[Federal Register Volume 59, Number 248 (Wednesday, December 28, 1994)]
[Unknown Section]
[Page ]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-30664]


[Federal Register: December 28, 1994]


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DEPARTMENT OF DEFENSE
DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 7 and 52

[FAC 90-23; FAR Case 91-6; Item V]
RIN 9000-AE86


Federal Acquisition Regulation; Lease with Option to Purchase

AGENCIES: Department of Defense (DOD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council have agreed on a final rule to amend 
the Federal Acquisition Regulation (FAR), based on the Defense 
Management Review (DMR), to include information required to support a 
contracting officer's decision to use a lease with an option to 
purchase, and to outline the Government's right to purchase at any time 
during the performance of the contract. This regulatory action was not 
subject to Office of Management and Budget review under Executive Order 
12866, dated September 30, 1993.

EFFECTIVE DATE: February 27, 1995.

FOR FURTHER INFORMATION CONTACT: Mr. Ralph DeStefano at (202) 501-1758 
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 FAC 90-23, FAR case 91-6.

SUPPLEMENTARY INFORMATION:

A. Background

    The Secretary of Defense directed that the Defense Federal 
Acquisition Regulation Supplement (DFARS) be streamlined and rewritten 
as part of the DMR Regulatory Reform initiative. This initiative 
resulted in movement of some DFARS language and language from lower 
level supplements to the FAR.
    FAR 7.402(b)(2) states that if a lease is justified, a lease with 
option to purchase is preferable. However, there is no FAR coverage to 
implement this requirement. This proposed rule implements FAR 
7.402(b)(2) and outlines the Government's right to purchase at any time 
during the performance of the contract.
    A proposed rule was published in the Federal Register at 56 FR 
37404, August 6, 1991. Ten comments received from five individuals and 
organizations were considered, and changes were made in the development 
of the final rule.

B. Regulatory Flexibility Act

    The Department of Defense, the General Services Administration, and 
the National Aeronautics and Space Administration certify that this 
final rule will not have a significant economic impact on a substantial 
number of small entities under the Regulatory Flexibility Act, 5 U.S.C. 
601, et seq., because the change does not impose any new requirements 
on contractors, large or small, and serves only to clarify existing 
regulatory coverage. No public comments were received which addressed 
the statement to that effect which was published as a proposed rule.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the 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 7 and 52

    Government procurement.

    Dated: December 7, 1994.
Albert A. Vicchiolla,
Director, Office of Federal Acquisition Policy.

    Therefore, 48 CFR parts 7 and 52 are amended as set forth below:
    1. The authority citation for 48 CFR parts 7 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 7--ACQUISITION PLANNING

    2. Section 7.402 is amended by adding paragraph (b)(4) to read as 
follows:


7.402  Acquisition methods.

* * * * *
    (b) * * *
    (4) If a lease with option to purchase is used, the contract shall 
state the purchase price or provide a formula which shows how the 
purchase price will be established at the time of purchase.
    3. Section 7.404 is added to read as follows:


7.404  Contract clause.

    The contracting officer shall insert a clause substantially the 
same as the clause in 52.207-5, Option to Purchase Equipment, in 
solicitations and contracts involving a lease with option to purchase.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    4. Section 52.207-5 is added to read as follows:


52.207-5  Option to purchase equipment.

    As prescribed in 7.404, insert a clause substantially the same as 
the following:

Option to Purchase Equipment (Feb 1995)

    (a) The Government may purchase the equipment provided on a 
lease or rental basis under this contract. The Contracting Officer 
may exercise this option only by providing a unilateral modification 
to the Contractor. The effective date of the purchase will be 
specified in the unilateral modification and may be any time during 
the period of the contract, including any extensions thereto.
    (b) Except for final payment and transfer of title to the 
Government, the lease or rental portion of the contract becomes 
complete and lease or rental charges shall be discontinued on the 
day immediately preceding the effective date of purchase specified 
in the unilateral modification required in paragraph (a) of this 
clause.
    (c) The purchase conversion cost of the equipment shall be 
computed as of the effective date specified in the unilateral 
modification required in paragraph (a) of this clause, on the basis 
of the purchase price set forth in the contract, minus the total 
purchase option credits accumulated during the period of lease or 
rental, calculated by the formula contained elsewhere in this 
contract.
    (d) The accumulated purchase option credits available to 
determine the purchase conversion cost will also include any credits 
accrued during a period of lease or rental of the equipment under 
any previous Government contract if the equipment has been on 
continuous lease or rental. The movement of equipment from one site 
to another site shall be ``continuous rental.''
(End of clause)
[FR Doc. 94-30664 Filed 12-27-94; 8:45 am]
BILLING CODE 6820-34-P