FAR 45.602-4—Interagency property transfer costs.
Plain-English Summary
FAR 45.602-4 addresses how costs are handled when Government property is transferred from one agency to another during plant clearance or other disposition actions. It covers four main subjects: the prohibition on reimbursing the losing agency for transferred property, the limited exception when FMR 102-36.285 applies, allocation of transportation and preparation-for-shipment costs, the role of the contract administration office in processing contract modifications, and the receiving agency’s duty to provide funding data and transfer or shipping documents promptly. In practice, this section prevents agencies from treating interagency transfers as a sale or reimbursement event unless a specific property-management exception applies. It also makes clear that the receiving agency, not the contractor, bears certain movement and preparation costs when those costs are not already the contractor’s responsibility under the contract. Finally, it ties the property transfer process to contract administration actions so that plant clearance can proceed without delay and the contract file can be updated correctly.
Key Rules
No reimbursement for transfers
When property is transferred from one agency to another, the agency giving up the property is not to be reimbursed in any manner unless the special circumstances in FMR 102-36.285 apply. The default rule is that the transfer is an internal Government disposition, not a reimbursable transaction.
Limited exception applies
Reimbursement is allowed only if the circumstances in FMR 102-36.285 (41 CFR 102-36.285) are met. That cross-reference is the only stated exception in this section, so agencies must confirm the regulatory basis before any payment is made.
Receiving agency pays certain costs
The agency receiving the property must pay transportation costs that are not the contractor’s responsibility, as well as costs to pack, crate, or otherwise prepare the property for shipment. This shifts those costs to the receiving agency when they are not already allocated elsewhere by the contract.
Contract administration office updates contract
The contract administration office must process the appropriate contract modifications. This ensures the contract record reflects the transfer and any resulting changes to property accountability, delivery, or administrative terms.
Prompt documentation is required
To speed plant clearance, the receiving agency must promptly provide funding data and transfer or shipping documents to the contract administration office. Delays in these documents can slow disposition actions and contract closeout activities.
Responsibilities
Agency transferring the property
Transfer the property without expecting reimbursement, unless the FMR 102-36.285 exception applies. It must also coordinate the transfer through the proper property and contract administration channels so the disposition can be completed correctly.
Receiving agency
Pay transportation costs not assigned to the contractor and pay costs to pack, crate, or otherwise prepare the property for shipment. It must also promptly furnish funding data and transfer or shipping documents to the contract administration office to accelerate plant clearance.
Contract administration office
Process the appropriate contract modifications needed to reflect the interagency transfer and support plant clearance. It must use the funding data and shipping/transfer documents provided by the receiving agency to complete the administrative record.
Contractor
Bear transportation or preparation costs only to the extent those costs are the contractor’s responsibility under the contract. The contractor should coordinate with the contracting and property administration functions to avoid improper charging or duplicate payment.
Practical Implications
This section prevents agencies from treating transferred property as a reimbursable asset sale, which helps avoid improper payments and audit findings.
The biggest cost-allocation issue is determining whether transportation or preparation costs are the contractor’s responsibility; if not, the receiving agency pays them.
Plant clearance can stall if the receiving agency does not quickly provide funding data and shipping documents, so timely coordination is essential.
Contract administration offices should expect to issue or process contract modifications whenever property moves between agencies, even if the transfer seems routine.
A common pitfall is assuming the losing agency can be paid for the property by default; the regulation says the opposite unless the narrow FMR exception applies.
Official Regulatory Text
Agencies whose property is transferred to other agencies shall not be reimbursed for the property in any manner unless the circumstances of FMR 102-36.285 (41 CFR102-36.285) apply. The agency receiving the property shall pay any transportation costs that are not the contractor’s responsibility and any costs to pack, crate, or otherwise prepare the property for shipment. The contract administration office shall process appropriate contract modifications. To accelerate plant clearance, the receiving agency shall promptly furnish funding data, and transfer or shipping documents to the contract administration office.