22442 Federal Register / Vol. 60, No. 87 / Friday, May 5, 1995 / Proposed Rules

DEPARTMENT OF DEFENSE

GENERAL SERVICES

ADMINISTRATION

NATIONAL AERONAUTICS AND

SPACE ADMINISTRATION

48 CFR Parts 45 and 52

[FAR Case 91–117]

RIN 9000–AG23

Federal Acquisition Regulation; Use

and Charges Clause

AGENCIES: Department of Defense (DOD),

General Services Administration (GSA),

and National Aeronautics and Space

Administration (NASA).

ACTION: Proposed rule.

SUMMARY: The Civilian Agency

Acquisition Council (CAAC) and the

Defense Acquisition Regulations

Council (DAR Council) are proposing

changes to the coverage ‘‘Contractor Use

and Rental of Government Property,’’

and the clause ‘‘Use and Charges,’’ to

clarify the Federal Acquisition

Regulation (FAR) coverage pertaining to

rental payments for Government-owned

real property and equipment. This

regulatory action was not subject to

Office of Management and Budget

review pursuant to Executive Order

12866, dated September 30, 1993.

DATES: Comments should be submitted

on or before July 5, 1995 to be

considered in the formulation of a final

rule.

ADDRESSES: Interested parties should

submit written comments to: General

Services Administration, FAR

Secretariat (VRS), 18th and F Streets,

NW, Room 4037, Washington, DC

20405.

Please cite FAR case 91–117 in all

correspondence related to this case.

FOR FURTHER INFORMATION CONTACT: Ms.

Linda Klein at (202) 501–3775 in

reference to this FAR case. For general

information, contact the FAR

Secretariat, Room 4037, GS Building,

Washington, DC 20405 (202) 501–4755.

Please cite FAR case 91–117.

SUPPLEMENTARY INFORMATION:

A. Background

The CAAC and the DAR Council have

agreed on changes to FAR parts 45 and

52 as a result of a proposal from the

DOD Inspector General to improve and

clarify current language relating to

rental payments for Government-owned

real property and equipment. The

proposed rule improves the current

language by distinguishing between

equipment and real property; clarifying

that total equipment costs include such

factors as rehabilitation and rebuild

costs; clarifying the role of the

contracting officer; clarifying the use of

credits; specifying that rental rates for

real property shall be in accordance

with commercial rates as stated in FAR

45.403; and providing for payment of

interest on late rental payments.

B. Regulatory Flexibility Act

This proposed rule is not expected to

have a significant economic impact on

a substantial number of small entities

within the meaning of the Regulatory

Flexibility Act, 5 U.S.C. 601 et seq.,

because only a small amount of property

is accountable to contracts with small

businesses. An Initial Regulatory

Flexibility Analysis has, therefore, not

been performed. Comments from small

entities concerning the affected FAR

subpart will be considered in

accordance with 5 U.S.C. 610 of the Act.

Such comments must be submitted

separately and should cite 5 U.S.C. 601

et seq. (FAR case 91–117), in

correspondence.

C. Paperwork Reduction Act

The Paperwork Reduction Act does

not apply because the proposed changes

to the FAR do not impose recordkeeping

or information collection requirements,

or collections of information from

offerors, contractors, or members of the

public which require the approval of the

Office of Management and Budget under

44 U.S.C. 3501 et seq.

List of Subjects in 48 CFR Parts 45 and

52

Government procurement.

Dated: May 1, 1995.

C. Allen Olson,

Director, Office of Federal Acquisition Policy.

Therefore, it is proposed that 48 CFR

parts 45 and 52 be amended as set forth

below:

1. The authority citation for 48 CFR

parts 45 and 52 continues to read as

follows:

Authority: 40 U.S.C. 486(c); 10 U.S.C.

chapter 137; and 42 U.S.C. 2473(c).

PART 45—GOVERNMENT PROPERTY

2. Section 45.402 is amended by

revising paragraph (a) to read as follows:

45.402 Authorizing use of Government

production and research property.

(a) Contracting officers who believe it

to be in the Government’s interest for a

prospective contractor or subcontractor

to use existing Government production

and research property shall authorize

such use in the contract. The

contracting officer shall confirm the

availability of the property and

coordinate with the administrative

contracting officer (ACO) before

authorizing its use on either a rental or

rent-free basis. The contracting officer

shall provide the ACO copies of all

correspondence and approvals

authorizing contractors’ or

subcontractors’ use of Government

production and research property.

