Government-Furnished Equipment is property owned by the government and provided to a contractor for use in performing a specific contract. GFE is one category of Government-Furnished Property under FAR Part 45 — alongside government-furnished material, special tooling, and special test equipment. The defining characteristic is government title: GFE remains government property throughout contract performance, must be tracked under the contractor's property management system, must be returned at contract end (or otherwise dispositioned by the government), and cannot be commingled with the contractor's own assets without specific authorization. The contracting officer determines whether GFE will be provided based on availability, cost-effectiveness, and program requirements stated in the contract.
The contractor's property management obligations are substantial. FAR 52.245-1 requires contractors holding GFE to establish and maintain a property management system addressing acquisition, receipt, records, identification, custody, use, maintenance, subcontractor control, reports, relief of stewardship, utilization, and disposition. The system is subject to government audit; deficiencies can trigger corrective action or, in severe cases, removal of property control. Loss, damage, theft, or destruction of GFE must be reported immediately and may create financial liability for the contractor depending on the cause and the contract clauses.
For small contractors, accepting GFE is an operational decision with downstream cost. The property management system investment, audit exposure, and disposition logistics all add overhead. The benefit is that GFE shifts equipment cost out of contractor pricing — a meaningful margin contributor on equipment-heavy contracts. The trade-off is worth modeling at proposal time, not after award.