(a) General.

(1) Military Departments and Defense Agencies will declare DoD property excess and use the DoD in-transit control system (ICS) as required by DoD Instruction 5000.64 and DLM 4000.25-2.

(2) Generating activities are encouraged to retain physical custody until disposition instructions are provided to reduce processing costs; e.g., packaging, crating, handling, and transportation (PCH&T).

(3) Disposal of wholesale excess DoD property CONUS stocks from DLA Depot recycling control points (RCPs) is automated. This property does not require transport to a DLA Disposition Services site. Authorized excess DoD property is transferred between the RCP account and the DLA Disposition Services account (SC4402). The following FSGs, FSCs, SCCs, and DEMIL codes are ineligible for RCP:

(i) FSGs: 10, 11, 12, 13, 14, 18, 26, 68, 80, 87, 88, 89, 91 and 94.

(ii) FSCs: 2350, 3690, 4470, 4920, 4927, 6505, 6508, 6750, and 8120.

(iii) SCCs: H.

(iv) DEMIL Codes: G and P.

(b) Property and scrap accepted and excluded.

(1) DLA Disposition Services must accept and dispose of all authorized DoD-generated excess, surplus, FEPP, scrap, and other personal property with the exclusions in paragraph (e) of this section.

(2) Property not disposed of through RTDS will be processed for disposal under an HW contract, except as specified elsewhere. For example, HP will be processed on HW disposal service contracts. Other property will be downgraded to scrap, demilitarized, processed for A/D, or disposed of through a DLA Disposition Services service contract.

(3) DLA Disposition Services sites minimize processing delays as much as possible. In the event a site is unable to physically accept the property at the desired time and location due to workload, generating activities may retain the property for processing in-place, seek another DLA Disposition Services site, or hold the property until the DLA Disposition Services site is able to receive the property.

(4) DLA Disposition Services sites:

(i) Accept and process nonsalable materiel that has no reutilization, transfer, donation, or sale value but is not otherwise restricted from disposal by U.S. law or Federal or military regulations.

(ii) Ensure that disposition is by the most economical and practical method; for example, donation in lieu of A/D or through a service contract that meets minimum legal requirements for disposal of the specific types of property.

(5) DLA Disposition Services sites may not accept (either physically or on its account) and no reutilization or sale service will be given for:

(i) Radioactive waste, items, devices, or materiel (all materiel that is radioactive).

(ii) Property designated for disposal by the Military Departments as identified in DoD Manual 4160.21, Volume 4.

(iii) Classified material, except that which is addressed by paragraph (b)(5)(v) of this section.

(iv) Nuclear weapons-related materiel.

(v) Classified and unclassified information systems security material (cryptological (CRYPTO) or communications security (COMSEC)). Disposal of FSCs 5810 and 5811 are the responsibility of the Military Departments and may not be transferred to DLA Disposition Services in their original configuration as specified in DoD 4160.28-M Volumes 1-3.

(vi) Property containing information covered by 5 U.S.C. 552a, also known as the Privacy Act of 1974.

(6) DoD Components will manage the collection and disposal of installation refuse and trash. If refuse and trash, when properly segregated, possesses RTDS potential, disposition may be accomplished via DLA Disposition Services, recycling provisions of refuse collection contracts, in-house refuse operations, or QRPs as appropriate.

(7) The DLA Disposition Services site operating as a tenant on an installation will notify the host activity when unauthorized shipments are received at the DLA Disposition Services site (including off-site shipments) of radioactive items, classified material, nuclear weapons-related materiel, and classified and unclassified information systems security material (CRYPTO/COMSEC). The host activity will be responsible for retrieving and securing any radioactive items, classified items and unclassified information systems security material (CRYPTO/COMSEC) immediately upon request of the DLA Disposition Services site.

(8) DLA Disposition Services sites will not accept scrap accumulations that are contaminated or commingled with:

(i) MPPEH.

(ii) MLI that require DEMIL (DEMIL Codes C, D, E and F) and MLI that require mutilation (DEMIL Code B). MLI with DEMIL Code G and P are not authorized for acceptance by DLA Disposition Services in their original state.

(iii) CCL items that have not undergone mutilation to the point of scrap as defined in DoD Instruction 2030.08.

(iv) HP FSCs.

(9) Contaminated scrap should be turned in as HW.

(c) Scrap segregation and identification.

(1) Separating material at the source simplifies scrap segregation and reduces handling. Commingling material may reduce or, in some instances, destroy the value of the scrap.

(2) Generating activities are responsible for initial identification and segregation. The major basic material or content will be used in the item nomenclature block of the DTID.

(3) Scrap will be segregated to ensure only authorized items are in a scrap pile.

