DAOD 3013-0, Disposal of Materiel

1. Introduction

Date of Issue: 2012-02-28

Date of Last Modification: 2018-03-27

Application: This DAOD is a directive that applies to employees of the Department of National Defence (DND employees) and an order that applies to officers and non-commissioned members of the Canadian Armed Forces (CAF members).

Supersession:

  • CFAO 36-53, Materiel Disposal
  • DAOD 3013-1, Disposal of Surplus Materiel

Approval Authority: Assistant Deputy Minister (Materiel) (ADM(Mat))

Enquiries:

  • Director Materiel Policy and Procedures (DMPP) (for policy and procedures)
  • Director Supply Chain Operations (DSCO) (for disposal, sales and artifacts)

2. Definitions

assembly (ensemble)

A portion of an item of equipment that can be provisioned and replaced as an entity, normally incorporating one or more sub-assemblies. (Defence Terminology Bank Record number 21544 to be amended)

capital asset (immobilisation)

Materiel that is purchased, constructed, developed or otherwise acquired, or is held for use, in the production or supply of goods, delivery of services or production of program outputs.

Note 1 – A capital asset is used to achieve a government objective, and the risks and benefits of its ownership clearly rests with the government. A capital asset is expected to have a useful life extending beyond one fiscal year, is intended to be used on a continuing basis and is not intended for resale in the ordinary course of operations.

Note 2 – For DND accounting purposes, the standard dollar value threshold of materiel is $30,000 to qualify as a capital asset. A capital asset with a standard dollar value of less than $30,000 is not usually amortized.

(Defence Terminology Bank record number 35853).

centrally-managed materiel (matériel géré au niveau central)

Materiel that is:

  • assigned a supply manager and a supply manager code, other than locally-managed materiel; and
  • normally stocked nationally at depots and bases.

(Defence Terminology Bank Record number 48274)

controlled goods (marchandises contrôlées)

Means the goods referred to in the schedule to the Defence Production Act. (Section 35 of the Defence Production Act)

(Defence Terminology Bank Record number 48276)

conversion to waste (conversion en déchet)

A conversion of materiel to a waste product through recycling, destruction or discarding as garbage. (Defence Terminology Bank record number 694744)

donation (don)

In the disposal of materiel, a provision of surplus materiel without remuneration to an eligible recipient outside of the federal government. (Defence Terminology Bank record 694745)

end-of-life materiel (matériel en fin de vie)

Materiel for which a requirement still exists but the materiel, or its residual, can no longer be used for its intended purpose as determined by a delegated authority. (Defence Terminology Bank record number 694746)

fair market value (juste valeur marchande)

The price that would be agreed to in an open and unrestricted market between knowledgeable and willing parties dealing at arm's length who are fully informed and not under any compulsion to transact. (Policy on Management of Materiel, Treasury Board) (Defence Terminology Bank record number 694747)

inventory (stock)

Materiel held in stock at a storage facility or accounted for within a materiel management system of record, including materiel that is undergoing repair or materiel provided on a free issue basis to a contractor for incorporation in other materiel under production or undergoing modification, repair or overhaul. (Defence Terminology Bank record number 694748)

limited market (marché limité)

In the disposal of materiel, a market in which the participation of eligible interested parties in dealings for surplus materiel has been restricted. (Defence Terminology Bank record number 694749)

locally-managed materiel (matériel géré au niveau local)

Materiel that is purchased using locally allocated funds and managed by a base, wing or unit commanding officer or civilian equivalent. It does not include any materiel that is subject to a restriction under the Defence Production Act or the Controlled Goods Regulations, or is otherwise centrally-managed materiel. (Defence Terminology Bank record number 48259)

major support system (système de soutien principal)

A support ship, armoured support vehicle, transport aircraft or other similar materiel provided as a support system for the CAF. (Defence Terminology Bank Record number 48260 to be amended)

major weapon system (système d'arme principal)

A destroyer, submarine, armoured land combat vehicle, artillery system, combat aircraft or other similar materiel provided as a weapon system for the CAF. (Defence Terminology Bank Record number 32331 to be amended)

materiel (matériels)

All public property, other than real property, immovables and money, provided for the Canadian Forces or for any other purpose under the National Defence Act, and includes any vessel, vehicle, aircraft, animal, missile, arms, ammunition, clothing, stores, provisions or equipment so provided. (Subsection 2(1) of the National Defence Act) (Defence Terminology Bank record number 864)

record (document)

Any documentary material, regardless of medium or form.
(Section 3 of the Access to Information Act)
(Defence Terminology Bank record number 43222)

sub-assembly (sous-ensemble)

