Many Defense Contractors are required to adhere to the FAR 52.245-1 clause. This Government Property clause is included in many defense contracts and ensures that the expectations of the contractor have been clarified — namely that the Contractor must meet these government property management obligations. 

If your organization is holding a contract with the US Military it’s very important to be aware of the 52.245-1 clause. This clause makes it clear that when a contractor is in possession of Government Property they are obligated to manage (control, use, preserve, protect, repair and maintain) these physical assets on behalf of the Department of Defense.

Historically, these “stewardship responsibilities” may have not been in the forefront of every contractor’s mind — but, as the FIAR Audit becomes more and more intense, these government property management and reporting obligations are becoming pivotal to everyone’s success.

The FIAR Audit is really about accountability. The federal Government needs to know the quantity, location, condition, and value of the assets it owns. The DoD is an enormous organization and they are trying to manage their assets as best they can and prevent unnecessary storage and maintenance costs or unnecessary purchase of items already on hand.

Using IUIDs for Labeling and Tracking Assets

Military standards require that all military equipment and assets be labeled with an Item Unique Identifier (or IUID) when DFAR 252.211-7003 is referenced within your contract. This IUID typically comes in the form of a 2-dimensional Data Matrix barcode that is applied to the asset either as a direct marking or a label. This unique ID is similar in concept to a license plate and used to track and manage the asset through its lifecycle. Contracts that reference the DFARS 252.211-7007 clause are obligated to mark, track and report their assets with an IUID.

Government Property Reporting Obligations

This all goes back to the contractor’s stewardship responsibilities to label, track, maintain records and report their government property.  There is a common misconception that as long as the asset has an IUID label applied to it – then you are all set. That is incorrect. There is also a very clear reporting obligation.

Asset information about the government property needs to be reported to the IUID Registry. The IUID Registry has been around for close to fifteen years and has been put in place to be the single repository – the master data source – to store all asset data. 

The IUID Registry is now a part of the Pentagon’s Wide Area Workflow (or WAWF e-Business Suite).  It contains all of the required asset management information that contractors are obligated to maintain. Contractors need to leverage the IUID Registry infrastructure and methodologies to maintain audit readiness and meet this reporting requirement.

Watch the Video

To learn more about your government property reporting obligations watch this quick 1-minute video taken from our recent webinar session on Audit Readiness.

government property reporting obligations

More videos…

If you are interested to watch the other videos associated with our recent Audit Readiness Webinar click here.