FAR 45.606—Contractor scrap procedures.
Plain-English Summary
FAR 45.606 addresses how contractors and the Government should handle scrap generated under a contract, with a focus on disposal procedures, segregation and special handling of certain scrap streams, and the Government’s ability to abandon removed parts in some maintenance and repair situations. The section is aimed at making scrap disposition efficient, properly controlled, and fully documented in the contractor’s property management procedures. It also recognizes that not all scrap is the same: some scrap may be sensitive, hazardous, contaminated, classified, controlled, valuable because of precious or strategic metals, or dangerous to public health or safety, and those conditions may require separate processing, segregation, or reporting. Finally, it clarifies that unless the contract says otherwise, the Government may abandon parts removed and replaced during normal maintenance or during repair, maintenance, overhaul, or modification work. In practice, this section helps property administrators and plant clearance officers decide how scrap should be managed, what controls are needed, and when special disposition rules apply.
Key Rules
Scrap procedures must be documented
The property administrator should coordinate with the plant clearance officer to ensure the contractor’s scrap disposal processes are effective, efficient, proper, and written into the contractor’s property management procedures. This means scrap handling is not informal or ad hoc; it must be part of the contractor’s approved property control system.
Special scrap may need segregation
The property administrator should determine whether different scrap types require separate disposal processing, physical segregation, or separate plant clearance reporting. The level of control depends on the nature of the scrap and the risks or restrictions attached to it.
Sensitive and hazardous scrap needs extra controls
Scrap may require special handling if it consists of sensitive items, contains or is contaminated with hazardous materials or wastes, is classified or otherwise controlled, contains precious or strategic metals, or is dangerous to public health or safety. These categories can trigger unique disposal methods, security measures, environmental controls, or reporting requirements.
Government may abandon removed parts
Unless the contract says otherwise, the Government may abandon parts removed and replaced as part of normal maintenance, or removed during repair, maintenance, overhaul, or modification. This rule affects ownership and disposition of removed parts and should be read together with the contract’s specific property and disposal clauses.
Responsibilities
Property Administrator
Coordinate with the plant clearance officer to ensure the contractor’s scrap disposal methods are effective, efficient, proper, and documented. Also determine whether scrap types require segregation, special processing, or separate reporting based on the contract work and the nature of the scrap.
Plant Clearance Officer
Work with the property administrator on scrap disposition issues and help ensure scrap is cleared and disposed of in accordance with applicable property disposal procedures and any special handling requirements.
Contractor
Maintain and follow property management procedures that document scrap disposal processes, methods, and practices. The contractor must also identify and handle scrap in a way that supports any required segregation, special processing, or reporting.
Government/Contracting Activity
Ensure contract terms and conditions clearly address any departure from the default rule allowing abandonment of removed parts, especially where the Government wants to retain ownership or impose special disposition requirements.
Practical Implications
Contractors should expect scrap handling to be part of property system reviews, not just a warehouse or cleanup issue. If the procedures are weak or undocumented, the contractor may face findings during property administration or plant clearance.
Scrap streams should be evaluated early for special characteristics such as hazardous content, contamination, classification, or precious metals. Failing to segregate these materials can create compliance, safety, environmental, and security problems.
The default abandonment rule for removed parts can be overridden by contract language, so both sides should check the contract before assuming who owns removed components. This is especially important in maintenance-heavy contracts and modification work.
A common pitfall is treating all scrap as ordinary waste. Some scrap may require separate plant clearance reporting or unique disposal methods, and mixing it with general scrap can cause improper disposition or loss of recoverable value.
Contractors should align scrap procedures with environmental, safety, security, and property requirements at the same time. A process that is efficient but not compliant, or compliant but not documented, will not satisfy the intent of this section.
Official Regulatory Text
(a) The property administrator should, in coordination with the plant clearance officer, ensure that contractor scrap disposal processes, methods, and practices allow for effective, efficient, and proper disposition and are properly documented in the contractor’s property management procedures. (b) The property administrator should determine the extent to which separate disposal processing or physical segregation for different scrap types is or may be required. Such scrap may require physical segregation, unique disposal processing, or separate plant clearance reporting. For example, the scope of work may create scrap- (1) Consisting of sensitive items; (2) Containing hazardous materials or wastes; (3) Contaminated with hazardous materials or wastes; (4) That is classified or otherwise controlled; (5) Containing precious or strategic metals; or (6) That is dangerous to public health or safety. (c) Absent contract terms and conditions to the contrary, the Government may abandon parts removed and replaced from property as a result of normal maintenance actions or removed from property as a result of the repair, maintenance, overhaul, or modification process.