A portion of an assembly, consisting of two or more parts that can be replaced as an entity. (Defence Terminology Bank record number 2617)

surplus materiel (matériel en surplus)

Materiel that a delegated authority has declared to be no longer required by the DND or the CAF. (Defence Terminology Bank Record number 46699)

trade in (échange)

In the disposal of materiel, a use of surplus materiel as payment or partial payment for the procurement of new materiel. (Defence Terminology Bank record number 694750)

transfer (transfert)

In the disposal of materiel, a movement of surplus materiel at fair market value, book value or without remuneration to a federal government recipient. (Defence Terminology Bank record number 694751)

valuable surplus materiel (matériel en surplus de valeur)

Surplus materiel that has a market value exceeding the projected cost of sale. (Defence Terminology Bank record number 694752)


3. Policy Direction

Context

3.1 This DAOD covers the disposal of all “materiel” as defined in subsection 2(1) of the National Defence Act. Materiel includes capital assets, inventories, assemblies and sub-assemblies as defined in section 2 of this DAOD.

3.2 This DAOD should be read in conjunction with relevant Treasury Board and ADM(Mat) policies, instructions, directives, standards and guidance in respect of the disposal of materiel.

3.3 The two categories of materiel in the Department of National Defence (DND) and the Canadian Armed Forces (CAF) dealt with under this DAOD are surplus materiel and end-of-life materiel.

Exclusion

3.4 This DAOD does not provide authority for any declaration of in-service materiel as surplus materiel or as end-of-life materiel simply in order to facilitate a transfer, trade in, sale or donation.

Policy Statement

3.5 The DND and the CAF are committed to carrying out the disposal of materiel as efficiently and effectively as possible in a manner that:

  1. occurs as soon as possible after materiel is declared to be surplus materiel or end-of-life of materiel;
  2. provides the best value for the Crown;
  3. has regard to heritage and public interest considerations;
  4. demonstrates due diligence in complying with all applicable requirements in statutes, regulations, directives and guidelines for controlled goods, hazardous material, protection of the environment, animals, export controls and safety;
  5. demonstrates due diligence in complying with Government of Canada materiel policies implementing international agreements;
  6. ensures completion, prior to disposal, of the appropriate identification of controlled goods, their demilitarization, and the seeking of transfer authorizations and implementation; and
  7. ensures that any live animal being withdrawn from military use is treated ethically and humanely and in accordance with the best interest of both the animal and the Crown.

Requirements

3.6 The DND and the CAF must:

  1. ensure transparency and fairness in the management of the disposal of materiel;
  2. keep records of decisions and approval documents substantiating any disposal of materiel, including auditable records of the costing analyses used for the disposal;
  3. utilize the materiel management system of record for the retention of documents relating to the disposal of materiel and for audit purposes;
  4. protect the integrity of materiel pending disposal action;
  5. dispose of surplus materiel with no warranty as to condition, serviceability or fitness for use;
  6. transfer surplus materiel, when practicable, to a federal government recipient;
  7. have delegation instruments in place that clearly set out DND and CAF authorities and accountabilities for the disposal of materiel;
  8. utilize applicable Public Services and Procurement Canada (PSPC) sales instruments when conducting any sales of surplus materiel in Canada;
  9. attempt the sale of surplus materiel at fair market value in an open and transparent process when conducting sales outside of Canada or in locations too remote for PSPC;
  10. attempt the sale of valuable surplus materiel at fair market value, utilizing applicable PSPC sales instruments;
  11. utilize the following cost minimizing options when the projected costs of a disposal exceed the anticipated proceeds:
    1. donation to a provincial, territorial or municipal government, a First Nation, other national government or a member of a treaty organization of which Canada is a member, such as the United Nations;
    2. donation to a recognized charitable or non-profit organization;
    3. trade in; or
    4. conversion to waste;
  12. consult with the Assistant Deputy Minister (Policy) (ADM(Pol)) when making a donation of surplus materiel to a charitable or non-profit organization outside of Canada;
  13. offer the right of first refusal of all surplus unclassified personal computers, laptops, servers, monitors, keyboards, mice, printers, modems, hubs, network cards, hard drives and other related hardware to the Innovation, Science and Economic Development Canada Computers for Schools Program;
  14. generate and retain a Form CF 1303-E, Declaration of Surplus, and a Form DND 4001-E, Disposal Plan, for materiel declared surplus to requirements, in accordance with A-LM-007-100/AG-001, Supply Administration Manual; and
  15. generate and retain a technical instruction for disposal for materiel declared to be end-of-life materiel in accordance with A-LM-007-100/AG-001.

