[Federal Register: July 15, 2004 (Volume 69, Number 135)]
[Proposed Rules]
[Page 42543-42547]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15jy04-23]
[[Page 42543]]
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Part III
Department of Defense
General Services Administration
National Aeronautics and Space Administration
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48 CFR Parts 45 and 52
Federal Acquisition Regulation; Government Prope
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rty Rental and Special Tooling; Proposed Rule
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 45 and 52
[FAR Case 2002-015]
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: Proposed rule.
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SUMMARY: The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council (Councils) are proposing to amend the
Federal Acquisition Regulation (FAR) by incorporating the Class
Deviations regarding use and charges and special tooling, both of which
have been applicable to the Department of Defense since 1998. Both
deviations are 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. It also revises the special tooling
clause and addresses the issue of title to special tooling.
DATES: Interested parties should submit comments in writing on or
before September 13, 2004 to be considered in the formulation of a
final rule.
ADDRESSES: Submit comments identified by FAR case 2002-015 by any of
the following methods:
Federal eRulemaking Portal: http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.regulations.gov.
Follow the instructions for submitting comments.
Agency Web Site: http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.acqnet.gov/far/ProposedRules/proposed.htm.
Click on the FAR case number to submit comments. E-mail: farcase.2002-015@gsa.gov. Include FAR case 2002-
015 in the subject line of the message.
Fax: 202-501-4067.
Mail: General Services Administration, Regulatory
Secretariat (VR), 1800 F Street, NW, Room 4035, ATTN: Laurie Duarte,
Washington, DC 20405.
Instructions: Please submit comments only and cite FAR case 2002-
015 in all correspondence related to this case. All comments received
will be posted without change to http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.acqnet.gov/far/ProposedRules/proposed.htm
, including any personal information
provided.
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 FAR case 2002-015.
SUPPLEMENTARY INFORMATION:
A. Background
The proposed rule incorporates two Department of Defense class
deviations 98-O0010, Use and Charges, and 98-O0011, Special Tooling,
into FAR Part 45 and makes appropriate revisions to FAR 52.245-9, Use
and Charges, and FAR 52.245-17, Special Tooling. The proposed rule
establishes, as the basis for rental charges, the time property is
actually used for commercial purposes, rather than 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. These changes are intended to encourage dual use of Government
property. The revised rental calculation would also be used in the
procedures for eliminating competitive advantage associated with
contractor possession of Government property (see FAR Subpart 45.2).
With respect to special tooling, the proposed rule substitutes a
substantially revised special tooling clause for the clause at 52.245-
17, Special Tooling, and waives that portion of the clause at 52.245-2,
Government Property (Fixed-Price Contracts), that states that special
tooling is subject to title provisions in that latter clause. The
revised clause adds title provisions.
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 Councils do not expect this proposed rule to 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.
Adoption of the proposed changes may have a slight reduction in
recordkeeping requirements for civilian agency contractors and would
decrease the amount of information required under the reporting
requirements. An Initial Regulatory Flexibility Analysis has,
therefore, not been performed. The Councils invite comments from small
businesses and other interested parties. The Councils will consider
comments from small entities concerning the affected FAR Parts 45 and
52 in accordance with 5 U.S.C. 610. Interested parties must submit such
comments separately and should cite 5 U.S.C. 601, et seq. (FAR case
2002-015), in correspondence.
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.
We are publishing the current burdens associated with this case for
your information. The following information for OMB Clearance 9000-0075
is provided:
Annual Reporting Burden:
FAR 52.245-9 and 45.302-6(c). The Government property is provided
to contractors on a rent-free use basis. However, we estimate that 10
percent of all contractors use property that requires rental payments.
We estimate that 500 contractors submit 4 quarterly reports, and that
it takes 1 hour to store, retrieve, prepare and submit the report.
