FAR 45.107—Contract clauses.
Plain-English Summary
FAR 45.107 tells contracting officers when to include the Government property clauses in solicitations and contracts, and which version of the clause to use. It covers the basic Government Property clause at 52.245-1, including when to use Alternate I and Alternate II, the special Government Property (Installation Operation Services) clause at 52.245-2 for certain fixed-price service contracts on Government installations, and the Use and Charges clause at 52.245-9 whenever 52.245-1 is included. It also explains when a Government property clause is not required for purchase orders for property repair if the Government property being repaired is at or below the simplified acquisition threshold and no other Government property is furnished. In practice, this section is a clause-selection rulebook: it helps the contracting officer match the contract type, the source and amount of Government-furnished property, and the nature of the work to the correct property-management terms. The practical significance is substantial because the chosen clause determines the contractor’s property responsibilities, accountability, use rights, charges, and risk allocation for Government-owned or Government-furnished property.
Key Rules
Insert 52.245-1 broadly
The contracting officer must include FAR 52.245-1, Government Property, in cost-reimbursement and time-and-materials contracts, and in labor-hour contracts when property is expected to be furnished. It is also required in fixed-price contracts when the Government will provide Government property, and in certain FAR Part 12 actions when Government property over the simplified acquisition threshold is furnished or when the contractor is directed to acquire property for use under the contract that will be titled in the Government.
Use Alternate I when applicable
The contracting officer must use 52.245-1 with Alternate I for contracts other than those covered by FAR 45.104(a), which addresses responsibility and liability for Government property. This alternate adjusts the clause for the property-management circumstances identified by the regulation.
Use Alternate II for certain research
The contracting officer must use 52.245-1 with Alternate II when the contract is for basic or applied research at nonprofit institutions of higher education or nonprofit organizations whose primary purpose is scientific research. This alternate is tailored to the special research environment described in FAR 35.014.
Add 52.245-2 for installation services
For fixed-price service contracts performed on a Government installation, the contracting officer must insert 52.245-2, Government Property (Installation Operation Services), when Government-furnished property is provided only for initial provisioning and the Government is not responsible for repair or replacement. This clause addresses a narrower operating-services scenario than the standard Government Property clause.
Include 52.245-9 with 52.245-1
Whenever 52.245-1 is included, the contracting officer must also insert 52.245-9, Use and Charges. This ensures the contract addresses how Government property may be used and whether charges apply.
Repair purchase order exception
Purchase orders for property repair do not need a Government property clause if the unit acquisition cost of the Government property being repaired does not exceed the simplified acquisition threshold, unless the Government also furnishes other property that is not being repaired. If other Government property is provided, the clause requirement can still apply.
Responsibilities
Contracting Officer
Determine whether Government property will be furnished or acquired for Government title, identify the correct contract type and acquisition method, and insert the required property clauses and the correct alternates. The contracting officer must also recognize the limited exception for low-dollar repair purchase orders and ensure 52.245-9 is included whenever 52.245-1 is used.
Contractor
Review the contract clauses to understand property accountability, authorized use, charges, and any special terms tied to the alternate clause selected. The contractor must manage Government property in accordance with the incorporated clause and comply with any property-related reporting, care, and use requirements.
Agency/Program Office
Identify early whether Government-furnished property, contractor-acquired Government-titled property, or installation operating support property will be involved, and provide accurate acquisition planning information to the contracting officer. The agency must also ensure the property arrangement matches the intended contract performance model.
Practical Implications
Clause selection is not optional; it depends on contract type and the presence of Government property, so acquisition planning must identify property needs early.
A common mistake is forgetting 52.245-9 whenever 52.245-1 is used, which can leave the contract incomplete on use-and-charges terms.
Another frequent pitfall is using the wrong alternate to 52.245-1, especially in research contracts or in contracts where FAR 45.104(a) affects responsibility and liability.
For fixed-price service work on Government installations, 52.245-2 may apply even when the standard Government Property clause is not the best fit, so the contracting officer must distinguish initial provisioning from repair/replacement responsibility.
The repair purchase order exception is narrow: it applies only when the unit acquisition cost of the property being repaired is at or below the simplified acquisition threshold and no other Government property is furnished.
Official Regulatory Text
(a) (1) Except as provided in paragraph (d) of this section, the contracting officer shall insert the clause at 52.245-1 , Government Property, in- (i) All cost-reimbursement and time-and-material type solicitations and contracts, and labor-hour solicitations when property is expected to be furnished for the labor-hour contracts. (ii) Fixed-price solicitations and contracts when the Government will provide Government property. (iii) Contracts or modifications awarded under FAR part 12 procedures where Government property that exceeds the simplified acquisition threshold, as defined in FAR 2.101 , is furnished or where the contractor is directed to acquire property for use under the contract that is titled in the Government. (2) The contracting officer shall use the clause with its Alternate I in contracts other than those identified in FAR 45.104 (a), Responsibility and Liability for Government Property. (3) The contracting officer shall use the clause with its Alternate II when a contract for the conduct of basic or applied research at nonprofit institutions of higher education or at nonprofit organizations whose primary purpose is the conduct of scientific research (see 35.014 ) is contemplated. (b) The contracting officer shall also insert the clause at 52.245-2 , Government Property (Installation Operation Services), in fixed-price service contracts to be performed on a Government installation when Government-furnished property will be provided for initial provisioning only and the Government is not responsible for repair or replacement. (c) The contracting officer shall insert the clause at 52.245-9 , Use and Charges, in solicitations and contracts when the clause at 52.245-1 is included. (d) Purchase orders for property repair need not include a Government property clause when the unit acquisition cost of Government property to be repaired does not exceed the simplified acquisition threshold, unless other Government property (not for repair) is provided.