32 C.F.R. PART 172—DISPOSITION OF PROCEEDS FROM DOD SALES OF SURPLUS PERSONAL PROPERTY
Title 32 - National Defense
Authority: 40 U.S.C. 484 and 485, 10 U.S.C. 2577.
Source: 54 FR 35483, Aug. 28, 1989, unless otherwise noted.
This document provides revised and expanded instructions on the collection and disposition of cash and cash equivalents received by the DoD Components for the DoD sale of surplus personal property. This part: (a) Applies to the Office of the Secretary of Defense (OSD), the Military Departments, the Joint Chiefs of Staff (JCS) and the Joint Staff, the Unified and Specified Commands, the Inspector General of the Department of Defense (IG, DoD), the Defense Agencies, and DoD Field Activities (hereafter referred to collectively as “DoD Components”). (b) Applies to the proceeds resulting from sales made under authority of Public Law 152 and to the following: (1) Personal property governed by DoD 4160.21–M. (2) Surplus Government-owned personal property in the possession of contractors, as described in FAR subpart 45.6. (3) Recyclable material governed by 10 U.S.C. 2577. Such materials would otherwise be sold as scrap or discarded as waste, but are capable of being reused after undergoing some type of physical or chemical processing. The recycling of hazardous materials or hazardous waste shall be accomplished with due recognition of the types of materials being processed and the applicable regulation governing the handling and disposal of such materials. Qualified recyclable materials do not include the following: (i) Precious metal-bearing scrap and those items that may be used again for their original purposes or functions without any special processing; e.g., used vehicles, vehicle or machine parts, bottles (not scrap glass), electrical components, and unopened containers of oil or solvent. (ii) Ships, planes, or weapons that must undergo demilitarization or mutilation before sale. (iii) Scrap generated from DoD industrial fund (IF) operations that has been routinely sold with the proceeds being used to offset customer costs. (iv) Bones, fats, and meat trimmings generated by a commissary store or exchange. (a) Cash or cash equivalents in the prescribed amounts shall accompany bid deposits for a bid to be considered responsive. Similarly, cash or cash equivalents for the total sales price shall be received by the DoD Components or, in authorized cases, by contractors before the transfer of physical possession to the successful bidder. (b) Amounts collected by the DoD Components in connection with the sale of excess and surplus property shall be deposited promptly to the U.S. Treasury accounts prescribed in accordance with this instruction. The use of suspense accounts shall be minimal. If the account, ultimately to be credited with the proceeds of a sale, can be determined reasonably at the time funds are collected, the deposit shall be made immediately to that account. (c) The Secretary of each Military Department shall establish qualified recycling programs. The effort associated with the collecting, processing and selling of recyclable material is in appendix A to this part. (1) Proceeds from the sale of recyclable material shall be used to reimburse installation-level costs incurred in operation of the recyclable program. (2) After reimbursement of the cost incurred by the installation to operate the recycling program, installation commanders may use up to 50 percent of remaining sale proceeds for pollution abatement, energy conservation, and occupational safety and health activities. A project may not be carried out for an amount greater than 50 percent of the amount established by law as the maximum amount for a minor construction project. (3) Any sale proceeds remaining after paragraphs (c)(1) and (2) of this section may be transferred to installation morale or welfare activities. The Heads of DoD Components that sell surplus personal property shall implement the procedures prescribed in this part for the disposition of cash and cash equivalents received in connection with such sales. (a) Required bid deposits. When a sale conducted by a DoD Component provides for bid deposit with subsequent removal, the following procedures shall apply: (1) Term bid. This type of bid deposit is applicable when the sale involves the purchase of scrap or disposable material that will be generated over time with periodic removal by the successful bidder. The amount of the bid deposit required to accompany such bids is the average estimated quantity of such material to be generated during a 3 month period multiplied by 20 percent of the bid price. The calculation is illustrated, as follows: (2) Other than term bid. With the exception of term bids, payment in the amount of 20 percent of the bid shall accompany the bid. (b) Payment terms. When a sale conducted by a DoD Component provides for immediate pickup, the entire amount of the sales price shall be collected from the buyer at the conclusion of the sale. If the sale