ADMINISTRATIVE CODE

TITLE 44: GOVERNMENT CONTRACTS, GRANTMAKING, PROCUREMENT AND PROPERTY MANAGEMENT
SUBTITLE D: PROPERTY MANAGEMENT
CHAPTER I: DEPARTMENT OF CENTRAL MANAGEMENT SERVICES
PART 5020 FEDERAL SURPLUS PROPERTY: ILLINOIS STATE PLAN, STATE AGENCY FOR FEDERAL SURPLUS PROPERTY

SUBPART A: GENERAL

Section 5020.100 Authority

Section 5020.110 Policy

Section 5020.120 Applicability

SUBPART B: ELIGIBILITY AND RESPONSIBILITY

Section 5020.200 Determination of Eligible Recipients

Section 5020.210 Authorized Representative File

Section 5020.220 Notice to the Public of SASP Activities

Section 5020.230 Cooperative Agreements

SUBPART C: DISTRIBUTION OF FEDERAL SURPLUS PROPERTY

Section 5020.300 Distribution of Surplus Property

Section 5020.310 Distribution of Major Items

Section 5020.320 Distribution of Small Items

Section 5020.330 Preference Given to Disaster Victims

Section 5020.340 Competing Requests For Surplus Property

SUBPART D: TRANSFERABLE PROPERTY

Section 5020.400 Conditions Placed on the Transfer of Surplus Property

Section 5020.410 Special Conditions on Transfer of Motor Vehicles

Section 5020.420 Restrictions on Surplus Property Other Than Motor Vehicles

Section 5020.430 Waiver of Conditions or Restrictions

Section 5020.440 Donation Document

SUBPART E: IMPLEMENTATION OF SERVICE CHARGES

Section 5020.500 Service Charges

Section 5020.510 Criteria Used to Set Service Charges

Section 5020.520 Reduction of Service Charge

SUBPART F: AUDITING AND COMPLIANCE REQUIREMENTS

Section 5020.600 Compliance Inspection

Section 5020.610 Return of Donated Property

Section 5020.620 Non-Utilized Surplus Property

Section 5020.630 Report of Fraud or Misuse of Surplus Property

SUBPART A: GENERAL

Section 5020.100 Authority

The Illinois Surplus Property Section of the Department of Central Management Services is designated as the State Agency for Surplus Property Utilization and the State Agency for Federal Surplus Property responsible for administering the State Plan of Operation pursuant to 30 ILCS 255/2 and 20 ILCS 430 and in accordance with regulations set forth in 40 U.S.C. 549 and 41 CFR 102-37.130 through 515 (2023).

(Source: Amended at 48 Ill. Reg. 11297, effective July 16, 2024)

Section 5020.110 Policy

a) The State Agency for Federal Surplus Property (SASP), administered by the Department of Central Management Services, shall regulate the accountability, and control of all personal property acquired from the United States of America under and in conformance with 41 CFR 102-37.130 through 515 (2023).

b) The Department shall regulate the distribution of federal property to eligible recipients within the State of Illinois.

c) Representatives of the Department may visit United States Government installations to select from property that is available for donation.

d) The Department shall monitor the use of property acquired by eligible recipients for the duration of the restriction period as further defined in Section 5020.400.

e) A service charge may be assessed eligible recipients for the acquisition of federal surplus property in accordance with Section 5020.500.

f) These functions shall be carried out by the Department of Central Management Services Federal Surplus Property Division.

(Source: Amended at 48 Ill. Reg. 11297, effective July 16, 2024)

Section 5020.120 Applicability

a) This Part applies to any activity of the Department of Central Management Services pertaining to the acquisition, accountability, control, and distribution of all tangible personal property acquired by the State of Illinois through the Federal Donation Program (41 CFR 102-37.130 through 515 (2023)).

b) This Part applies to all eligible recipients. For the purposes of this Part, the term "eligible recipients" means qualified recipients that meet the determination criteria in Section 5020.200 and that include:

1) Public Agencies

A) Conservation.

B) Economic development.

C) Public education.

D) Indian tribes, bands, groups, pueblos, or communities located on State reservations.

E) Volunteer fire districts and/or departments.

F) Programs for the elderly.

G) Public health.

H) Parks & Recreation.

I) Public safety.

J) Public purposes.

