FAR 45.600—Scope of subpart.
Plain-English Summary
FAR 45.600 defines the scope of Subpart 45.6 and tells contracting personnel and contractors when its inventory-disposition rules apply. It covers policies and procedures for reporting, reutilization, and disposal of contractor inventory that is excess to contract needs, as well as property that supports a claim against the Government, including termination inventory under fixed-price contracts. In practice, this means the subpart governs how contractors identify and report excess property, how the Government may direct reutilization or disposal, and how claim-related property is handled when a contract ends or is terminated. The section also draws important boundaries: it does not apply to real property, and it does not apply to property where the Government’s lien or title exists only because of advance, progress, or performance-based payments that have already been liquidated. This scope statement is important because it prevents misuse of the subpart and helps parties determine whether property must be managed under these rules or under some other FAR, contract, or property-disposition framework.
Key Rules
Covers excess contractor inventory
The subpart applies to contractor inventory that is excess to contract requirements. That includes property the contractor holds under a contract but no longer needs to perform the work or satisfy contract obligations.
Includes claim-related property
The subpart also applies to property that forms the basis of a claim against the Government, such as termination inventory under fixed-price contracts. This ensures there are procedures for reporting and handling property tied to contract claims or terminations.
Addresses reporting, reutilization, disposal
The scope is not limited to disposal; it also includes reporting and reutilization. Contractors and the Government must follow the prescribed process to identify excess property, consider reuse, and then dispose of it if reuse is not appropriate.
Excludes real property
This subpart does not apply to the disposal of real property. Buildings, land, and other real property are handled under different authorities and procedures.
Excludes certain payment-related title or liens
The subpart does not apply to property where the Government has a lien or title solely because of advance, progress, or performance-based payments that have been fully liquidated. Once those payments are liquidated, this subpart is not the governing disposal rule for that property.
Responsibilities
Contracting Officer
Determine whether property falls within the scope of Subpart 45.6 and apply the reporting, reutilization, and disposal procedures when contractor inventory or claim-related property is involved. The contracting officer must also recognize when the subpart does not apply and route the matter to the correct authority or contract clause.
Contractor
Identify and report excess contractor inventory and property associated with claims against the Government, including termination inventory when applicable. The contractor must follow the required reutilization and disposal procedures rather than unilaterally disposing of covered property.
Agency
Provide and enforce the policies and procedures that govern how covered property is reported, reused, and disposed of. The agency must also ensure that real property and liquidated payment-related property are handled outside this subpart under the proper rules.
Practical Implications
This section is a threshold rule: before anyone disposes of property, they must first decide whether Subpart 45.6 applies. Misclassifying property can lead to improper disposal, unsupported claims, or failure to follow required reporting steps.
Contractors should pay close attention to termination inventory and other claim-related property, especially on fixed-price contracts, because those items may need to be preserved, reported, and processed under this subpart rather than treated as ordinary surplus.
Real property is outside the scope, so users should not rely on this subpart for land, buildings, or similar assets; different disposal rules apply.
Property tied only to liquidated advance, progress, or performance-based payments is also outside the scope, which is a common point of confusion when title or lien issues exist but the payment obligation has already been satisfied.
The practical risk is using the wrong property-disposition process. That can delay closeout, create audit findings, or weaken a contractor’s or the Government’s position in a claim or termination settlement.
Official Regulatory Text
This subpart establishes policies and procedures for the reporting, reutilization, and disposal of contractor inventory excess to contracts and of property that forms the basis of a claim against the Government ( e.g. , termination inventory under fixed-price contracts). This subpart does not apply to the disposal of real property or to property for which the Government has a lien or title solely as a result of advance, progress, or performance-based payments that have been liquidated.