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Subpart 18-13.4-Use and Rental of Government Production and Research Property

§ 18–13.401 Policy.

It is the policy of NASA to put Government production and research property which is in the possession of a contractor or subcontractor to the greatest possible use in the performance of Government contracts or subcontracts, so long as such use does not confer a competitive advantage on the contractor or subcontractor contrary to the policies set forth in Subpart 18-13.5.

(a) Industrial Plant Equipment (IPE) is acquired by NASA for use by a contractor in performing NASA work only when the contractor is unable or unwilling to furnish the IPE, and it is deemed in the best interest of the Government to provide such equipment to meet required delivery schedules for NASA materials and services. Existing Governmentowned IPE may be provided contractors when substantial savings to the Government will accrue, and no competitive advantage is conferred.

(b) There are instances where Government-owned IPE is required to remain in a contractor's plant to perform NASA work, but where the full capacity of the equipment is not required for this work. In such instances, contractors may be authorized to make use of the equipment for commercial work under three conditions where such authorization may be in the interest of the Government:

(1) To keep the equipment in a high state of operational readiness through regular usage;

(2) Where substantial savings to the Government would accrue through overhead cost sharing and receipt of rentals,

or

(3) To avoid an inequity to the contractor who is required, at the Government's request, to retain the equipment in place, often intermingled with contractor-owned plant equipment required for the production of commercial orders. §18-13.402 Authorizing a contractor to use Government production and research property without charge.

(a) A contractor may use Government production and research property without charge:

(1) In the performance of(i) Prime contracts which specifically authorize use without charge;

(ii) Subcontracts of any tier if the contracting officer having cognizance over the prime contract concerned has authorized use without charge by:

(a) Approving a subcontract specifically authorizing such use;

(b) Including such authorization in the prime contract; or

(c) By otherwise approving such use in writing;

(iii) Contracts of foreign government if use without charge has been authorized in writing pursuant to § 18-13.406; or

(iv) Research, development, or educational work by nonprofit organizations if the contracting officer having cognizance of such property approves such use in writing.

(2) Provided, as to subparagraph (1) (i) and (ii) of this paragraph

(i) The procedures set forth in Subpart 18-13.5 are complied with;

(ii) The contracting officer having cognizance of the prime contract determines that the Government will receive adequate consideration for the use of the property through reduced costs for the supplies or services or otherwise; and

(iii) A concurrence in the proposed use of the property in accordance with paragraphs (b) and (c) of this section is obtained.

(b) (1) A contracting officer desiring to authorize use of Government production and research property under the cognizance of another contracting officer may request the latter to give his concurrence in such use. If concurrence is denied, the resolution procedures set forth in paragraph (c) of this section shall be employed.

(2) Unless its use is authorized by the solicitation, each solicitation shall require that any contractor or subcontractor desiring to use Government production and research property in his possession in the performance of the proposed Government contract or subcontract shall request the contracting officer having cognizance of such property to give his written concurrence in such use. Such concurrence shall be given whenver possible and shall contain any information required by § 18-13.502 or § 18-13.503.

(c) If the contracting officer having cognizance of Government production and research property refuses to give the concurrence called for by paragraph (b) (2) of this section, the contractor may report the matter to the contracting officer, who may then request permission of the contracting officer having cognizance over such property to authorize its use. The latter shall respond promptly to this request. In the event of a disagreement between the two contracting officers, they shall refer the matter to the head of their respective installation as promptly as may be practicable. If the latter are unable to reach agreement, they shall refer the matter to their respective higher echelons of procurement authority for resolution. Any intergovernmental issue shall be referred to the Director of Procurement, NASA Headquarters for resolution.

(d) Notwithstanding paragraph (a) of this section, a contract may be modified to provide for the use of Government production and research property on a rent-free basis, if the contract is equitably adjusted to reflect the elimination of rent and any other amount attributable thereto.

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For purposes of documentation and administration, a copy of any authorization to use Government provided production and research porperty shall be furnished by the contracting officer granting the authorization to the contracting officer requesting the authority to use the property. A record of contracts and subcontracts on which the property is authorized to be used shall be included in the file of the contract under which the property is accountable. Documentation of any authorization to use Government property in the performance of a supply or service contract shall accompany each supply or service contract submitted to NASA Headquarters for review.