2) Non-Profit Educational and Public Health Activities

A) Medical institutions, hospitals, clinics, health centers, and outpatient facilities.

B) Educational institutions, schools, preschools, colleges, universities, and schools for persons with disabilities.

C) Child care centers.

D) Educational radio and TV stations.

E) Museums.

F) Libraries.

G) Nursing homes.

H) Programs for the elderly.

I) Food banks.

J) Alcohol and drug abuse treatment centers.

K) Providers of assistance to the homeless.

L) Providers of assistance to the impoverished.

M) Adult day care center.

N) Nursing homes or geriatric centers.

3) Veteran-owned and service-disabled veteran-owned small businesses.

4) Programs for the homeless (e.g., homeless shelters, foodbanks).

5) Veteran organizations (e.g., VFWs, American Legions).

6) SEAs − Service Educational Activities (e.g., Boy/Girl Scouts, American Red Cross).

7) U.S. Small Business Administration (SBA) 8(a) small businesses (e.g., construction, services, retail, agricultural) (see 15 U.S.C. 636(j)(10) and 637(a)).

c) These rules apply to all tangible personal property acquired by the Department from the United States Government.

(Source: Amended at 48 Ill. Reg. 11297, effective July 16, 2024)

SUBPART B: ELIGIBILITY AND RESPONSIBILITY

Section 5020.200 Determination of Eligible Recipients

a) Organizations eligible to become recipients of Federal Surplus property include, but are not limited to:

1) Public agencies such as schools, airports, and public safety (law enforcement agencies and fire departments).

2) Local, city, county, or State government

3) Certain Non-Profit Organizations with an IRS 501(c) ruling, including medical facilities, providers of assistance to the homeless or impoverished, museums.

4) Veteran-owned and service-disabled veteran-owned small businesses.

5) Programs for the homeless (homeless shelters, foodbanks, etc.)

6) Veteran organizations (VFWs, American Legions, among others)

7) SEAs − Service Educational Activities (Boy/Girl Scouts, American Red Cross, etc.)

8) Small Business Administration (SBA) 8(a) small businesses (construction, services, retail, agricultural)

b) Each organization seeking to become a recipient shall be required to file with SASP.

1) The organization's name, address and telephone number.

2) The name and title of the organization's chief executive officer.

3) A description of the organization outlining the type of organization; and the details and scope of its programs and activities.

4) When items available are insufficient to fill all requests, the SASP shall request additional information to determine the requesting organizations' relative income and expenses.

5) If the applicant is a private tax exempt organization, an official certificate issued by the Internal Revenue Service stating that the organization has tax exempt status under Section 501(c)(3) of the Internal Revenue Code of 1954. (26 U.S.C 501).

6) An "Application Certification and Agreement" form, signed by the recipient's head authorized official, accepting the terms and conditions under which surplus property shall be transferred.

7) A duly executed authorization from the head authorized official of the applying organization giving one or more persons the power to act as agents for the applicant.

8) A completed "Assurance of Compliance" form indicating that the applicant is in compliance with the civil rights and non-discriminatory regulations off the Federal General Services Administration.

9) A list of the types of equipment, vehicles, supplies and machines the applicant desires to receive.

10) Proof that the organization is approved, accredited, or licensed by a body with statutory or administrative authority to issue the approval, accreditation, or license.

11) If the applicant is a veteran-owned small business, an official certification from the SBA that the applicant is a veteran-owned small business is required.

12) If the applicant is a veteran organization, it must be recognized by the Secretary of Veterans Affairs.

c) All organizations submitting applications shall submit all additional information, documentation or proof required by SASP to process applications.

d) All necessary application forms shall be provided by the SASP.

e) After a completed application is submitted, the SASP shall evaluate the prospective recipient and notify the organization if it is accepted or rejected. Prospective recipients shall only be disqualified if they do not meet the requirements listed under subsections (a) and (b). Prospective recipients shall have the right to appeal such rejection to the General Services Administration of the United States Government pursuant to 41 CFR 102-37.130 through 515 (2023).

f) All approvals of eligibility shall be reviewed after three years or as required to determine continued eligibility status.

(Source: Amended at 48 Ill. Reg. 11297, effective July 16, 2024)

Section 5020.210 Authorized Representative File

Recipients without an authorization letter on file shall receive authorization when they provide a letter of official authorization.