provides for a bid deposit, the balance of the bid price shall be paid before removal of the property. (c) Form of payment—(1) Cash and certified checks. When a sale is conducted by a DoD Component, cash or its equivalent shall be collected for bid deposits and for remaining amounts due. Guaranteed negotiable instruments, such as cashiers checks, certified checks, travelers checks, bank drafts, or postal money orders are acceptable as a cash equivalent. (2) Personal checks. Personal checks may be accepted by a DoD Component only when a performance bond or a bank letter of credit is on hand that will cover the amount due. If the check is dishonored, amounts due shall be collected from the issuer of the performance bond or letter of credit. (i) If a bidder intends to use a bond or letter of credit without an accompanying personal check, the claim against the performance bond or letter of credit shall be made for any amounts due. (ii) If personal checks are used, the bond or letter of credit shall be returned intact after the applicable personal checks are honored, unless other instructions have been received from the bidder. (2) Credit cards. Approved credit cards may be accepted by a DoD Component for payment. (i) Before initiating any credit card transactions, the selling DoD Component shall enter into an agreement with a network commercial bank. Currently, the Treasury has approved the use of “Master Card” and “Visa” charge cards. Changes or additions to approved credit cards are announced in Comptroller of the Department of Defense (C, DoD) memoranda or in changes to the TFM. Except for equipment and communication costs, the Treasury pays any fees normally charged to sellers. If the Treasury policy of paying such charges is changed, any charges for the processing of approved credit card transactions shall be assessed to the buyer. (ii) If a credit card is used for the bid deposit and authorization is declined, the bid shall be rejected as nonresponsive and other bidders considered. (iii) Approval for charges against credit cards shall be processed as follows: (A) The credit card presented shall be passed through the DoD installation's credit card swiper. The swiper is connected electronically with the network commercial bank selected by the DoD Component, and keys are provided to enter the proposed charge amount. If the charge is approved, the swiper will provide an approval number that shall be recorded on the charge slip. Note: A swiper is an electronic device that is used to capture the magentic information contained on a credit card and transmit it to the network commercial bank for validation and authorization of a sale. The information captured normally includes the account number, issuing bank, date of expiration of the card, and any credit restrictions that may apply. (B) The bidder shall sign a standard credit card charge form at the sale contracting office. A copy of this form shall be returned to the card holder at that time. A copy of the charge slip shall be retained by the selling DoD activity as a record of the sale. On the following business day, the installation finance and accounting officer or the activity providing accounting support shall submit the signed credit card forms with a supporting cover sheet showing the total charges to the network commercial bank. Accounting control must be maintained over such in-transit deposits. (C) On receipt of the credit card charge forms, the network commercial bank shall charge the bidder's credit card account and deposit the funds to the Treasury general account. The network commercial bank also is required to forward a copy of the deposit slip to the DoD installation making the sale within 1 business day. On receipt of the deposit slip, the in-transit account shall be cleared and appropriate accounts credited following the procedures in paragraph (d) of this section: (iv) If a contractor's bid is provided by message, mail, or telephone to the U.S. Government using a credit card instead of other forms of payment, the following information is required: (A) Account number. (B) Bidders name, as it appears on the credit card. (C) Date of expiration of the card. (D) Issuing bank. (E) Type of card. Any additional cost incurred by the Department of Defense in connection with the use of the charge card, such as telephone calls to obtain approval from the network bank, shall be billed to the purchaser as an additive charge. (d) Disposition of proceeds. (1) Proceeds from the sale of surplus personal property shall be deposited by the collecting DoD Component promptly to the U.S. Treasury accounts prescribed in appendix B to this part. The use of suspense accounts shall be minimal. If the account ultimately to be credited with the proceeds of a sale can be determined reasonably at the time the funds are collected, the deposit shall be made immediately to that account. (2) See paragraph (f) of this section for special instructions on the processing of proceeds resulting from the