§ 18-13.402-51 Provisions of related procurement contracts requiring the use of Government facilities in the possession of a contractor.

When a related rocurement contract, or modification thereto is negotiated on the basis of the use of facilitise which have been previously provided (or are currently being provided under an existing contract) by NASA or another Government agency to the prime contractor or his subcontractors, the following procedures shall apply:

(a) Facilities which are authorized for use by a prime contractor shall be identified by the facilities contract number. If use of the facilities is authorized on a no-charge basis, the contract shall contain the following clause:

USE OF GOVERNMENT FACILITIES ON A
NO-CHARGE BASIS (OCTOBER 1967)

The Contractor is authorized to use on a no-charge basis, in the performance of this contract, the Government-owned facilities provided to him under the facilities contract identified below:

(b) Where no-charge use of facilities is authorized for subcontract work which will support the related prime procurement contract, the names of subcontractors, with the respective facilities contract numbers and items to be produced, shall be inserted in the related procurement contract, or modification thereof, pursuant to § 18-13.402-53.

§ 18-13.402-52 Related procurement contracts requiring the provision of additional facilities.

(a) Prior to executing a related procurement contract in which it is agreed that additional Government facilities shall be provided, the contracting officer shall determine whether the proposed contractor has in existence a facilities contract with NASA. If so, the contracting officer shall arrange with the contracting officer administering the facilities contract to have the proposed additional facilities included under the facilities contract and the related procurement contract shall specify such arrangement. If the proposed contractor does not have a facilities contract with NASA, the contracting officer shall either enter into a separate facilities contract or provide the required facilities under the related procurement contract, subject to the limitations set forth in §18-13.303-1.

(b) If a related procurement contract, or a modification thereof, is negotiated on the basis that additional facilities will be provided to the contractor under a separate facilities contract (either directly by the Government or by contractor acquisition at Government expense), the following Facilities clause shall be inserted in the schedule of such related procurement contract:

FACILITIES (JULY 1968)

(a) The terms and conditions of the contract are based on the providing to the Contractor, under separate facilities contract, of certain facilities which are described in

Such facilities, as determined by the Contracting Officer shall be either furnished to the Contractor directly by the Government, or the Contractor shall be authorized to acquire them at Government expense. The parties hereby agree to enter into such a separate facilities contract, or to supplement an existing facilities contract to cover such additional facilities, as the case may be, at the earliest practicable date. Any separate facilities contract shall be made using such applicable contract form, if any, as is prescribed by the NASA Procurement Regulation in effect on the date such facilities contract is executed and shall provide that such facilities may be used rent-free in the performance of this contract.

(b) It is agreed that if such facilities are not provided at the time and to the extent as indicated in paragraph (a) above, an equitable adjustment shall, upon timely written request of the Contractor, be made in the terms and conditions of this contract to the extent required by reason of the Government's failure to provide such facilities.

(c) In the blank in paragraph (a) of the foregoing clause, specifically identify the facilities to be provided, either (1) by referencing the contractor's proposal or that portion thereof which describes the additional facilities to be provided, or (2) by referencing any other document which identifies and describes the facilities, or (3) by identifying and describing in the clause itself the facilities which have been agreed upon as those to be provided. Where rent-free use will not be authorized, the clause shall be modified to delete the reference to such use.

§ 18-13.402-53 Facilities for subcontractors on a no-charge basis.

If it is desired to permit a contractor to let certain of his subcontractors have the benefit of the use of Government facilities in the possession of such subcontractors on a no-charge basis, whether or not the prime contractor is to have the use of facilities on a no-charge basis, the Use of Government Facilities by Subcontractors clause set forth below shall be included in the related procurement contract: Provided, That (a) the price or the fee of the prime contract is negotiated on the specific understanding that the use of the facilities on a no-charge basis will be permitted in the performance of the specified subcontract items by the specified subcontractors to be set forth in paragraph (a) of the Use of Government Facilities by Subcontractors clause and (b) the subcontractor is not placed in a favored competitive position.

