(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:
|Estimated quantity of material to be generated each quarter (pounds)
|Bid price—$1.00 per pound
|20 percent of bid price
|Amount to accompany bid
(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.
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.
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.
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.
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.
Approval for charges against credit cards shall be processed as follows:
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.
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.
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.
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:
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:
Bidders name, as it appears on the credit card.
Date of expiration of the 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.
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.
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.
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.
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:
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.
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.
The Military Department's finance and accounting office shall:
Report weekly transactions to the responsible fiscal station cited on the collection voucher.
Report the collections within the same month in the “Statement of Transactions” to the Treasury.
(g) Contractor sales of surplus Government-furnished property.
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.
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.
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:
Represent an increase in the dollar value of the applicable contract(s).
Were made instead of disbursements on the applicable contract(s).
Were returned to miscellaneous receipt account 972651, “Sale of Scrap and Salvage, Materials, Defense.”
The accounting office for the contract is identified in the accounting classification code. See DoD 7220.9-M, chapter 17 for additional information.
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.