C. 11101.

Munitions List Items (MLIs) are commodities (usually defense articles/defense services) listed in the International Traffic in Arms Regulation (22 CFR part 121), published by the U.S. Department of State. 41 CFR 102-36.40.

Nuclear weapon component or weapon-like component means parts of whole war reserve nuclear weapon systems, joint test assemblies, trainers, or test devices, including associated testing, maintenance, and handling equipment; or items that simulate such parts.

Organizational Property Management Officers means establish and administer personal property management programs within their organizations consistent with applicable laws, regulations, practices, and standards.

Personal property means any property, except real property. For purposes of this part, the term excludes records of the Federal Government, and naval vessels of the following categories: Battleships, cruisers, aircraft carriers, destroyers, and submarines. 102-36.40.

Program Secretarial Officer (PSO) Assistant Secretaries/Program Element Heads.

Proliferation-sensitive property means nuclear-related or dual-use equipment, material, or technology as described in the Nuclear Suppliers Group Trigger List and Dual-Use List, or equipment, material or technology used in the research, design, development, testing, or production of nuclear or other weapons.

Property Administrator means an authorized representative of the contracting officer appointed in accordance with agency procedures, responsible for administering the contract requirements and obligations relating to Government property in the possession of a contractor FAR 45-101.

Property management means the system of acquiring, maintaining, using and disposing of the personal property of an organization or entity. 102-35.20.

Radioactive property means any item or material that is contaminated with radioactivity and which emits ionizing radiation in excess of background radiation as measured by appropriate instrumentation.

Sensitive Personal Property includes all items, regardless of value, that require special control and accountability due to unusual rates of loss, theft or misuse, or due to national security or export control considerations. Such property includes weapons, ammunition, explosives, information technology equipment with memory capability, cameras, and communications equipment. These classifications do not preclude agencies from specifying additional personal property classifications to effectively manage their programs. 41 CFR 102-35.20.

Spare equipment/property means items held as replacement spares for equipment in current use in DOE program.

Special nuclear material means plutonium, uranium 233, uranium enriched in the isotope 233 or 235, any other materials which the Nuclear Regulatory Commission pursuant to the Atomic Energy Act of 1954, as amended, determines to be special nuclear material, or any material artificially enriched by any of the foregoing, but does not include source material.

Trigger List means nuclear material, equipment, and related technology as described in International Atomic Energy Agency in INFCIRC 254, Part 1 and as implemented by the Nuclear Regulatory Commission in 10 CFR part 110.

Unclassified controlled nuclear information means U.S. Government information pertaining to atomic energy defense activities as defined in section 148 of the Atomic Energy Act. Such information can relate to aspects of nuclear weapons design, development, testing, physical security, production, or utilization facilities. 10 CFR part 1017.

(b) Acronyms. As used in this chapter, the following acronyms apply:

CFR: Code of Federal Regulations

CSC: Customer Supply Center

CUI: Controlled Unclassified Information

DEAR: Department of Energy Acquisition Regulation

DOD: Department of Defense

DOE: Department of Energy

DOE-PMR: Department of Energy Property Management Regulations

DPMO: Departmental Property Management Officer

ECCN: Export Control Classification Number

ECI: Export Controlled Information

EHFFP: Equipment Held For Future Projects

EOQ: Economic Order Quantity

FAR: Federal Acquisition Regulation

FPMR/FMR: Federal Property Management Regulations/Federal Management Regulation

FSC: Federal Supply Classification

FSCG: Federal Supply Classification Group

GAO: General Accounting Office

GSA: General Services Administration

GVWR: Gross Vehicle Weight Rating

INFCIRC: International Atomic Energy Agency Information Circular

IFMS: Interagency Fleet Management System

IT: Information Technology

LEDP: Laboratory Equipment Donation Program

M&O: Management and Operating

MCTL: Military Critical Technologies List

OPMO: Organizational Property Management Officer

OPSEC: Operations Security

PA: Property Administrator

PSO: Program Secretarial Officer (PSO)

SNM: Special Nuclear Material

UCNI: Unclassified Controlled Nuclear Information

U.S.C.: United States Code

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§109-1.101   Federal Property Management Regulations/Federal Management Regulation System.

