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Project Property Disposition Guidance



1. Up-to-Date Inventory

The first step in preparing the property disposition plan is to review the project up-to-date
inventory list. Ideally, the project PMU has maintained all along an accurate, up-to-date project
inventory that includes all expendable and non-expendable property purchased with contract
funds. Note that most contracts require annual reporting of the status of non-expendable goods
and equipment with a value greater than $500 (AIDAR 752.232-70) to the contracting officer. If
the project does not have an accurate inventory, a physical inventory must be conducted to know
exactly what has been purchased by the project well in advance of project close-out.

The physical inventory should be compared to the theoretical inventory (i.e., purchasing records)
to make sure that records in the home office and the field office are in synch. Conducting an
audit of the inventory early on will allow time to reconcile differences, resolve mysteries, and
make planning easier. Remember that the inventory will include items purchased both in the
field and in the home office. Don’t neglect this — auditors will spend a lot of time making sure
we have done it right. Be especially vigilant of big-ticket items during the final days of a project,
especially items for which the project will be held responsible (those over $500). If something is
irretrievably missing, file a police report and submit a copy to USAID. If something is broken,
seek approval to dispose. Projects should not maintain inventory including broken equipment.
Why would we ask any recipients to receive broken equipment?

In addition, verify that the files contain all documentation regarding inventory, including price
quotes, purchase orders and receipts, user manuals, licenses, etc. and that the actual inventory
tracker has all the relevant information regarding the equipment including description, serial
numbers, value, condition, and location.

Sometimes project property has been handed over to counterpart agencies or other non-
governmental recipients over the course of the project. Make sure the files reflect this
information by including signed transfer agreements and signed acts of acceptance (as discussed
below) for all items already transferred. If no records were kept at the time, be sure to get the
recipient to sign the documents retroactively, so that auditors can figure out where everything
went. If the items disposed are non-expendable property, confirm that the CO has approved this
early disposition of project property.

2. Disposition Plan and USAID Approval

A disposition plan is a document prepared by Chemonics that recommends to USAID which
organizations should have final ownership of the property purchased with contract funds or
furnished by USAID to Chemonics (including its partners) during the contract. It is important to
first review the contract, as it may specify what happens to project equipment at close-out.
Chemonics does not have a disposition plan template; the PMU/FO might decide to submit, for
instance, a table in Excel or a letter for USAID. The property disposition plan should be
submitted to the contracting officer for approval per FAR 52.245-1, “Government Property”. The
COTR likely will have to agree with the disposition plans, so get him/her on board early.
Although the FAR only requires disposition approval of non-expendable property (items with a


unit cost of $500 or more), at close-out, Chemonics generally includes all existing contract
property in the disposition plan.

When developing a disposition plan, the PMU/FO should consider the following questions: Who
gets what? What is the physical destination of every item? Who signs for it? Does he/she have
authority? Does the signer sign for each truckload, item by item, or for the whole shipment?
These considerations should be thoroughly thought out and included in the plan.

It is important to verify that the proposed recipients are interested or can receive the property,
however, to manage expectations, it is important to disclose that the transfer of property is
subject to USAID approval.

Be careful in letting USAID talk us into setting up a formal committee to decide who gets what
project property. This is really up to USAID, so don’t get caught in the middle. Make
recommendations, offer to deliver the property to wherever it needs to go, but make it clear that
the decision rests with them.

3. Transfer of Property

Once USAID provides disposition instructions or approves Chemonics’ disposition of the
property, the PMU/FO should start the coordination with the recipients that will receive the
property. It is essential that all equipment be transferred before the performance end date, as any
transportation or delivery charges will not be allowable after the end date. To document the
transfer of the property, two documents should be signed and saved in the files:

