Federal Acquisition Regulation; Government Property Rental and Special Tooling, 43583-43586 [05-14670]
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Federal Register / Vol. 70, No. 143 / Wednesday, July 27, 2005 / Rules and Regulations
as a HUBZone small business concern is
certified by SBA as a HUBZone small
business concern by accessing the
Central Contractor Registration (CCR)
database or by contacting the SBA.
Options for contacting the SBA
include—
(i) HUBZone web page at https://
dsbs.sba.gov/dsbs/
dsplsearchhubzone.cfm;
(ii) In writing to the AA/HUB at U.S.
Small Business Administration, 409 3rd
Street, S.W., Washington DC 20416; or
(iii) E-mail at hubzone@sba.gov.
(2) Protests challenging HUBZone
small business concern size status must
be filed in accordance with 13 CFR
121.411.
PART 52—SOLICITATION PROVISIONS
AND CONTRACT CLAUSES
3. Amend section 52.212–5 by—
I a. Revising the date of the clause; and
I b. Removing from paragraph (b)(8)(i)
‘‘(JAN 2002’’) and adding ‘‘(JUL 2005’’).
The revised and added text reads as
follows:
I
52.212–5 Contract Terms and Conditions
Required to Implement Statutes or
Executive Orders—Commercial Items.
*
*
*
*
*
CONTRACT TERMS AND CONDITIONS
REQUIRED TO IMPLEMENT STATUTES OR
EXECUTIVE ORDERS—COMMERCIAL
ITEMS (JUL 2005)
*
*
*
*
*
I 4. Amend section 52.219–9 by—
I a. Revising the date of the clause;
I b. Redesignating paragraph (e)(4) as
paragraph (e)(5); and
I c. Adding a new paragraph (e)(4).
The revised and added text reads as
follows:
52.219–9
Plan.
*
Small Business Subcontracting
*
*
*
*
SMALL BUSINESS SUBCONTRACTING
PLAN (JUL 2005)
*
*
*
*
(e) * * *
(4) Confirm that a subcontractor
representing itself as a HUBZone small
business concern is identified as a
certified HUBZone small business
concern by accessing the Central
Contractor Registration (CCR) database
or by contacting SBA.
*
*
*
*
*
[FR Doc. 05–14669 Filed 7–26–05; 8:45 am]
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GENERAL SERVICES
ADMINISTRATION
NATIONAL AERONAUTICS AND
SPACE ADMINISTRATION
48 CFR Parts 45 and 52
[FAC 2005–05; FAR Case 2002–015; Item
V]
RIN 9000–AJ99
Federal Acquisition Regulation;
Government Property Rental and
Special Tooling
AGENCIES: Department of Defense (DoD),
General Services Administration (GSA),
and National Aeronautics and Space
Administration (NASA).
ACTION: Final rule.
SUMMARY: The Civilian Agency
Acquisition Council and the Defense
Acquisition Regulations Council
(Councils) have agreed on a final rule
amending the Federal Acquisition
Regulation (FAR) to incorporate a class
deviation regarding use and charges,
which has been applicable to the
Department of Defense since 1998. This
deviation is appropriate for application
across the Federal Government. The
change clarifies the basis for
determining the rental charges for the
use of Government property and is
intended to promote the dual use of
such property. The final rule
specifically impacts contracting officers,
property administrators, and contractors
responsible for the management of
Government property.
DATES: Effective Date: August 26, 2005.
FOR FURTHER INFORMATION CONTACT: The
FAR Secretariat at (202) 501–4755 for
information pertaining to status or
publication schedules. For clarification
of content, contact Ms. Jeritta Parnell,
Procurement Analyst, at (202) 501–
4082. Please cite FAC 2005–05, FAR
case 2002–015.
SUPPLEMENTARY INFORMATION:
A. Background
*
BILLING CODE 6820–EP–S
DEPARTMENT OF DEFENSE
DoD, GSA, and NASA published a
proposed rule in the Federal Register at
69 FR 42544, July 15, 2004, to
incorporate two Department of Defense
class deviations, 98–O0010, Use and
Charges, and 98–O0011, Special
Tooling, into FAR Part 45 and make
appropriate revisions to FAR 52.245–9,
Use and Charges, and FAR 52.245–17,
Special Tooling. The final rule
establishes, as the basis for rental
charges, the time property is actually
used for commercial purposes, rather
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43583
than the time available for use; permits
contractors to obtain property appraisals
from independent appraisers; permits
appraisal-based rentals for all property;
and allows contracting officers to
consider alternate bases for determining
rentals. The final rule does not change
the requirements for special tooling as
originally proposed by the Councils
because the Councils are now
considering deleting the clause in its
entirety rather than revising it based on
comments received on the proposed
rule. The Councils plan to solicit
comments on the proposed deletion of
the FAR clause at 52.245–17, Special
Tooling, under another proposed rule.
