[Federal Register Volume 60, Number 87 (Friday, May 5, 1995)]
[Proposed Rules]
[Pages 22442-22443]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-11176]



      

[[Page 22441]]

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Part II

Department of Defense

General Services Administration

National Aeronautics and Space Administration
_______________________________________________________________________



48 CFR Parts 45 and 52



Federal Acquisition Regulation: Use and Charges Clause; Proposed Rule

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

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.

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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 [[Page 22443]] any non-Government use of plant equipment. 
Before authorizing non-Government 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                    
------------------------------------------------------------------------
                                                         Monthly rental 
                   Age of equipment                           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