Section 5020.220 Notice to the Public of SASP Activities

a) The SASP shall participate in the discussion of the SASP's policy, procedure, and programs with potential participants.

b) The SASP shall notify the public through marketing channels (e.g., website, email, social media) of SASP offerings and programs.

c) The SASP shall actively seek opportunities to contact prospective recipients and encourage them to participate in the surplus property program.

(Source: Amended at 48 Ill. Reg. 11297, effective July 16, 2024)

Section 5020.230 Cooperative Agreements

When the SASP feels that it is advantageous to do so the SASP shall enter into cooperative agreements with recipients, other State governments and Federal agencies, when such cooperative agreements will increase the fair and equitable distribution of Federal property.

SUBPART C: DISTRIBUTION OF FEDERAL SURPLUS PROPERTY

Section 5020.300 Distribution of Surplus Property

a) The SASP shall make property available to eligible recipients on a fair and equitable basis.

b) The following factors shall be considered in distributing property:

1) Relative needs.

2) Relative resources.

3) Ability to utilize the property.

c) A recipient's relative needs shall be evaluated by determining:

1) Size and type of program conducted.

2) Contemplated use and frequency of use.

3) Critical or urgent need.

4) Geographical location (i.e., urban, suburban, rural).

5) Interest and expression of need on the part of the recipient in property available.

d) A recipient's relative resources shall be evaluated by determining:

1) Funding sources.

2) Availability of funds.

3) Availability of equipment.

e) A recipient's ability to utilize surplus property shall be evaluated by determining:

1) Length of time of property's contemplated usage.

2) The time when property can be put into use.

3) Availability of funds to repair or maintain property in use.

4) Recipient's ability to select and remove property from the Surplus Distribution Center in a timely manner.

5) Type, quality, and program compliance of property previously received by recipient.

(Source: Amended at 48 Ill. Reg. 11297, effective July 16, 2024)

Section 5020.310 Distribution of Major Items

a) To ensure that recipients located some distance away from the General Services Administration (GSA) distribution sites receive their fair share of the major items of surplus distributed, such recipients may submit a "want list" to the SASP.

b) Items which may be requested on such lists include, but are not limited to:

1) Vehicles.

2) Materials handling equipment.

3) Machine tools.

4) Generators.

5) Air compressors.

6) Business machines.

7) Boats.

8) Aircraft.

9) Items of electronic or scientific equipment.

c) If required by the federal General Services Administration, the recipient shall be required to provide a letter of intent to the federal Surplus Property Section, Administrative Office.

(Source: Amended at 48 Ill. Reg. 11297, effective July 16, 2024)

Section 5020.320 Distribution of Small Items

a) Small miscellaneous items such as nuts, bolts and washers shall be available to recipients to select and pick up at the GSA distribution sites or other designated sites.

b) The quantity distributed to any one donee may be limited depending on the total quantity on hand.

(Source: Amended at 48 Ill. Reg. 11297, effective July 16, 2024)

Section 5020.330 Preference Given to Disaster Victims

a) Recipients who experience a local disaster or loss of property due to fire, floods, tornadoes or other causes shall be given temporary priority during the emergency conditions for all requested surplus property.

b) The SASP shall make a special effort to locate and distribute surplus property to such recipients.

Section 5020.340 Competing Requests For Surplus Property

a) When one or more potential recipients requests the same item of surplus property, the SASP shall award the item after considering each recipient's need, resources and ability to utilize.

b) The decision of the SASP in such awards shall be final.

SUBPART D: TRANSFERABLE PROPERTY

Section 5020.400 Conditions Placed on the Transfer of Surplus Property

a) The SASP shall require as a condition of transfer:

1) That all items donated with an acquisition cost of $5,000 or less must be placed into use within one year of donation.

2) That all items donated with an acquisition cost of $5,000 or less must be used for one year after being placed in use or otherwise returned to the SASP.

b) The SASP shall impose any additional conditions involving special handling or use limitations on specific types or items of surplus property when it is directed to do so by the federal General Services Administration.

c) The SASP may impose any other conditions or restrictions on the transfer or use of items or types of surplus property that it deems necessary in specific situations. Such conditions or restrictions may be based upon the type of property, the type of donee, and the needs of the donee for the property.

d) All terms, conditions, reservations and restrictions governing the transfer of surplus property shall be provided with each SASP donation document.