§109-1.101-50   DOE-PMR System.

The DOE-PMR system described in this subpart is established to provide uniform personal property management policies, standards, and practices within the Department.

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§109-1.102   Federal Property Management Regulations/Federal Management Regulation.

§109-1.102-50   DOE-PMRs.

The DOE-PMRs (41 CFR Ch. 109) implements and supplements the FPMR/FMR (41 CFR Ch. 101) issued by the General Services Administration (GSA), Public Laws, Executive Orders, Office of Management and Budget directives, and other agency issuances affecting the Department's personal property management program.

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§109-1.103   FPMR/FMR temporary regulations.

§109-1.103-50   DOE-PMR temporary policies and bulletins.

(a) Subject to applicable procedural requirements in 41 U.S.C. 1707, 42 U.S.C 7191 and 5 U.S.C 553, Personal Property Letters are authorized for publication of temporary policies that should not be codified in the Code of Federal Regulations (CFR).

(b) DOE-PMR Bulletins are used to disseminate information concerning personal property management matters not affecting policy or to clarify instructions in actions required by the FPMR/FMR or DOE-PMR.

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§109-1.104   Publication and distribution of FPMR/FMR.

§109-1.104-50   Publication and distribution of DOE-PMR.

The DOE-PMR will be published in the Federal Register and will appear in the CFR as Chapter 109 of Title 41, Public Contracts and Property Management. Written publications of the DOE-PMR will be distributed to DOE offices.

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§109-1.106   Applicability of FPMR/FMR.

§109-1.106-50   Applicability of FPMR/FMR and DOE-PMR.

(a) The FPMR/FMR and DOE-PMR apply to all direct operations.

(b) The DOE-PMR does not apply to facilities and activities conducted under Executive Order 12344 (Naval Nuclear Propulsion Program) and Public Law 98-525.

(c) Unless otherwise provided in the appropriate part or subpart, the FPMR/FMR and DOE-PMR apply to designated contractors.

(d) The Procurement Executive or head of a contracting activity may designate contractors other than designated contractors to which the FPMR/FMR and DOE-PMR apply.

(e) Program Secretarial Officers and other DOE elements are responsible to identify the contracts that involve the life-cycle management of personal property assets. The respective program's Head of Contracting Activity is responsible to issue direction to Contracting Officers to incorporate any and all applicable requirements of the FPMR/FMR and DOE-PMR and any supplemental Program Office guidance into contracts identified with life-cycle management of personal property.

(f) Principal authority and responsibility for the administration of DOE personal property in the custody of its contractors rest with the responsible Contracting Officer.

(g) The FPMR/FMR and DOE-PMR shall be used by contracting officers in the administration of applicable contracts, and in the review, approval, or appraisal of such contractor operations.

(h) Regulations for the management of Government property in the possession of other DOE contractors are contained in the Federal Acquisition Regulation (FAR), 48 CFR part 45, and in the DOE Acquisition Regulation (DEAR), 48 CFR part 945.

(i) Regulations for the management of personal property held by financial assistance recipients are contained in the DOE Financial Assistance Rules (10 CFR part 600) 2 CFR parts 200 and 910 and DOE Order 534.1, Accounting.

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§109-1.107-50   Consultation regarding DOE-PMR.

(a) The DOE-PMR shall be fully coordinated with all Departmental elements substantively concerned with the subject matter.

(b) The accountable Under Secretary is responsible for implementation of the DOE PMR through their respective DOE elements.

(c) Program Secretarial Officers and DOE elements with responsibility for personal property, as delegated by their cognizant Under Secretary, may develop program management plans and issue internal program office guidance that is aligned to the requirements in the DOE-PMR and as explicitly authorized by their Under Secretary.

(d) Heads of Contracting Activity designates Organizational Property Management Officers (OPMO) to establish and administer personal property management programs within their organizations.

(e) Contracting Officers designates Property Administrators (PA) as authorized representatives responsible performing delegated contract administration functions for contract and financial assistance requirements relating to Government personal property.

(f) The Office of Management is responsible for Agency-level management of the contract property program and provides policy and management assistance in support of the policy implementation effort. The Office of Management designates an Agency Property Executive to serve as National Utilization Officer responsible for promoting acquisition and utilization of excess personal property and for establishing policies, standards, and guidance in accordance with applicable laws, regulations and sound personal property management practices and standards.

