83_FR_45244 83 FR 45072 - Federal Acquisition Regulation: Rental Cost Analysis in Equipment Acquisitions

83 FR 45072 - Federal Acquisition Regulation: Rental Cost Analysis in Equipment Acquisitions

DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

Federal Register Volume 83, Issue 172 (September 5, 2018)

Page Range45072-45073
FR Document2018-19177

DoD, GSA, and NASA are proposing to amend the Federal Acquisition Regulation (FAR) to clarify the term ``lease.''

Federal Register, Volume 83 Issue 172 (Wednesday, September 5, 2018) 
[Federal Register Volume 83, Number 172 (Wednesday, September 5, 2018)]
[Proposed Rules]
[Pages 45072-45073]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-19177]



[[Page 45072]]

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 7

[FAR Case 2017-017; Docket No. 2017-0017, Sequence No. 1]
RIN 9000-AN63


Federal Acquisition Regulation: Rental Cost Analysis in Equipment 
Acquisitions

AGENCY: Department of Defense (DoD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Proposed rule.

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SUMMARY: DoD, GSA, and NASA are proposing to amend the Federal 
Acquisition Regulation (FAR) to clarify the term ``lease.''

DATES: Interested parties should submit comments to the Regulatory 
Secretariat Division at one of the addresses shown below on or before 
November 5, 2018 to be considered in the formulation of a final rule.

ADDRESSES: Submit comments in response to FAR Case 2017-017 by any of 
the following methods:
     Regulations.gov: http://www.regulations.gov. Submit 
comments via the Federal eRulemaking portal by entering ``FAR Case 
2017-017'' under the heading ``Enter Keyword or ID'' and selecting 
``Search.'' Select the link ``Comment Now'' that corresponds with ``FAR 
Case 2017-017.'' Follow the instructions provided on the screen. Please 
include your name, company name (if any), and ``FAR Case 2017-017'' on 
your attached document.
     Mail: General Services Administration, Regulatory-
Secretariat Division (MVCB), ATTN: Lois Mandell, 1800 F Street NW, 2nd 
Floor, Washington, DC 20405.
    Instructions: Please submit comments only and cite ``FAR case 2017-
017'' in all correspondence related to this case. All comments received 
will be posted without change to http://www.regulations.gov, including 
any personal and/or business confidential information provided. To 
confirm receipt of your comment(s), please check www.regulations.gov, 
approximately two to three days after submission to verify posting 
(except allow 30 days for posting of comments submitted by mail).

FOR FURTHER INFORMATION CONTACT: For clarification of content, contact 
Mr. Michael O. Jackson, Procurement Analyst, at 202-208-4949. For 
information pertaining to status or publication schedules, contact the 
Regulatory Secretariat Division at 202-501-4755. Please cite ``FAR Case 
2017-017.''

SUPPLEMENTARY INFORMATION: 

I. Background

    DoD, GSA, and NASA are proposing to amend the FAR to clarify, in 
FAR subpart 7.4, Equipment Lease or Purchase, that the term ``lease,'' 
as used in the subpart, includes the ``rental'' of equipment. This 
change clarifies that agencies should be evaluating comparative costs 
and other factors when considering whether to lease or rent equipment 
versus purchase equipment. The rule also adds a helpful link to a GSA 
site that provides additional guidance on renting and leasing equipment 
and updates the GSA office from which agencies may request information 
when making lease or purchase decisions. In addition, weblinks have 
been added to the rule for Office of Management and Budget (OMB) 
guidance for lease-purchase analysis, see Special Guidance for Lease-
purchase Analysis (Section 13 of (OMB) Circular A-94, also see 
8.c.(2)); and OMB Circular A-11 Appendix B Budgetary Treatment of 
Lease-Purchases and Leases of Capital Assets.

II. Discussion and Analysis

    This rule proposes to amend FAR subpart 7.4, as follows:
     Adding language to the scope of the subpart to clarify 
that the term ``lease'', as used in the subpart, applies to both the 
lease and rental of equipment, and to identify some general factors 
that may vary when leasing or renting equipment.
     Adding a GSA website that provides information that could 
assist the contracting officer in making equipment lease or purchase 
decisions, and updating the GSA office to contact when an agency 
requests assistance with the lease versus purchase analysis decision. 
In addition, weblinks have been added to the rule for OMB guidance for 
lease-purchase analysis.

