41 C.F.R. Subpart E—Donations to Public Agencies, Service Educational Activities (SEAs), and Eligible Nonprofit Organizations
Title 41 - Public Contracts and Property Management
The pronoun “you,” when used in this subpart, refers to the State agency for surplus property (SASP). The following statutes provide the authority to donate surplus Federal property to different types of recipients: (a) Section 549(d) of title 40, United States Code authorizes surplus property under the control of the Department of Defense (DOD) to be donated, through SASPs, to educational activities which are of special interest to the armed services (referred to in this part 102–37 as service educational activities or SEAs). (b) Section 549(c)(3) of title 40, United States Code authorizes SASPs to donate surplus property to public agencies and to nonprofit educational or public health institutions, such as: (1) Medical institutions. (2) Hospitals. (3) Clinics. (4) Health centers. (5) Drug abuse or alcohol treatment centers. (6) Providers of assistance to homeless individuals. (7) Providers of assistance to impoverished families and individuals. (8) Schools. (9) Colleges. (10) Universities. (11) Schools for the mentally disabled. (12) Schools for the physically disabled. (13) Child care centers. (14) Radio and television stations licensed by the Federal Communications Commission as educational radio or educational television stations. (15) Museums attended by the public. (16) Libraries, serving free all residents of a community, district, State or region. (c) Section 213 of the Older Americans Act of 1965, as amended (42 U.S.C. 3020d), authorizes donations of surplus property to State or local government agencies, or nonprofit organizations or institutions, that receive Federal funding to conduct programs for older individuals. [67 FR 2584, Jan. 18, 2002, as amended at 71 FR 23868, Apr. 25, 2006] (a) For most public and nonprofit activities, the SASP determines if an applicant is eligible to receive property as a public agency, a nonprofit educational or public health institution, or for a program for older individuals. A SASP may request GSA assistance or guidance in making such determinations. (b) For applicants that offer courses of instruction devoted to the military arts and sciences, the Defense Department will determine eligibility to receive surplus property through the SASP as a service educational activity or SEA. To qualify for donation program eligibility through a SASP, an applicant must: (a) Conform to the definition of one of the categories of eligible entities listed in §102–37.380 (see appendix C of this part for definitions); (b) Demonstrate that it meets any approval, accreditation, or licensing requirements for operation of its program; (c) Prove that it is a public agency or a nonprofit and tax-exempt organization under section 501 of the Internal Revenue Code; (d) Certify that it is not debarred, suspended, or excluded from any Federal program, including procurement programs; and (e) Operate in compliance with applicable Federal nondiscrimination statutes. A SASP may accept the following documentation as evidence that an applicant has met established standards for the operation of its educational or health program: (a) A certificate or letter from a nationally recognized accrediting agency affirming the applicant meets the agency's standards and requirements. (b) The applicant's appearance on a list with other similarly approved or accredited institutions or programs when that list is published by a State, regional, or national accrediting authority. (c) Letters from State or local authorities (such as a board of health or a board of education) stating that the applicant meets the standards prescribed for approved or accredited institutions and organizations. (d) In the case of educational activities, letters from three accredited or State-approved institutions that students from the applicant institution have been and are being accepted. (e) In the case of public health institutions, licensing may be accepted as evidence of approval, provided the licensing authority prescribes the medical requirements and standards for the professional and technical services of the institution. (f) The awarding of research grants to the institution by a recognized authority such as the National Institutes of Health, the National Institute of Education, or by similar national advisory council or organization. In general, you must maintain the records required by your State plan to document donee eligibility (see appendix B of this part). For SEAs, you must maintain separate records that include: (a) Documentation verifying that the activity has been designated as eligible by DOD to receive surplus DOD property. (b) A statement designating one or more donee representative(s) to act for the SEA in acquiring property. (c) A listing of the types of property that are needed or have been authorized by DOD for use in the SEA's program. You must update donee eligibility records as needed, but no less than every 3 years, to ensure that all documentation supporting the donee's eligibility is current and accurate. Annually, you must update files for nonprofit organizations whose eligibility depends on annual appropriations, annual licensing, or annual certification. Particular care must be taken to ensure that all records relating to the authority of donee representatives to receive and receipt for property, or to screen property at Federal facilities, are current. If you determine that a donee has failed to maintain its eligibility status, you must terminate distribution of property to that donee, recover any usable property still under Federal restriction (as outlined in §102–37.465), and take any other required compliance actions. If an applicant appeals a negative eligibility determination, forward complete documentation on the appeal request, including your comments and recommendations, to the applicable GSA regional office for review and coordination with GSA headquarters. GSA's decision will be final.