sale of recyclable material. (e) Return of bid deposits to unsuccessful bidders. (1) Cash collected from unsuccessful bidders by a DoD Component shall be deposited to account X6875, “Suspense,” and a check shall be drawn on that account to reimburse unsuccessful bidders. (2) Normally, noncash bid deposits shall be returned to unsuccessful bidders by DoD Components through the mail. However, when a bidder has requested expedited return and has provided the name of a carrier and a charge account number, the designated carrier shall be called to pick up the deposit with the explicit condition that applicable carrier costs will be charged to the bidder's account. (f) Sales of recyclable material. The efforts associated with collection and processing of recyclable material are reflected in appendix A to this part. The following transactions for others (TFO) procedures apply: (1) Proceeds from the sale of recyclable material shall be deposited in F3875, “Budget Clearing Account (Suspense).” The deposit to F3875 shall identify the fiscal station and the name of the installation (use the full name and do not abbreviate) that is to receive the proceeds. Deposits that do not provide the necessary information shall be referred formally to the property disposal cashier for the required information. (2) The Military Department's finance and accounting office receiving the sales proceeds shall mail a copy of the cash collection voucher to the fiscal station shown on the collection voucher. This advance copy shall be used by the fiscal station to record the collection of proceeds to its account and shall be used for followup purposes, as necessary. The copy received through the financial network shall be used to clear the undistributed collection. These vouchers shall be mailed in the weekly TFO cycle. (3) The Military Department's finance and accounting office shall: (i) Report weekly transactions to the responsible fiscal station cited on the collection voucher. (ii) Report the collections within the same month in the “Statement of Transactions” to the Treasury. (g) Contractor sales of surplus Government-furnished property. (1) DFARS §245.610 provides overall direction for crediting proceeds from contractor conducted sales of surplus Government furnished property. Paragraph (g)(5) of this section provides the procedures that shall be used to ensure proper accounting for such proceeds. (2) The contractor making the sale may follow normal company policy on bid deposits and form of payment. However, any loss associated with dishonored payment shall be the contractor's responsibility. (3) The plant clearance officer (PLCO) is responsible for notifying the appropriate accounting office of the amounts collected by the contractor. The PLCO shall also notify the accounting office whether such collections: (i) Represent an increase in the dollar value of the applicable contract(s). (ii) Were made instead of disbursements on the applicable contract(s). (iii) Were returned to miscellaneous receipt account 972651, “Sale of Scrap and Salvage, Materials, Defense.” (4) The accounting office for the contract is identified in the accounting classification code. See DoD 7220.9–M, chapter 17 for additional information. (5) The accounting office shall prepare the source documents necessary to account properly for the transaction. The value of applicable Government property general-ledger-asset accounts shall be reduced for each alternative set forth in paragraph (g)(3) of this section. Additionally, for alternatives (addressed in paragraph (g)(3)(i) or (g)(3)(ii) of this section, an accounting entry shall be made to reflect the creation of reimbursable obligational authority and the use of such authority. The reports cited in §§172.5(f)(3) (i) and (ii) of this part are exempt from licensing in accordance with paragraph E.4g. of DoD 7750.5–M. [55 FR 13903, Apr. 13, 1990]
Title 32: National Defense
PART 172—DISPOSITION OF PROCEEDS FROM DOD SALES OF SURPLUS PERSONAL PROPERTY
Section Contents
§ 172.1 Purpose.
§ 172.2 Applicability and scope.
§ 172.3 Policy.
§ 172.4 Responsibilities.
§ 172.5 Procedures.
§ 172.6 Information requirements.
Appendix A to Part 172—Efforts and Costs Associated With the Disposal of Recyclable Material
Appendix B to Part 172—Disposition of Amounts Collected From Successful Bidders
§ 172.1 Purpose.
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§ 172.2 Applicability and scope.
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§ 172.3 Policy.
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§ 172.4 Responsibilities.
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§ 172.5 Procedures.
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Estimated 3,000 quantity of material to be generated each quarter (pounds)Bid price_$1.00 x $1.00 per pound ------------------------------------ Subtotal... $3,00020 percent of bid 20 price ------------------------------------ Amount to $600 accompany bid.
§ 172.6 Information requirements.
