FAR 45.3—Subpart 45.3

Use and rental.

FAR 45.301 explains when Government property may be used by a contractor and when rent must be charged. It covers the baseline rule that Government property is normally provided rent-free for performance of the contract under which it is accountable, plus the exceptions for rental or other consideration when the property is used on other contracts or for commercial purposes. It also addresses special treatment for property left in place or installed on contractor-owned property for mobilization or future Government production, and it distinguishes between Government and non-Government use of that property. In addition, the section gives contracting officers authority to approve rent-free use by nonprofit organizations for research, development, or educational work when the use is in the national interest, does not directly benefit a profit-making organization, and provides some direct benefit to the Government. Finally, it covers use of Government property under fixed-price contracts, cost-type Government contracts, and commercial use, including the requirement for fair rental or other adequate consideration and the need for Head of the Contracting Activity approval when non-Government use will exceed 25 percent of total use. In practice, this section is about protecting the Government’s property interests while allowing flexible, authorized use when it supports mission needs or produces adequate value in return.

Contracts with foreign governments or international organizations.

FAR 45.302 is a very short but important rule about how the Government handles requests from foreign governments or international organizations to use Government property. The section covers one topic only: requests made by, or for the benefit of, a foreign government or an international organization to use Government-owned property, and it directs that those requests be handled under the applicable agency procedures. In practice, this means the FAR does not create a single government-wide approval process, pricing rule, or disposition method for these requests; instead, each agency’s internal property-management and foreign-use procedures control. The purpose is to ensure consistent handling of sensitive property-use requests that may involve diplomatic, legal, security, export-control, or policy considerations beyond ordinary domestic contractor use. For contracting officers, property administrators, and program officials, the practical significance is that they must look to agency-specific rules before allowing any foreign government or international organization to use Government property, rather than assuming standard contractor property-use rules apply.

Use of Government property on independent research and development programs.

FAR 45.303 addresses when a contracting officer may let a contractor use Government property for an independent research and development (IR&D) program. It focuses on three core issues: protecting the Government’s primary use of the property, preventing contractors from keeping property that should otherwise be released, and ensuring the Government does not pay twice for the same property use through IR&D reimbursement claims. The rule also ties property use to the contractor’s agreement not to charge rental value to other Government contracts and requires a rental charge adjustment when IR&D costs are allocated to commercial work. In practice, this section is about balancing flexibility for contractor innovation with safeguards against improper cost recovery and misuse of Government-owned assets. It matters to both contracting officers and contractors because it affects property management, IR&D cost proposals, and the allowability of claimed Government shares of IR&D expenses.