Four respondents provided public
comments. Consideration of these
comments resulted in only minor
administrative changes to the proposed
rule. The resolution of the comments
follows:
Summary of Comments Received/
Disposition
1. Proposed Rule (PR): 52.245–9.
Deviation to the clause at 52.245–9 sets
a fair and equitable method for applying
a rent usage when Government property
is used for commercial purposes or
existing Government property is used
for future contracts and equitable
adjustment is needed to eliminate unfair
competitive advantage.
Concur.
2. PR: 52.245–17. All respondents
proposed the elimination of the special
tooling clause.The Councils plan to
solicit comments on the proposed
deletion of the FAR clause at 52.245–17,
Special Tooling, under another
proposed rule.
3. PR: 52.245–9(h). Amend paragraph
(h) to strike ‘‘person’’ and replace it
with ‘‘contractor.’’ Rationale is that a
company would control their personnel
through their administrative procedures
when wrong is discovered and the
Government may control the contractor
in a like manner.
Nonconcur. The legal basis for this
citation, 18 U.S.C. 641, applies to an
individual, as well as a corporate entity.
4. PR: 52.245–9. It may make sense to
provide a time frame where an
immediate need for usage of property
from another contract becomes
imminent and use of the property would
not interfere with the owning contract,
and the ACO is not available for
authorization, a period of 48 hours,
documented by the losing contract,
would be allowed for transfer of tooling
and use of such tooling be paid for at
a higher rate than the proposed
schedule. Tooling would be returned
immediately if authorization were not
received.
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Federal Register / Vol. 70, No. 143 / Wednesday, July 27, 2005 / Rules and Regulations
Nonconcur. While there may be some
instances where it would appear to be
beneficial to allow contractors to make
such a decision, other business and
regulatory factors, including those
associated with competition and
appropriations law, must be considered
before alternative use is allowed. This
decision should be reserved to the
Administrative Contracting Officer.
5. PR: 45.106. Add at 45.106(h)(3),
‘‘Contractors shall be encouraged to
submit plans and enter into advance
agreements to minimize unnecessary
delays, administrative costs and
possible legal exposure.’’ Approved
plans for use and charges of a contract,
program, site, or entity would be
beneficial to both the Government and
the contractor in that the clause, as now
written, will cause unnecessary delays,
administrative cost and legal exposure.
This type of plan would be similar to a
site scrap plan as now provided for in
FAR Part 45.
Nonconcur. Approval of commercial
use, as part of a general plan or
agreement, limits the Government’s
ability to regulate that said use serves
the best interests of the Government. It
may also restrict the Government’s right
to recall that property when needed to
satisfy what the Government determines
to be a greater need, e.g., war fighting,
civil defense, disaster assistance.
6. PR: 45.306–5. Eliminate the policy
at 45.306–5 for special tooling.
The Councils plan to solicit
comments on the proposed deletion of
FAR 52.245–17, Special Tooling, and
the related coverage at 45.306–5 under
another proposed rule.
7. PR: 52.245–9(a). Change the
definition of Government property to
mean all ‘‘real and personal’’ property.
Nonconcur. This change is
unnecessary.
8. PR: 52.245–9(c). Revise the
exception of the use of Government
property in this paragraph to be
described as ‘‘production’’ material.
Non-production material (expendable
items) may be suitable for rental in some
circumstances.
Nonconcur. There is no FAR
classification differentiating between
production material and non-production
expendables. Rather, when an item does
not lose its identity or is not consumed
during the production process, it should
not be classified as material. The
property is more appropriately
classified as equipment, agency peculiar
property, or another class of property
dependent upon its nature and use.
9. PR: 52.245–9(d)(2). Change
estimated rental charge for ‘‘other’’
property to ‘‘personal’’ property.
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Nonconcur. This change is
unnecessary.
10. PR: 52.245–9(g). Request an
additional requirement that the
Government shall disclose any intent to
revoke use authorization prior to
agreeing to contractor use. A practice of
full disclosure is necessary as part of
good relations and business practices,
otherwise contractors may acquire
resources unnecessarily.
Nonconcur. There are many reasons
why the Government may choose to
revoke a use agreement. Not all of these
are known at the time of approval. Some
may involve emergency conditions that
could not be anticipated at the initiation
of an agreement. Therefore, it is not in
the Government’s best interest to limit
its options by tacitly agreeing that there
is no intention to revoke use.