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§109-1.108   Agency implementation and supplementation of FPMR/FMR.

(a) The DOE-PMR includes basic and significant Departmental personal property management policies and standards which implement, supplement, or deviate from the FPMR/FMR. In the absence of any DOE-PMR issuance, the basic FPMR/FMR material shall govern.

(b) The DOE-PMR shall be consistent with the FPMR/FMR and shall not duplicate or paraphrase the FPMR/FMR material.

(c) Implementing procedures, instructions, and guides which are necessary to clarify or to implement the DOE-PMR may be issued by Headquarters or field organizations, provided that the implementing procedures, instructions and guides:

(1) Are consistent with the policies and procedures contained in this regulation;

(2) To the extent practicable, follow the format, arrangement, and numbering system of this regulation; and

(3) Contain no material which duplicates, paraphrases, or is inconsistent with the contents of this regulation.

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§109-1.110-50   Deviation procedures.

(a) Each request for deviation shall contain the following:

(1) A statement of the deviation desired, including identification of the specific paragraph number(s) of the DOE-PMR;

(2) The reason why the deviation is considered necessary or would be in the best interest of the Government;

(3) If applicable, the name of the contractor and identification of the contractor affected;

(4) A statement as to whether the deviation has been requested previously and, if so, circumstances of the previous request;

(5) A description of the intended effect of the deviation;

(6) A statement of the period of time for which the deviation is needed; and

(7) Any pertinent background information which will contribute to a full understanding of the desired deviation.

(b)(1) Requests for deviations from applicable portions of the FPMR/FMR and DOE-PMR (except aviation related portions) shall be forwarded with supporting documentation by the Organizational Property Management Officer (OPMO) to the Office of Management.

(2) Requests for deviations from aviation related portions of the FPMR/FMR and DOE-PMR concerning aviation operations shall be forwarded by the OPMO or on-site DOE Aviation Management Officer with supporting documentation to the DOE Senior Aviation Management Official.

(c) The accountable Under Secretary is authorized to approve documented program-specific or location-specific exemptions, exclusions, and/or deviations from requirements of the DOE PMR based on mission needs, efficiency, and/or efficacy of execution without disregarding federal laws and regulations.

(d) Requests for deviations from the FPMR/FMR will be coordinated with GSA by the Office of Management.

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Subpart 109-1.50—Personal Property Management Program

§109-1.5000   Scope of subpart.

This subpart supplements the FPMR/FMR, states DOE personal property management policy and program objectives, and prescribes authorities and responsibilities for the conduct of an efficient personal property management program in DOE.

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§109-1.5001   Policy.

It is DOE policy that a program for the management of personal property shall be established and maintained to meet program needs. Personal property shall be managed efficiently, in accordance with Federal statutes and regulations, and in alignment with mission needs. Personal property must be managed in a safe and secure manor and ensure personal property assets are available to support efficient mission execution. Commercial practices may be used (i.e., industry leading practices, voluntary consensus standards) that are necessary, appropriate, and provide effective and efficient Government property management, except where those practices are inconsistent with law, regulation or otherwise impractical.

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§109-1.5002   Personal property management program objectives.

The objectives of the DOE personal property management program are to provide:

(a) A system for efficiently managing personal property in the custody or possession of DOE organizations and designated contractors; and

(b) Uniform principles, policies, and standards for efficient management of personal property that are sufficiently broad in scope and flexible in nature to facilitate adaptation to local needs and various kinds of operations.

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Subpart 109-1.51—Personal Property Management Standards and Practices

§109-1.5100   Scope of subpart.

This subpart provides guidance on DOE standards and practices to be applied in the management of personal property.

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§109-1.5101   Official use of personal property.

Personal property shall be used only in the performance of official work of the United States Government, except:

(a) In emergencies threatening loss of life or property as authorized by law;

(b) As otherwise authorized by law and approved by the Office of Management; Program Secretarial Officer (PSO) for their respective organizations; or a contracting officer for contractor-held property.

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§109-1.5102   Maximum use of personal property.

Personal property management practices shall assure the best possible use of personal property. Supplies and equipment shall be generally limited to those items essential for carrying out the programs of DOE efficiently.