Title 41: Public Contracts and Property Management
PART 102–37—DONATION OF SURPLUS PERSONAL PROPERTY
Subpart E—Donations to Public Agencies, Service Educational Activities (SEAs), and Eligible Nonprofit Organizations
§ 102-37.375 How is the pronoun “you” used in this subpart?
§ 102-37.380 What is the statutory authority for donations of surplus Federal property made under this subpart?
Donee Eligibility
§ 102-37.385 Who determines if a prospective donee applicant is eligible to receive surplus property under this subpart?
§ 102-37.390 What basic criteria must an applicant meet before a SASP can qualify it for eligibility?
§ 102-37.395 How can a SASP determine whether an applicant meets any required approval, accreditation, or licensing requirements?
§ 102-37.400 What type of eligibility information must a SASP maintain on donees?
§ 102-37.405 How often must a SASP update donee eligibility records?
§ 102-37.410 What must a SASP do if a donee fails to maintain its eligibility status?
§ 102-37.415 What should a SASP do if an applicant appeals a negative eligibility determination?
Conditional Eligibility
§ 102-37.420 May a SASP grant conditional eligibility to applicants who would otherwise qualify as eligible donees, but have been unable to obtain approval, accreditation, or licensing because they are newly organized or their facilities are not yet constructed?
You may grant conditional eligibility to such an applicant provided it submits a statement from any required approving, accrediting, or licensing authority confirming it will be approved, accredited, or licensed.
§ 102-37.425 May a SASP grant conditional eligibility to a not-for-profit organization whose tax-exempt status is pending?
No, under no circumstances may you grant conditional eligibility prior to receiving from the applicant a copy of a letter of determination by the Internal Revenue Service stating that the applicant is exempt from Federal taxation under section 501 of the Internal Revenue Code.
§ 102-37.430 What property can a SASP make available to a donee with conditional eligibility?
You may only make available surplus property that the donee can use immediately. You may not make available property that will only be used at a later date, for example, after the construction of the donee's facility has been completed.
Terms and Conditions of Donation
§ 102-37.435 For what purposes may donees acquire and use surplus property?
A donee may acquire and use surplus property only for the following authorized purposes:
(a) Public purposes. A public agency that acquires surplus property through a SASP must use such property to carry out or to promote one or more public purposes for the people it serves.
(b) Educational and public health purposes, including related research. A nonprofit educational or public health institution must use surplus property for education or public health, including research for either purpose and assistance to the homeless or impoverished. While this does not preclude the use of donated surplus property for a related or subsidiary purpose incident to the institution's overall program, the property may not be used for a nonrelated or commercial purpose.
(c) Programs for older individuals. An entity that conducts a program for older individuals must use donated surplus property to provide services that are necessary for the general welfare of older individuals, such as social services, transportation services, nutrition services, legal services, and multipurpose senior centers.
§ 102-37.440 May donees acquire property for exchange?
No, a donee may not acquire property with the intent to sell or trade it for other assets.
§ 102-37.445 What certifications must a donee make before receiving property?
Prior to a SASP releasing property to a donee, the donee must certify that:
(a) It is a public agency or a nonprofit organization meeting the requirements of the Property Act and/or regulations of GSA;
(b) It is acquiring the property for its own use and will use the property for authorized purposes;
(c) Funds are available to pay all costs and charges incident to the donation;
(d) It will comply with the nondiscrimination regulations issued under title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d–2000d–4), section 122 of title 40, United States Code, section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794), as amended, title IX of the Education Amendments of 1972 (20 U.S.C. 1681–1688), as amended, and section 303 of the Age Discrimination Act of 1975 (42 U.S.C. 6101–6107); and
(e) It isn't currently debarred, suspended, declared ineligible, or otherwise excluded from receiving the property.
[67 FR 2584, Jan. 18, 2002, as amended at 71 FR 23868, Apr. 25, 2006]
§ 102-37.450 What agreements must a donee make?