11. PR: 52.245–9(h). Delete the section
that states that unauthorized use of
Government property can subject a
person to consequences under 18 U.S.C.
641. There is no need to restate this law,
or any other law, in a regulation. The
contractor has an obligation to establish
internal controls to prevent
unauthorized use, and including a
reference to the United States Code is
unnecessary.
Nonconcur. We believe that it is
beneficial to advise those who use
Government property of the
ramifications of unauthorized use. The
repetition of the legal authority has
precedent in other parts of the FAR,
particularly when criminal liability is
the result of inappropriate action. See
also Comment No. 3, above.
This is not a significant regulatory
action and, therefore, was not subject to
review under Section 6(b) of Executive
Order 12866, Regulatory Planning and
Review, dated September 30, 1993. This
rule is not a major rule under 5 U.S.C.
804.
C. Paperwork Reduction Act
B. Regulatory Flexibility Act
45.302–6
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 within the
meaning of the Regulatory Flexibility
Act, 5 U.S.C. 601, et seq., because the
rule only clarifies FAR coverage to
clarify the basis for determining rental
charges for the use of Government
property and is intended to promote the
dual use of such property. Therefore,
this rule will allow small businesses
more flexibility in the use of
Government property.
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The Paperwork Reduction Act does
apply; however, these changes to the
FAR do not impose additional
information collection requirements to
the paperwork burden previously
approved under OMB Control Number
9000–0075.
List of Subjects in 48 CFR Parts 45 and
52
Government procurement.
Dated: July 20, 2005.
Julia B. Wise,
Director, Contract Policy Division.
Therefore, DoD, GSA, and NASA
amend 48 CFR parts 45 and 52 as set
forth below:
I 1. The authority citation for 48 CFR
parts 45 and 52 is revised to read as
follows:
I
Authority: 40 U.S.C. 121(c); 10 U.S.C.
chapter 137; and 42 U.S.C. 2473(c).
PART 45—GOVERNMENT PROPERTY
2. Amend section 45.106 by adding
paragraph (h) to read as follows:
I
45.106
Government property clauses.
*
*
*
*
*
(h)(1) Insert the clause at 52.245–9,
Use and Charges—
(i) In fixed-price or labor-hour
solicitations and contracts under which
the Government will furnish property
for performance of the contract;
(ii) In all cost-reimbursement and
time-and-materials solicitations and
contracts; and
(iii) In solicitations and contracts
when a consolidated facilities contract
or a facilities use contract is
contemplated.
(2) The contracting officer may
modify the clause if an alternative rental
methodology is used in accordance with
45.403.
[Amended]
3. Amend section 45.302–6 by
removing paragraph (c); and
redesignating paragraphs (d) and (e) as
paragraphs (c) and (d), respectively.
I 4. Revise section 45.403 to read as
follows:
I
45.403
Rental—Use and Charges clause.
(a) The contracting officer shall charge
contractors rent for using Government
production and research property,
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. If the agency head
determines it to be in the Government’s
interest, an alternative method for
computing rent may be used.
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(b) The contracting officer shall
ensure the collection of any rent due the
Government from the contractor.
PART 52—SOLICITATION PROVISIONS
AND CONTRACT CLAUSES
5. Revise section 52.245–9 to read as
follows:
I
52.245–9
Use and Charges.
As prescribed in 45.106(h), insert the
following clause:
USE AND CHARGES (AUG 2005)
(a) Definitions. As used in this clause:
Acquisition cost means the
acquisition cost recorded in the
Contractor’s property control system or,
in the absence 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 all
property owned by or leased to the
Government or acquired by the
Government under the terms of the
contract. It includes both Governmentfurnished property and contractoracquired property as defined in FAR
45.101.
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
nongovernmental purposes.
Rental time means the number of
hours, to the nearest whole hour, rented
property is actually used for
nongovernmental 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 (less normal
wear and tear).
(b) Use of Government property. The
Contractor may use the Government
property without charge in the
performance of—
(1) Contracts with the Government
that specifically authorize such use
without charge;
(2) Subcontracts of any tier under
Government prime contracts if the
Contracting Officer having cognizance
of the prime contract—
(i) Approves a subcontract specifically
authorizing such use; or
(ii) Otherwise authorizes such use in
writing; and
(3) Other work, if the Contracting
Officer specifically authorizes in writing
use without charge for such work.
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(c) Rental. If granted written
permission by the Contracting Officer,
or if it is specifically provided for in the
Schedule, the Contractor may use the
Government property (except material)
for a rental fee for work other than that
provided in paragraph (b) of this clause.