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§109-1.5103   Loan of personal property.

(a) Personal property which is not excess and would otherwise be out of service for temporary periods may be loaned to other DOE offices and contractors, other Federal agencies, and to others for official purposes. The loan request shall be in writing, stating the purpose of the loan and period of time required. The loan shall be executed on DOE Form 4420.2, Personal Property Loan Agreement when approved in writing by the OPMO or on-site DOE property administrator. When approved, a memorandum transmitting the loan agreement shall be prepared identifying the loan period, delivery time, method of payment and transportation, and point of delivery and return, to ensure proper control and protect DOE's interest. The domestic loan period shall not exceed one year, but may be renewed in one year increments. Second renewals of loan agreements shall be reviewed and justified at a level of management at least two levels above that of the individual making the determination to loan the property. Third renewals shall be approved by the head of the field organization or designee.

(b) Requests for loans to foreign Governments and other foreign organizations shall be submitted to the Office of International Affairs for approval, with a copy to the cognizant Headquarters program office.

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§109-1.5105   Identification marking of personal property.

(a) Personal property shall be marked “U.S. Government property” or “U.S. DOE”) subject to the criteria below. The markings shall be securely affixed to the property, legible, and conspicuous. Examples of appropriate marking media are bar code labels, decals, and stamping.

(b) Personal property which by its nature cannot be marked, such as stores items, metal stock, etc., is exempted from this requirement.

(c) To the extent practicable and economical, markings shall be removed prior to disposal outside of DOE. 41 CFR 102-35.30.

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§109-1.5106   Segregation of personal property.

Generally, contractor-owned personal property shall be segregated from Government personal property. Commingling of Government and contractor-owned personal property may be allowed only when:

(a) The segregation of the property would materially hinder the progress of the work (i.e., segregation is not feasible for reasons such as small quantities, lack of space, or increased costs); and

(b) Control procedures are adequate (i.e., the Government property is specifically marked or otherwise identified as Government property).

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§109-1.5107   Physical protection of personal property.

Controls such as property pass systems, memorandum records, regular or intermittent gate checks, and/or perimeter fencing shall be established as appropriate to prevent loss, theft, or unauthorized removal of property from the premises on which such personal property is located.

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§109-1.5108   Personal property records requirements.

The contractor's property control records shall provide the following information for every accountable item of Government personal property in the contractor's possession and any other data elements required by specific contract provisions:

(a) Contract number or equivalent code designation.

(b) Asset type.

(c) Description of item (name, serial number, national stock number (if available)).

(d) Property control number (Government ownership identity).

(e) Unit acquisition cost (including delivery and installation cost, when appropriate, and unit of measure).

(f) Acquisition document reference and date.

(g) Manufacturer's name, model and serial number.

(h) Quantity received, fabricated, issued or on hand.

(i) Location (physical area)

(j) Custodian name and organization code.

(k) Use status (active, storage, excess, etc.)

(l) High risk designation.

(m) Disposition document reference and date.

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§109-1.5108-1   Equipment.

An individual property record will be developed and maintained for each item of equipment.

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§109-1.5108-3   Stores inventories.

Perpetual inventory records are to be maintained for stores inventory items.

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§109-1.5108-4   Precious metals.

Perpetual inventory records are to be maintained for precious metals.

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§109-1.5108-5   Administratively controlled items.

No formal property management records are required to be maintained for this category of personal property, which includes such items as those controlled for calibration or maintenance purposes, contaminated property, tool crib items, and equipment pool items. Various control records can be employed to help safeguard this property against waste and abuse, including purchase vs. use information, tool crib check-outs, loss and theft reports, calibration records, disposal records, and other similar records. Control techniques would include physical security, custodial responsibility, identification/marking, or other locally established control techniques.

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§109-1.5110   Physical inventories of personal property.

(a) Physical inventories of those categories of personal property as specified in paragraph (g) of this section shall be conducted at all DOE and designated contractor locations.

(b) Physical inventories shall be performed by the use of personnel other than custodians of the property. Where staffing restraints or other considerations apply, the inventory may be performed by the custodian with verification by a second party.

