7115.54

and supply contracts terminated for the convenience of the Government where a formal notice of termination was issued and include all such terminations settled during the month and those still in process of settlement. When construction contracts have been settled during the month for which the report is made, the words, "including (Number) construction contracts" will be typed into the summary opposite "Terminations Settled During the Month." The amount of interest paid on a settled termination should be shown as a separate item in the blank column following Column 21 of the form. Dates of filing of contractor's proposal should not be changed nor should claims be considered as revised solely because of the addition of interest. To afford sufficient time to prepare such reports only activities up to and including the 25th day of the month will be included therein. Any such activities occurring after the 25th day of the month will be included in the following month's report. The report will be submitted on WD AGO Form 505 (monthly Contract Termination Status Report), 1 August 1945, in triplicate, to reach the Chief of Engineers not later than the 5th day of the month following the period reported.

Contract termination status report for fixed-fee contract terminations (Reports Control Symbol WD GSP-22) required by JTR 891, and 893.1, will cover all terminations for fixed-fee prime contracts for the convenience of the Government specified in JTR 893.1 and will include all terminations settled during the month and those still in process of settlement. The amount of interest on a settled termination should be shown as a separate item in column 23 of the form immediately below date of settleTo afford sufficient time to prepare such reports only activities up to and including the 25th day of the month will be included in the following month's report. Any such activities occurring after the 25th day of the month will be included in the following month's report. The report will be submitted in triplicate on WD AGO Form 0405 and forwarded so as to reach the Chief of Engineers not later than the 5th day of the month following the report period.

c. Analysis of settlement of cost-plus-a-fixed-fee contracts (Reports Control Symbol WD GSP-18) required by JTR 897.1, will be attached to and submitted with Contract Termination Status Report for Fixed Fee Contract Terminations (WD AGO Form 0405) referred to in the preceding paragraph.

d. Disposition of contractor inventory report (Reports Control Symbol WD GSP-19) required by JTR 882 will be submitted in duplicate to reach Chief of Engineers not later than the 8th day of the following month. This report will be consolidated by division engineers in the same manner as the former Plant Clearance Report which this report supersedes.

e. Findings and appeals report required by JTR 896 will be submitted in triplicate to reach the Chief of Engineers not later than the 8th day of the following month.

7115.54

CHANGE 1, 28 July 47

To Part I, Chapter VII

Summary of WD AGO Forms 505 and 0405 (Reports Control Symbol WD GSP-23) required by JTR 892.5 and 893.5 will be submitted in triplicate to reach the Chief of Engineers not later than the 6th day of the following month.

SECTION 20

RENTAL OF CONSTRUCTION EQUIPMENT AND GOVERNMENT –

OWNED MACHINE TOOLS AND EQUIPMENT

7120.01 Scope of Section

There is set forth in this section instructions relative to use and administration of lease agreements and related instruments and relating to the leasing of Government-owned machine tools and equipment to contractors.

7120.02 Reserved

7120.03 Forms of Leases and Related Instruments

a. Rental of Government-owned construction equipment to construction contractors. In such transactions War Department Contract Form 14 set forth in PR No. 13 will be used.

b. Rental of privately-owned construction equipment by Government. In such transactions ENG Form 17 (Hire of Plant or Equipment by Government) set forth in section 13 will be used.

C.

Rental of third-party owned construction equipment with right of recapture by fixed-fee contractors. In such transactions ENG Form 57 (Equipment Rental Agreement with Recapture Provisions) set forth in section 13 will be used.

d. "Schedule 'A' rates of rental," Relating to construction equipment. In transactions contemplated by a, b, and c, above, ENG Form 920-1 set forth in section 13 will be used as an attachment to rental agreement.

e. "Assignment of Equipment Rental Agreements to Fixed Fee Contractor or Government.

section 13 will be used.

In such transactions ENG Form 57a set forth in

f. Rental of third-party owned construction equipment without right of recapture by fixed-fee contractors. In such transactions ENG Form 57 will be altered as hereinafter indicated in this section 20 and ENG Form 923-1 (Waiver of Recapture Requirements) set forth in section 13 will be used as an attachment to the rental agreement.

to lump

g. "Lease of Government-owned machine tools and equipment sum supply contractors. In such transactions, ENG Form 647 set forth in section 13 will be used.

CHANGE 12, 20 Aug 49

To Part I, Chapter VII

7120.04

7120.04 Ordinary Repairs to Construction Equipment Will Be Made by Lessee

It is usually impracticable for parties to leases of construction equipment to provide that the lessors will make ordinary repairs. Therefore, except as hereinafter indicated in this paragraph, all leases of construction equipment entered into by use of WD Contract Form 14 ENG Form 17 (Hire of Plant or Equipment by Government) and ENG Form 57 (Equipment Rental Agreement with Recapture Provisions) will provide that the lessee will make ordinary repairs.

a. Privately-owned construction equipment rented by Government.

By the provisions of section a, article 5, ENG Form 17 broad responsibilities are placed upon the lessor for the making of repairs during the term of the lease, unless it is provided otherwise in the specifications to be attached to the form. The form as drafted creates such responsibility for the reason that it is frequently used to lease floating plant, etc., with operators. In that event it is essential to provide that the lessor will make the repairs. However, in the renting of equipment at rental rates on the most advantageous terms to the Government, it may be desirable in many cases to provide for the Government assuming the responsibility for the making of ordinary repairs. In such event, the specifications attached to ENG Form 17 must provide for altering the lessor's responsibilities as set forth in section a of article 5 of the form.

b. Third-party owned construction equipment rented by fixed-fee contractors. Unless authority is obtained in advance from the division engineer, contracting officers will not permit fixed-fee contractors to alter the provisions of ENG Form 57 (Equipment Rental Agreement with Recapture Provisions) which require the lessee to make ordinary repairs.

