[Federal Register Volume 83, Number 172 (Wednesday, September 5, 2018)]
[Proposed Rules]
[Pages 45072-45073]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-19177]
[[Page 45072]]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Part 7
[FAR Case 2017-017; Docket No. 2017-0017, Sequence No. 1]
RIN 9000-AN63
Federal Acquisition Regulation: Rental Cost Analysis in Equipment
Acquisitions
AGENCY: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Proposed rule.
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SUMMARY: DoD, GSA, and NASA are proposing to amend the Federal
Acquisition Regulation (FAR) to clarify the term ``lease.''
DATES: Interested parties should submit comments to the Regulatory
Secretariat Division at one of the addresses shown below on or before
November 5, 2018 to be considered in the formulation of a final rule.
ADDRESSES: Submit comments in response to FAR Case 2017-017 by any of
the following methods:
Regulations.gov: http://www.regulations.gov. Submit
comments via the Federal eRulemaking portal by entering ``FAR Case
2017-017'' under the heading ``Enter Keyword or ID'' and selecting
``Search.'' Select the link ``Comment Now'' that corresponds with ``FAR
Case 2017-017.'' Follow the instructions provided on the screen. Please
include your name, company name (if any), and ``FAR Case 2017-017'' on
your attached document.
Mail: General Services Administration, Regulatory-
Secretariat Division (MVCB), ATTN: Lois Mandell, 1800 F Street NW, 2nd
Floor, Washington, DC 20405.
Instructions: Please submit comments only and cite ``FAR case 2017-
017'' in all correspondence related to this case. All comments received
will be posted without change to http://www.regulations.gov, including
any personal and/or business confidential information provided. To
confirm receipt of your comment(s), please check www.regulations.gov,
approximately two to three days after submission to verify posting
(except allow 30 days for posting of comments submitted by mail).
FOR FURTHER INFORMATION CONTACT: For clarification of content, contact
Mr. Michael O. Jackson, Procurement Analyst, at 202-208-4949. For
information pertaining to status or publication schedules, contact the
Regulatory Secretariat Division at 202-501-4755. Please cite ``FAR Case
2017-017.''
SUPPLEMENTARY INFORMATION:
I. Background
DoD, GSA, and NASA are proposing to amend the FAR to clarify, in
FAR subpart 7.4, Equipment Lease or Purchase, that the term ``lease,''
as used in the subpart, includes the ``rental'' of equipment. This
change clarifies that agencies should be evaluating comparative costs
and other factors when considering whether to lease or rent equipment
versus purchase equipment. The rule also adds a helpful link to a GSA
site that provides additional guidance on renting and leasing equipment
and updates the GSA office from which agencies may request information
when making lease or purchase decisions. In addition, weblinks have
been added to the rule for Office of Management and Budget (OMB)
guidance for lease-purchase analysis, see Special Guidance for Lease-
purchase Analysis (Section 13 of (OMB) Circular A-94, also see
8.c.(2)); and OMB Circular A-11 Appendix B Budgetary Treatment of
Lease-Purchases and Leases of Capital Assets.
II. Discussion and Analysis
This rule proposes to amend FAR subpart 7.4, as follows:
Adding language to the scope of the subpart to clarify
that the term ``lease'', as used in the subpart, applies to both the
lease and rental of equipment, and to identify some general factors
that may vary when leasing or renting equipment.
Adding a GSA website that provides information that could
assist the contracting officer in making equipment lease or purchase
decisions, and updating the GSA office to contact when an agency
requests assistance with the lease versus purchase analysis decision.
In addition, weblinks have been added to the rule for OMB guidance for
lease-purchase analysis.
III. Applicability to Contracts at or Below the Simplified Acquisition
Threshold and for Commercial Items, Including Commercially Available
Off-the-Shelf Items
This rule amends the FAR to clarify that although the term
``lease'' applies to both the lease and rental of equipment, there are
some differences between renting and leasing in many industries, and
there is no standard distinction between both renting and leasing that
spans across all industries. This case does not add any new provisions
or clauses or impact any existing provisions or clauses.
IV. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess
all costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). E.O.
13563 emphasizes the importance of quantifying both costs and benefits,
of reducing costs, of harmonizing rules, and of promoting flexibility.
This is not a significant regulatory action and, therefore, was not
subject to review under section 6(b) of E.O. 12866, Regulatory Planning
and Review, dated September 30, 1993. This rule is not a major rule
under 5 U.S.C. 804.
V. Executive Order 13771
This rule is not subject to E.O. 13771, because this rule is not a
significant regulatory action under E.O. 12866.