* * * * *

3. Section 45.403 is revised to read as

follows:

45.403 Rental—Use and Charges clause.

(a) The contracting officer shall charge

contractors rent for using Government

real property, plant equipment, special

tooling, and special test equipment,

except as prescribed in 45.404 and

45.405. Rent shall be computed in

accordance with the clause at 52.245–9,

Use and Charges.

(b) Commercial rates for real property

shall be established by using a certified

appraisal, if feasible. If such an

appraisal is not economically feasible,

commercial rates may be established by

using Industrial Real Estate Surveys,

local rental surveys, or information

obtained from the local Chambers of

Commerce and local realtors. To

calculate rent for real property,

commercial rates should be applied

against the percentage of commercial

sales to total sales or some other

equitable basis. The cost of necessary

Government-owned support facilities

supporting the real property made

available on a rental basis should be

considered when establishing the

commercial rate.

(c) If the agency head or designee

determines it to be in the Government’s

interest, rent for classes of production

and research property may be

determined on a basis other than the

clause at 52.245–9, Use and Charges.

(d) The contracting officer shall

determine if the contractor may use

Government production and research

property on a rental basis and shall

determine the length of the rental

authorization. The administrative

contracting officer shall develop the

rental agreement and shall ensure the

collection of any rent due the

Government from the contractor’s use of

Government production and research

property.

4. Section 45.407 is amended by

revising paragraph (a) to read as follows:

45.407 Non-Government use of plant

equipment.

* * * * *

(a) The contracting officers advance

written approval shall be required for
Federal Register / Vol. 60, No. 87 / Friday, May 5, 1995 / Proposed Rules 22443

any non-Government use of plant

equipment. Before authorizing nonGovernment use exceeding 25 percent,

the contracting officer shall obtain

approval of the head (or designee) of the

agency that awarded the contract to

which the property is accountable. The

contracting officer shall forward to the

administrative contracting officer copies

of all approvals for non-Government use

of active plant equipment.

* * * * *

PART 52— SOLICITATION

PROVISIONS AND CONTRACT

CLAUSES

5. Section 52.245–9 is revised to read

as follows:

52.245–9 Use and Charges.

As prescribed in 45.302–6(c), insert

the following clause:

Use and Charges (Date)

(a) For purposes of this clause, the types

of Government property to be rented are

divided into two categories, real property

(see 45.101) and equipment. Equipment, as

used in this clause, consists of plant

equipment, special test equipment, and

special tooling.

(b) The Contractor may use the real

property and equipment without charge in

the performance of—

(1) Contracts with the Government that

specifically authorize such use without

charge; and

(2) Subcontracts of any tier under

Government prime contracts if the

Contracting Officer having cognizance of the

prime contract specifically authorizes such

use in writing.

(c) Unless otherwise directed in writing by

the Contracting Officer, the Contractor shall

give priority in the use of the real property

and equipment to performing contracts and

subcontracts of the Contracting Officer

having cognizance of the real property and

equipment and shall not undertake any work

involving the use of the real property and

equipment that would interfere with

performing existing Government contracts or

subcontracts.

(d) If granted written permission by the

Contracting Officer, or if it is specifically

provided for in the Schedule, the Contractor

may use the real property and equipment for

work other than that provided in paragraph

(b) of this clause, subject to payment of

rental. Authorizing such use of the real

property and equipment does not waive any

rights of the Government to terminate the

Contractor’s right to use the real property and

equipment.

(e) The rental fee for use of real property

and equipment shall be determined in

accordance with the following paragraphs:

(1) The basis for computation of the fee

shall be established in writing prior to any

use of the real property and equipment on a

rental basis.

(2) Rental rates for real property and

associated fixtures, shall be in accordance

with commercial rates as established under

section 45.403 of the Federal Acquisition

Regulation.

(3) Rental rates for equipment shall be

established in accordance with paragraph (f)

and TABLE I of this clause.

(4) Rental for real property and equipment

shall be calculated on a per month basis.

Rental payments shall be made at intervals of

not less than one nor more than six months.

The rental agreement shall specify the

frequency of the payment.

