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Panoptic Enterprises' FEDERAL CONTRACTS DISPATCH

DATE: July 15, 2004

SUBJECT: Federal Acquisition Regulation (FAR); Government Property Rental and Special Tooling

SOURCE: Federal Register, July 15, 2004, Vol. 69, No. 135, page 42543

AGENCIES: Department of Defense (DOD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA)

ACTION: Proposed Rule

SYNOPSIS: It is proposed that FAR Part 45, Government Property, and corresponding clauses be amended to clarify the basis for determining the rental charges for the use of government property, and address the issue of title to special tooling.

DATES: Comments should be submitted on or before September 15, 2004.

FOR FURTHER INFORMATION CONTACT: Jeritta Parnell, 202-501-4082.

SUPPLEMENTAL INFORMATION: The proposed rule would amend FAR Part 45, FAR 52.245-9, Use and Charges, and FAR 52.245-17, Special Tooling, to incorporate two DOD class deviations that were originally authorized in 1998 and which remain in effect: 98-O0010, Use and Charges, and 98-O0011, Special Tooling. In 1999, both deviations were extended "until the FAR is revised" (Deviations 99-O0011 and 99O0012, respectively). Deviation 98-O0010 (and superseding 99-O0011) encourages dual-use of DOD property, and Deviation 98-O0011 (and superseding 99-O0012) directs all DOD contracting activities to use the April 1984 edition of the Special Tooling clause instead of the current FAR 52.245-17, and addresses the issue of title to special tooling. Both deviations are considered appropriate for application government-wide.

The following are the main changes being proposed by this rule:

• FAR 45.106, Government Property Clauses, would be amended to add paragraph (h), which would state: "Insert the clause at [FAR] 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) when a consolidated facilities contract or a facilities use contract is contemplated. The contracting officer may modify the clause if an alternative rental methodology is used in accordance with [FAR] 45.403 [Rental -- Use and Charges Clause]."
  
  
• FAR 45.306-5, Contract Clause, which contains the prescription for use of FAR 52.245-17, would be amended to remove the requirement that the clause be used when the contract will include special tooling provided by the government.
  
  
• FAR 45.403, Rental -- Use and Charges Clause, would be revised to remove language pertaining to "rent for classes of production and research property other than plant equipment" and replace it with "If the agency head determines it to be in the government's interest, an alternative method for computing rent may be used."
  
  
• FAR 52.245-9, Uses and Charges, would be completely revised. The revised clause would:
  
  
  • Make the time that property is actually used for commercial purposes the basis for calculating rental (definition of "rental time" in paragraph (a)).
    
    
  • It would permit contractors to obtain property appraisals from independent appraisers (paragraph (e)).
    
    
  • It would permit appraisal-based rentals for all property (paragraph (e)(2)).
    
    
  • It would allow contracting officers to consider alternate bases for determining rentals (paragraph (e)(3)).
  
  
  
• FAR 52.245-17, Special Tooling, would be completely revised (bringing it back to the 1984 version with some changes). The most significant change would be the addition of the statement that "the government has the right to take title to all special tooling...until such time as that right to take title is relinquished by the Contracting Officer..." This language is not included in the 1984 version of the clause.

FOR FURTHER INFORMATION CONTACT: Panoptic Enterprises at 703-451-5953 or by e-mail to Panoptic@FedGovContracts.com.

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