(c) Detailed procedures for the taking of physical inventories shall be developed for each DOE office and designated contractor. The OPMO/PA shall review and approve the DOE office and contractor procedures.

(d) The conduct of a physical inventory will be observed, or follow-on audits made, by independent representatives, e.g., finance, audit, or property personnel, to the extent deemed necessary to assure that approved procedures are being followed and results are accurate. These observations or audits shall be documented and the documentation retained in the inventory record file.

(e) The DOE capitalization threshold for items acquired prior to October 1, 2011 is $50,000. For items acquired on or after October 1, 2011, the threshold is $500,000.

(f) Procedures that are limited to a check-off of a listing of recorded property without actual verification of the location and existence of such property do not meet the requirements of a physical inventory.

(g) The frequency of physical inventories of personal property shall be as follows:

(1) Equipment—biennial 98%. Inventory accuracy.

(2) Sensitive items—annual 100%. Inventory accuracy.

(3) Stores inventories—annual.

(4) Precious metals—annual 100% Inventory accuracy.

(5) HRPP—annual 100% Inventory accuracy.

(6) All other accountable property every three years 98% Inventory accuracy.

(7) Administratively controlled items—There is no formal Department requirement for the performance of physical inventories of this property. However, OPMOs/PA's determines inventory requirements based on management needs.

(h) Physical inventories shall be performed at intervals more frequently than required when experience at any given location or with any given item or items indicates that this action is necessary for effective property accounting, utilization, or control as directed by OPMO/PA.

(i) Physical inventories of equipment may be conducted by the “inventory by exception” method. The system and procedures for taking physical inventories by this method must be fully documented and approved in writing by the OPMO/PA.

(j) The results of physical inventories shall be reconciled with the property records, and with applicable financial control accounts.

(k) The results of physical inventories shall be reported to the OPMO/PA.

(l) Physical inventories of equipment and stores inventories may be conducted using statistical sampling methods in lieu of the normal wall-to-wall method. The sampling methods employed must be statistically valid and approved in writing by the OPMO. If use of the statistical methods of physical inventory does not produce acceptable results, the wall-to-wall method shall be used to complete the inventories.

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§109-1.5112   Loss, damage, or destruction of personal property in possession of DOE direct operations.

DOE offices shall establish procedures to provide for the reporting, documentation, and investigation of instances of loss, damage, or destruction of personal property including:

(a) Notification to appropriate DOE organizations and law enforcement offices;

(b) Determination of cause or origin;

(c) Liability and responsibility for repair or replacement; and

(d) Actions taken to prevent further loss, damage, or destruction, and to prevent repetition of similar incidents.

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§109-1.5113   Loss, damage, or destruction of personal property in possession of designated contractors.

(a) Designated contractors shall report any loss, damage, or destruction of personal property in its possession or control, including property in the possession or control of subcontractors, to the property administrator as soon as it becomes known.

(b) When physical inventories, consumption analyses, or other actions disclose consumption of property considered unreasonable by the property administrator; or loss, damage, or destruction of personal property not previously reported by the contractor, the property administrator shall require the contractor to investigate the incidents and submit written reports.

(c) Reports of physical inventory results and identified discrepancies shall be submitted to the property administrator within 90 days of completion of physical inventories. An acceptable percentage of shrinkage for stores inventories shall be determined by the property administrator on a location-by-location basis, based on type and cost of materials, historical data, and other site-specific factors. This determination shall be in writing and be supported by appropriate documentation.

(d) The contractor's report referenced above shall contain factual data as to the circumstances surrounding the loss, damage, destruction or excessive consumption, including:

(1) The contractor's name and contract number;

(2) A description of the property;

(3) Cost of the property, and cost of repairs in instances of damage (in event actual cost is not known, use reasonable estimate);

(4) The date, time (if pertinent), and cause or origin; and

(5) Actions taken by the contractor to prevent further loss, damage, destruction, or unreasonable consumption, and to prevent repetition of similar incidents.

(e) The property administrator shall ensure that the corrective actions taken by the contractor under paragraph (d)(5) of this section satisfactorily address system weaknesses.

(f) The contracting officer shall make a determination of contractor liability with a copy of the determination furnished to the contractor and the property administrator. Costs may be assessed against a contractor for physical inventory discrepancies or other instances of loss of Government property within the terms of the contract. Credit should only be applied if specific items reported as lost can be uniquely identified. General physical inventory write-ons are not to be used as a credit.