(4) DLA Disposition Services sites will provide guidance and, where possible, containers for use by scrap generators at the source.

(5) The generating activity collecting the scrap or waste will maintain proper segregation of the material and determine a point at which no further material will be added. When scrap piles are being built by the DLA Disposition Services site, the same principles apply. Scrap generated from explosive and incendiary items and chemical ammunition is dangerous and will not be commingled with other types of property.

(d) Documentation for disposal through DLA Disposition Services.

(1) Use DoD automated information systems to the extent practical to prepare documentation for excess, surplus, or scrap DoD property or FEPP. This method of submitting information is preferred, particularly for turn-in of HW. In addition to submitting the information through automated information systems, hard copies must be produced and maintained with the items during the disposal processes.

(2) The generator will provide to the DLA Disposition Services site an original and three hard copies of a DD Form 1348-1A, “Issue Release/Receipt Document,” or DD Form 1348-2, “Issue Release/Receipt Document with Address Label” (available at http://www.dtic.mil/whs/directives/infomgt/forms/formsprogram.htm.) The DTID must include a valid DoDAAC as authorized in Volume 6 of DLM 4000.25, “Department of Defense Activity Address Code (DoDAAC) Directory (Activity Address Code Sequence)” (available at http://www2.dla.mil/j-6/dlmso/elibrary/Manuals/DLM/V6/Volume6.pdf). All further references to DD Form 1348-1A, which also include DD Form 1348-2, will be referred to in this subpart as a DTID. Table 1 of this section provides guidance on preparation of the DD Form 1348 series documents. For scrap transfers, see paragraph (f) of this section.

(3) Generating activities may use the DLA Disposition Services web-based program electronic turn-in document (ETID) for submitting the required information electronically. ETID accommodates generators that do not have service-unique automated capabilities. ETID access and guidance are located on the DLA Disposition Services Web site. Generating activities requiring ETID access must apply for a user ID and password.

(4) In addition to the data required by DLM 4000.25-1, the DTID must clearly indicate:

(i) The reimbursable category (such as foreign purchased, NAF, FCA), including the reimbursement fund citation, or an appropriate indicator that reimbursement is required (e.g., purchased with NAF or Disposal Authority Code “F” for FCAs). DTIDs without reimbursement data will be processed as non-reimbursable.

(ii) The value and a list of component parts removed from major end items or a copy of the limited technical inspection showing the nature and extent of repair required.

(iii) One of the SCCs listed in DLM 4000.25-2 as determined by the generator.

(5) DoD Components will turn in usable property with line item designations.

(i) To the extent possible, usable property will be turned in as individual line items with their assigned and valid NSN and UII (when applicable). Exceptions include property turned in as generator batchlots (see criteria in paragraph (g)(5)(ii) of this section); furniture turned in as a group on a single form; and locally purchased property without an NSN.

(ii) Property may be turned in without a valid NSN when the materiel cannot be identified to a valid NSN in FEDLOG (e.g., locally purchased property). Prior to assigning an LSN, generating activities will match the part number or bar code number from the property against the DLA Logistics Information Service Universal Directory of Commercial Items Cross Reference Inquiry.

(iii) Generating activities will assign an LSN if a part number or barcode is not available; the property is lost, abandoned, or unclaimed privately owned personal property; or the property is confiscated or captured enemy materiel. In Block 25 of the DTID, annotate the FSC, NATO codification bureau code, if available, and identify the noun, nomenclature, or part number.

(iv) Due to national security concerns, the FSCs listed in Table 2 of this section that are clearly MLI or CCL items require a higher degree of documentation. When these items are not assigned an NSN, the DTID must include the appropriate FSC; the valid part number and manufacturer's name; nomenclature that accurately describes the item; the end item application; and a clear text statement explaining why the NSN is not included (e.g., locally purchased item, found on post, lost, abandoned, privately owned property). This information may be annotated directly on the DTID or securely attached to the DTID.

(v) The DTID for any property turned in by LSN without an assigned DEMIL code must include a required clear text DEMIL statement, based on information in DoD 4160.28-M Volumes 1-3. Generating activities may request assistance of a DLA Disposition Services site, DLA, or the integrated manager for the FSC to determine the appropriate statement. DLA Disposition Services sites will assist generating activities in developing the clear text DEMIL statement and assignment of the appropriate DEMIL code. If assistance is not requested or not used, DLA Disposition Services sites may reject the turn-in of materiel which does not meet established criteria.

(6) Scrap DTIDs will include:

(i) DI code.

(ii) Unit of issue (pounds or kilograms).

(iii) Quantity (total weight (estimated or actual)).

(iv) DTID number.

(v) Precious metals indicator code.

(vi) Disposal authority code.

(vii) Basic material content (Block 17).