(Source: Amended at 48 Ill. Reg. 11297, effective July 16, 2024)

Section 5020.410 Special Conditions on Transfer of Motor Vehicles

a) All passenger motor vehicles donated shall be placed into use within one year of donation.

b) All passenger motor vehicles donated must be used for eighteen months after being placed in use or otherwise returned to the SASP.

c) Combat Type Aircraft:

1) All combat type aircraft are subject to permanent restrictions imposed by the federal government pursuant to 41 CFR 102-37.130 through 515 (2023).

2) Combat type aircraft are also subject to all terms and restrictions contained in the "Conditional Transfer Document" 41 CFR 102-37.130 through 515 (2023).

d) Non-Combat Type Aircraft

1) All non-combat type aircraft having a unit acquisition cost of $3000 or more are subject to permanent instructions imposed by the federal government on their use, transfer and disposal for five years from the date the aircraft is put into use 41 CFR 102-37.130 through 515 (2023).

2) All non-combat type aircraft are subject to the terms and restrictions contained in the "Conditional Transfer Document" form 41 CFR 102-37.130 through 515 (2023).

e) Ships and boats 50 or more feet in length:

1) All ships and boats having a unit acquisition cost of $5,000 or more are subject to restrictions on their use, transfer or disposal for five years from the date they are placed in use.

2) All ships and boats are subject to the terms and conditions listed on the "Conditional Transfer Document" form (see 41 CFR 102-37.460(c)).

(Source: Amended at 48 Ill. Reg. 11297, effective July 16, 2024)

Section 5020.420 Restrictions on Surplus Property Other Than Motor Vehicles

Surplus property, other than motor vehicles, having an acquisition cost of $5,000 or more is subject to restrictions on its use, transfer and disposal for eighteen months from the date the property is placed in service 41 CFR 102-37.130 through 515 (2023).

(Source: Amended at 48 Ill. Reg. 11297, effective July 16, 2024)

Section 5020.430 Waiver of Conditions or Restrictions

a) The SASP shall amend, modify or grant release of any term, condition, reservation or restriction the SASP has imposed on the transfer, use, or disposal of surplus property when:

1) The conditions which make the waiver necessary include but are not limited to the type of equipment, the condition of equipment, that which is in the best interest of the public welfare, health and safety of the donee organization; and

2) The conditions which make the waiver necessary have been reduced to writing; and

3) The conditions which make the waiver necessary have received federal General Services' Administration's approval.

b) The SASP may reduce the restriction periods on motor vehicles subject to federal approval, or items of surplus property having a unit acquisition cost of $5,000 or more when the SASP feels good and sufficient reason is present. Good and sufficient reasons shall include, but are not limited to, condition of the property and proposed use (i.e., secondary, cannibalization).

c) The SASP shall not grant recipients release from any federal regulation or law unless specifically authorized by federal regulation or law to do so. The Department of Central Management Services shall base its decision on whether to grant a recipient release from any federal regulation or law according to the standards in, and provisions of, 41 CFR 102-37.130 through 515 (2023)

(Source: Amended at 48 Ill. Reg. 11297, effective July 16, 2024)

Section 5020.440 Donation Document

a) A recipient shall not be issued any surplus property until a donation document for the property has been signed by an authorized representative, as noted in the authorized representative file, of the recipient.

b) A copy of each donation document and invoice shall be filed in the recipients' file by the SASP. Recipients' files shall contain copies of donation documents and invoices for all property issued to that recipient.

(Source: Amended at 48 Ill. Reg. 11297, effective July 16, 2024)

SUBPART E: IMPLEMENTATION OF SERVICE CHARGES

Section 5020.500 Service Charges

a) The SASP may charge service fees in accordance with subsection (b). (See Sec. 4 of the Federal Surplus Property Act.)

b) Service Charges.

1) The service charge shall be assessed at a rate to cover all costs involved in acquiring and distributing surplus property. In determining what is fair and equitable charge, the SASP shall consider the criteria set forth in Section 5020.510.

2) The service charges shall be fair and equitable in relation to the service performed. Emphasis shall be placed on keeping the service charge to a minimum while providing optimum service and maintaining the SASP activity on a sound financial basis.

c) For fiscal years when the SASP is funded through the General Revenue Fund, no service charges will be assessed.

