FAR Part 45: Government Property

In plain English

FAR Part 45 prescribes policies and procedures for providing Government property to contractors, managing and using that property, and reporting, redistributing, and disposing of contractor inventory. It matters because contractors must understand when they are responsible for Government property, how to manage it, and what happens when it is no longer needed.

Key rules

• Contractors are ordinarily required to furnish all property necessary to perform Government contracts; contracting officers provide Government property only when it is clearly demonstrated to be in the Government's best interest and meets other conditions. (45.102)
• Contractors are generally not held liable for loss of Government property under cost-reimbursement, time-and-material, labor-hour, or fixed-price contracts awarded on the basis of certified cost or pricing data, but the contracting officer may revoke this assumption of risk if the contractor's property management practices are noncompliant. (45.104)
• The Government retains title to all Government-furnished property until properly disposed of; for contractor-acquired property, title vests in the Government only in accordance with the contract's financing provisions or specific requirements for passage of title. (45.401, 45.402)
• Government property shall normally be provided on a rent-free basis for performance of the contract under which it is accountable, but rental charges apply to non-Government use. (45.301)
• The contracting officer must insert the clause at 52.245-1, Government Property, in cost-reimbursement, time-and-material, and labor-hour solicitations and contracts when property is expected to be furnished, and in fixed-price solicitations and contracts when the Government will provide Government property. (45.107)
• The contracting officer must consider any potentially unfair competitive advantage from an offeror possessing Government property by applying a rental equivalent evaluation factor for evaluation purposes only. (45.202)
• When contractor inventory is excess, plant clearance officers initiate reutilization actions in descending priority: reuse within the owning agency, transfer to schools and nonprofits, report to GSA, and then other disposal methods. (45.602-2)
• The standard screening period for contractor inventory is 46 days, beginning upon the plant clearance officer's acceptance of an inventory disposal schedule. (45.602-3)

Who does what

In practice

• When bidding, check if the solicitation lists Government-furnished property; if so, your price may need to account for rental charges or evaluation factors.
• During performance, follow your property management system and contract requirements for tracking, using, and protecting Government property.
• When Government property is no longer needed, follow the reutilization and disposal procedures, including preparing inventory disposal schedules and supporting plant clearance actions.

Common pitfalls

• Assuming the Government will provide property: contractors are ordinarily required to furnish all property necessary to perform, and Government property is provided only when clearly demonstrated to be in the Government's best interest (45.102).
• Failing to maintain an adequate property management system: noncompliance can lead to the contracting officer revoking the Government's assumption of risk for loss of Government property (45.104).
• Using Government property for non-Government purposes without paying required rental charges: rent-free basis applies only to performance of the contract under which the property is accountable (45.301).
• Ignoring the screening period for excess property: the standard screening period is 46 days, and disposal actions cannot proceed until screening is complete (45.602-3).

Written by AI from this part's codified text (2026-10-04); cited sections are checked against the part. A guide, not legal advice: the regulation text, the solicitation and your contract rule.