(viii) Reimbursement data, if applicable.

(7) For HP documentation, see DoD Manual 4160.21, Volume 4.

(8) The generating activities will complete documentation for in-transit control of property (excluding scrap (SCC S)), waste, NAF, lost, abandoned, or unclaimed, privately owned, and FCA property) in accordance with DoD 4160.28-M Volume 3, for shipments or transfers to DLA Disposition Services sites of property with a total acquisition value of $800 or greater and all property designated as pilferable or sensitive identified by an NSN or part number. The ICS document tracks property from the time of release by generating activity (regardless whether the property is shipped to the DLA Disposition Services site or retained by the generating activity) until the DLA Disposition Services site accepts accountability. The generating activities will update the records to reflect the change in accountability and custody.

(9) DoD Components will identify defective items, parts, and components containing latent defects.

(i) General information—(A) Category 1 (CAT 1) defective or counterfeit property.

(1) Is identified as military or Federal Government specification property intended for use in safety critical areas of systems, as determined by the user and reported to the item manager.

(2) Does not meet commercial specifications.

(3) If used, would create a public health or safety concern; RTDS as usable property is prohibited.

(4) Must be mutilated by the generating activity according to specific instructions provided by the item manager.

(B) Category 2 (CAT 2) defective property.

(1) Does not meet military or Federal Government specifications, but may meet commercial specifications.

(2) Cannot be used for its intended military purpose and must not be redistributed within the Department of Defense, as directed by the item manager.

(3) May be used for commercial purposes and may be transferred, donated, or sold as usable property.

(4) If sold, requires special terms and conditions warning purchasers that the property is CAT 2 defective and is not acceptable for resale back to the Department of Defense.

(ii) ICP requirements.

(A) ICPs will list defective property with the Government-Industry Data Exchange Program (GIDEP). GIDEP is located at http://www.gidep.org/.

(B) The DLA Disposition Services Safe Alert or Latent Defect (SALD) program contains additional disposal processing information for defective property and can be viewed at http://www.dispositionservices.dla.mil/.

(iii) Sales requirements.

(A) If the property has been rejected as defective due to non-conformance with U.S. Government specifications, it may be authorized for sale with a statement as to the specific reason for its rejection. DLA Disposition Services will ensure that U.S. Government identification, such as contract numbers, specification numbers, NSN, and any other printing that would identify the item with the U.S. Government is removed or obliterated. A statement to this effect will be included in the sales offering, as a condition of sale. Terms or conditions in sale offerings will warn purchasers that the property is CAT 2 defective and is not acceptable for resale to the Department of Defense.

(B) Return copies of the DTID from the DLA Disposition Services site. Unless generating activities provide written notification to DLA Disposition Services sites that electronic receipt confirmations are acceptable, DLA Disposition Services sites will provide final receipt documentation for each DTID. Generating activities can use the DLA Disposition Services property accounting system to query transactions status.

(e) Property custody determinations—(1) Physical custody retention.

(i) Generating activities should consider retaining physical custody of property declared as excess to reduce handling and preclude transportation costs.

(ii) An MOU will be established between the servicing DLA Disposition Services site and the generating activity. Custodial and accountability responsibilities will be identified in the MOU. DLA Disposition Services sites will not take accountability until the MOU is executed and signed at the approval levels identified in the MOU.

(iii) Inspection(s) will be completed by the DLA Disposition Services site, where appropriate. If not accomplished by the DLA Disposition Services site, a mutually agreeable disposal condition code will be assigned.

(iv) Generating activities are responsible for all expenses incurred before acceptance of accountability by a DLA Disposition Services site. At the point of DLA Disposition Services accountability acceptance (not in conditional acceptance time frame as described in paragraph (g)(2) of this section), expenses (e.g., PCH&T of non-hazardous excess, surplus, and FEPP) are borne by DLA Disposition Services. Exceptions may be negotiated by a DoD Component or federal agency representative at a level commensurate with DLA Disposition Services Director (Senior Executive Service level).

(v) The DLA Disposition Services site will provide barcode labels to the generating activity to affix on the property. The labels will contain the DTID number, DEMIL code, and federal condition code. The label will be positioned to clearly indicate that the property accountability has passed to DLA Disposition Services (e.g., “on DLA Disposition Services Site Inventory”). Property should be consolidated and protected in a designated area. The activity with physical custody is responsible for the property's care and protection until it is disposed of or moved to a DLA Disposition Services site.

(2) Turn-ins. When the generating activity decides to transport property to the DLA Disposition Services site, the care and custody of the property will be borne by the DLA Disposition Services site at the point of physical receipt.

(f) Transferring usable property and scrap to a DLA Disposition Services site.