Authorizing such use of the Government
property does not waive any rights of
the Government to terminate the
Contractor’s right to use the Government
property. The rental fee shall be
determined in accordance with the
following paragraphs.
(d) General. (1) Rental requests shall
be submitted to the Administrative
Contracting Officer (ACO), identify the
property for which rental is requested,
propose a rental period, and compute an
estimated rental charge by using the
Contractor’s best estimate of rental time
in the formulae described in paragraph
(e) of this clause.
(2) The Contractor shall not use
Government property for
nongovernmental purposes, including
Independent Research and
Development, until a rental charge for
real property, or estimated rental charge
for other property, is agreed upon.
Rented property shall be used only on
a non-interference basis.
(e) Rental charge.—(1) Real property
and associated fixtures. (i) The
Contractor shall obtain, at its expense, a
property appraisal from an independent
licensed, accredited, or certified
appraiser that computes a monthly,
daily, or hourly rental rate for
comparable commercial property. The
appraisal may be used to compute
rentals under this clause throughout its
effective period or, if an effective period
is not stated in the appraisal, for one
year following the date the appraisal
was performed. The Contractor shall
submit the appraisal to the ACO at least
30 days prior to the date the property is
needed for nongovernmental use.
Except as provided in paragraph
(e)(1)(iii) of this clause, the ACO shall
use the appraisal rental rate to
determine a reasonable 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 appraisal
rental rates shall be divided by 720 or
24, respectively, to determine an hourly
rental rate.
(iii) When the ACO believes the
appraisal rental rate is unreasonable, the
ACO shall promptly notify the
Contractor. The parties may agree on an
alternative means for computing a
reasonable rental charge.
(iv) The Contractor shall obtain, at its
expense, additional property appraisals
in the same manner as provided in
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43585
paragraph (e)(1)(i) if the effective period
has expired and the Contractor desires
the continued use of property for
nongovernmental use. The Contractor
may obtain additional appraisals within
the effective period of the current
appraisal if the market prices decrease
substantially.
(2) Other Government property. The
Contractor may elect to compute the
rental charge using the appraisal
method described in paragraph (e)(1) of
this clause subject to the constraints
therein or the following formula in
which rental time shall be expressed in
increments of not less than one hour
with portions of hours rounded to the
next higher hour: The rental charge is
calculated by multiplying 2 percent of
the acquisition cost by the hours of
rental time, and dividing by 720.
(3) Alternative methodology. The
Contractor may request consideration of
an alternative basis for computing the
rental charge if it considers the monthly
rental rate or a time-based rental
unreasonable or impractical.
(f) Rental payments. (1) Rent is due 60
days following completion of the rental
period or as otherwise specified in the
contract. The Contractor shall compute
the rental due, and furnish records or
other supporting data in sufficient detail
to permit the ACO to verify the rental
time and computation. Payment shall be
made by check payable to the Treasurer
of the United States and sent to the
contract administration office identified
in this contract, unless otherwise
specified by the Contracting Officer.
(2) Interest will be charged if payment
is not made by the date specified in
paragraph (f)(1) of this clause. 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) 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.
(g) Use revocation. At any time during
the rental period, the Government may
revoke nongovernmental 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 (less normal wear
and tear), or both.
(h) Unauthorized use. The
unauthorized use of Government
property can subject a person to fines,
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imprisonment, or both, under 18 U.S.C.
641.
(End of clause)
52.245–10
[Amended]
Building, Washington, DC, 20405, (202)
501–4755, for information pertaining to
status or publication schedules. Please
cite FAC 2005–05, Technical
Amendment.
6. Amend section 52.245–10 in the
List of Subjects in 48 CFR Part 4
introductory paragraph by removing
Government procurement.
‘‘45.302–6(d)’’ and adding ‘‘45.302–6(c)’’
Dated: July 20, 2005.
in its place.
I
52.245–11
[Amended]
7. Amend section 52.245–11 in the
introductory paragraph by removing
‘‘45.302–6(e)(1)’’ and adding ‘‘45.302–
6(d)(1)’’ in its place.
I
[FR Doc. 05–14670 Filed 7–26–05; 8:45 am]
BILLING CODE 6820–EP–S
Julia B. Wise,
Director, Contract Policy Division.
Therefore, DoD, GSA, and NASA
amend 48 CFR part 4 as set forth below:
I
PART 4—ADMINISTRATIVE MATTERS
1. The authority citation for 48 CFR
part 4 is revised to read as follows:
I
Authority: 40 U.S.C. 121(c); 10 U.S.C.
chapter 137; and 42 U.S.C. 2473(c).
