If property screened through GSA is not selected by a federal, state or local government agency, a nonprofit organization, or a member of the general public, GSA will authorize the owning agency to dispose of the property. Recycling is considered a component of abandonment/destruction and applies only to personal property that has been through the entire excess/surplus process.
Retaining Recycling Proceeds
In general, a federal agency can generate and retain recycling revenue. Each situation is different, depending on the type of property and the relationship between the agency and the recycler. Specifically, agencies can retain recycling revenue under these conditions:
- If the agency sells scrap material or expendable property to a recycler, the proceeds can be retained under the recyclable materials provision of FMR 102-38.295 for the specific purposes listed in Public Law 107-67.
- If the agency has decided to abandon or destroy the item(s), and hires a recycler to destroy the item and sell the residual material on the agency’s behalf, the agency can receive proceeds under the recyclable materials provisions of FMR 102-38.295.
Agencies cannot retain recycling revenue in these situations:
- If the agency sells surplus equipment, such as a computer, to a recycler, the agency may keep only enough revenue to cover the direct costs, and reasonably related indirect costs incurred in selling the property. The rest of the proceeds must be deposited as miscellaneous receipts in the U.S. Treasury.
- If the agency gives personal property to a recycler as an abandonment/destruction item (instead of selling it), the agency no longer owns the item and is not entitled to any proceeds retention.
There is no limit on the quantity or frequency that an agency recycles.
Use of Recycling Proceeds
Agencies can use recycling proceeds for “other employee as authorized by law or as deemed appropriate by the head of the federal agency,” according to Public Law 107-67. This includes employees' child care programs. It does not, however, include construction projects.
In addition, recycling proceeds must be available until expended. Agencies should consult their General Counsel or Chief Financial Officer for more specific guidance, as stated in FMR 102-38.295.
Agencies, whenever possible, should try to recycle or reuse construction materials such as:
• Black iron
• Mild steel
• Metal pan ceiling
• Light fixtures
• Partitions (gypsum wallboard, light gauge steel, gypsum block, etc.)
• BX wire
In general, federal agencies may retain the proceeds of recycling these building materials. However, while not mandatory, agencies should report scrap steel to GSA because it could be used by other federal agencies. If scrap steel is not used by another federal agency, and goes to a recycler, the holding agency may retain all sales proceeds according to FMR 102-38.295.
Furniture may be exchanged or sold under the Exchange/Sale authority (FMR 102.39). Proceeds must be applied on a one-for-one basis and used for replacement furniture during the fiscal year in which the property was sold or during the following fiscal year.
Furniture in very bad condition, such as a broken and torn chair, can fall into the abandonment/destruction category if the property has no commercial value or the estimated cost of its continued care and handling exceed the estimated proceeds from its sale (FMR 102-36.305). If the agency gives the furniture to a recycler after classifying it as abandonment/destruction, the agency relinquishes ownership and is no longer entitled to any proceeds of recycling.
An agency can sell surplus furniture to a recycler to be refurbished. However, the agency can keep only that portion of the sales proceeds equal to the direct costs and reasonably related indirect costs incurred in selling surplus personal property, unless the situation meets the exclusions of FMR 102-38.295.