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(b) If the Contractor enters into other subcontracts with subcontractors who have Government-owned facilities provided to them under Facilities contracts which provide that no-charge use may be authorized, the Contracting Officer may authorize the use of such facilities on a no-charge basis: Provided:

(i) He determines that such use will not give the subcontractor a favored competitive position; and

(ii) This contract is amended to reflect adequate consideration to the Government for the use of such facilities on a no-charge basis.

Such subcontracts shall specifically authorize the no-charge use, and require the written approval of the Contracting Officer. No modification to this contract will be required, as provided in (ii) above, if the Contracting Officer determines that an elimination of charge for use of such facilities will, of itself, result in an adequate decreased cost to the Government under this contract.

(c) If the Government-owned facilities provided to the Contractor or any subcontractor hereunder on a no-charge basis are increased or decreased or do not remain available during the performance of this contract, or if any change is made in the terms and conditions under which they are made available, such equitable adjustments as may be appropriate will be made in the terms of this contract, unless such increase or decrease was contemplated in the establishment of the price of this contract or a subcontract.

(d) The Contractor agrees that he will not directly or indirectly, through overhead charges or otherwise, include in the price of this contract, or seek reimbursement under this contract for, any rental charge paid by the Contractor for the use on other contracts of the facilities referred to herein. Any subcontract hereunder which authorizes the subcontractor to use Government facilities on a no-charge basis shall contain a provision to the same effect as this paragraph (d).

§ 18-13.402-54 Contract provisions where facilities are provided under a contract other than a facilities contract.

USE OF GOVERNMENT FACILITIES BY SUBCONTRACTORS (APRIL 1962)

(a) The following subcontractors having Government-owned facilities provided under the Facilities contracts set forth below, in effect on the date of this contract, are au

(a) Where Government-owned facilities are to be acquired or fabricated by a contractor under a contract other than a facilities contract, the following clause, with the schedule terms called for therein, shall be included in the contract, in addition to the appropriate Government Property clause:

FACILITIES ACQUIRED OR FABRICATED (MAY 1965)

Subject to the approval of the contracting officer, the contractor may acquire or fabricate the facilities listed in the schedule of the contract. Costs incurred therefor will be allowable costs, provided that the contractor shall have no obligation to acquire or fabricate facilities and the Government shall have no obligation to reimburse any amount for such facilities in excess of the total estimated facilities costs set forth in the Schedule, unless this contract is amended to increase such amount. The facilities acquired or fabricated shall be considered Government property and subject to the provisions of the Government Property clause of this contract.

(b) Where existing facilities are to be furnished under a contract containing the appropriate Government Property clause of Subpart 18-13.7, no separate clause covering such facilities generally is necessary. The items of facilities will be listed or specified in the schedule Government-furnished property. However, if installation of such existing facilities to be furnished by the Government is to be performed by the contractor at Government expense, the contract schedule shall so state and set forth the total estimated cost therefor.

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§ 18-13.403 Rental of Government production and research property.

(a) When use of Government production and research property is authorized by the contracting officer having cognizance of the property, rent computed in accordance with § 18-13.404 shall be charged for such use except where use without charge is authorized under § 1813.402. If this contracting officer refuses to grant such authorization with respect to work for the Government, the contracting officer having cognizance of the procurement may refer the matter to the higher echelons of authority referred to in § 18-13.402(c).

(b) When Government production and research property is no longer required for the performance of Government contracts or subcontracts, it shall not continue to be made available to a contractor solely for commercial use pursuant to this subpart, (see § 18-13.301 (e)).

(c) Each contracting officer having cognizance of Government production and research property shall be responsible for the collection of rent thereon.

§ 18-13.404 Rental rates and policies applicable to the use of Government production and research property.

(a) Except as provided in paragraph (b) of this section, the rent for all Government production and research property shall be computed in accordance with the "Use and Charges" clause set forth in § 18-7.702-12 for facilities. Rent for machine tools (Federal Supply Classes 3405, 3408, 3410, 3411 through 3419) and secondary metalforming and cutting machines (Federal Supply Classes 3441 through 3449) shall be based on the time such property is available for use. Rent for other classes of Government production and research property is normally charged on the same basis; however, if the Director of Procurement determines it to be in the best interest of the Government, rent may be charged on an actual use or other basis. In such cases, the Use and Charges clause should be appropriately modified.