Before a SASP may release property to a donee, the donee must agree to the following conditions:
(a) The property is acquired on an “as is, where is” basis, without warranty of any kind, and it will hold the Government harmless from any or all debts, liabilities, judgments, costs, demands, suits, actions, or claims of any nature arising from or incident to the donation of the property, its use, or final disposition.
(b) It will return to the SASP, at its own expense, any donated property:
(1) That is not placed in use for the purposes for which it was donated within 1 year of donation; or
(2) Which ceases to be used for such purposes within 1 year after being placed in use.
(c) It will comply with the terms and conditions imposed by the SASP on the use of any item of property having a unit acquisition cost of $5,000 or more and any passenger motor vehicle or other donated item. (Not applicable to SEAs.)
(d) It agrees that, upon execution of the SASP distribution document, it has conditional title only to the property during the applicable period of restriction. Full title to the property will vest in the donee only after the donee has met all of the requirements of this part.
(e) It will comply with conditions imposed by GSA, if any, requiring special handling or use limitations on donated property.
(f) It will use the property for an authorized purpose during the period of restriction.
(g) It will obtain permission from the SASP before selling, trading, leasing, loaning, bailing, cannibalizing, encumbering or otherwise disposing of property during the period of restriction, or removing it permanently for use outside the State.
(h) It will report to the SASP on the use, condition, and location of donated property, and on other pertinent matters as the SASP may require from time to time.
(i) If an insured loss of the property occurs during the period of restriction, GSA or the SASP (depending on which agency has imposed the restriction) will be entitled to reimbursement out of the insurance proceeds of an amount equal to the unamortized portion of the fair market value of the damaged or destroyed item.
Special Handling or Use Conditions
§ 102-37.455 On what categories of surplus property has GSA imposed special handling conditions or use limitations?
GSA has imposed special handling or processing requirements on the property discussed in this section. GSA may, on a case-by-case basis, prescribe additional restrictions for handling or using these items or prescribe special processing requirements on items in addition to those listed in this section.
(a) Aircraft and vessels. The requirements of this section apply to the donation of any fixed- or rotary-wing aircraft and donable vessels that are 50 feet or more in length, having a unit acquisition cost of $5,000 or more, regardless of the purpose for which donated. Such aircraft or vessels may be donated to public agencies and eligible nonprofit activities provided the aircraft or vessel is not classified for reasons of national security and any lethal characteristics are removed. The following table provides locations of other policies and procedures governing aircraft and vessels:
------------------------------------------------------------------------ For. . . See. . .------------------------------------------------------------------------(1) Policies and procedures Part 102-33, subpart D, of this governing the donation of aircraft chapter. parts.------------------------------------------------------------------------(2) Documentation needed by GSA to § 102-37.225. process requests for aircraft or vessels.------------------------------------------------------------------------(3) Special terms, conditions, and § 102-37.460. restrictions imposed on aircraft and vessels.------------------------------------------------------------------------(4) Guidelines on preparing letters § 102-37.230. of intent for aircraft or vessels.------------------------------------------------------------------------
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(b) Alcohol. (1) When tax-free or specially denatured alcohol is requested for donation, the donee must have a special permit issued by the Assistant Regional Commissioner of the appropriate regional office, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Department of the Justice, in order to acquire the property. Include the ATF use-permit number on the SF 123, Transfer Order Surplus Personal Property. (2) You may not store tax-free or specially denatured alcohol in SASP facilities. You must make arrangements for this property to be shipped or transported directly from the holding agency to the designated donee. (c) Hazardous materials, firearms, and property with unsafe or dangerous characteristics. For hazardous materials, firearms, and property with unsafe or dangerous characteristics, see part 101–42 of this title. (d) Franked and penalty mail envelopes and official letterhead. Franked and penalty mail envelopes and official letterhead may not be donated without the SASP certifying that all Federal Government markings will be obliterated before use. [67 FR 2584, Jan. 18, 2002, as amended at 71 FR 23868, Apr. 25, 2006] § 102-37.460 What special terms and conditions apply to the donation of aircraft and vessels?The following special terms and conditions apply to the donation of aircraft and vessels: (a) There must be a period of restriction which will expire after the aircraft