(g) If part of a designated contractor's personal property management system is found to be unsatisfactory, the property administrator shall increase surveillance of that part to prevent, to the extent possible, any loss, damage, destruction or unreasonable consumption of personal property. The property administrator shall give special attention to reasonably ensuring that any loss, damage, destruction or unreasonable consumption occurring during a period when a contractor's personal property management system is not approved is identified before approval or reinstatement of approval.

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§109-1.5114   Use of non-Government-owned property.

Non-Government-owned personal property shall not be installed in, affixed to, or otherwise made a part of any Government-owned personal property when such action will adversely affect the operation or condition of the Government property.

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§109-1.5148   Personal property management reports.

Annual personal property reports as required by 41 CFR 102 35.25 and internal DOE personal property reports must be submitted to the Office of Management at a date determined by the Property Executive.

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Subpart 109-1.52—Personal Property Management Program for Designated Contractors

§109-1.5200   Scope of subpart.

This subpart prescribes policy and responsibilities for the establishment, maintenance, and appraisal of designated contractors' programs for the management of personal property.

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§109-1.5201   Policy.

(a) Designated contractors shall establish, implement, and maintain a system that provides for an efficient personal property management program. The system shall be consistent with the terms of the contract; prescribed policies, procedures, regulations, statutes, and instructions; and directions from the contracting officer.

(b) Designated contractors' personal property management systems shall not be considered acceptable until reviewed and approved in writing by the cognizant DOE contracting office in accordance with §109-1.5205 of this subpart.

(c) Designated contractors shall maintain their personal property management systems in writing. Revisions to the systems shall be approved in writing by the cognizant DOE contracting office in accordance with §109-1.5205 of this subpart.

(d) Designated contractors shall include their personal property management system in their management surveillance or internal review program in order to identify weaknesses and functions requiring corrective action.

(e) Designated contractors are responsible and accountable for all Government personal property in the possession of subcontractors, and shall include appropriate provisions in their subcontracts and property management systems to assure that subcontractors establish and maintain efficient systems for the management of Government personal property in their possession in accordance with §109-1.5204 of this subpart.

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§109-1.5202   Establishment of a personal property holdings baseline.

(a) If the contractor is a new designated contractor, the contractor may accept the previous contractor's personal property records as a baseline or may perform a complete physical inventory of all personal property. This physical inventory is to be performed within the time period specified by the contracting officer or the contract, but no later than one year after the execution date of the contract. If the physical inventory is not accomplished within the allotted time frame, the previous contractor's records will be considered as the baseline.

(b) If any required physical inventories have not been accomplished within the time periods prescribed in §109-1.5110(f) of this part, the new contractor shall either perform such physical inventories within 120 days of contract renegotiation, or accept the existing property records as the baseline.

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§109-1.5203   Management of subcontractor-held personal property.

Designated contractors shall require those subcontractors provided Government-owned personal property to establish and maintain a system for the management of such property. As a minimum, a subcontractor's personal property management system shall provide for the following:

(a) Adequate records.

(b) Controls over acquisitions.

(c) Identification as Government-owned personal property.

(d) Physical inventories.

(e) Proper care, maintenance, and protection.

(f) Controls over personal property requiring special handling (i.e., nuclear-related, proliferation-sensitive, hazardous, or contaminated property).

(g) Reporting, redistribution, and disposal of excess and surplus personal property.

(h) Accounting for personal property that is lost, damaged, destroyed, stolen, abandoned, or worn out.

(i) Periodic reports, including physical inventory results and total acquisition cost of Government property.

(j) An internal surveillance program, including periodic reviews, to ensure that personal property is being managed in accordance with established procedures.

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§109-1.5204   Review and approval of a designated contractor's personal property management system.

