FAR 18.126—Contractor rent-free use of Government property.
Plain-English Summary
FAR 18.126 is a narrow exception to the normal rule that contractors must pay rent when using Government-owned property. It addresses contractor rent-free use of Government production and research property when that property is part of a general program approved by the Federal Emergency Management Agency (FEMA) and the property meets the criteria referenced in FAR 45.301. In practical terms, this section tells contracting personnel that rental charges are not automatically required in this special emergency-related context, but only when the property and program fit the stated conditions. The section is important because it prevents unnecessary rental billing in approved FEMA-related programs while still preserving the general rule that Government property use is ordinarily chargeable. It also signals that users must look to the property-management rules in FAR Part 45, especially the cited criteria, to determine whether the exception applies. For contractors, the section can affect cost treatment and contract administration; for contracting officers, it affects whether rent should be assessed at all.
Key Rules
General rental rule exception
Rental requirements do not apply to certain Government production and research property when the conditions in this section are met. This is an exception, not a broad waiver, so the default expectation remains that Government property use may be subject to rent unless the exception clearly applies.
FEMA-approved general program
The property must be part of a general program approved by the Federal Emergency Management Agency. Approval by FEMA is a threshold requirement; without it, the rent-free treatment described here is not available.
Property must meet criteria
The Government property must also satisfy the specific criteria referenced in FAR 45.301. This means the section cannot be applied in isolation; the property’s eligibility depends on the separate property-management standards incorporated by reference.
Limited to production and research property
The exception applies only to items of Government production and research property. Other categories of Government property are not covered by this section and remain subject to the normal rental rules unless another authority applies.
Cross-reference controls application
The operative details are not fully stated here and must be determined by consulting FAR 45.301. Contracting personnel must use the cross-reference to confirm whether the property qualifies before treating the use as rent-free.
Responsibilities
Contracting Officer
Determine whether the Government property is covered by a FEMA-approved general program and whether it meets the criteria in FAR 45.301 before waiving rental charges. Ensure the contract file supports the basis for rent-free use.
Contractor
Use Government production and research property only within the scope of the approved program and provide any information needed to show the property meets the referenced criteria. Do not assume rent-free use applies unless the contracting officer confirms eligibility.
Agency
Maintain compliance with FEMA-approved program requirements and property-management rules. Ensure the program and the property are properly documented so rental treatment is applied consistently and lawfully.
FEMA
Approve the general program that serves as the basis for the rent-free exception. Its approval is a prerequisite for the exception to apply.
Practical Implications
This section can eliminate rental charges for qualifying Government production and research property, but only in a very specific FEMA-approved context.
A common pitfall is assuming all Government property used in emergency-related work is rent-free; the property must also meet the criteria in FAR 45.301.
Contracting officers should document both the FEMA program approval and the property’s eligibility to avoid later disputes over rental charges.
Contractors should not rely on this section as a blanket cost-saving rule; if the approval or criteria are missing, normal rental requirements may still apply.
Because the section is brief and cross-referenced, users must read it together with FAR 45.301 to apply it correctly.
Official Regulatory Text
Rental requirements do not apply to items of Government production and research property that are part of a general program approved by the Federal Emergency Management Agency and meet certain criteria. (See 45.301 .)