[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]



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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 ncsccustomer.service@gsa.gov. 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