VI. Regulatory Flexibility Act
DoD, GSA, and NASA do not expect this rule to have a significant
economic impact on a substantial number of small entities within the
meaning of the Regulatory Flexibility Act codified at 5 U.S.C. 601 et
seq. However, an Initial Regulatory Flexibility Analysis (IRFA) has
been performed and is summarized as follows:
DoD, GSA, and NASA are proposing to amend the Federal
Acquisition Regulation (FAR) to clarify, in FAR subpart 7.4, that
the term ``lease'' includes the ``rental'' of equipment. This change
clarifies that agencies should be evaluating comparative costs and
other factors when considering whether to lease or rent equipment
versus purchase equipment.
The objective of the rule is to ensure the value of rental
agreements are included in the decision on whether to lease or
purchase equipment. The legal basis for the FAR is 40 U.S.C. 121(c),
10 U.S.C. chapter 137, and 51 U.S.C. 20113.
Based on Fiscal Year 2016 data from the Federal Procurement Data
System, the Government issued approximately 34,925 contract actions
for the rent/lease or purchase of equipment. Of the 34,925 contract
actions, approximately 20,100 awards were made to 6,670 unique small
business entities. The average award to small businesses was valued
at approximately $700,000.
This rule does not impose any new reporting, recordkeeping or
other compliance requirements. The rule does not duplicate,
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overlap, or conflict with any other Federal rules. There are no
known significant alternative approaches to the proposed rule that
would meet the applicable requirement.
The Regulatory Secretariat Division has submitted a copy of the
IRFA to the Chief Counsel for Advocacy of the Small Business
Administration. A copy of the IRFA may be obtained from the Regulatory
Secretariat Division. DoD, GSA and NASA invite comments from small
business concerns and other interested parties on the expected impact
of this rule on small entities.
DoD, GSA, and NASA will also consider comments from small entities
concerning the existing regulations in subparts affected by this rule
consistent with 5 U.S.C. 610. Interested parties must submit such
comments separately and should cite 5 U.S.C. 610 (FAR Case 2017-017) in
correspondence.
VII. Paperwork Reduction Act
The proposed rule does not contain any information collection
requirements that require the approval of the Office of Management and
Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).
List of Subjects in 48 CFR Part 7
Government procurement.
Dated: August 30, 2018.
William F. Clark,
Director, Office of Government-wide Acquisition Policy, Office of
Acquisition Policy, Office of Government-wide Policy.
Therefore, DoD, GSA, and NASA are proposing to amend 48 CFR part 7
as set forth below:
PART 7--ACQUISITION PLANNING
0
1. The authority citation for part 7 continues to read as follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51
U.S.C. 20113.
0
2. Revise section 7.400 to read as follows:
Sec. 7.400 Scope of subpart.
This subpart provides guidance pertaining to the decision to
acquire equipment by lease or purchase. It applies to both the initial
acquisition of equipment and the renewal or extension of existing
equipment leases. The term ``lease'', as used in this subpart, applies
to both the lease and rental of equipment. While there are some
differences between renting and leasing in many industries, there is no
standard distinction between both renting and leasing that spans across
all industries. Rental agreements are typically for shorter periods of
time than lease agreements. Additionally, maintenance requirements and
financial terms (e.g., fees or payment terms) differ between a lease
and a rental agreement.
Sec. 7.401 [Amended]
0
2. Amend section 7.401 by removing from paragraph (a)(3) ``rental
payments'' and adding ``lease, or other periodic payments, however
described,'' in its place.
0
3. Amend section 7.403 by revising the section heading and paragraph
(b), and adding paragraph (c) to read as follows:
Sec. 7.403 General Services Administration assistance and OMB
Guidance.
* * * * *
(b) Agencies may request information from the following GSA office:
GSA FAS National Customer Service Center by phone at 1-800-488-3111 or
by email at [email protected]. Additional information to
assist with deciding whether to purchase or lease equipment is
available at https://www.gsa.gov/acquisition/purchasing-programs/gsa-schedules/list-of-gsa-schedules/schedule-51-vhardware-superstore/equipment-rental-and-leasing.
(c) See Special Guidance for Lease-purchase Analysis (Section 13 of
OMB Circular A-94, also see 8.c.(2)) at https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/circulars/A94/a094.pdf and OMB Circular
A-11 Appendix B Budgetary Treatment of Lease-Purchases and Leases of
Capital Assets at https://www.whitehouse.gov/wp-content/uploads/2018/06/app_b.pdf.
[FR Doc. 2018-19177 Filed 9-4-18; 8:45 am]
BILLING CODE 6820-EP-P