or vessel has been used for the purpose stated in the letter of intent (see §102–37.230) for a period of 5 years, except that the period of restriction for a combat-configured aircraft is in perpetuity. (b) The donee of an aircraft must apply to the FAA for registration of an aircraft intended for flight use within 30 calendar days of receipt of the aircraft. The donee of a vessel must, within 30 calendar days of receipt of the vessel, apply for documentation of the vessel under applicable Federal, State, and local laws and must record each document with the U.S. Coast Guard at the port of documentation. The donee's application for registration or documentation must include a fully executed copy of the conditional transfer document and a copy of its letter of intent. The donee must provide the SASP and GSA with a copy of the FAA registration (and a copy of its FAA Standard Airworthiness Certificate if the aircraft is to be flown as a civil aircraft) or Coast Guard documentation. (c) The aircraft or vessel must be used solely in accordance with the executed conditional transfer document and the plan of utilization set forth in the donee's letter of intent, unless the donee has amended the letter, and it has been approved in writing by the SASP and GSA and a copy of the amendment recorded with FAA or the U.S. Coast Guard, as applicable. (d) In the event any of the terms and conditions imposed by the conditional transfer document are breached, title may revert to the Government. GSA may require the donee to return the aircraft or vessel or pay for any unauthorized disposal, transaction, or use. (e) If, during the period of restriction, the aircraft or vessel is no longer needed by the donee, the donee must promptly notify the SASP and request disposal instructions. A SASP may not issue disposal instructions without the prior written concurrence of GSA. (f) Military aircraft previously used for ground instruction and/or static display (Category B aircraft, as designated by DOD) or that are combat-configured (Category C aircraft) may not be donated for flight purposes. (g) For all aircraft donated for nonflight use, the donee must, within 30 calendar days of receipt of the aircraft, turn over to the SASP the remaining aircraft historical records (except the records of the major components/life limited parts; e.g., engines, transmissions, rotor blades, etc., necessary to substantiate their reuse). The SASP in turn must transmit the records to GSA for forwarding to the FAA. Release of Restrictions§ 102-37.465 May a SASP modify or release any of the terms and conditions of donation?You may alter or grant releases from State-imposed restrictions, provided your State plan of operation sets forth the standards by which such actions will be taken. You may not grant releases from, or amendments or corrections to: (a) The terms and conditions you are required by the Property Act to impose on the use of passenger motor vehicles and any item of property having a unit acquisition cost of $5,000 or more. (b) Any special handling condition or use limitation imposed by GSA, except with the prior written approval of GSA. (c) The statutory requirement that usable property be returned by the donee to the SASP if the property has not been placed in use for the purposes for which it was donated within 1 year of donation or ceases to be used by the donee for those purposes within 1 year of being placed in use, except that: (1) You may grant authority to the donee to cannibalize property items subject to this requirement when you determine that such action will result in increased use of the property and that the proposed action meets the standards prescribed in your plan of operation. (2) You may, with the written concurrence of GSA, grant donees: (i) A time extension to place property into use if the delay in putting the property into use was beyond the control and without the fault or negligence of the donee. (ii) Authority to trade in one donated item for one like item having similar use potential. § 102-37.470 At what point may restrictions be released on property that has been authorized for cannibalization?Property authorized for cannibalization must remain under the period of restriction imposed by the transfer/distribution document until the proposed cannibalization is completed. Components resulting from the cannibalization, which have a unit acquisition cost of $5,000 or more, must remain under the restrictions imposed by the transfer/distribution document. Components with a unit acquisition cost of less than $5,000 may be released upon cannibalization from the additional restrictions imposed by the State. However, these components must continue to be used or be otherwise disposed of in accordance with this part. § 102-37.475 What are the requirements for releasing restrictions on property being considered for exchange?GSA must consent to the exchange of donated property under Federal restrictions or special handling conditions. The donee must have used the donated item for its acquired purpose for a minimum of 6 months prior to being considered for exchange, and it must be demonstrated that the exchange will result in increased utilization value to the donee. As a condition of approval of the exchange, the item being exchanged must have remained in compliance with the terms and conditions of the donation. Otherwise, §102–37.485 applies. The item acquired by the donee must be: (a) Made subject