(1) Generating activities will comply with this part, DLM 4000.25-1, and their Service or agency retention and disposal policies and procedures when preparing property for transfer for disposal. The generating service will maintain accountable records of accountable property, in accordance with DoD Instruction 5000.64, until formally relieved of accountability by DLA Disposition Services.

(2) Generating activities will schedule all transfers (receipt in-place or physical) through advanced notification (i.e., use of a listing or automated DTIDs.)

(3) Usable property will, to the extent possible, be transferred as individual line items with their assigned valid NSN and UII (when applicable). Exceptions include property turned in as generator batchlots, furniture turned in as a group on a “tally-in” form, and locally purchased property without an NSN.

(4) Scrap, properly identified with supply class by basic material content and segregated, must be transferred to a DLA Disposition Services site using a DTID.

(5) If the deficiency prohibits further DoD use, the materiel will remain in SCC Q, and owners will direct transfer of the materiel to DLA Disposition Services sites following the guidance in paragraph (d)(9) of this section. Improperly documented, unauthorized source, defective, non-repairable, and time-expired aviation CSI/FSCAP materiel that is not mutilated by the holding activity will be directed to the DLA Disposition Services site in SCC Q with management code S. All such materiel will be mutilated. The ICP/IMM should identify to the DLA Disposition Services any unique instructions for disposal requiring specific methods or information regarding hazardous material, waste, or property contained in the item. When transferring such aviation CSI/FSCAP to a DLA Disposition Services site, the generating activity DTID must clearly state in block 17 that the part is defective, non-reparable, time-expired, or otherwise deficient and that mutilation is required.

(6) Property capable of spilling or leaking may not be transferred to a DLA Disposition Services site in open, broken, or leaking containers. All property will be non-leaking and safe to handle.

(7) For physical transfers, generating activities will be responsible for movement of the property or scrap to the nearest DLA Disposition Services location.

(8) DEMIL instructions are to be provided by the ICP or IMM. DEMIL F items must have a valid and verifiable NSN. LSNs with DEMIL F are not valid. DLA Disposition Services sites will not accept DEMIL F property without the proper instructions.

(9) DTIDs that do not meet the requirements in paragraph (e) of this section will be rejected and returned to the Military Departments.

(10) To obtain DEMIL F instructions, please visit the Army's Integrated Logistics Support Center Web site at https://tulsa.tacom.army.mil/DEMIL.

(g) Receipt of property and scrap—(1) During transfer.

(i) DLA Disposition Services sites are responsible for ensuring proper receipt, classification, processing, safeguarding, storing, and subsequent shipping of all property and scrap. This includes property to be accounted for as items and properly segregated scrap and waste with RTDS value, and materiel destined for disposal.

(ii) DLA Disposition Services sites will assist, when requested, in tracing property when an in-transit control follow-up has been received by the generating or shipping activity.

(iii) DLA Disposition Services sites will maintain close liaison with generating activities to ensure:

(A) Informational guidance on disposal transfers is given to generating activities.

(B) A DLA Disposition Services site's receiving capability and the volume of property to be transferred is taken into consideration for turn-in scheduling. Property inspections will be performed in-place if more advantageous due to the characteristics of the property, as determined by DLA Disposition Services.

(C) Assistance is provided to generating activities, as needed, to assure proper segregation of scrap and HW material before transfer. If the weight generated, market conditions, or local trade practices warrant, further scrap segregation will be made.

(D) All property (except unsalable materiel that is precluded from sale by law), including scrap and refuse or trash with a RTDS value, is processed as set forth in this part and will not be disposed of by dumping in landfills. If the DLA Disposition Services site has knowledge of salable materiel being dumped in a sanitary fill, the DLA Disposition Services site chief will notify the installation commander regarding the matter.

(E) Property received is protected to prevent damage from unnecessary exposure to the elements. Property transferred as condemned may still be usable, and its preservation may benefit the Defense Materiel Disposal Program.

(1) Instances of improper handling of government property will be brought to the attention of the generating activity or installation commander for remedial action.

(2) Recurrent instances of improper care or handling will be documented for referral to DLA and the disposal focal points of the Military Departments and Defense Agencies.

(iv) The generating activity will assure all property and scrap is properly identified, including special handling requirements, and that automated information system or manually prepared documentation contains the required number of copies and appropriate information for property received in place or physically accepted.

(A) To the maximum extent possible, DLA Disposition Services sites will validate items during pre-receipt processes with documentation preparation and receipt processes with the physical transfer of the property.

(1) The generator's representative (if present) should assist with validation. Whether received in place or at a DLA Disposition Services site, a receipt copy of the DTID will be provided to the generator's representative at that time.