Respondents: 500
Responses per respondent: 4
Total annual responses: 2,000
Preparation hours per response: 1
Total response burden hours: 2000
FAR 52.245-17(f)(1) and 45.306-5. We estimate that approximately
900 contractors have special tooling. Using the 900 as a baseline, we
estimate that 75 contractors also must maintain records on special
tooling that they actually produce. We estimate that each contractor
maintains 200 records and it takes 30 minutes to prepare each record.
Respondents: 75
Responses per respondent: 200
Total annual responses: 15,000
Preparation hours per response: .5
Total response burden hours: 7,500
The FAR requires three lists. We added hours for the initial list
of special tooling and the final list of special tooling. The excess
list of special tooling is covered in the paragraph below. We
calculated additional hours as follows:
Respondents: 900
Responses per respondent: 10
Total annual responses: 9,000
Preparation hours per response: 1.5
Total response burden hours: 13,500
FAR 52.245-17(h). Of the 75 contractors maintaining special tooling
[[Page 42545]]
in accordance with this clause, we estimate that 15 percent, or
approximately 12 contractors submit excess listings and that it takes
each contractor 2 hours to store, retrieve, prepare and submit the
information.
Respondents: 12
Responses per respondent: 1
Total annual responses: 12
Preparation hours per response: 2
Total response burden hours: 24
If this rule is approved as a final rule, this coverage will be
deleted and the burden hours will be slightly reduced.
FAR 52.245-17(i)(4) requires contractors to submit two copies of
all special tooling lists to the ACO, PCO, and ICP unless otherwise
directed. We calculate the hours as follows:
Respondents: 900
Responses per respondent: 10
Total annual responses: 9,000
Preparation hours per response: .1
Total response burden hours: 900
Requester may obtain a copy of the information collection from the
General Services Administration, FAR Secretariat (VR), Room 4035,
Washington, DC 20405, telephone (202) 501-4755. Please cite OMB Control
Number 9000-0075, Government Property, in all correspondence.
List of Subjects in 48 CFR Parts 45 and 52
Government procurement.
Dated: July 7, 2004.
Laura Auletta,
Director, Acquisition Policy Division.
Therefore, DoD, GSA, and NASA propose amending 48 CFR parts 45 and
52 as set forth below:
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
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) 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]
3. Amend section 45.302-6 by removing paragraph (c); and
redesignating paragraphs (d) and (e) as paragraphs (c) and (d),
respectively.
4. Revise section 45.306-5 to read as follows:
45.306-5 Contract clause.
Insert the clause at 52.245-17, Special Tooling, in solicitations
and contracts when--
(a) A fixed-price contract is contemplated;
(b) The Government desires to reserve the right to obtain title in
the special tooling acquired by the contractor; and
(c) The Special Tooling is not a required deliverable.
5. 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.
(b) The contracting officer shall ensure the collection of any rent
due the Government from the contractor.
45.505-1 [Amended]
6. Amend section 45.505-1 in the introductory text of paragraph (a)
by adding ``or unless records are maintained as required by paragraph
(h) of the clause at 52.245-17, Special Tooling,'' after the word
``section,''
45.505-4 [Amended]
7. Amend section 45.505-4 in paragraph (a) by adding ``or unless
records are maintained as required by paragraph (h) of the clause at
52.245-17, Special Tooling,'' after ``45.505-1(b),''
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
8. Amend section 52.245-2 by revising the date of the clause;
removing the second sentence of paragraph (c)(2); and revising
paragraph (c)(3) to read as follows:
52.245-2 Government Property (Fixed-Price Contracts).
* * * * *
GOVERNMENT PROPERTY (FIXED-PRICE CONTRACTS) (DATE)
* * * * *
(c) * * *
(3) Title to each item of facilities, and special test equipment
and special tooling (other than that subject to the clause at
52.245-17, Special Tooling), acquired by the Contractor for the
Government under this contract shall pass to and vest in the
Government when its use in performing this contract commences or
when the Government has paid for it, whichever is earlier, whether
or not title previously vested in the Government.
* * * * *
9. 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 in
solicitations and contracts:
USE AND CHARGES (DATE)
(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 non-governmental
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.
