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Defense Surplus Equipment Disposal: Background Information

On July 31, 2008, DLA awarded Liquidity Services, Inc. a contract to be the primary manager for the receipt, storage, marketing, and disposition of virtually all usable defense surplus property approved by DOD for sale to the public. The contract had a base term of three years with two one-year renewal options.6 The contract was later extended through February 15, 2013.7 On September 13, 2012, Liquidity Services announced that DLA had exercised the second of (potentially) two, 12-month extension periods, under its “Surplus Useable Property Sales Contract” to sell DOD surplus property. The surplus contract’s performance period was extended through February 13, 2014. 8

Major New Developments

P.L. 112-239 (H.R. 4310, 112th Congress) contains at least three provisions that impact the policy governing the distribution of DOD surplus or excess property.9 Section 1051 expands the Secretary of the Army’s authority to loan or donate small firearms, determined to be excess, for use during funerals and other ceremonial purposes;10 Section 1053 grants the Secretary of Defense the authority to transfer mine-resistant, ambush-protected vehicles and spare parts, to nonprofit U.S. humanitarian, demining organizations for training purposes,11 and Section 1091 grants DOD the authority to transfer certain aircraft, with exceptions, to the Secretary of Agriculture and the Secretary of Homeland Security for use by the Forest Service and the U.S. Coast Guard. 12

Controlling Legal Authority

Authority for the disposal of surplus defense property can be found in P.L. 94-519, 10 U.S.C. 381, which amends the Federal Property and Administrative Services Act of 1949 (40 U.S.C. 484), P.L. 107-117, and Department of Defense (DOD) Directive 4140.1, Supply Chain Materiel Management Policy; DOD 4160.21-M Defense Materiel Disposition Manual, and DOD 4160.21- M-1 Defense Demilitarization Manual. 13



7 Clabaugh, Jeff. Liquidity Services Get DOD Extension. Washington Business Journal, August 22, 2011. Accessed online at http://www.bizjournals.com/washington/news/2011/08/22/liquidity-services-gets-dod-extension.html; also Jamil, Aisha. DOD Extends Liquidity Services Contract for Surplus Usable Property Sales. Washington Exec, August 30, 2011. Accessed online at http://www.washingtonexec.com/2011/08/dod-extends-liquidity-services-inc-contract-for- surplus-useable-property-sales/.

8 Press Release. Liquidity Services, Inc. Receives Contract Extension for Surplus Used Property Sales, September 12, 2012. Accessed online at http://www.liquidityservicesinc.com/company/news/press-releases/1735034/. Property is offered for sale through Liquidity Services’ online auction marketplace, http://www.govliquidation.com/.


H.R. 4310 became P.L. 112-239 on January 2, 2013.

10 Section 1072. Expansion of Authority of the Secretary of the Army to loan or donate excess small arms for funeral and other ceremonial purposes. H.R. 4310, Subtitle G., Miscellaneous Authorities and Limitations.

11 Section 1075. Authority to Transfer Surplus Mine-Resistant Ambush-Protected Vehicles and Spare Parts. H.R. 4310, Subtitle G., Miscellaneous Authorities and Limitations.



H.R. 4310, Section 1091. Transfer Excess Aircraft to Other Departments of the Federal Government. http://www.acq.osd.mil/log/sci/mat_disposition.htm.

Congressional Research Service


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