(b) The rental charge required by paragraph (a) of this section shall not be applicable to:

(1) Wholly Government-owned plants operated by private contractors on a fee basis;

(2) Items of equipment which are of such size or complexity, or have such performance characteristics, that they present unusual problems in relation to the time required for their preparation for shipment, installation, and preparation for operation: Provided, That the Office of Emergency Preparedness has approved the general program involving such equipment;

(3) Government production and research property left in place or installed on contractor-owned property for mobilization or future production purposes of NASA: Provided, That a rental charge computed in accordance with paragraph (a) of this section shall apply to so much of such property or its capacity as may be used or authorized for use; or

(4) Such other Government production and research property as may be otherwise excepted by the Office of Emergency Preparedness.

[36 F.R. 25118, Dec. 29, 1971]

§ 18-13.405 Non-Government use of industrial plant equipment (IPE). (a) The prior written approval of the contracting officer is required for any non-Government use of active Government-owned industrial plant equipment (see B.102-11). Before non-Government

use exceeding 25 percent may be authorized, prior approval of the Director of Procurement shall be obtained. In addition, non-Government use of machine tools, and secondary metal-forming and cutting machines (Federal Supply Classes 3405, 3408, 3410, 3411 through 3419 and 3441 through 3449) in excess of 25 percent shall require the advance approval of the Office of Emergency Preparedness which shall be obtained through the Director of Procurement with the concurrence of the Director of Facilities. Requests requiring the approval of the Director of Procurement or the Office of Emergency Preparedness shall be submitted at least 6 weeks in advance of the projected use and shall include:

(1) The total number of active IPE items involved and total acquisition cost thereof; and

(2) An itemized listing of active equipment having an acquisition cost of $25,000 or more, showing for each such item the nomenclature, production equipment code, year of manufacture, and the acquisition cost.

(b) The percentage of Government and non-Government use shall be computed on the basis of time available for use. For this purpose the contractor's normal work schedule, as represented by scheduled production shift hours, shall be used. All active industrial plant equipment located at any single plant having a unit acquisition cost of less than $25,000 may be averaged over a quarterly period. Equipment having a unit acquisition cost of $25,000 or more shall be considered on an item by item basis.

(c) The approvals under paragraph (a) of this section may be granted only when it is in the interest of the Government (1) to keep the equipment in a high state of operational readiness through regular usage; (2) because substantial savings to the Government would accrue through overhead cost sharing and receipt of rental; or (3) to avoid an inequity to the contractor who is required, at the Government's request, to retain the equipment in place, often intermingled with contractor-owned equipment required for commercial production. Approval for non-Government use shall be for a period of not more than 1 year. Approval for non-Government use in excess of 25 percent shall be for a period of not less than 3 months.

(d) Rent-free use of Government property for independent research and development generally will be discouraged except in unusual circumstances where it is determined that:

(1) Such use is clearly in the best interests of the Government (for example, the project can reasonably be expected to be of value in specific Government programs), and

(2) The policy set forth in § 18-13.501 is adhered to in that no competitive advantage will accrue to the contractor through such authorized use of Government property.

[36 F.R. 6972, Apr. 13, 1971, as amended at 36 F.R. 25119, Dec. 29, 1971]

§ 18-13.406 Rent-free use of Government production and research property on work for foreign govern

ments.

Upon the request of a foreign government, or a contractor certifying that he is acting on behalf of a foreign government, Government production and research property located in the United States, its possessions, or Puerto Rico, may be authorized for use without charge on contracts of foreign government or subcontracts thereunder if:

(a) Such use is approved by the Director of Procurement with the concurrence of the Director, Office of Facilities, NASA Headquarters;

(b) Such use is legally authorized; (c) The foreign government's placement of the contract directly with the contractor is consistent with the best interest of the United States;

(d) It appears that the foreign government will place the contract with the contractor whether or not such use is au-thorized, or that no competitive pricing advantage will accrue to the contractor by virtue of such use;

(e) The contractor agrees that no charge for the use of such property will be included in the price charged the foreign government under the contract; and

(f) Such use will not interfere with foreseeable requirements of the United States.

§ 18-13.407 Use of Government producproduction and research property without

charge by nonprofit organizations.

The contracting officer cognizant of Government production and research property in the possession of a nonprofit organization may approve the use of such property by such organization without

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