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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, 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 Administrative Contracting Officer 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 administrative Contracting Officer 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 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.
(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 non-governmental 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 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 compute the rental due, and furnish records or
other supporting data in sufficient detail to permit the
administrative Contracting Officer 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
specified payment date or, in the absence of a specified date, the
61st 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) 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, imprisonment, or both, under
18 U.S.C. 641.
(End of clause)
52.245-10 [Amended]
10. 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]
11. Amend section 52.245-11 in the introductory paragraph by
removing ``45.302-6(c)(1)'' and adding ``45.302-6(d)(1)'' in its place.
12. Revise section 52.245-17 to read as follows:
52.245-17 Special Tooling.
As prescribed in 45.306-5, insert the following clause:
SPECIAL TOOLING (DATE)
(a) Definition. Special tooling means jigs, dies, fixtures,
molds, patterns, taps, gauges, other equipment and manufacturing
aids, all components of these items, and replacement of these items
that are of such a specialized nature that without substantial
modification or alteration their use is limited to the development
or production of particular supplies or parts thereof or performing
particular services. It does not include material, special test
equipment, facilities (except foundations and similar improvements
necessary for installing special tooling), general or special
machine tools, or similar capital items.
(b) Applicability. This clause applies to all special tooling
manufactured or acquired under this contract other than that
identified as a deliverable.
(c) Special tooling, for the purpose of this clause, does not
include any item acquired by the Contractor before the effective
date of this contract, or replacement of such items, whether or not
altered or adapted for use in performing this contract, or items
specifically excluded by the Schedule of this contract.
(d) Title. The Government has the right to take title to all
special tooling subject to this clause until such time as that right
to take title is relinquished by the Contracting Officer as provided
for in paragraphs (k)(3) and (4) of this clause.
(e) Use of special tooling. The Contractor agrees to use the
special tooling only in performing this contract or as otherwise
approved by the Contracting Officer.
(f) Initial list of special tooling. If the Contracting Officer
so requests, the Contractor shall furnish the Government an initial
list of all special tooling acquired or manufactured by the
Contractor for performing this contract. The list shall specify the
nomenclature, tool number, related product part number (or service
performed), retention determination (see paragraph (e) of this
clause) original acquisition date and unit acquisition cost of the
special tooling. The list shall separately identify special tooling
that has become obsolete due to design or specification changes. The
list shall be furnished within 60 days after delivery of the first
production end item under this contract unless a later date is
prescribed.
(g) Contractor's offer to retain special tooling. The Contractor
may indicate a desire to retain certain items of special tooling at
the time it furnishes a list or notification pursuant to paragraph
(f) or (j) of this clause. The Contractor shall furnish a written
offer designating those items that it wishes to retain by
specifically listing the items to include identifying the items as
to the particular products, parts, or services for which the items
were used or designed. The offer shall be made on one of the
following bases:
(1) An amount shall be offered for retention of the items free
of any Government interest. This amount should ordinarily not be
less than the current fair value of the items, considering among
other things, the value of the items to the Contractor for use in
future work.
(2) Retention may be requested for a limited period of time and
under terms as may be agreed to by the Government and the
Contractor. This temporary retention is subject to final disposition
pursuant to paragraph (k) of this clause.
[[Page 42547]]
(h) Property control records. The Contractor shall maintain
adequate property control records of all special tooling in
accordance with its normal industrial practice. The records shall be
made available for Government inspection at all reasonable times. To
the extent practicable, the Contractor shall identify all special
tooling subject to this clause with an appropriate stamp, serial
number, tag, or other mark.
(i) Maintenance. The Contractor shall take all reasonable steps
necessary to maintain the identity and existing condition of usable
items of special tooling from the date such items are no longer
needed by the Contractor until final disposition under paragraph (k)
of this clause. These maintenance requirements do not apply to those
items designated by the Contracting Officer for disposal as scrap or
identified as of no further interest to the Government under
paragraph (k)(4) of this clause. The Contractor is not required to
keep unneeded items of special tooling in place.
