[Federal Register Volume 60, Number 172 (Wednesday, September 6, 1995)]
[Proposed Rules]
[Pages 46259-46260]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-22001]



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DEPARTMENT OF DEFENSE

48 CFR Part 52


Federal Acquisition Regulation; Use and Charges Clause Class 
Deviation

AGENCY: Department of Defense (DoD).

ACTION: Notice of proposed class deviation.

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SUMMARY: The Department of Defense (DoD) is proposing a class deviation 
from the Federal Acquisition Regulation (FAR) that simplifies the 
method of determining rental charges for government property. The 
proposed class deviation will allow defense contractors to propose 
rental charges for the commercial use of government property and real 
property while revisions to the FAR are being drafted.

DATES: Comments on the proposed class deviation should be submitted in 
writing at the address shown below on or before November 6, 1995 to be 
considered in the formulation of the final class deviation.

ADDRESSES: Interested parties should submit written comments to: Ms. 
Angelena Moy, MPI, Room 3E144, Pentagon, Washington, DC 20301-3000. FAX 
(703) 695-7596.

FOR FURTHER INFORMATION CONTACT:
Ms. Angelena Moy, telephone (703) 695-1099.

SUPPLEMENTARY INFORMATION: 

A. Background

    On September 16, 1994 (59 FR 47583) the Director of Defense 
Procurement announced an initiative to rewrite FAR Part 45, Government 
Property, to make it easier to understand and to minimize the burdens 
imposed on contractors and the Government. The Director of Defense 
Procurement is providing a forum for an exchange of ideas and 
information with government and industry personnel by holding public 
meetings, soliciting public comments, and publishing notices of public 
meetings in the Federal Register. Interested parties were invited to 
provide written suggestions or comments in the notice of public hearing 
dated September 16, 1994 (59 FR 47583). Twenty-two commentors provided 
approximately 500 comments, including a recommendation that simplifying 
the procedures for computing rental charges for government property 
would reduce administrative burdens and provide cost savings.
    In order to expedite implementation of simplified government 
property rental procedures, DoD is proposing a class deviation from 
current FAR methods of determining rental charges for commercial use of 
government property. The proposed class deviation was included in 
discussions during the public hearings that have been held on the 
rewrite of FAR Part 45. DoD proposes to deviate from the clause at FAR 
52.245-9 as follows:

Part 52--Solicitation Provisions and Contract Clauses

52.245-9  Use and Charges

     Deviation authorizes DoD to use the following clause in 
lieu of the clause at 52.245-9. This clause requires contractors, for 
real property and associated fixtures, to obtain certified property 
appraisals that compute a monthly, daily, or hourly rental rate for 
comparable commercial property. Rental charges would be determined by 
multiplying the rental time by an appraisal rental rate expressed as a 
rate per hour. For other government property, rental charges will be 
the smaller of two percent of the property's acquisition cost 
multiplied by the ratio of rental time to time available for use, or by 
the method described for real property and associated fixtures.

Use and Charges (APR 1984) (Deviation)

    (a) Deviations.
    As used in this clause--
    Acquisition cost means the acquisition cost recorded in the 
contractor's property control system or, in the absense of such 
record, the value attributed by the Government to a government 
property item for purposes of determining a reasonable rental 
charge.
    Government property means property owned, licensed, or leased by 
the Government.
    Real property means land and rights in land, ground 
improvements, utility distribution systems, and buildings and other 
structures. It does not include foundations and other work necessary 
for installing special tooling, special test equipment, or 
equipment.
    Rental period means the calendar period during which government 
property is made available for commercial purposes.
    Rental time means the number of hours, to the nearest whole 
hour, rented property is actually used for commercial purposes. It 
includes time to set up the property for such purposes, perform 
required maintenance, and restore the property to its condition 
prior to rental.
    Time available for use means the number of hours, to the nearest 
whole hour, in the rental period.
    (b) General. (1) Rental requests must be submitted to the 
administrative Contracting Officer, identify the property desired, 
propose a rental period, and calculate an estimated rental charge.
    (2) The Contractor shall not use government property for 
commercial purposes until a rental charge for real property, or 
estimated rental charge for other property, is agreed upon. Rented 
property may be used only on a non-interference basis.
    (3) Notwithstanding any other provision of this contract, the 
Contractor is responsible for any loss, theft, or destruction of, or 
damage to, government property during its use for commercial 
purposes.
    (c) Estimated rental charge. The estimated rental charge 
submitted with the Contractor's rental request shall be computed by 
substituting the Contractor's best estimate of the time the property 
might be used for commercial purposes for rental time in the 
formulae described in paragraph (d) of this clause.
    (d) Final rental charge--(1) Real property and associated 
fixtures--(i) The Contractor shall obtain, at its expense, a 
property appraisal from an independent licensed or certified 
appraiser that computes a monthly, daily, or hourly rental rate for 
comparable commercial property no more than one year prior to the 
date the property is desired for commercial use and submit the 
appraisal to the administrative Contracting Officer at least 30 days 
prior to that date. Except as provided in paragraph (d)(1)(iv) of 
this clause, the administrative Contracting Officer shall use 

[[Page 46260]]
the appraisal rental rate to determine an equitable rental charge.
    (ii) Rental charges shall be determined by multiplying the 
rental time by the appraisal rental rate expressed as a rate per 
hour. Monthly or daily rental rates shall be divided by 720 or 24, 
respectively, to determine an hourly rental rate.
    (iii) The Contractor may request consideration of an alternate 
basis for computing the rental charge if it considers a time based 
rental unreasonable or impractical.
    (iv) When the administrative Contracting Officer has reason to 
believe the appraisal rental rate is not reasonable, he or she shall 
promptly notify the Contractor and provide his or her rationale. The 
parties may agree on an alternate means for computing a reasonable 
rental charge.
    (2) Other government property. The final rental charge shall be 
the smaller of--
    (i) Two percent (2%) of the property's acquisition cost 
multiplied by the ratio of rental time to time available for use 
where time shall be expressed in increments not less than one hour; 
or,
    (ii) A rental charge based upon the appraisal method described 
in paragraph (d)(1) of this clause subject to the constraints of 
that paragraph.
    (e) Rental payments. (1) Rent is due at the time and place 
specified by the Contracting Officer. If a time is not specified, 
the rental is due 60 days following completion of the rental period. 
The Contractor shall calculate the rental due, and furnish records 
or other supporting data in sufficient detail to permit the 
administrative Contracting Officer to verify the rental time.
    (2) Interest will be charged if payment is not made by the 
specified payment date or, in the absence of a specified date, the 
sixty-first day following completion of the rental period. Interest 
will accrue 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 rent is due.
    (3) At any time during the rental period, the Government may 
revoke commercial use authorization and require the Contractor, at 
the Contractor's expense, to return the property to the Government, 
restore the property to its pre-rental condition, or both.
    (f) The Government's acceptance of any rental payment under this 
clause, in whole or in part, shall not be construed as a waiver or 
relinquishment of any rights it may have against the Contractor 
stemming from the Contractor's unauthorized use of government 
property or any other failure to perform this contract according to 
its terms.

(End of clause)

List of Subjects in 48 CFR Part 52

    Government procurement.
Michele P. Peterson,
Executive Editor, Defense Acquisition Regulations Council.
[FR Doc. 95-22001 Filed 9-5-95; 8:45 am]
BILLING CODE 5000-04-M