(a) An initial review of a designated contractor's personal property management system shall be performed by the property administrator within one year after the execution date of the contract, except for contract extensions or renewals or when an existing contractor has been awarded a follow-on contract. The purpose of the review is to determine whether the contractor's system provides adequate protection, maintenance, utilization, and disposition of personal property, and reasonable assurance that the Department's personal property is safeguarded against waste, loss, unauthorized use, or misappropriation, in accordance with applicable statutes, regulations, contract terms and conditions, programmatic needs, and good business practices. If circumstances preclude completion of the initial review within the “within one year” initial review requirement, the property administrator shall request a deviation from the requirement in accordance with the provisions of §109-1.110-50 of this part.

(b) If a designated contractor is the successor to a previous designated contractor and the contract award was based in part on the contractor's proposal to overhaul the existing personal property management system(s), the “within one year” initial review requirement may be extended based on:

(1) The scope of the overhaul; and

(2) An analysis of the cost to implement the overhaul within a year versus a proposed extended period.

(c) When an existing contract has been extended or renewed, or the designated contractor has been awarded a follow-on contract, an initial review of the contractor's personal property management system is not required. In such cases, the established appraisal schedule will continue to be followed as prescribed in paragraph (d) of this section.

(d) At a minimum of every three years after the date of approval of a designated contractor's property management system, the OPMO/PA shall make an appraisal of the personal property management operation of the contractor. The purpose of the appraisal is to determine if the contractor is managing personal property in accordance with its previously approved system and procedures, and to establish whether such procedures are efficient. The appraisal may be based on a formal comprehensive appraisal or a series of formal appraisals of the functional segments of the contractor's operation.

(e) A designated contractor's property management system shall be approved, conditionally approved, or disapproved in writing by the head of the field organization with advice of the contracting officer, property administrator, OPMO, legal counsel, and appropriate program officials. Approval authority may be redelegated to the contracting officer or OPMO/PA. Conditional approval and disapproval authority cannot be redelegated. When a system is conditionally approved or disapproved, the property administrator or contracting officer shall advise the contractor, in writing, of deficiencies that need to be corrected, and a time schedule established for completion of corrective actions.

(f) Appropriate follow-up will be made by the property administrator to ensure that corrective actions have been initiated and completed.

(g) When a determination has been made by the property administrator that all major system deficiencies identified in the review or appraisal have been corrected, the head of the field organization shall withdraw the conditional approval or disapproval, and approve the system with the concurrence of the OPMO/PA. The approval shall be in writing and addressed to appropriate contractor management.

(h) The property administrator shall maintain a copy of all designated contractor personal property management system appraisals and approvals in such manner as to be readily available to investigative and external review teams.

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§109-1.5205   Personal property management system changes.

Any proposed significant change to a designated contractor's approved personal property management system shall be reviewed by the property administrator at the earliest possible time. Such changes should then be approved in writing on an interim basis, or disapproved in writing, by the property administrator as appropriate.

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Subpart 109-1.53—Management of High Risk Personal Property

§109-1.5300   Scope of subpart.

(a) This subpart provides identification, accounting, control, and disposal policy guidance for the following categories of high risk personal property: Especially designed or prepared property, export controlled property, nuclear weapon components or weapon-like components, and proliferation sensitive property. The guidance is intended to ensure that the disposition of these categories of high risk personal property does not adversely affect the national security or nuclear nonproliferation objectives of the United States.

(b) The other categories of high risk personal property are controlled by other life cycle management programs and procedures monitored by other Departmental elements.

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§109-1.5301   Applicability.

This subpart is applicable to all DOE organizations which purchase, manage or dispose of Government personal property, or contract for the management of Government facilities, programs, or related services, which may directly or indirectly require the purchase, management, or disposal of Government-owned personal property. Using the high-risk personal property control requirements in this subpart as guidance, Program Secretarial Officer (PSO) or OPMOs/PAs shall ensure that designated contractors and financial assistance recipients are responsible for developing a cost effective high-risk property management system, covering all operational responsibilities enumerated in this subpart.

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§109-1.5302   Policies.

(a) It is the responsibility of DOE organizations and designated contractors to manage and control Government-owned high risk personal property in an efficient manner. High-risk personal property will be managed throughout its life cycle so as to protect public and DOE personnel safety and to advance the national security and the nuclear nonproliferation objectives of the U.S. Government.

(b) The disposition of high risk property is subject to special considerations. Items of high risk property may present significant risks to the national security and nuclear nonproliferation objectives of the Government which must be evaluated. Organizations will identify high risk property and control its disposition to eliminate or mitigate such risks. In no case shall property be transferred or disposed unless it receives a high risk assessment and is handled accordingly.

