Managing Government Furnished Material (GFM): Accountability and Integration in DLA Contracts

In certain high-complexity DLA contracts, particularly those involving maintenance, repair, and overhaul (MRO) or specific assembly roles, the government may provide Government Furnished Material (GFM). GFM refers to property in the possession of, or directly acquired by, the Government and subsequently furnished to the contractor for performance of a contract. While GFM can reduce the contractor's initial material costs, it introduces a significant layer of administrative and physical accountability regulated by FAR Part 45.

The Accountability Framework

The moment GFM enters a contractor’s facility, it must be tracked with the same precision as the final deliverable. Contractors are required to maintain a property management system that covers the entire lifecycle of the material—from receipt and identification to consumption or return. Failure to accurately track GFM can lead to "Loss of Government Property" investigations, which can jeopardize a firm’s eligibility for future industrial contracts.

Integration into Production

Integrating GFM requires careful technical oversight. Contractors must verify that the material provided meets the specifications required for the final assembly. If the GFM is defective or does not arrive on schedule, the contractor must follow strict notification protocols to avoid being held liable for production delays. This "Government-Contractor" synergy is a hallmark of advanced industrial operations.

Common Pitfalls in GFM Management

One of the most frequent mistakes is the commingling of GFM with the contractor’s own industrial stock. GFM must remain clearly identified and, in many cases, physically segregated to ensure no unauthorized use occurs. Additionally, the reporting of "excess" GFM at the end of a contract is a required step that many firms overlook, leading to administrative hurdles during contract closeout.