to the period of restriction remaining on the item exchanged; and (b) Of equal or greater value than the item exchanged. Compliance and Utilization§ 102-37.480 What must a SASP do to ensure that property is used for the purpose(s) for which it was donated?You must conduct utilization reviews, as provided in your plan of operation, to ensure that donees are using surplus property during the period of restriction for the purposes for which it was donated. You must fully document your efforts and report all instances of noncompliance (misuse or mishandling of property) to GSA. § 102-37.485 What actions must a SASP take if a review or other information indicates noncompliance with donation terms and conditions?If a review or other information indicates noncompliance with donation terms and conditions, you must: (a) Promptly investigate any suspected failure to comply with the conditions of donated property; (b) Notify GSA immediately where there is evidence or allegation of fraud, wrongdoing by a screener, or nonuse, misuse, or unauthorized disposal or destruction of donated property; (c) Temporarily defer any further donations of property to any donee to be investigated for noncompliance allegations until such time as the investigation has been completed and: (1) A determination made that the allegations are unfounded and the deferment is removed. (2) The allegations are substantiated and the donee is proposed for suspension or debarment; and (d) Take steps to correct the noncompliance or otherwise enforce the conditions imposed on use of the property if a donee is found to be in noncompliance. Enforcement of compliance may involve: (1) Ensuring the property is used by the present donee for the purpose for which it was donated. (2) Recovering the property from the donee for: (i) Redistribution to another donee within the State; (ii) Transfer through GSA to another SASP; or (iii) Transfer through GSA to a Federal agency. (3) Recovering fair market value or the proceeds of disposal in cases of unauthorized disposal or destruction. (4) Recovering fair rental value for property in cases where the property has been loaned or leased to an ineligible user or used for an unauthorized purpose. (5) Disposing of by public sale property no longer suitable, usable, or necessary for donation. § 102-37.490 When must a SASP coordinate with GSA on compliance actions?You must coordinate with GSA before selling or demanding payment of the fair market or fair rental value of donated property that is: (a) Subject to any special handling condition or use limitation imposed by GSA (see §102–37.455); or (b) Not properly used within 1 year of donation or which ceases to be properly used within 1 year of being placed in use. § 102-37.495 How must a SASP handle funds derived from compliance actions?You must handle funds derived from compliance actions as follows: (a) Enforcement of Federal restrictions. You must promptly remit to GSA any funds derived from the enforcement of compliance involving a violation of any Federal restriction, for deposit in the Treasury of the United States. You must also submit any supporting documentation indicating the source of the funds and essential background information. (b) Enforcement of State restrictions. You may retain any funds derived from a compliance action involving violation of any State-imposed restriction and use such funds as provided in your State plan of operation. Returns and Reimbursement§ 102-37.500 May a donee receive reimbursement for its donation expenses when unneeded property is returned to the SASP?When a donee returns unneeded property to a SASP, the donee may be reimbursed for all or part of the initial cost of any repairs required to make the property usable if: (a) The property is transferred to a Federal agency or sold for the benefit of the U.S. Government; (b) No breach of the terms and conditions of donation has occurred; and (c) GSA authorizes the reimbursement. § 102-37.505 How does a donee apply for and receive reimbursement for unneeded property returned to a SASP?If the donee has incurred repair expenses for property it is returning to a SASP and wishes to be reimbursed for them, it will inform the SASP of this. The SASP will recommend for GSA approval a reimbursement amount, taking into consideration the benefit the donee has received from the use of the property and making appropriate deductions for that use. (a) If this property is subsequently transferred to a Federal agency, the receiving agency will be required to reimburse the donee as a condition of the transfer. (b) If the property is sold, the donee will be reimbursed from the sales proceeds. Special Provisions Pertaining to SEAs§ 102-37.510 Are there special requirements for donating property to SEAs?Yes, only DOD-generated property may be donated to SEAs. When donating DOD property to an eligible SEA, SASPs must observe any restrictions the sponsoring Military Service may have imposed on the types of property the SEA may receive. § 102-37.515 Do SEAs have a priority over other SASP donees for DOD property?Yes, SEAs have a priority over other SASP donees for DOD property, but only if DOD requests GSA to allocate surplus DOD property through a SASP for donation to a specific SEA. In such cases, DOD would be expected to clearly identify the items in question and briefly justify the request. Browse Previous | Browse Next
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