| "The government... for the protection of its property rights... may resort to the same remedies as a private person." Rex Trailer Co. v. United States, supra at 151; Cotton v. United States, 52 U.S. 229 (1850). Ignorance of the government's title to property is no defense, and one acquiring the property from the converter acquires no greater interest than the converter had. See Union Naval Stores v. United States, 240 U.S. 284 (1916). This rule is varied as to certain fungible agricultural commodities by 15 U.S.C. § 714p. The United States is not required to record its title under state recording statutes. United States v. County of Allegheny, supra; In re Double H Products Corp., 462 F.2d 52 (3d Cir. 1972); In the Matter of American Boiler Works, Inc., 220 F.2d 319 (3d Cir. 1955). No lien can be asserted against government property without its consent. See United States v. Ansonia Brass & Copper Co., 218 U.S. 452 (1910); United States v. Ameco Electronics Corp., supra.
When performing a government contract, property in the possession of the contractor may belong to the United States. Typically, this occurs either because the property was furnished by the government (so called "government-furnished property") to enable it to perform, or because it became government property as a result of one of the title-vesting provisions of the contract, such as a progress payment clause. Under the normal progress payment clause, see, e.g., 48 C.F.R. § 52.232-16(d), title to property vests immediately in the United States once that property has been allocated or chargeable to the contract performance, whether or not it was part of supplies being manufactured that, in fact, have not yet been delivered to the government. See, e.g., United States v. Ansonia Brass & Copper Co., supra; United States v. Lindberg Corp., 882 F.2d 1158 (7th Cir. 1989); In re American Pouch Foods, Inc., 769 F.2d 1190 (7th Cir. 1985), cert. denied, 475 U.S. 1082 (1986); In re Double H Products Corp., supra; In re American Boiler Works, supra. But see Marine Midland Bank v. United States, 687 F.2d 395 (Ct. Cl. 1982) (holding that the United States took a lien rather than legal title pursuant to the title vesting clause of the contract), cert. denied, 460 U.S. 1037 (1983)
Following termination of a government contract for convenience or default, or after completion of performance, courts have allowed the United States to recover improperly retained government property through replevin actions against the contractor. See United States v. Lindberg Corp., supra at 1160-61 (district court had jurisdiction over replevin action brought by government); United States v. Digital Products Corp., 624 F.2d 690, 692 (5th Cir. 1980); United States v. Pearson's E.F. & C., Inc., 771 F. Supp. 810, 818 (S.D. Tex. 1990) (28 U.S.C. § 1345 vested district court with jurisdiction over government's action to recover property). But see United States v. J & E Salvage Co., 55 F.3d 985 (4th Cir. 1995) (holding that a conversion action brought by the United States in district court seeking the return of certain government property, was in reality a contract claim which had to be addressed under the Contract Disputes Act and, therefore, exclusive jurisdiction rests with the Court of Federal Claims. 28 U.S.C. § 1491.) Because of the jurisdictional difficulties suggested by the J & E Salvage Co. case, the Commercial Litigation Branch should be contacted before a replevin action is brought in district court involving government property held under a government contract.
Updated February 19, 2015