III. Applicability to Contracts at or Below the Simplified Acquisition 
Threshold and for Commercial Items, Including Commercially Available 
Off-the-Shelf Items

    This rule amends the FAR to clarify that although the term 
``lease'' applies to both the lease and rental of equipment, there are 
some differences between renting and leasing in many industries, and 
there is no standard distinction between both renting and leasing that 
spans across all industries. This case does not add any new provisions 
or clauses or impact any existing provisions or clauses.

IV. Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). E.O. 
13563 emphasizes the importance of quantifying both costs and benefits, 
of reducing costs, of harmonizing rules, and of promoting flexibility. 
This is not a significant regulatory action and, therefore, was not 
subject to review under section 6(b) of E.O. 12866, Regulatory Planning 
and Review, dated September 30, 1993. This rule is not a major rule 
under 5 U.S.C. 804.

V. Executive Order 13771

    This rule is not subject to E.O. 13771, because this rule is not a 
significant regulatory action under E.O. 12866.

VI. Regulatory Flexibility Act

    DoD, GSA, and NASA do not expect this rule to have a significant 
economic impact on a substantial number of small entities within the 
meaning of the Regulatory Flexibility Act codified at 5 U.S.C. 601 et 
seq. However, an Initial Regulatory Flexibility Analysis (IRFA) has 
been performed and is summarized as follows:

    DoD, GSA, and NASA are proposing to amend the Federal 
Acquisition Regulation (FAR) to clarify, in FAR subpart 7.4, that 
the term ``lease'' includes the ``rental'' of equipment. This change 
clarifies that agencies should be evaluating comparative costs and 
other factors when considering whether to lease or rent equipment 
versus purchase equipment.
    The objective of the rule is to ensure the value of rental 
agreements are included in the decision on whether to lease or 
purchase equipment. The legal basis for the FAR is 40 U.S.C. 121(c), 
10 U.S.C. chapter 137, and 51 U.S.C. 20113.
    Based on Fiscal Year 2016 data from the Federal Procurement Data 
System, the Government issued approximately 34,925 contract actions 
for the rent/lease or purchase of equipment. Of the 34,925 contract 
actions, approximately 20,100 awards were made to 6,670 unique small 
business entities. The average award to small businesses was valued 
at approximately $700,000.
    This rule does not impose any new reporting, recordkeeping or 
other compliance requirements. The rule does not duplicate,

[[Page 45073]]

overlap, or conflict with any other Federal rules. There are no 
known significant alternative approaches to the proposed rule that 
would meet the applicable requirement.

    The Regulatory Secretariat Division has submitted a copy of the 
IRFA to the Chief Counsel for Advocacy of the Small Business 
Administration. A copy of the IRFA may be obtained from the Regulatory 
Secretariat Division. DoD, GSA and NASA invite comments from small 
business concerns and other interested parties on the expected impact 
of this rule on small entities.
    DoD, GSA, and NASA will also consider comments from small entities 
concerning the existing regulations in subparts affected by this rule 
consistent with 5 U.S.C. 610. Interested parties must submit such 
comments separately and should cite 5 U.S.C. 610 (FAR Case 2017-017) in 
correspondence.

VII. Paperwork Reduction Act

    The proposed rule does not contain any information collection 
requirements that require the approval of the Office of Management and 
Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).

List of Subjects in 48 CFR Part 7

    Government procurement.

    Dated: August 30, 2018.
William F. Clark,
Director, Office of Government-wide Acquisition Policy, Office of 
Acquisition Policy, Office of Government-wide Policy.

    Therefore, DoD, GSA, and NASA are proposing to amend 48 CFR part 7 
as set forth below:

PART 7--ACQUISITION PLANNING

0
1. The authority citation for part 7 continues to read as follows:

    Authority:  40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 
U.S.C. 20113.

0
2. Revise section 7.400 to read as follows:


Sec.  7.400   Scope of subpart.