(Source: Amended at 48 Ill. Reg. 11297, effective July 16, 2024)

Section 5020.510 Criteria Used to Set Service Charges

a) Total service charges collected shall be based on the pro rated expenses incurred annually by the SASP. Such costs include, but are not limited to charges for:

1) Personnel,

2) Transportation,

3) Utilities,

4) Fuels,

5) Telephone service,

6) Warehousing and storage,

7) Insurance,

8) Printing,

9) Office supplies,

10) Travel expenses,

b) The criteria used to establish service charges on specific pieces of surplus property shall include:

1) Original acquisition cost,

2) Present value,

3) Screening cost,

4) Quantity,

5) Condition,

6) Transportation cost from the holding agency,

7) Loading and unloading costs,

8) Packing and/or crating,

9) Administrative cost,

10) Repair and rehabilitation necessary,

11) Utilization and compliance inspection necessary,

12) Delivery to recipient, if necessary.

c) Special or extraordinary costs may be added to the service charge when:

1) Property requires extensive rehabilitation.

2) Property requires transportation from an overseas location.

3) Property requires long haul transportation.

4) Property requires unusual and extensive packing or screening.

5) Property is subject to long term restrictions.

d) All special or extraordinary costs listed in the preceding section shall be discussed with the recipient before final shipping.

Section 5020.520 Reduction of Service Charge

At any point when audits reveal a surplus of working capital, the SASP shall reduce service charges until a balance between costs and income is achieved.

SUBPART F: AUDITING AND COMPLIANCE REQUIREMENTS

Section 5020.600 Compliance Inspection

a) The SASP shall conduct a regular survey to ensure that recipients are utilizing federal property in the correct manner and in compliance with applicable federal standards, guidelines or restrictions pursuant to 41 CFR 102-37.130 through 515 (2023). Surveys shall be conducted on a random basis.

b) Surveys will be conducted on a minimum of 10% of all property subject to 18 month restrictions distributed during the preceding year which are subject to 18 month restrictions pursuant to 41 CFR 102-37.130 through 515 (2023).

c) A report shall be prepared by the SASP summarizing the results of these surveys, including:

1) The names of all recipients surveyed.

2) A list of property surveyed.

3) Any violations discovered.

4) Any corrective actions taken.

d) A copy of all survey reports shall be made available to the federal General Services Administration, the Illinois State Police and any other law enforcement agency having jurisdiction over the subject where the report is in question.

(Source: Amended at 48 Ill. Reg. 11297, effective July 16, 2024)

Section 5020.610 Return of Donated Property

a) In the event that the SASP determines that a recipient has not put an item of surplus property into use within one year of the receipt of the property or has not used the property in accordance with any special restrictions that might pertain to that surplus property, the SASP shall instruct the recipient to:

1) Return the surplus property to the SASP warehouse at the recipient's expense.

2) Retransfer the property to another recipient, SASP, or to a federal agency.

b) To avoid unnecessary returns of surplus property the SASP shall ensure that all recipients are made adequately aware of any use requirements and restrictions applying to property they are issued.

(Source: Amended at 48 Ill. Reg. 11297, effective July 16, 2024)

Section 5020.620 Non-Utilized Surplus Property

a) All property which has been in the possession of the SASP for 18 months which has not been distributed to eligible recipients shall be reported to the federal General Services Administration (GSA).

b) Upon receiving authorization from the GSA, the SASP shall proceed to dispose of the property as directed by the GSA, by:

1) Transferring the property to another SASP or a federal agency.

2) Disposing of the property at public sale.

3) Abandoning or destroying the property.

c) In the event that the SASP is instructed to dispose of surplus property by transferring it to another agency or selling it, the SASP shall seek reimbursement for its costs in doing so, as instructed by the GSA.

(Source: Amended at 48 Ill. Reg. 11297, effective July 16, 2024)

Section 5020.630 Report of Fraud or Misuse of Surplus Property

Where the SASP uncovers evidence that there has been fraud in acquiring surplus property or misuse of surplus property, the SASP shall conduct a preliminary compliance review to determine if a formal investigation is necessary. A formal investigation shall be requested if the preliminary compliance review fails to resolve questions on the use of the property or indicates a possible criminal violation. Where there is need for formal investigation the SASP shall notify and cooperate with the Illinois State Police, the FBI, and the federal General Services Administration.

(Source: Amended at 48 Ill. Reg. 11297, effective July 16, 2024)