Used Components Purchased for Performance of R&D

Are the costs for the items going to be charged to an indirect cost account, or directly to the contract?

Hilarity_Follows said:

This question is regarding an R&D CPFF type contract with DoD, (this is not a contract to deliver any specific supplies or materials.) As part of the effort, the firm is creating a prototype for testing. The science team at the firm wants to buy some used components on ebay to save money instead of buying the components new from the actual manufacturer. The prototype that would be made from these components could be consumed in testing, it is unclear at this point, or it could have to be delivered to the agency as residual materials. It is not specifically a deliverable in the contract, it's research so there are no specs tied around this prototype either. The contract has FAR 52.245-1. 

The only clause I can think of requiring a firm to use only new or vendor re-manufactured items in performance/ delivery is FAR 52.211-5 Material Requirements. This clause is NOT included in this contract. 

Is there another contract clause or requirement to look for I am not thinking of that would prevent this type of purchase?

52.236-5   Material and Workmanship is used with construction contracts. The clause requires new and unused materials and equipment for construction contracts. I don’t think that there is a general requirement for government contracts, absent a contract clause in your contract.

But since it is A CPFF contract, why not consult with the government authorized  representative or the KO?

ji20874 said:

Are the costs for the items going to be charged to an indirect cost account, or directly to the contract?

The items would be a direct cost to the contract. If an indirect company expense, I wouldn't be concerned too much about it.

Used parts in general concern me because doing so may adversely impact compliance or risk with requirements included in such clauses as Warranty, Counterfeit Goods, Patent Trademark and Copyright, Intellectual Property, and Acceptance and Rejection and Inspection Clause. You may look for those in your contract. I would not do so unless the highest official in the company for Quality, Program Management, Engineering and Property Management signed off. If the prototype was intended to "prove" something to be built and delivered just like it, will it be built with new or used parts? I would be sceptical that it proved it for new parts. Perhaps there is some rationale based on a better description of what the prototype is, whether it is controlled by a contract specification or drawing, whether a used part meets those requirements and how it is "consumed" in test and whether it is ever really built again. I am doubting that money would actually be saved in the long run. You have a cost contract. Is a used part really your best efforts (which is the essence of a cost type contract)?

Hilarity, are you with the R&D contractor or the Government? 

Either way, what is your actual concern? I couldn’t tell from your description whether there is a technical problem with using less than new parts.

On ‎4‎/‎17‎/‎2019 at 9:28 AM, Hilarity_Follows said:

This question is regarding an R&D CPFF type contract with DoD, (this is not a contract to deliver any specific supplies or materials.) As part of the effort, the firm is creating a prototype for testing. ... The prototype ... is not specifically a deliverable in the contract, it's research so there are no specs tied around this prototype either.

You are building a prototype that is not a deliverable. Go ahead and acquire the used materials. You are fine. The government will appreciate the cost savings.

I agree with that. Why add more to the deficit. The government didn’t say they would use it after your r&d efforts.