So correct me if I’m wrong but the department doesn’t own these they are technically loaned to the agency?

What’s the rules if/when the .gov wants them back or you return them? Can you just send the lower?

They’re supposed to be returned in the same configuration. Maybe if some components get damaged and replaced it isn’t a big deal, but I doubt that stripping them to the receiver will be looked upon kindly.  I would imagine that at the very least the department would be banned from the 1033 Program.

Technically they remain DoD/DLA property.
The whole weapon must be returned.

Realistically, they never ask for them back. Agencies end up returning them if they don't want/need them anymore (usually to avoid the annual inventory paperwork).

A bunch of us ran into this issue with 1911s some years back.

It seems a small, local college had received a bunch of GI 1911s for their security guards many, many years ago through .Gov. The guards finally complained that they wanted something modern that wasn't so heavy (.) The college traded them into a LGS for some striker guns.

So far so good. LGS put the 1911s on sale and I picked up a nice Remington Rand. The guns were in various conditions, including one that had the finish completely ground off.

About two month later I got a call from the LGS. .Gov wanted their guns back. I'm not sure how .Gov found out, but they maintained in no uncertain terms that the guns were still government property and the college had no right to dispose of them.

Never knew what happened to all the returned guns but I hope they weren't scrapped.

Didn't you hear?  CMP sold them off to flippers ;)