(2) If the turn-in is not accompanied by the generator's representative, the official receipt documentation will be provided in the most efficient method available; e.g., through an electronic listing of items received, an actual copy of an annotated DTID or an electronic return of an annotated DTID through a web based document management system.

(3) For turn-ins accompanied by a generator representative, a conditional receipt copy will be provided at the time of delivery. DLA Disposition Services sites will initial in block 22 and date block 23 of the DTID. This copy constitutes conditional acceptance and becomes the official receipt unless property is rejected on a supply discrepancy report within 15 workdays.

(B) Validation will consist of verifying property description and quantity, and assuring an authorized and appropriate SCC was assigned by the generating activity. DLA Disposition Services sites and generating activities will work together to validate and verify requirements and obtain appropriate certifications, etc., when property is received in place versus physically transported to a DLA Disposition Services site. The MOU, discussed in §273.6, will be used for securing and documenting these requirements.

(C) DLA Disposition Services site personnel may exercise discretionary authority to change and challenge SCCs (except for items in SCC Q, which will be downgraded to scrap and mutilated).

(D) For items in the general hardware, clothing, tools, furniture, and other nontechnical FSCs, DLA Disposition Services sites are authorized to use their best knowledge, judgment, and discretion to change and assign the appropriate SCC when determined, through physical inspection and examination, or where an obvious error in condition coding exists. DLA Disposition Services sites are responsible for any SCC changes they make and will document the change on the DTID.

(E) For specialized items such as avionics, or items that require test, measurement, or diagnostic to determine serviceability, DLA Disposition Services site should challenge the generating activity SCC assignment if it appears incorrect. Items in original pack and unopened containers that are coded condemned or unserviceable should be viewed with guarded skepticism and challenged back to the generating activity.

(v) Appropriate actions will be taken for discrepancies detected during pre-receipt or receipt:

(A) If property is to be physically received and the generating activity's representative is present, accountability and physical custody of the property will normally remain with the generator until reconciled. DLA Disposition Services sites, at their discretion, may retain physical custody until reconciled.

(B) Discrepancies noted during the receiving process, which may be discovered after electronic or hard copy documentation is received, will be processed in accordance with DLAI 4140.55/AR 735-11-2/Secretary of the Navy Instruction (SECNAVINST) 4355.18A/Air Force Joint Manual (AFJM) 23-215, “Reporting of Supply Discrepancies” (available at http://www.dla.mil/issuances/Documents__1/i4140.55%20(Joint%20Pub%20-%206%20Aug%202001).pdf.

(C) DLA Disposition Services will barcode the property for identification purposes. Barcoding should include use of any UII or IUID in place when applicable.

(2) Conditional and accountable acceptance distinction. Conditional and accountable acceptances are separate actions.

(i) Conditional acceptance occurs when a generating activity representative accompanies a transfer. DLA Disposition Services sites will provide a conditional receipt copy at time of physical delivery. Conditional acceptance becomes official and final acceptance receipt unless property is officially rejected by the DLA Disposition Services site within 15 workdays.

(ii) Accountable acceptance becomes final when verification of accurate property description, valid condition code assignment, correct quantity, and UII (when applicable) is completed by the DLA Disposition Services site. Physical inspections will be conducted, as appropriate.

(iii) During the conditional acceptance processing, if the property is physically transferred to the DLA Disposition Services site and an inventory discrepancy surfaces, the DLA Disposition Services site will research and provide a report of the lost, damaged, or destroyed property in accordance with procedures in DoD 7000.14-R Volume 12, Chapter 7. If the property remains at the generating activity site for receipt-in-place and an inventory discrepancy surfaces, the generating activity will research and provide a report of the lost, damaged, or destroyed property in accordance with procedures in DoD 7000.14-R Volume 12, Chapter 7. The accountable organization will amend the accountable property records as appropriate upon completion of the property loss investigation.

(3) Document acceptance. DLA Disposition Services sites will use a full signature for receipts in block 22 of the DTID. The conditional acceptance date will be entered in block 23. DLA Disposition Services sites will also use this date for the accountable record receipt transaction.

(4) Returning receipts. DLA Disposition Services sites will return one hard copy on physical transfers, including generator-prepared batchlots, if required by the generating activity. DLA Disposition Services will make return receipts available to generators via a web based document management system. Generating activities may access this system via the DLA Disposition Services Web site and search, view, and download copies of turn-in documentation. DLA Disposition Services personnel should work with generating activities to encourage the use of a web-based document management system and eliminate hard copy return receipts.

(i) For property physically received by a DLA Disposition Services site, generating activities will be provided a receipt copy upon delivery.

(A) These receipts are considered conditional acceptance of accountability, pending completion of DLA Disposition Services site inspection and verification of the turn-in. If no follow-up report is received by the generating activity within 15 workdays, the provisional copy becomes the official receipt document, and the DLA Disposition Services Site assumes full accountability.

