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FAR and DFARS › FAR Part 32: Contract Financing › Subpart 32.5

FAR 32.503-15 Application of Government title terms.

The codified text (eCFR, as of 2026-10-02). Under the Revolutionary FAR Overhaul ↗, agencies follow class deviations with new text for many parts while the formal rules go through the Federal Register: check the solicitation and your contract's clauses, which rule.

In plain English

This section explains how Government title under the Progress Payments clause affects property. It clarifies that such property is not automatically Government-furnished property, and that certain property types are still governed by other clauses. It also sets rules for scrap disposal, transferring inventory, and who holds title to excess property after the contract is complete.

Applies to: Contractors with progress payments under Government contracts

What it requires

  • Credit the costs of contract performance with the proceeds of scrap disposition
  • Obtain contracting officer approval before transferring inventory items from the contract for its own use or other disposition
  • Eliminate costs allocable to transferred property from the costs of contract performance
  • Repay or credit the Government an amount equal to the unliquidated progress payments allocable to the transferred property

Key terms: Progress Payments clause · Government-furnished property · Government Property · termination inventory · unliquidated progress payments

Written by AI from this section's text. A guide, not legal advice: the text below rules.

The text

(a) Property to which the Government obtains title by operation of the Progress Payments clause solely is not, as a consequence, Government-furnished property.

(b) Although property title is vested in the Government under the Progress Payments clause, the acquisition, handling, and disposition of certain types of property are governed by—

(1) The clause at 52.245-1, Government Property; and

(2) The termination clauses at 52.249, for termination inventory.

(c) The contractor may sell or otherwise dispose of current production scrap in the ordinary course of business on its own volition, even if title has vested in the Government under the Progress Payments clause. The contracting officer shall require the contractor to credit the costs of the contract performance with the proceeds of the scrap disposition.

(d) When the title to materials or other inventories is vested in the Government under the Progress Payments clause, the contractor may transfer the inventory items from the contract for its own use or other disposition only if, and on terms, approved by the contracting officer. The contractor shall (1) eliminate the costs allocable to the transferred property from the costs of contract performance, and (2) repay or credit to the Government an amount equal to the unliquidated progress payments, allocable to the transferred property.

(e) If excess property remains after the contract performance is complete and all contractor obligations under the contract are satisfied, including full liquidation of progress payments, the excess property is outside the scope of the Progress Payments clause. Therefore, the contractor holds title to it.

Sections it refers to

Sections that refer to it

← 32.503-14 Protection of Government title. · 32.503-16 Risk of loss. →

Rule changes for FAR Part 32

Source: eCFR, 48 CFR chapters 1 and 2 (GPO GovInfo bulk data) ↗. Plain words for the terms: glossary.

FAR 32.503-15 Application of Government title terms · SpendQuery