FAR 45.4—Subpart 45.4

Title to Government-furnished property.

FAR 45.401 addresses a basic but important ownership rule for Government property in federal contracting: title remains with the Government for all Government-furnished property (GFP) until the property is properly disposed of under applicable law or regulation. It also clarifies that property the Government leases and then furnishes to a contractor for use is treated as GFP under the Government Property clause at FAR 52.245-1. In practice, this section establishes who owns the property, which affects custody, accountability, risk management, recordkeeping, maintenance, and disposal decisions. It helps prevent confusion over whether a contractor has acquired ownership simply by receiving, using, or holding Government property. The rule is especially significant for contractors managing equipment, tools, materials, or leased items provided by the Government, because title determines what can be sold, scrapped, transferred, or retained and who must follow the Government property clause requirements.

Title to contractor-acquired property.

FAR 45.402 explains when title to contractor-acquired property passes to the Government and when it stays with the contractor. It covers two major contract environments: fixed-price contracts, and cost-reimbursement/time-and-materials contracts. The section also ties title passage to financing provisions, other contract-specific title clauses, deliverable end items, and the special treatment of items the contractor will keep using after Government inspection and acceptance. In practice, this rule determines who owns property, who bears risk and accountability, how property must be recorded in the contract, and whether an item must be treated as Government-furnished property (GFP) through a contract modification. It is a core property-management rule because title affects control, disposition, reimbursement, and the contractor’s ability to use, retain, or dispose of the property after performance.