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Appendix A to Part 172—Efforts and Costs Associated With the Disposal of Recyclable Material
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Appendix B to Part 172—Disposition of Amounts Collected From Successful Bidders
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------------------------------------------------------------------------ Disposition of: --------------------------------------- Type of property (80%) remaining (20%) bid deposit balance------------------------------------------------------------------------1. Scrap turned in by industrial IF................ IF. fund (IF) activities.2. Usable personal property IF................ IF. purchased by and turned in by IF activities.3. Property purchased with funds _ X8420........... _ X8420. from trust fund _ X8420, ``Surcharge Collections, Sales of Commissary Stores''.4. Automatic data processing _ F3875, Budget _ F3875. Upon equipment owned by the General Clearing Account receipt of the Services Administration (GSA) (Suspense). entire amount due and leased to DoD. from the bidder, a check shall be drawn on the suspense account and forwarded to GSA at the following address: General Services Administration Office of Finance (WBCRC), Collections and Securities, 7th and I Streets NW., Washington, DC 20407.5. Section 605(d) the Foreign Assistance Act of 1965, provides that proceeds from the sale of defense articles shall be credited to the appropriation, fund or account used to procure the article or to the account currently available for the same general purpose. a. Pre-MAP merger (Pre FY 82) 11_1082, ``Foreign 11_1082. property issued under the Military Military Assistance Program Financing (MAP) and returned as no Program'' longer needed, and all MAP (Effective 1 funded personal property October 1989 the belong to Security Assistance 11_1080, Offices (SAO). ``Military Assitance,'' account is no longer available for the receipt of proceeds). b. Security Assistance Offices 978242 XDM_ 978242 XDM_ (SAO) personal property S843000. S843000. purchased with Foreign Military Sales Administrative Funds (11x8242).6. Coast Guard property under _ F3875........... _ F3875. Upon the physical control of the receipt of the Coast Guard at the time of sale. entire amount due from the bidder, a check shall be drawn on the suspense account and forwarded to the Coast Guard at the following address: Commandant, U.S. Coast Guard (GFAC), Washington, DC 20593.7. Property owned by _ X6874, _ X6875. Upon nonappropriated fund ``Suspense''. receipt of the instrumentalities, excluding entire amount due garbage suitable for animal from the bidder, consumption that is disposed of a check shall be under a multiple-pickup drawn on the contract. suspense account and forwarded to the applicable instrumentality.8. Recyclable material.......... _ F3875 \1\....... _ F3875.\1\ Upon receipt of the entire amount due from the bidder, deposit total proceeds to the accounts designated by the DoD Military Installation that gave the material up for disposal.9. Lost, abandoned, or unclaimed 972651,``Sale of _ X6001, privately owned personal Scrap and Salvage ``Proceeds of property. Materials, Sales of Lost, Defense''. Abandoned or Unclaimed Personal Property.'' The owner(s) of lost, abandoned, or unclaimed property may claim the net proceeds from sale of that property within 5 years of the date of the sale by providing proof of ownership to the government. After 5 years from the date of the sale, any unclaimed net proceeds shall be transferred from _ X6001 to general fund miscellaneous receipt account _1060, ``Forfeitures of Unclaimed Money and Property.''10. Property owned by a country Operation and _ X6875. Upon or international organization. maintenance receipt of the appropriation of entire amount due the DoD Component from the bidder, that sells the a check for 80% property. (This of the sales is reimbursement price shall be for selling drawn on the expenses.). suspense account and forwarded to the applicable foreign country or international organization.11. Bones, fats, and meat Stock Fund........ Stock Fund. trimmings generated by a commissary store.12. Government furnished (\2\)............. (\2\). property sold by contractors.13. All other property.......... 972651............ 972651.------------------------------------------------------------------------\1\ 10 U.S.C. 2577 limits the amounts which can be held in F3875 at the end of any fiscal year resulting from the program to $2 million. Amounts in excess of $2 million are to be transferred to Miscellaneous Receipts of the Treasury. This instruction provides for immediate distribution of all sales proceeds received from the recyclable program.\2\ See subsection D.7. of the basic Instruction.