(j) Final list of special tooling. No later than 60 days prior
to the last scheduled delivery on this contract, the Contractor
shall furnish the Contracting Officer a final list of special
tooling with the same information as required for the initial list
under paragraph (f) of this clause. The final list shall include all
items, with an identification of the items not previously reported
under paragraph (f) of this clause. Special Tooling that has become
obsolete as a result of changes in design or specification that was
not previously reported under paragraph (f) of this clause shall be
separately identified. The Contracting Officer may extend this
requirement until the completion of this contract.
(k) Disposition instructions. The Contracting Officer shall
provide the Contractor with disposition instructions for special
tooling identified in a list submitted under paragraph (f) or (j) of
this clause. The instructions shall be provided within 90 days of
receipt of the list or notice, unless the period is extended by
mutual agreement. The Contracting Officer may direct disposition by
any of the methods listed in paragraphs (k)(1) through (4) of this
clause, or a combination of such methods. Any failure of the
Contracting Officer to provide specific instructions within the 90-
day period shall be construed as direction under paragraph (k)(3) of
this clause.
(1) The Contracting Officer shall give the Contractor a list
specifying the products, parts, or services for which the Government
may require special tooling and request the Contractor to transfer
title (to the extent not previously transferred under any other
clause of this contract) and deliver to the Government all usable
items of special tooling that were designed for or used in the
production or performance of such products, parts, or services and
that were on hand when such production or performance ceased.
(2) The Contracting Officer may accept or reject any offer made
by the Contractor under paragraph (g) of this clause to retain items
of special tooling or may request further negotiation of the offer.
The Contractor agrees to enter into the negotiations in good faith.
The net proceeds from the Contracting Officer's acceptance of the
Contractor's retention offer shall either be deducted from amounts
due the Contractor under this contract or shall be otherwise paid to
the Government as directed by the Contracting Officer.
(3) The Contracting Officer may direct the Contractor to sell,
or dispose of as scrap, for the account of the Government, any
special tooling reported by the Contractor under this clause. The
net proceeds of all sales shall either be deducted from amounts due
the Contractor under this contract or shall be otherwise paid to the
Government as directed by the Contracting Officer. To the extent
that the Contractor incurs any costs occasioned by compliance with
such directions for which it is not otherwise compensated, the
contract price shall be equitably adjusted in accordance with the
Changes clause of this contract.
(4) The Contracting Officer may furnish the Contractor with a
statement disclaiming further Government interest or rights in any
of the special tooling listed.
(l) Storage or shipment. The Contractor shall promptly transfer
to the Government title to the special tooling specified by the
Contracting Officer and arrange for either the shipment or the
storage of such tooling in accordance with the final disposition
instructions in paragraph (k)(1) of this clause. Tooling to be
shipped shall be properly packaged, packed, and marked in accordance
with the directions of the Contracting Officer. Tooling to be stored
shall be stored pursuant to a storage agreement between the
Government and the Contractor, and as directed by the Contracting
Officer. Tooling shipped or stored shall be accompanied by operation
sheets or other appropriate data necessary to show the manufacturing
operations or processes for which the items were used or designed.
To the extent that the Contractor incurs costs for authorized
storage or shipment under this paragraph and not otherwise
compensated for, the contract price shall be equitably adjusted in
accordance with the Changes clause of this contract.
(m) Subcontract provisions. In order to perform this contract,
the Contractor may place subcontracts (including purchase orders)
involving the use of special tooling. If the full cost of the
tooling is charged to those subcontracts, the Contractor agrees to
include in the subcontracts appropriate provisions to obtain
Government rights comparable to the rights of the Government under
this clause (unless the Contractor and the Contracting Officer agree
that such rights are not of substantial interest to the Government).
The Contractor agrees to exercise such rights for the benefit of the
Government as directed by the Contracting Officer.
(End of clause)
[FR Doc. 04-15815 Filed 7-14-04; 8:45 am]