45.301 Use and rental
Source: FAR 45.301 on acquisition.gov
Government property is generally provided rent-free for contract performance, but rental charges or approvals are required for non-Government or commercial use, with specific rules for nonprofits and usage thresholds.
Overview
FAR 45.301 outlines the policies and procedures for contractor use and rental of Government property. It establishes when Government property may be provided rent-free, when rental charges apply, and the conditions under which contractors—especially nonprofit organizations—may use Government property for research, development, or educational purposes. The section also addresses the use of Government property for commercial purposes and the need for fair rental or other consideration, as well as the requirement for prior approval if non-Government use exceeds 25% of total use.
Key Rules
- Rent-Free Use for Contract Performance
- Government property is typically provided rent-free for use under the contract to which it is accountable or otherwise authorized.
- Rental Charges for Non-Government Use
- Rental charges apply when Government property is used for non-Government commercial purposes, except when left in place for mobilization or future production.
- Nonprofit Organization Use
- Nonprofits may use Government property rent-free for research, development, or education if it serves the national interest, does not benefit profit-making organizations, and the Government receives a direct benefit.
- Use Under Other Contracts
- Contractors may use Government property under other fixed-price contracts with fair rental or other consideration, as determined by the contracting officer.
- Cost-Type Contracts
- Rent-free use may be authorized for cost-type contracts other than the accountable contract.
- Commercial Use and Approval Threshold
- Contractors may use Government property for commercial purposes with consideration; prior approval is required if non-Government use exceeds 25% of total use.
Responsibilities
- Contracting Officers: Authorize use, determine fair rental/consideration, and obtain approvals for high-percentage non-Government use.
- Contractors: Use Government property only as authorized, pay rental charges when required, and seek approvals for commercial/non-Government use.
- Agencies: Oversee compliance and ensure proper authorization and benefit to the Government.
Practical Implications
- Ensures Government property is used appropriately and not unfairly leveraged for commercial gain.
- Contractors must track and report usage, seek necessary approvals, and understand when rental charges apply.
- Noncompliance can result in financial penalties or loss of property use privileges.
This subpart prescribes policies and procedures for contractor use and rental of Government property.
(a) Government property shall normally be provided on a rent-free basis in performance of the contract under which it is accountable or otherwise authorized.
(b) Rental charges, to the extent authorized do not apply to Government property that is left in place or installed on contractor-owned property for mobilization or future Government production purposes; however, rental charges shall apply to that portion of property or its capacity used for non-government commercial purposes or otherwise authorized for use.
(c) The contracting officer cognizant of the Government property may authorize the rent-free use of property in the possession of nonprofit organizations when used for research, development, or educational work and-
(1) The use of the property is in the national interest;
(2) The property will not be used for the direct benefit of a profit-making organization; and
(3) The Government receives some direct benefit, such as rights to use the results of the work without charge, from its use.
(d) In exchange for consideration as determined by the cognizant contracting officer(s), the contractor may use Government property under fixed-price contracts other than the contract to which it is accountable. When, after contract award, a contractor requests the use of Government property, the contracting officer shall obtain a fair rental or other adequate consideration if use is authorized.
(e) The cognizant contracting officer(s) may authorize the use of Government property on a rent-free basis on a cost type Government contract other than the contract to which it is accountable.
(f) In exchange for consideration as determined by the cognizant contracting officer, the contractor may use Government property for commercial use. Prior approval of the Head of the Contracting Activity is required where non-Government use is expected to exceed 25 percent of the total use of Government and commercial work performed.