(B) If the receipt is not recorded in a web based document management system within 30 days, the provisional copy becomes the official receipt copy and the DLA Disposition Services Site assumes full accountability.

(C) If a discrepancy is found, DLA Disposition Services sites may contact the generating activity and attempt resolution. If required, the guidance shown in paragraph (g)(2)(iii) of this section will be used for inventory discrepancies.

(D) When acceptance is not possible, a reject notice will be provided to the generating activity within 7 workdays. Return receipts are available to generators via a web based document management system.

(ii) For turn-ins made by commercial carrier, parcel post, etc., DLA Disposition Services sites will provide receipt copies no later than 5 workdays after delivery. These receipts are considered conditional acceptance of accountability pending completion of DLA Disposition Services site inspection and verification of the turn-in. If a discrepancy is found, DLA Disposition Services sites may contact and attempt resolution. When acceptance is not possible, a reject notice will be provided to the generating activity within 7 workdays.

(5) DLA Disposition Services site batchlots.

(i) Consistent with the DoD ICS and in accordance with DLA Disposition Services operating guidance, DLA Disposition Services sites may batchlot property after receipt:

(A) Batchlot property with an extended line item value of $800 or less, in SCCs A—H.

(B) Batchlot property that does not contain pilferable or sensitive materiel.

(ii) Property assigned DEMIL code “A” in the critical or non-critical FSG/FSCs, excluding FSCs 5985, 5998, and 5999, is eligible for batchlotting.

(iii) DLA Disposition Services sites may batchlot property requiring the same type of special processing, e.g., reimbursable property, same FSC.

(iv) DLA Disposition Services sites may batchlot clothing and textile products with infrared or spectral reflectance with a DEMIL code of “E,” but the batchlots require a certification on the DTID (see Figure 1 of this section).

(v) DLA Disposition Services sites will exclude from batchlotting:

(A) Chemical, biological, radiological, and nuclear (CBRN) property and clothing (FSG 83 and 84); lab equipment such as centrifuges, biological incubators, micromilling machines, biological safety cabinets and laboratory evaporators; (FSG 66), camouflage clothing and individual equipment.

(B) Low dollar property with high potential for RTDS.

(C) Property defined as a special case in Enclosure 3 of DoD Manual 4160.21, Volume 4 that requires special receipt and handling requirements that cannot be met at time of receipt.

(D) DEMIL required items identified in DoD 4160.28-M Volumes 1-3, DEMIL codes B, Q, and property in critical FSCs in DEMIL codes C, D, E, F, G, and P. Property in FSCs 5935, 5996, and 5999 will not be batchlotted regardless of DEMIL code.

(E) Property requiring inert certification.

(F) Small arms or light weapons.

(G) Lasers.

(H) Radioactive materiels (e.g., gauges, meters, watches) not eligible for turn-in.

(I) Chemical, biological, radiological, nuclear—defense (CBRN-D) equipment—These items are DEMIL F and instructions have to be followed for disposition and are NOT turned in to DLA disposition.

(J) Items with a CIIC. Items determined to be pilferable or sensitive in accordance with Volume 6 of DLM 4000.25 and DLA Regulation 4145.11/AR 740.7/Navy Supply System Command Instruction (NAVSUPINST) 4440.146C/Marine Corps Order (MCO) 4450.11, “Safeguarding of DLA Sensitive Inventory Items, Controlled Substances, and Pilferable Items of Supply” (available at http://www.dla.mil/issuances/Documents__1/r4145.11.pdf).

(K) HP.

(L) Metalworking machinery and former industrial plant equipment.

(M) Grade 8 fasteners and machine bolts in FSCs 5305 and 5306. Do not batchlot these items if they appear on the SALD list.

(N) Property in SCC A with a total extended value, per DTID, of $50 or more, as shown in Table 3 of this section.

(vi) Notwithstanding the information in paragraph (g)(5)(v) of this section, RTD customers may order individual items from a batchlot. DLA Disposition Services sites will honor these requests. Otherwise, items will not be removed from batchlots.

(vii) DLA Disposition Services sites are responsible for ensuring official receipt copies are returned accessible to generating activities (electronically or hard copy). They must provide tracing assistance for any DTID receipt copy not received by the generating activity.

(h) Identification, barcoding, and storage requirements.

(1) Usable property, transferred to a DLA Disposition Services site or received in original location, must be clearly identified with barcode labels. The labels will be affixed to property from time of receipt (physically or receipt-in-place) until final removal and will correspond with accountability records. For property stored at DLA Disposition Services sites, signs will be placed appropriately to identify property status (RTD, DEMIL, etc.) and to minimize confusion to customers.

