52.208-4 Vehicle Lease Payments
Source: FAR 52.208-4 on acquisition.gov
Contractors are paid rent only for vehicles that meet contract requirements and are available for government use, with payments prorated and withheld for non-compliance or unavailability.
Overview
FAR 52.208-4, Vehicle Lease Payments, outlines the terms and conditions for payment of rent under government contracts for leasing motor vehicles (except those leased in foreign countries). The clause specifies how and when rent accrues, under what circumstances rent is withheld, and how payments are calculated and processed. It ensures that contractors are paid only for vehicles that meet contract requirements and are available for government use, and provides clear guidance on proration and invoicing.
Key Rules
- Payment Upon Invoice
- The government pays rent for each vehicle at the contract rate upon submission of proper invoices or vouchers.
- Accrual of Rent
- Rent starts from the later of contract start or vehicle delivery and continues until contract expiration or termination, but only while the vehicle is in government possession.
- Non-Compliance Withholding
- Rent does not accrue for vehicles that do not meet contract requirements or the Condition of Leased Vehicles clause until corrected or replaced.
- Unavailability/Unusability
- Rent is not paid for periods when the vehicle is unavailable or unusable due to the contractor’s failure to provide required services.
- Proration of Rent
- Monthly rent is prorated at 1/30th of the monthly rate per day; if mileage provisions apply, payment is as specified in the contract schedule.
Responsibilities
- Contracting Officers: Ensure vehicles meet contract requirements before approving rent payments; withhold rent for non-compliance or unavailability.
- Contractors: Submit proper invoices, maintain vehicles per contract, and ensure vehicles meet all requirements.
- Agencies: Oversee contract compliance and payment processing.
Practical Implications
This clause protects the government from paying for non-compliant or unusable vehicles and ensures contractors are compensated fairly for vehicles in proper condition and use. Contractors must maintain vehicles and documentation to avoid payment delays or disputes. Common issues include disputes over vehicle condition, periods of unavailability, and proper proration of rent.
As prescribed in 8.1104(a), insert the following clause in solicitations and contracts for leasing motor vehicles, unless the motor vehicles are leased in foreign countries:
Vehicle Lease Payments (Apr 1984)
(a) Upon the submission of proper invoices or vouchers, the Government shall pay rent for each vehicle at the rate(s) specified in this contract.
(b) Rent shall accrue from the beginning of this contract, or from the date each vehicle is delivered to the Government, whichever is later, and shall continue until the expiration of the contract term or the termination of this contract. However, rent shall accrue only for the period that each vehicle is in the possession of the Government.
(c) Rent shall not accrue for any vehicle that the Contracting Officer determines does not comply with the Condition of Leased Vehicles clause of this contract or otherwise does not comply with the requirements of this contract, until the vehicle is replaced or the defects are corrected.
(d) Rent shall not accrue for any vehicle during any period when the vehicle is unavailable or unusable as a result of the Contractor’s failure to render services for the operation and maintenance of the vehicle as prescribed by this contract.
(e) Rent stated in monthly terms shall be prorated on the basis of 1/30 th of the monthly rate for each day the vehicle is in the Government’s possession. If this contract contains a mileage provision, the Government shall pay rent as provided in the Schedule.
(End of clause)