FAR 51.106—Title.
Plain-English Summary
FAR 51.106 addresses who owns property acquired by a contractor when the contractor is acting under the contracting officer’s authorization to acquire Government property. Its core purpose is to make title rules clear so the parties know whether title vests in the Government, the contractor, or another party as stated in the contract. The section also creates a special rule for contracts with educational institutions when the Government Property clause at 52.245-1, Alternate II, is used: property with a unit acquisition cost of less than $5,000 vests in the contractor under the clause, unless the agency sets a higher threshold. In practice, this section matters because title determines who bears risk, who controls disposition, how property is recorded, and what happens when the contract ends or property is no longer needed. It is especially important for contractors managing purchased equipment, supplies, or other property under Government authorization, and for contracting officers drafting or administering property clauses and title provisions.
Key Rules
Title Follows the Contract
Property acquired under the contracting officer’s authorization takes title as the contract provides. The default rule is that title vests according to the contract language unless the contract specifically says otherwise.
Contract Controls Ownership
If the contract states a different title arrangement, that specific provision governs. This means the contracting officer must ensure the contract clearly identifies who will hold title and under what conditions.
Educational Institution Exception
For contracts with educational institutions using 52.245-1, Alternate II, title to property with a unit acquisition cost of less than $5,000 vests in the contractor as provided in the clause. This is a special ownership rule tied to that clause and type of contractor.
Agency May Raise Threshold
Agencies may set a higher dollar threshold than $5,000 when appropriate. Any higher threshold must be established by the agency and applied consistently with the clause and contract terms.
Unit Acquisition Cost Matters
The educational institution rule turns on the unit acquisition cost of the property, not aggregate purchase value or later market value. Correct cost classification is therefore essential to determine where title vests.
Responsibilities
Contracting Officer
State title provisions clearly in the contract, ensure the correct property clause is used, and confirm whether any special title rule applies, including the educational institution threshold and any agency-approved higher threshold.
Contractor
Acquire property only under the contracting officer’s authorization, follow the contract’s title provisions, and maintain records that show whether title vests in the contractor or another party.
Educational Institution Contractor
Apply the 52.245-1, Alternate II title rule for property below the applicable unit acquisition cost threshold and track whether the agency has established a higher threshold.
Agency
If desired, establish a higher threshold for educational institution property title treatment and ensure agency policy aligns with the FAR clause and contract administration practices.
Practical Implications
Title determines who owns the property, so it affects control, accountability, insurance/risk decisions, and end-of-contract disposition.
A common pitfall is assuming all property bought under Government authorization automatically belongs to the Government; this section makes clear that the contract language controls unless a specific rule says otherwise.
For educational institutions, the $5,000 threshold is easy to misapply if staff look at total purchase orders instead of unit acquisition cost.
Contracting officers should verify that the correct clause version is included, because the title outcome depends on the clause and any agency-approved threshold.
Contractors should keep detailed property records showing acquisition cost and title status to avoid disputes during audits, closeout, or property disposition.
Official Regulatory Text
(a) Titleto all property acquired by the contractor under the contracting officer’s authorization shall vest in the parties as provided in the contract, unless specifically provided for otherwise. (b) If contracts are with educational institutions and the Government Property clause at 52.245-1 , AlternateII, is used, title to property having a unit acquisition cost of less than $5,000 shall vest in the contractor as provided in the clause. Agencies may provide higher thresholds, if appropriate.