FAR 45.602—Reutilization of Government property.
Plain-English Summary
FAR 45.602 addresses what happens when Government property is no longer needed for continued performance of a Government contract. It covers reutilization of that property, including transfer and donation, and sets the basic framework for deciding whether excess property should be kept in use on another contract, moved to another Government purpose, or otherwise disposed of. The section is important because it helps the Government avoid unnecessary purchases, reduce waste, and recover value from property already in its possession. It also clarifies the scope of the rule by excluding scrap from most of the section, except for scrap aircraft parts under 45.602-1. In practice, this section is the starting point for determining whether contractor-held Government property can be reassigned, transferred, or donated instead of being treated as surplus or disposed of immediately. It matters to both contracting officers and contractors because it affects property accountability, contract closeout, and the timing and method of disposition decisions.
Key Rules
Applies to unused Government property
This section applies when Government property is no longer required for continued performance of a Government contract. The focus is on reutilizing property that still has value and can be used again rather than disposing of it as waste.
Includes transfer and donation
Reutilization under this section includes transfer and donation of Government property. Those options allow property to be redirected to another Government use or otherwise placed where it can still serve a public purpose.
General exclusion for scrap
Except for 45.602-1, this section does not apply to scrap. That means most scrap is handled under different rules and is not subject to the reutilization framework in this section.
Scrap aircraft parts exception
The only scrap covered by this section is scrap aircraft parts, and even then only as provided in 45.602-1. This creates a narrow exception to the general exclusion for scrap.
Supports efficient property management
The rule exists to ensure Government property is managed efficiently and not left idle when it can be reused elsewhere. It is part of the broader Government property system that emphasizes accountability, conservation, and value retention.
Responsibilities
Contracting Officer
Determine whether Government property no longer needed for contract performance should be reutilized, transferred, donated, or otherwise handled under the applicable property rules. Ensure the correct disposition path is used and that scrap is not treated under this section unless it is scrap aircraft parts covered by 45.602-1.
Contractor
Identify Government property that is no longer required for the contract and support the Government’s reutilization or disposition process. Maintain accountability for the property until it is properly directed for transfer, donation, or other authorized disposition.
Property Administrator
Assist in identifying excess Government property and coordinating reutilization actions consistent with contract property procedures. Verify that property records and disposition actions reflect the correct status of the property.
Agency/Department
Provide the internal processes and disposition channels needed to move unneeded Government property into reuse, transfer, or donation pathways. Ensure property management policies align with the FAR’s reutilization framework and scrap exceptions.
Practical Implications
Contractors should not assume unneeded Government property can simply be discarded; it may need to be reported and held for reutilization or transfer.
The scrap exclusion is a common trap: most scrap is outside this section, but scrap aircraft parts are treated differently and require attention to 45.602-1.
Contract closeout can be delayed if excess property is not identified early and disposition instructions are not obtained promptly.
Accurate property records matter because reutilization decisions depend on knowing what property exists, where it is, and whether it is still usable.
Contracting officers and property personnel should coordinate early to avoid unnecessary purchases, duplicate inventory, or improper disposal of Government-owned items.
Official Regulatory Text
This section is applicable to the reutilization, including transfer and donation, of Government property that is not required for continued performance of a Government contract. Except for 45.602-1 , this section does not apply to scrap other than scrap aircraft parts.