Government Property (Part 45)

FAR 52.245-1

Government Property

Establishes the contractor's stewardship obligations for Government property: receipt, accountability records, maintenance, use, subcontractor control, reports, relief of stewardship responsibility, contract closeout. Includes 10 outcomes the contractor's property management system must achieve.

FAR / DFARS Part
FAR Part 45 — Government Property
Prescribed By
FAR 45.107(a) — Required when the Government will furnish property to the contractor, or contractor will acquire property for the Government.
Flow-down to Subcontracts

Flow down to subcontracts whenever property is furnished (45.106, 52.245-1(j)).

What this clause requires

  • 1Establish and maintain a property management system that achieves 10 specified outcomes (acquisition, receipt, records, identification, physical inventory, subcontractor control, reports, relief, utilization, closeout).
  • 2Accept stewardship of Government-furnished property upon receipt; report shortages/overages in 90 days.
  • 3Maintain physical inventory and reconcile to property records at least annually.
  • 4Establish loss reporting — losses must be reported promptly via the System for Award Management (eGOPM or similar).
  • 5Cannot use Government property for non-contract work without CO approval.
  • 6Contract closeout — disposition instructions issued by CO; contractor must comply.

When this clause applies

Contracts where the Government furnishes property (GFP) or where the contract authorizes acquisition of property by the contractor (Contractor-Acquired Property — CAP).

Common pitfalls

!Inadequate property management system — DCMA Property Administrator findings can result in system disapproval and CPARS impact.
!Failing to report losses — non-reporting is its own breach.
!Co-mingling Government property with commercial inventory without segregation — audits become impossible.
!Subcontractor property — the prime is responsible for sub-tier property management; flow-down is required.

Proposal-team checklist

  • ☐Maintain a documented property management system aligned with ASTM E2812 (industry standard) or equivalent.
  • ☐Train PMs and warehouse staff on receipt, ID marking, inventory cycle, and loss reporting.
  • ☐Build sub-property flow-down clauses; require sub property reports periodically.
  • ☐Set quarterly internal property audits — pre-empts DCMA findings.

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FAQ

Who pays for Government property losses?

Generally the Government bears the risk of loss for GFP — but the contractor is liable for loss caused by failure to comply with the property management system requirements. Documentation is the contractor's protection.

Can I use GFP for commercial work?

Only with CO approval and typically with rental charges per FAR 45.301. Unauthorized use is a breach.

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Reference content based on the Federal Acquisition Regulation and DFARS as of June 2026. Always verify the current clause text at acquisition.gov before relying on it for an actual submission. Educational reference; not legal advice.