FAR 45.303—Use of Government property on independent research and development programs.
Plain-English Summary
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.
Key Rules
CO may authorize IR&D use
The contracting officer has discretion to allow Government property to be used on an IR&D program. This is not automatic; the authorization depends on the conditions in the rule being satisfied.
No conflict with primary use
The property’s use on IR&D must not interfere with its primary Government purpose. The use also cannot be a way for the contractor to keep property that could otherwise be released from Government control.
No rental reimbursement claim
The contractor must agree not to seek reimbursement from any Government contract for the rental value of the property. This prevents the contractor from charging the Government for use of property the Government already owns or controls.
Commercial share must be adjusted
If a rental charge is allocated to the commercial portion of the IR&D program cost, that amount must be deducted from any agreed Government share of IR&D reimbursement. This ensures the Government only pays its proper share of net IR&D costs.
Responsibilities
Contracting Officer
Determine whether Government property may be used on the contractor’s IR&D program and ensure the use meets all required conditions. The contracting officer must protect the Government’s primary property interests and avoid authorizing arrangements that would let the contractor retain property that should be released.
Contractor
Use the property only in a way that does not conflict with its primary Government use, agree not to claim rental reimbursement against any Government contract, and properly account for any rental charge allocated to commercial work so it can be deducted from the Government’s share of IR&D costs.
Agency/Government
Ensure property management and cost reimbursement practices do not result in duplicate payment or improper retention of Government property. The agency must support oversight so IR&D use of property remains consistent with property disposition and cost principles.
Practical Implications
Contractors should treat IR&D use of Government property as an exception that requires approval and careful cost accounting, not as a routine entitlement.
A common pitfall is trying to recover rental value indirectly through IR&D or other contract charges; this section prohibits that.
Contracting officers should verify that allowing IR&D use will not delay release or disposition of property that is no longer needed for the Government’s primary purpose.
If IR&D costs are split between commercial and Government-related work, the rental charge treatment must be documented clearly to avoid overbilling or audit findings.
Both sides should coordinate property records, IR&D accounting, and contract cost claims so the Government does not pay for the same property use twice.
Official Regulatory Text
The contracting officer may authorize a contractor to use the property on an independent research and development (IR&D) program, if- (a) Such use will not conflict with the primary use of the property or enable the contractor to retain property that could otherwise be released; (b) The contractor agrees not to claim reimbursement against any Government contract for the rental value of the property; and (c) A rental charge for the portion of the contractor’s IR&D program cost allocated to commercial work is deducted from the claim for reimbursement of any agreed-upon Government share of the contractor’s IR&D costs.