DEPARTMENT OF DEFENSE
4.1102
GENERAL SERVICES
ADMINISTRATION
[Amended]
2. Amend section 4.1102 by removing
from paragraph (c)(1)(ii) ‘‘52.204–
7(g)(1)(i)(3)’’ and adding ‘‘52.204–
7(g)(1)(i)(C)’’ in its place.
I
NATIONAL AERONAUTICS AND
SPACE ADMINISTRATION
ACTION:
Small Entity Compliance Guide.
SUMMARY: This document is issued
under the joint authority of the
Secretary of Defense, the Administrator
of General Services and the
Administrator for the National
Aeronautics and Space Administration.
This Small Entity Compliance Guide has
been prepared in accordance with
Section 212 of the Small Business
Regulatory Enforcement Fairness Act of
1996. It consists of a summary of rules
appearing in Federal Acquisition
Circular (FAC) 2005–05 which amend
the FAR. An asterisk (*) next to a rule
indicates that a regulatory flexibility
analysis has been prepared. Interested
parties may obtain further information
regarding these rules by referring to FAC
2005–05 which precedes this document.
These documents are also available via
the Internet at https://www.acqnet.gov/
far.
[FR Doc. 05–14671 Filed 7–26–05; 8:45 am]
FOR FURTHER INFORMATION CONTACT
BILLING CODE 6820–EP–S
48 CFR Part 4
Laurieann Duarte, FAR Secretariat, (202)
501–4755. For clarification of content,
contact the analyst whose name appears
in the table below.
[FAC 2005–05; Item VI]
DEPARTMENT OF DEFENSE
Federal Acquisition Regulation;
Technical Amendment
Department of Defense (DoD),
General Services Administration (GSA),
and National Aeronautics and Space
Administration (NASA).
ACTION: Final rule.
AGENCIES:
This document makes an
amendment to the Federal Acquisition
Regulation (FAR) in order to make an
editorial correction.
DATES: Effective Date: July 27, 2005.
FOR FURTHER INFORMATION CONTACT: The
FAR Secretariat, Room 4035, GS
SUMMARY:
GENERAL SERVICES
ADMINISTRATION
NATIONAL AERONAUTICS AND
SPACE ADMINISTRATION
48 CFR Chapter 1
Federal Acquisition Regulation; Small
Entity Compliance Guide
AGENCIES: Department of Defense (DoD),
General Services Administration (GSA),
and National Aeronautics and Space
Administration (NASA).
LIST OF RULES IN FAC 2005–05
Item
Subject
I ............
II ...........
III ..........
*IV ........
V ...........
VI ..........
Definition of Information Technology (Interim) ....................................................................................
Documentation Requirement for Limited Sources under Federal Supply Schedules ........................
Payment Withholding ...........................................................................................................................
Confirmation of HUBZone Certification (Interim) ................................................................................
Government Property Rental and Special Tooling .............................................................................
Technical Amendment.
SUPPLEMENTARY INFORMATION:
Summaries for each FAR rule follow.
For the actual revisions and/or
amendments to these FAR cases, refer to
the specific item number and subject set
forth in the documents following these
item summaries.
FAC 2005–05 amends the FAR as
specified below:
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FAR case
Item I—Definition of Information
Technology(FAR Case 2004–030)
This interim rule amends FAR
2.101(b) to revise the definition of
‘‘information technology’’ to reflect the
recent changes to the definition
resulting from the enactment of Public
Law 108–199.
The new language at Section 535(b) of
Division F of Public law 108–199
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2004–030
2005–004
2004–003
2005–009
2002–015
Analyst
Davis.
Nelson.
Olson.
Cundiff.
Parnell.
permanently revises the term
‘‘information technology,’’ which is
defined at 40 U.S.C. 11101, to add
‘‘analysis’’ and ‘‘evaluation’’ and to
clarify the term ‘‘ancillary equipment.’’
This permanent change to the
terminology necessitated this interim
rule to amend the FAR.
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]]>Agencies
[Federal Register Volume 70, Number 143 (Wednesday, July 27, 2005)]
[Rules and Regulations]
[Pages 43583-43586]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-14670]
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 45 and 52
[FAC 2005-05; FAR Case 2002-015; Item V]
RIN 9000-AJ99
Federal Acquisition Regulation; Government Property Rental and
Special Tooling
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council (Councils) have agreed on a final rule
amending the Federal Acquisition Regulation (FAR) to incorporate a
class deviation regarding use and charges, which has been applicable to
the Department of Defense since 1998. This deviation is appropriate for
application across the Federal Government. The change clarifies the
basis for determining the rental charges for the use of Government
property and is intended to promote the dual use of such property. The
final rule specifically impacts contracting officers, property
administrators, and contractors responsible for the management of
Government property.