(2) Scrap transferred to a DLA Disposition Services site or received in original location will be accumulated and segregated to prevent commingling basic material content.

(i) For use in providing the basic material content information, scrap will be identified using the standard waste and scrap classification code (SCL) contained in the DAISY codes and terms pocket reference located at the DLA Disposition Services Web page (https://www.dispositionservices.dla.mil/publications/index.shtml). The pocket reference is formatted alphabetically.

(ii) Barcoded labels are not required for scrap accumulations. However, both the generating activity and DLA Disposition Services accounting records must correspond with the scrap identifications and weights. DLA Disposition Services must use the SCL in its DAISY accounting records.

(iii) During storage, DLA Disposition Services will place appropriate signs to identify types of scrap and maximize visibility to customers.

(i) Accounting for property at the DLA Disposition Services site.

(1) Correct accounting for all excess property, surplus property, and FEPP by both the Military Departments and DLA Disposition Services sites is critical. Non-compliance can result in property being misappropriated with potentially severe consequences. Proper accounting impacts resourcing (money, equipment, and personnel) decisions.

(2) Accountability records will be maintained in auditable condition, allow property to be traced from receipt to final disposition and cleared from the ICS, when appropriate. DLA Disposition Services' accountability system will incorporate the requirements of DoD Directive 8320.02, 15 CFR parts 730 through 799, and DLA Regulation 7500.1, “Accountability and Responsibility for Government Property in the Possession of the Defense Logistics Agency,” (DLA Regulation 7500.1 is available at: http://www.dla.mil/issuances/.

(3) If a contingency operation requires a deviation from standard accountability practices, Military Departments and DLA Disposition Services sites will maintain spreadsheets, listings, or the most appropriate method of temporary accountable records. When the contingency operation reaches a point where prescribed accountability practices can be resumed, the temporary documents will be used for establishing, updating, or adjusting official accountability records (both Military Departments and DLA Disposition Services sites) as applicable.

(4) DLA Disposition Services' property accountability records will be maintained in sufficient detail to support required sales proceeds reimbursements.

(i) Materiel with different fund citation appropriations may be combined in sale lots; however, DLA Disposition Services accountability systems will retain individual disbursement information to allow appropriate reimbursements to local or departmental accounts, as designated by DoD 7000.14-R, “Department of Defense Financial Management Regulations (FMRs): Volume 11a, “Reimbursable Operations, Policy and Procedures“; Chapter 5, “Disposition of Proceeds from Department of Defense Sales of Surplus Personal Property”, (available at http://comptroller.defense.gov/fmr/current/11a/Volume__11a.pdf).

(ii) Non-reimbursable scrap may be physically combined with other scrap when considered advantageous; however, accountability records will be maintained to substantiate pro-rating of the proceeds.

(5) Usable and scrap determination and accounting are calculated as follows:

(i) When property not requiring DEMIL is assigned SCCs F, G, or H, the DLA Disposition Services site may determine property has scrap value only and classify and process as “scrap upon receipt.”

(ii) Personal property assigned other SCCs, which the DLA Disposition Services site determines to only have basic materiel content value, may be downgraded to scrap after the end-of-screening date (ESD) and completion of any required DEMIL.

(iii) DLA Disposition Services sites will minimize changing or challenging SCCs and downgrades upon receipt.

(iv) When an item has been offered on a competitive sale and no bid has been received, or bids received are less than the scrap value of the item, the property may be downgraded to scrap and re-offered for sale as scrap. This includes property returned to a DLA Disposition Services site from a joint commercial sales partner that has been confirmed as mis-described or as containing only basic material content value. Similar items received within a 12-month period that have a history of being nonsalable may be downgraded to scrap at ESD.

(v) When a DLA Disposition Services site determines obsolete printed materials have no RTD potential and only scrap market value, these items will be downgraded to scrap upon receipt.

(vi) When end items are turned in as scrap and are reclaimed or disassembled for their usable components, the DLA Disposition Services site's records will be adjusted to reflect the acquisition cost (estimated, if not known) of the components removed.

(6) Scrap accounting is calculated by weight.

(i) Estimated weight may be used for receiving scrap if scales are not available or if weighing is impractical. Disposition of scrap for sale or demanufacturing must be weighed to provide accurate accounting and reconciliation with the DLA Disposition Services accountable record.

(ii) The acceptable degree of accuracy of estimation is 25 percent for property processed by the ton, and 10 percent for property processed by the pound. Overages and shortages discovered on release of property that exceed allowable tolerances will be adjusted.

(iii) High value scrap must be weighed at the time of receipt.

(j) Calibration and maintenance of weigh scales.

