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H contractor liability for government property 1

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(h)Contractor Liability for Government Property.(1) Unless otherwise provided for in the contract, the Contrac-tor shall not be liable for loss of Government property fur-nished or acquired under this contract, except when any oneof the following applies—(i) The risk is covered by insurance or the Contractoris otherwise reimbursed (to the extent of such insurance orreimbursement). The allowability of insurance costs shall bedetermined in accordance with31.205-19.(ii) Loss of Government property that is the result ofwillful misconduct or lack of good faith on the part of the Con-tractor’s managerial personnel.(iii) The Contracting Officer has, in writing, revokedthe Government’s assumption of risk for loss of Governmentproperty due to a determination under paragraph (g) of thisclause that the Contractor’s property management practicesare inadequate, and/or present an undue risk to the Govern-ment, and the Contractor failed to take timely correctiveaction. If the Contractor can establish by clear and convincingevidence that the loss of Government property occurred whilethe Contractor had adequate property management practicesor the loss did not result from the Contractor’s failure to main-tain adequate property management practices, the Contractorshall not be held liable.(2) The Contractor shall take all reasonable actions nec-essary to protect the property from further loss. The Contrac-tor shall separate the damaged and undamaged property, placeall the affected property in the best possible order, and takesuch other action as the Property Administrator directs.(3) The Contractor shall do nothing to prejudice theGovernment’s rights to recover against third parties for anyloss of Government property.(4) The Contractor shall reimburse the Government forloss of Government property, to the extent that the Contractoris financially liable for such loss, as directed by the Contract-ing Officer.(5) Upon the request of the Contracting Officer, theContractor shall, at the Government’s expense, furnish to theGovernment all reasonable assistance and cooperation,including the prosecution of suit and the execution of instru-ments of assignment in favor of the Government in obtainingrecovery.(i)Equitable adjustment. Equitable adjustments under thisclause shall be made in accordance with the procedures of theChanges clause. However, the Government shall not be liablefor breach of contract for the following:(1) Any delay in delivery of Government-furnishedproperty.(2) Delivery of Government-furnished property in acondition not suitable for its intended use.(3) An increase, decrease, or substitution of Govern-ment-furnished property.(4) Failure to repair or replace Government property forwhich the Government is responsible.Standard Form 1428(j)Contractor inventory disposal. Except as otherwise pro-vided for in this contract, the Contractor shall not dispose ofContractor inventory until authorized to do so by the PlantClearance Officer or authorizing official.

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