DATES: Effective Date: August 26, 2005.
FOR FURTHER INFORMATION CONTACT: The FAR Secretariat at (202) 501-4755
for information pertaining to status or publication schedules. For
clarification of content, contact Ms. Jeritta Parnell, Procurement
Analyst, at (202) 501-4082. Please cite FAC 2005-05, FAR case 2002-015.
SUPPLEMENTARY INFORMATION:
A. Background
DoD, GSA, and NASA published a proposed rule in the Federal
Register at 69 FR 42544, July 15, 2004, to incorporate two Department
of Defense class deviations, 98-O0010, Use and Charges, and 98-O0011,
Special Tooling, into FAR Part 45 and make appropriate revisions to FAR
52.245-9, Use and Charges, and FAR 52.245-17, Special Tooling. The
final rule establishes, as the basis for rental charges, the time
property is actually used for commercial purposes, rather than the time
available for use; permits contractors to obtain property appraisals
from independent appraisers; permits appraisal-based rentals for all
property; and allows contracting officers to consider alternate bases
for determining rentals. The final rule does not change the
requirements for special tooling as originally proposed by the Councils
because the Councils are now considering deleting the clause in its
entirety rather than revising it based on comments received on the
proposed rule. The Councils plan to solicit comments on the proposed
deletion of the FAR clause at 52.245-17, Special Tooling, under another
proposed rule.
Four respondents provided public comments. Consideration of these
comments resulted in only minor administrative changes to the proposed
rule. The resolution of the comments follows:
Summary of Comments Received/Disposition
1. Proposed Rule (PR): 52.245-9. Deviation to the clause at 52.245-
9 sets a fair and equitable method for applying a rent usage when
Government property is used for commercial purposes or existing
Government property is used for future contracts and equitable
adjustment is needed to eliminate unfair competitive advantage.
Concur.
2. PR: 52.245-17. All respondents proposed the elimination of the
special tooling clause.The Councils plan to solicit comments on the
proposed deletion of the FAR clause at 52.245-17, Special Tooling,
under another proposed rule.
3. PR: 52.245-9(h). Amend paragraph (h) to strike ``person'' and
replace it with ``contractor.'' Rationale is that a company would
control their personnel through their administrative procedures when
wrong is discovered and the Government may control the contractor in a
like manner.
Nonconcur. The legal basis for this citation, 18 U.S.C. 641,
applies to an individual, as well as a corporate entity.
4. PR: 52.245-9. It may make sense to provide a time frame where an
immediate need for usage of property from another contract becomes
imminent and use of the property would not interfere with the owning
contract, and the ACO is not available for authorization, a period of
48 hours, documented by the losing contract, would be allowed for
transfer of tooling and use of such tooling be paid for at a higher
rate than the proposed schedule. Tooling would be returned immediately
if authorization were not received.
[[Page 43584]]
Nonconcur. While there may be some instances where it would appear
to be beneficial to allow contractors to make such a decision, other
business and regulatory factors, including those associated with
competition and appropriations law, must be considered before
alternative use is allowed. This decision should be reserved to the
Administrative Contracting Officer.
5. PR: 45.106. Add at 45.106(h)(3), ``Contractors shall be
encouraged to submit plans and enter into advance agreements to
minimize unnecessary delays, administrative costs and possible legal
exposure.'' Approved plans for use and charges of a contract, program,
site, or entity would be beneficial to both the Government and the
contractor in that the clause, as now written, will cause unnecessary
delays, administrative cost and legal exposure. This type of plan would
be similar to a site scrap plan as now provided for in FAR Part 45.
Nonconcur. Approval of commercial use, as part of a general plan or
agreement, limits the Government's ability to regulate that said use
serves the best interests of the Government. It may also restrict the
Government's right to recall that property when needed to satisfy what
the Government determines to be a greater need, e.g., war fighting,
civil defense, disaster assistance.
6. PR: 45.306-5. Eliminate the policy at 45.306-5 for special
tooling.
The Councils plan to solicit comments on the proposed deletion of
FAR 52.245-17, Special Tooling, and the related coverage at 45.306-5
under another proposed rule.
7. PR: 52.245-9(a). Change the definition of Government property to
mean all ``real and personal'' property.
Nonconcur. This change is unnecessary.
8. PR: 52.245-9(c). Revise the exception of the use of Government
property in this paragraph to be described as ``production'' material.