(1) DoD activities, including DLA Disposition Services sites with scales used for receipts and disposition of scrap, will ensure weigh scales under their jurisdiction are maintained, repaired, and calibrated annually or more often if required by State or local laws.

(2) Activities with scales will maintain a log or record of visits by qualified inspectors showing the date of the visit and, where appropriate, action taken to correct the accuracy of the scales. A signed copy of the inspector's findings will be maintained. The activity is responsible for obtaining the services of a qualified scale inspector and requesting repair when needed.

(k) Physical inventory accuracy.

(1) DLA Disposition Services sites will conduct physical inventories. At a minimum, a sample inventory will be conducted at each DLA Disposition Services site annually. Inventory accuracy of at least 90 percent will be maintained for all usable property, except DEMIL required property, HP, and pilferable or sensitive property. Discrepancies will be corrected in accordance with paragraph (l) of this section. If sample inventories for usable property are less than 90 percent accurate, a wall-to-wall inventory will be conducted.

(2) Physical inventories for DEMIL required property, HP, and pilferable or sensitive property will be conducted at least annually. Inventory accuracy of 100 percent will be maintained. If less than 100 percent accuracy, DLA Disposition Services site will report the discrepancies in accordance with procedures in DoD 7000.14-R.

(3) Usable property remaining on the DLA Disposition Services site account in excess of 6 months will be inventoried on a monthly basis and certified.

(4) Inventory discrepancies will be researched as part of the inventory process and corrections documented as inventory adjustments.

(5) DLA Disposition Services will provide the DLA Disposition Services sites with direction for maintaining and reconciling scrap accumulations and accountable records. Reconciliation will be performed at least monthly.

(l) Inventory discrepancies and adjustments—(1) Errors before acceptance. Item identification, quantity, condition, or price data errors discovered before official acceptance of accountability will be resolved and corrected during receipt.

(2) Errors after acceptance. Discrepancies discovered after acceptance of accountability; that is, differences between recorded balances and quantities on hand, will be processed as inventory adjustments. Inventory adjustment procedures are contained in DoD 7000.14-R, Volume 12, Chapter 7.

(3) Property not in DLA Disposition Services site custody.

(i) When property for which a DLA Disposition Services site has assumed accountability, but not physical custody, becomes lost, damaged, or destroyed, the custodial activity will investigate the discrepancy and provide its findings to the DLA Disposition Services site.

(ii) The DLA Disposition Services site will provide the custodial activity with requested item identification number, such as NSN, DTID number, or UII (when applicable) or copies of pertinent documentation for the lost, damaged, or destroyed item.

(A) If the custodial activity determines the discrepancy is due to a record keeping error, it will fully document the error and inform the DLA Disposition Services site to prepare an inventory adjustment.

(B) If the discrepancy is not due to a record keeping error, the custodial activity must prepare a DD Form 200, “Financial Liability Investigation of Property Loss,” in accordance with criteria contained in DoD 7000.14-R, Volume 12, Chapter 7.

(iii) Within 30 days after notification of the loss of the property, the custodial activity must provide the DLA Disposition Services site a completed copy of the DD Form 200 as supportive documentation for the DLA Disposition Services site to process an inventory adjustment.

(m) Property disposition—(1) Packing, crating, and handling (PC&H). PC&H for DoD orders will be arranged by the DLA Disposition Services site in most cases. When property is received in place, the generating activity will prepare the property for shipment. DLA Disposition Services will submit payment for these services according to the established ISSA or by DLA Disposition Services military interdepartmental purchase request.

(2) Transportation. DLA Disposition Services will directly fund transportation costs associated with reutilized property on each transaction. However, these costs are recouped as part of the Service-level annual billings for all associated disposition costs incurred by the services including all transportation costs during the year. That is, individual DoD units do not pay for reutilization transportation on each individual transaction, but their Military Service is billed on an annual basis.

(n) Audits—(1) Outside command involvement. When it is necessary to obtain or confirm data on materiel transferred to or from disposal accounts, and this involves crossing command lines between DoD Components, the policy in DoD Instruction 7600.02, “Audit Policies” (available at http://www.dtic.mil/whs/directives/corres/pdf/760002p.pdf) will apply.

(2) Joint Service/DLA Directives used during audits. The DoD Components will maintain a clear audit trail of the documentation for the disposition of property in accordance with their internal issuances for audits. The internal issuances that govern Army, Navy, and Air Force are:

(i) AR 36-2, “Audit Services in the Department of the Army” (available at http://www.apd.army.mil/pdffiles/r36__2.pdf).

(ii) SECNAVINST 7510.7F.

(iii) Air Force Policy Directive 65-3, “Internal Auditing” (available at http://static.e-publishing.af.mil/production/1/saf__fm/publication/afpd65-3/afpd65-3.pdf).