    a. Transfer Agreement: This document is signed by Chemonics and identifies the
       property being transferred, the original purchase cost, and indications on the use of the
       property. An optional element of the transfer agreement would be to include the current
       market value, if easily determinable. In the section where the original purchase cost is
       noted, an additional sentence could be added stating “The present value of the Property,
       agreed to by the Parties, is [state the current market value and currency].” Depending of
       the circumstances, USAID or a government counterpart might want to be a signatory to
       this agreement depending on the visibility and the type of property.
    b. Act of Acceptance: The act of acceptance is a document signed by the recipient
       acknowledging receipt of the property and original purchase value. Similar to the
       Transfer Agreement above, the current market value could be noted, if desired, by adding
       the following statement: “The present value of the Property, as agreed to by the Parties, is
       [state the current market value and currency]”.
    c. Deed of Donation: This also documents the transfer or donation of property from
       USAID/Contractor to a local recipient. This can be signed in lieu of the transfer
       agreement above depending on the decision of the PMU/FO and local law.

4. Things to Consider

There are specific items — such as project vehicles, office equipment, furniture, technical
materials, computers, project Web sites, and satellite phones — that merit further discussion.

2    PROJECT PROPERTY DISPOSITION GUIDANCE                                                  PROC.GD.017
                                                                           CHEMONICS INTERNATIONAL INC.

    a. Project vehicles. Vehicles are usually turned over to the host-country counterpart
       agency. It is courteous to ensure that all vehicles are tuned up, clean, and in good repair;
       this is even more important if they are going to a counterpart agency without the budget
       to repair them. Plan ahead — spare parts may take a while to track down. Make sure thate
       vehicles have been properly titled to allow for legal transfer and cancel all insurance once
       delivery is completed. All the documentation regarding the vehicles (e.g., title,
       registration, insurance and procurement information, import documents) should be in the
       FO files.
       Converting vehicles imported duty-free to locally owned status may require lengthy
       procedures, so once again, build in more lead time than you think you will need. Also,
       transferring titles can literally take months therefore, find out at least six months in
       advance what is involved.

    b. Office equipment, furniture, and technical library. As with vehicles, make sure that
       all office equipment and furniture is in good working order and cleaned before turnover.
       On the other hand, technical materials (books, journals, reference information) are
       generally donated to a counterpart library (check the contract) or distributed at USAID’s
       discretion. Make sure you schedule the move of any USAID- or project-owned
       appliances or furniture out of houses and the office a week or so in advance to allow time
       for thorough cleaning. Information regarding what will happen to all these items should
       be included as part of the disposition plan.

    c. Computer Equipment. It is very important to follow proper procedures for disposing of
       any computer equipment purchased by the project. For instance, all computers must be
       cleaned out of all proprietary information and illegal software programs before transfer.
       In addition, computers can be transferred only with software for which Chemonics
       owns/possesses licenses, although official legal transfer of registration to the new owners
       is not necessary. Also, remember to give the new owners any manuals or additional
       information regarding the equipment they are receiving.

    d. Project Web site. If the project has a Web site funded by the contract, the site is the
       property of USAID. Information regarding what will happen to the Web site should also
       be included in the disposition plan. Chemonics may not keep the Web site for
       informational or public relations purpose without prior approval from USAID.

    e. Satellite Phones. The project office should send a request for service cancellation to the
       HO PMU six weeks before the closing of the project. The request should list the exact
       date when phone service should cease. The six weeks’ advance notice is needed for the
       service provider to complete the billing and cancellation process of the phone.

        Each satellite phone supplied by Chemonics comes with a SIM card. These small,
        approximately one-inch, computer chips allow the phone to connect with the satellite
        receiver. When the phone service is cancelled, it is the SIM card that is cancelled and
        rendered obsolete. The phone itself is USAID’s property and should be included in the
        disposition plan. For USAID to reactivate service, it will need to get a new SIM card. The
        SIM card provided by Chemonics should be removed from the phone and

PROC.GD.017                                                 PROJECT PROPERTY DISPOSITION GUIDANCE     3

        discarded before the phone is given to the mission. For more information regarding
        disposition of satellite phones, contact the procurement department.

4    PROJECT PROPERTY DISPOSITION GUIDANCE                                            PROC.GD.017

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