Non-production material (expendable items) may be suitable for rental
in some circumstances.
Nonconcur. There is no FAR classification differentiating between
production material and non-production expendables. Rather, when an
item does not lose its identity or is not consumed during the
production process, it should not be classified as material. The
property is more appropriately classified as equipment, agency peculiar
property, or another class of property dependent upon its nature and
use.
9. PR: 52.245-9(d)(2). Change estimated rental charge for ``other''
property to ``personal'' property.
Nonconcur. This change is unnecessary.
10. PR: 52.245-9(g). Request an additional requirement that the
Government shall disclose any intent to revoke use authorization prior
to agreeing to contractor use. A practice of full disclosure is
necessary as part of good relations and business practices, otherwise
contractors may acquire resources unnecessarily.
Nonconcur. There are many reasons why the Government may choose to
revoke a use agreement. Not all of these are known at the time of
approval. Some may involve emergency conditions that could not be
anticipated at the initiation of an agreement. Therefore, it is not in
the Government's best interest to limit its options by tacitly agreeing
that there is no intention to revoke use.
11. PR: 52.245-9(h). Delete the section that states that
unauthorized use of Government property can subject a person to
consequences under 18 U.S.C. 641. There is no need to restate this law,
or any other law, in a regulation. The contractor has an obligation to
establish internal controls to prevent unauthorized use, and including
a reference to the United States Code is unnecessary.
Nonconcur. We believe that it is beneficial to advise those who use
Government property of the ramifications of unauthorized use. The
repetition of the legal authority has precedent in other parts of the
FAR, particularly when criminal liability is the result of
inappropriate action. See also Comment No. 3, above.
This is not a significant regulatory action and, therefore, was not
subject to review under Section 6(b) of Executive Order 12866,
Regulatory Planning and Review, dated September 30, 1993. This rule is
not a major rule under 5 U.S.C. 804.
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 within the meaning of the Regulatory
Flexibility Act, 5 U.S.C. 601, et seq., because the rule only clarifies
FAR coverage to clarify the basis for determining rental charges for
the use of Government property and is intended to promote the dual use
of such property. Therefore, this rule will allow small businesses more
flexibility in the use of Government property.
C. Paperwork Reduction Act
The Paperwork Reduction Act does apply; however, these changes to
the FAR do not impose additional information collection requirements to
the paperwork burden previously approved under OMB Control Number 9000-
0075.
List of Subjects in 48 CFR Parts 45 and 52
Government procurement.
Dated: July 20, 2005.
Julia B. Wise,
Director, Contract Policy Division.
0
Therefore, DoD, GSA, and NASA amend 48 CFR parts 45 and 52 as set forth
below:
0
1. The authority citation for 48 CFR parts 45 and 52 is revised to read
as follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
PART 45--GOVERNMENT PROPERTY
0
2. Amend section 45.106 by adding paragraph (h) to read as follows:
45.106 Government property clauses.
* * * * *
(h)(1) Insert the clause at 52.245-9, Use and Charges--
(i) In fixed-price or labor-hour solicitations and contracts under
which the Government will furnish property for performance of the
contract;
(ii) In all cost-reimbursement and time-and-materials solicitations
and contracts; and
(iii) In solicitations and contracts when a consolidated facilities
contract or a facilities use contract is contemplated.
(2) The contracting officer may modify the clause if an alternative
rental methodology is used in accordance with 45.403.
45.302-6 [Amended]
0
3. Amend section 45.302-6 by removing paragraph (c); and redesignating
paragraphs (d) and (e) as paragraphs (c) and (d), respectively.
0
4. Revise section 45.403 to read as follows:
45.403 Rental--Use and Charges clause.
(a) The contracting officer shall charge contractors rent for using
Government production and research property, 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. If the agency head determines it to be in
the Government's interest, an alternative method for computing rent may
be used.
[[Page 43585]]
(b) The contracting officer shall ensure the collection of any rent
due the Government from the contractor.
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
5. Revise section 52.245-9 to read as follows:
52.245-9 Use and Charges.
As prescribed in 45.106(h), insert the following clause:
USE AND CHARGES (AUG 2005)
(a) Definitions. As used in this clause:
Acquisition cost means the acquisition cost recorded in the
Contractor's property control system or, in the absence 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 all property owned by or leased to the
Government or acquired by the Government under the terms of the
contract. It includes both Government-furnished property and
contractor-acquired property as defined in FAR 45.101.
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 nongovernmental purposes.
Rental time means the number of hours, to the nearest whole hour,
rented property is actually used for nongovernmental 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 (less normal wear and tear).