3.7 The DND and the CAF must not:

  1. donate surplus materiel to an individual or a private sector organization without the written approval of the Treasury Board or an order in council;
  2. donate valuable surplus materiel without the written approval of the Minister of National Defence (MND); or
  3. attempt a sale of surplus materiel at less than fair market value or to a limited market without the written approval of the MND.

4. Consequences

General

4.1 Should clarification of the policy statement, requirements or authorities set out in this DAOD be required, DND employees and CAF members may seek direction through their channel of communication or chain of command, as appropriate. Failure by the DND and the CAF to ensure that the requirements specified in this DAOD are properly implemented may result in the DND and the CAF not achieving the corporate direction set out in the policy statement. Not achieving this corporate direction could affect the ability of the DND and the CAF to ensure that the CAF is prepared to undertake missions for the protection of Canada and Canadians and the maintenance of international peace and stability.

5. Authorities

Authority Table

5.1 The following table identifies the authorities associated with this DAOD:

The … has or have the authority to …
MND
  • approve the donation of valuable surplus materiel; and
  • approve a sale of surplus materiel at less than fair market value or to a limited market.
Vice Chief of the Defence Staff
  • declare major weapon systems and major support systems to be surplus materiel;
  • approve alternate applications of major weapon systems and major support systems; and
  • approve the distribution of the proceeds from the sale of surplus materiel.
ADM(Pol)
  • review any potential sale of surplus materiel that may have national or international implications; and
  • review for policy considerations any potential donation to a recipient outside of Canada.
ADM(Mat)
  • issue policies, instructions and guidelines for the disposal of surplus materiel and end-of-life materiel, including the associated delegation instruments pertaining to disposal methods;
  • declare assemblies, sub-assemblies and inventory under ADM(Mat) management to be surplus materiel;
  • approve disposal methods, including sales, transfers, donations, trade ins and conversions to waste, of any materiel under ADM(Mat) management; and
  • delegate, in writing, the authority for the approval of disposal plans to a level not below section head.
level one advisors with materiel responsibility, other than ADM(Mat)
  • declare assemblies, sub-assemblies and inventory under their management to be surplus materiel;
  • approve the disposal methods of sales, transfers, donations and conversions to waste of materiel under their management; and
  • delegate, in writing, the authority for the approval of disposal plans to a level not below section head.
Director General Materiel Systems and Supply Chain
  • issue policies, instructions and guidelines, other than DAODs, for the disposal of surplus materiel;
  • oversee program delivery for the disposal of surplus materiel; and
  • coordinate the disposal of major weapon systems and major support systems.
Director History and Heritage
  • advise on the retention of materiel for historical and heritage purposes.
Controlled Technology Access and Transfer Office
  • advise materiel managers on the disposal of controlled goods declared to be surplus materiel, including the securing of transfer authorizations from foreign governments.
base, wing, station, contingent and depot commanders and civilian equivalents
  • declare locally-managed materiel to be surplus materiel or end-of-life materiel;
  • approve the disposal methods of sales, transfers and conversions to waste of any locally-managed materiel; and
  • delegate, in writing, the authority for the approval of disposal plans to a level not below that of a logistics or supply officer at a base, wing, station, contingent or depot.

6. References

Acts, Regulations, Central Agency Policies and Policy DAOD

Other References

  • DAOD 3000-0, Materiel Acquisition and Support
  • DAOD 3003-0, Controlled Goods
  • DAOD 3003-1, Management, Security and Access Requirements Relating to Controlled Goods
  • DAOD 3008-0, Intellectual Property
  • DAOD 3017-0, Transfer of Materiel to Other Government Departments
  • DAOD 5045-0, Canadian Forces Personnel Support Programs
  • Financial Administration Manual, Chapter 1019-2, Accounting for the Disposal of Surplus Assets and the Return of Proceeds from the Disposal of Surplus Assets
  • Financial Administration Manual, Chapter 1020-4, Capital Assets
  • A-AD-266-000/AG-001, Canadian Forces Museums – Operations and Administration
  • A-FN-100-002/AG-006, Delegation of Authorities for Financial Administration for the Department of National Defence (DND) and the Canadian Armed Forces (CAF)
  • A-LM-007-100/AG-001, Supply Administration Manual
  • A-LM-158-005/AG-001, Transport Manual
  • C-02-007-000/AG-001, Controlled Technology Access Transfer (CTAT) Manual (available in English only)
  • A Guide to Canada's Export Control List, Global Affairs Canada
  • International Traffic in Arms Regulations, United States Department of State (available in English only)
  • Form DND 4001-E, Disposal Plan
  • Form CF 1303-E, Declaration of Surplus
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