(f) The full monthly equipment rental

charge is the monthly rental rate multiplied

by the total acquisition cost of the equipment

(as defined in subparagraph (f)(1)). The full

equipment rental charge for each month shall

be reduced by a credit for rent-free use, if

applicable. The credit equals the rental

amount that would otherwise be properly

allocable to the work for which the

equipment was used without charge under

paragraph (b) of this clause. The credit shall

be computed by multiplying the full rental

for the rental period by a fraction in which

the numerator is the amount of use of the

equipment by the Contractor without charge

during the period, and the denominator is the

total amount of use of the equipment by the

Contractor during the period. If the rent for

an item is excluded from the total rent

computations because the item was used 100

percent of the time for work without charge

under paragraph (b) of this clause, the units

of measure for that item shall also be

excluded from the credit calculations.

(1) The acquisition cost of the equipment

shall be the total cost to the Government,

including any substantial improvements at

Government expense. The Contracting

Officer responsible for the equipment will

determine the total acquisition cost, to

include rebuild, remanufacture or other

rehabilitation costs, and enhancements, as

well as, transportation and installation costs,

if borne by the Government. It does not

include the cost of normal maintenance.

(2) For the purpose of computing any

credit under this paragraph, the unit in

determining the amount of use of the

equipment shall be direct labor hours, sales,

hours of use, or other unit of measure that

will result in an equitable apportionment of

the rental charge, as approved by the

cognizant Contracting Officer.

(g) The Contractor shall compute the

amount of rentals to be paid on real property

and equipment for each rental period. Within

90 days after the close of each rental period,

the Contractor shall submit to the Contracting

Officer a written statement showing the

rental calculations for the real property and

equipment and listing the amount of rental

due the Government. The Contractor shall

make available such records and data as are

determined by the Contracting Officer to be

necessary to verify the information contained

in the statement.

(h) Concurrently with the submission of

the written statement prescribed by

paragraph (g) of this clause, the Contractor

shall pay the rental due the Government

under this clause. Payment shall be by check

made payable to the office designated for

contract administration and mailed or

delivered to the Administrative Contracting

Officer. Receipt and acceptance by the

Government of the Contractor’s check

pursuant to this paragraph shall constitute an

accord and satisfaction of the final amount

due the Government hereunder, unless the

Contractor is notified in writing within 180

days following receipt that the amount

received is not regarded by the Government

as the final amount due.

(i) If the Contractor fails to submit the

written statement and the amount due, as

required in paragraphs (g) and (h) of this

clause, the Contractor shall be liable for

interest charges on the amount due,

chargeable for each day the statement and

rental payment are late. The interest shall be

at the ‘‘Renegotiation Board Interest Rate’’

(published in the Federal Register

semiannually on or about January 1st and

July 1st for the period in which the amount

becomes due). Failure to submit timely

statements and/or rent payments may result

in the Contracting Officer revoking the

Contractor’s right to use the real property

and/or equipment for commercial purposes.

(j) If the Contractor uses any item of the

real property and equipment without

authorization, the Contractor shall be liable

for payment of 50 percent more than the

amount of rental that would have been due

had prior authorization been obtained.

(k) The acceptance of any rental payment

by the Government under this clause shall

not be construed as a waiver or

relinquishment of any rights it may have

against the Contractor growing out of the

Contractor’s unauthorized use of the real

property and/or equipment or any other

failure to perform this contract according to

its terms.

(1) For equipment of the types covered in

Federal Supply Group 34, metal cutting and

metal forming machine tools, the following

monthly rates shall apply:

TABLE I.—EQUIPMENT RENTAL RATES

Age of equipment Monthly

rental rate

Under 3 years old ................... 3.0 percent.

Over 3 to 8 years old ............. 1.5 percent.

Over 8 years old ..................... 1.0 percent.

The age of each item of the equipment

shall be based on the year in which it was

substantially improved or, if not improved,

the year of manufacture, with a birthday on

January 1 of each year thereafter. For

example, an item of equipment manufactured

or improved on July 15, 1992, will be

considered to be ‘‘over 1 year old’’ on and

after January 1, 1993, and ‘‘over 2 years old’’

on and after January 1, 1994.

(2) Rental of equipment not covered by (1)

above will be computed at a rate of 2 percent

per month of use.

(End of clause)

[FR Doc. 95–11176 Filed 5–4–95; 8:45 am]

BILLING CODE 6820–EP–P