(b) Use of Government property. The Contractor may use the
Government property without charge in the performance of--
(1) Contracts with the Government that specifically authorize such
use without charge;
(2) Subcontracts of any tier under Government prime contracts if
the Contracting Officer having cognizance of the prime contract--
(i) Approves a subcontract specifically authorizing such use; or
(ii) Otherwise authorizes such use in writing; and
(3) Other work, if the Contracting Officer specifically authorizes
in writing use without charge for such work.
(c) Rental. If granted written permission by the Contracting
Officer, or if it is specifically provided for in the Schedule, the
Contractor may use the Government property (except material) for a
rental fee for work other than that provided in paragraph (b) of this
clause. Authorizing such use of the Government property does not waive
any rights of the Government to terminate the Contractor's right to use
the Government property. The rental fee shall be determined in
accordance with the following paragraphs.
(d) General. (1) Rental requests shall be submitted to the
Administrative Contracting Officer (ACO), identify the property for
which rental is requested, propose a rental period, and compute an
estimated rental charge by using the Contractor's best estimate of
rental time in the formulae described in paragraph (e) of this clause.
(2) The Contractor shall not use Government property for
nongovernmental purposes, including Independent Research and
Development, until a rental charge for real property, or estimated
rental charge for other property, is agreed upon. Rented property shall
be used only on a non-interference basis.
(e) Rental charge.--(1) Real property and associated fixtures. (i)
The Contractor shall obtain, at its expense, a property appraisal from
an independent licensed, accredited, or certified appraiser that
computes a monthly, daily, or hourly rental rate for comparable
commercial property. The appraisal may be used to compute rentals under
this clause throughout its effective period or, if an effective period
is not stated in the appraisal, for one year following the date the
appraisal was performed. The Contractor shall submit the appraisal to
the ACO at least 30 days prior to the date the property is needed for
nongovernmental use. Except as provided in paragraph (e)(1)(iii) of
this clause, the ACO shall use the appraisal rental rate to determine a
reasonable 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 appraisal rental rates shall be divided by 720 or 24,
respectively, to determine an hourly rental rate.
(iii) When the ACO believes the appraisal rental rate is
unreasonable, the ACO shall promptly notify the Contractor. The parties
may agree on an alternative means for computing a reasonable rental
charge.
(iv) The Contractor shall obtain, at its expense, additional
property appraisals in the same manner as provided in paragraph
(e)(1)(i) if the effective period has expired and the Contractor
desires the continued use of property for nongovernmental use. The
Contractor may obtain additional appraisals within the effective period
of the current appraisal if the market prices decrease substantially.
(2) Other Government property. The Contractor may elect to compute
the rental charge using the appraisal method described in paragraph
(e)(1) of this clause subject to the constraints therein or the
following formula in which rental time shall be expressed in increments
of not less than one hour with portions of hours rounded to the next
higher hour: The rental charge is calculated by multiplying 2 percent
of the acquisition cost by the hours of rental time, and dividing by
720.
(3) Alternative methodology. The Contractor may request
consideration of an alternative basis for computing the rental charge
if it considers the monthly rental rate or a time-based rental
unreasonable or impractical.
(f) Rental payments. (1) Rent is due 60 days following completion
of the rental period or as otherwise specified in the contract. The
Contractor shall compute the rental due, and furnish records or other
supporting data in sufficient detail to permit the ACO to verify the
rental time and computation. Payment shall be made by check payable to
the Treasurer of the United States and sent to the contract
administration office identified in this contract, unless otherwise
specified by the Contracting Officer.
(2) Interest will be charged if payment is not made by the date
specified in paragraph (f)(1) of this clause. Interest will accrue at
the ``Renegotiation Board Interest Rate'' (published in the Federal
Register semiannually on or about January 1\st\ and July 1\st\) for the
period in which the rent is due.
(3) 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.
(g) Use revocation. At any time during the rental period, the
Government may revoke nongovernmental 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 (less
normal wear and tear), or both.
(h) Unauthorized use. The unauthorized use of Government property
can subject a person to fines,
[[Page 43586]]
imprisonment, or both, under 18 U.S.C. 641.
(End of clause)
52.245-10 [Amended]
0
6. Amend section 52.245-10 in the introductory paragraph by removing
``45.302-6(d)'' and adding ``45.302-6(c)'' in its place.
52.245-11 [Amended]
0
7. Amend section 52.245-11 in the introductory paragraph by removing
``45.302-6(e)(1)'' and adding ``45.302-6(d)(1)'' in its place.
[FR Doc. 05-14670 Filed 7-26-05; 8:45 am]
BILLING CODE 6820-EP-S