7120.05

Computation of Rental Rates Under Prescribed Lease Agreements

All the lease forms prescribed by this section 20 contemplate the use of ENG Form 920-1. "Schedule 'A' Rates of Rental" as an attachment to such forms. Schedule "A" contemplates a basic rental but does not contain provisions for calculating overtime rentals. In the event overtime or portions of a rental period become necessary, the method of calculations should be definitely set forth in Schedule "A".

7120.06

tors.

Government-Owned Construction Equipment Rented to Lump-Sum Contrac

Government-owned construction equipment may be rented to lump sum prime contractors or directly to lump sum subcontractors under either lump sum or fixed fee prime contracts by using WD Contract Form 14 in conformity with the principles set forth in paragraph 7120.04. Such instruments will be approved by the division engineer or an officer in his office specifically authorized by him to approve the same "by direction of the division engineer, "other than an officer executing the agreement as contracting officer. This requirement as to approval is necessary in order that the division

7120.06

engineer may effect necessary control over use and leasing of construction equipment. Any supplement to ENG Form 920-1 (Schedule "A") must bear the personal approval of the district engineer. Sums collected or withheld covering rentals will be turned over for deposit in Miscellaneous Receipts." (See par. 7103.18, with regard to numbering and PR 1314.5 for the alternate provisions permissible for inclusion as section 5 of form.) 7120.07 Contractor-Owned Construction Equipment Under Fixed Fee Contracts

&. Equipment to be furnished by fixed-fee contractors. If the fixedfee contractor fails to furnish any piece of equipment which by the terms of the contract he is required to furnish, there will be deducted from sums otherwise due an arount equal to the damage resulting to the Government. If doubt exists as to the proper construction to be placed upon the contract provisions, inquiry will be made of the Chief of Engineers, attention: Legal Division.

Valuation of contractor-owned construction equipment. Valuation of such equipment will be substantiated at the time of negotiations and prior to the execution of the contract. When such equipment arrives at the project, the contracting officer will inspect each item of equipment before the expiration of the period stated in the contract.

Rates to be paid. (See Contract Negotiations Manual).

d. Repairs to, or destruction, or loss of contractor-owned construction equipment. Only repairs due to the operation of the equipment while on the project, which do not become necessary due to the negligence of the contractor or his employees, are reimbursable. By the provisions of fixed-fee contracts, repairs to or destruction or loss of contractorowned construction equipment are the proper subject for reimbursement to the contractor, unless the repairs become necessary or the destruction or loss results due to the negligence of the contractor or its employees. Those provisions precluding reimbursement in the event of negligence of the contractor's employees are pertinent only when the property involved is construction equipment within the meaning of "construction plant" as used therein, which includes automotive equipment but excludes office equipment. 7120.08 Third-Party Owned Construction Equipment Rented by Fixed-Fee Construction Contractors

Competitive bids. If practicable, such equipment will be procured as the result of written competitive bids pursuant to written invitations. Such invitations will require the bidder to furnish the following information:

(1) Description.

(2) Name of manufacturer.

(3) Size.

CHANGE 1, 28 July 47
To Part I, Chapter VII

b.

(4) Model number.

(5) Year of manufacture.

(6) Location.

(7) Valuation.

(8) Rental Rate.

7120.08

Procedure in procuring competitive bids. Invitations will be circulated as widely as practicable and inform prospective bidders of the following:

(1) The equipment and attachments desired.

(2) That the rental agreement will be executed on ENG Form 57 (if practicable, a copy of the form should be attached to the invitation).

c.

Substantiation of valuation, liens, and title. If valuations submitted by bidders appear unreasonable, the question of valuation, if practicable, will be adjusted prior to award and incurring of transportation expenses. In cases where the prospective lessor is not the true or sole owner of the equipment presented for leasing, the execution by the true owner or the joint owner of schedule "C" attached to ENG Form 57 will be procured. The accuracy of statements as to liens as indicated on schedule "B", executed by the lessor and attached to ENG Form 57 will be verified if necessary.

d. Execution of agreements. Equipment rental agreements will be executed before equipment is put into service. Before approving such agreements contracting officer will make certain that the agreements are properly executed and that schedules "B" and "C" attached thereto are properly signed. Contractor and Government personnel will be cautioned against expressing opinion at any time as to the likelihood of exercise by the Government of the recapture option. No piece of equipment will be rented against which there are liens or other incumbrances in excess of 70 percent of the valuation of the equipment. (See par. 7120.09a)

7120.09 Discharge of Lessor of Indebtedness Secured by Liens or Other Incumbrances on the Title to Third-Party Owned Equipment Rented by Fixed-Fee Contractors

a.

Obligation of lessor. In the event of recapture, ENG Form 57 requires the lessor to furnish unincumbered title to the equipment recaptured, as evidenced by a bill of sale or certificate of title or an authenticated copy thereof. In order to assure that lessor will be able to furnish such title, lien holders will, at the time the agreement is executed, be requested to notify the contracting officer in writing if at any future time payments are not made within ten days of the due date thereof.