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§109-1.5303   Procedures.

(a) Identification, marking and control. To ensure the appropriate treatment of property at its disposal and to prevent inadvertent, uncontrolled release of high risk property, property should be assessed and evaluated as high risk property as early in its life cycle as practical.

(1) Newly acquired high risk personal property shall be identified and tracked during the acquisition process and marked upon receipt.

(2) All personal property shall be reviewed for high risk identification, marking, and database entry during regularly scheduled physical inventories, unless access to the property is difficult or impractical because the property is a component of a larger assembly, a complex operating system, or an older facility. The review of this property will be completed, prior to disposition, when replacing components or when operating systems and facilities are decommissioned and dismantling.

(3) High risk personal property which by its nature cannot be marked, such as stores items and metal stock, is exempt from this requirement. However, personal property management programs should contain documentation on the characterization of this property as high risk.

(b) Disposition of high risk property. (1) Prior to disposition, all personal property, materials or data will be assessed to determine:

(i) Whether it should be characterized as high risk, and

(ii) What actions are necessary to ensure compliance with applicable national security or nonproliferation controls.

(2) The DOE or designated contractor property management organization may not process high risk personal property into a reutilization/disposal program without performing the reviews prescribed by the local high risk property management system. The reviews must be properly documented, and all appropriate certifications and clearances received, in accordance with the approved site or facility personal property management program.

(3) The disposition (including demilitarization of items on the Munitions List) and handling of high risk personal property are subject to applicable provisions of subchapter H of the FPMR/FMR, subchapter H of this chapter, and the DOE Guidelines on Export Control and Nonproliferation.

(4) All applicable documentation, including records concerning the property's categorization as high risk, shall be included as part of the property transfer. The documentation shall be included with all transfers within, or external to, DOE.

(5) Unless an alternative disposition option appears to be in the best interest of the Government, surplus Trigger List components, equipment, and materials and nuclear weapon components shall either be sold for scrap after being rendered useless for their originally intended purpose or destroyed, with the destruction verified and documented. Requests for approval of an alternative disposition may be made through the cognizant Assistant Secretary to the Director of the Office of Nonproliferation and National Security.

(6) The following Export Restriction Notice, or approved equivalent notice, shall be included in all transfers, sales, or other offerings:

Export Restriction Notice

The use, disposition, export and re-export of this property are subject to all applicable U.S. laws and regulations, including the Atomic Energy Act of 1954, as amended; the Arms Export Control Act (22 U.S.C. 2751 et seq.); the Export Administration Act of 1979 as continued under the International Emergency Economic Powers Act (Title II of Pub. L. 95-223, 91 Stat. 1626, October 28, 1977); Trading with the Enemy Act (50 U.S.C. 4305) as amended by the Foreign Assistance Act of 1961); Assistance to Foreign Atomic Energy Activities (10 CFR part 810); Export and Import of Nuclear Equipment and Material (10 CFR part 110); International Traffic in Arms Regulations (22 CFR parts 120 et seq.); Export Administration Regulations (15 CFR part 730 et seq.);.); and the Espionage Act (37 U.S.C. 791 et seq.) which among other things, prohibit:

a. The making of false statements and concealment of any material information regarding the use or disposition, export or re-export of the property; and

b. Any use or disposition, export or re-export of the property which is not authorized in accordance with the provisions of this agreement.

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§109-1.5304   Deviations.

(a) Life cycle control determinations. When the PSO approves a contractor program containing controls, other than life cycle control consistent with this subpart, the decision shall be justified in writing and a copy sent to the Office of Management. A PSO's decision not to provide life-cycle control should take into account:

(1) The nature and extent of high risk property typically purchased or otherwise brought to a DOE or designated contractor facility or site;

(2) The projected stability of DOE and designated contractor operations; and

(3) The degree of confidence in the property control measures available at disposition.

(b) Certain transfers, sales, or other offerings of high risk personal property may require special conditions or specific restrictions as determined necessary by the property custodian or cognizant program office.

(c) Requests for deviations from the requirements of this subpart may be made through the cognizant PSO to the Office of Management.

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