    This subpart provides guidance pertaining to the decision to 
acquire equipment by lease or purchase. It applies to both the initial 
acquisition of equipment and the renewal or extension of existing 
equipment leases. The term ``lease'', as used in this subpart, applies 
to both the lease and rental of equipment. While there are some 
differences between renting and leasing in many industries, there is no 
standard distinction between both renting and leasing that spans across 
all industries. Rental agreements are typically for shorter periods of 
time than lease agreements. Additionally, maintenance requirements and 
financial terms (e.g., fees or payment terms) differ between a lease 
and a rental agreement.


Sec.  7.401   [Amended]

0
2. Amend section 7.401 by removing from paragraph (a)(3) ``rental 
payments'' and adding ``lease, or other periodic payments, however 
described,'' in its place.
0
3. Amend section 7.403 by revising the section heading and paragraph 
(b), and adding paragraph (c) to read as follows:


Sec.  7.403   General Services Administration assistance and OMB 
Guidance.

* * * * *
    (b) Agencies may request information from the following GSA office: 
GSA FAS National Customer Service Center by phone at 1-800-488-3111 or 
by email at [email protected]. Additional information to 
assist with deciding whether to purchase or lease equipment is 
available at https://www.gsa.gov/acquisition/purchasing-programs/gsa-schedules/list-of-gsa-schedules/schedule-51-vhardware-superstore/equipment-rental-and-leasing.
    (c) See Special Guidance for Lease-purchase Analysis (Section 13 of 
OMB Circular A-94, also see 8.c.(2)) at https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/circulars/A94/a094.pdf and OMB Circular 
A-11 Appendix B Budgetary Treatment of Lease-Purchases and Leases of 
Capital Assets at https://www.whitehouse.gov/wp-content/uploads/2018/06/app_b.pdf.

[FR Doc. 2018-19177 Filed 9-4-18; 8:45 am]
 BILLING CODE 6820-EP-P

45072 Federal Register / Vol. 83, No. 172 / Wednesday, September 5, 2018 / Proposed Rules DEPARTMENT OF DEFENSE FOR FURTHER INFORMATION CONTACT: For and there is no standard distinction clarification of content, contact Mr. between both renting and leasing that GENERAL SERVICES Michael O. Jackson, Procurement spans across all industries. This case ADMINISTRATION Analyst, at 202–208–4949. For does not add any new provisions or information pertaining to status or clauses or impact any existing NATIONAL AERONAUTICS AND publication schedules, contact the provisions or clauses. SPACE ADMINISTRATION Regulatory Secretariat Division at 202– 501–4755. Please cite ‘‘FAR Case 2017– IV. Executive Orders 12866 and 13563 48 CFR Part 7 017.’’ Executive Orders (E.O.s) 12866 and SUPPLEMENTARY INFORMATION: 13563 direct agencies to assess all costs [FAR Case 2017–017; Docket No. 2017– and benefits of available regulatory 0017, Sequence No. 1] I. Background alternatives and, if regulation is DoD, GSA, and NASA are proposing necessary, to select regulatory RIN 9000–AN63 to amend the FAR to clarify, in FAR approaches that maximize net benefits Federal Acquisition Regulation: Rental subpart 7.4, Equipment Lease or (including potential economic, Purchase, that the term ‘‘lease,’’ as used environmental, public health and safety Cost Analysis in Equipment in the subpart, includes the ‘‘rental’’ of effects, distributive impacts, and Acquisitions equipment. This change clarifies that equity). E.O. 13563 emphasizes the AGENCY: Department of Defense (DoD), agencies should be evaluating importance of quantifying both costs General Services Administration (GSA), comparative costs and other factors and benefits, of reducing costs, of and National Aeronautics and Space when considering whether to lease or harmonizing rules, and of promoting Administration (NASA). rent equipment versus purchase flexibility. This is not a significant ACTION: Proposed rule. equipment. The rule also adds a helpful regulatory action and, therefore, was not link to a GSA site that provides subject to review under section 6(b) of SUMMARY: DoD, GSA, and NASA are additional guidance on renting and E.O. 12866, Regulatory Planning and proposing to amend the Federal leasing equipment and updates the GSA Review, dated September 30, 1993. This Acquisition Regulation (FAR) to clarify office from which agencies may request rule is not a major rule under 5 U.S.C. the term ‘‘lease.’’ information when making lease or 804. DATES: Interested parties should submit purchase decisions. In addition, weblinks have been added to the rule V. Executive Order 13771 comments to the Regulatory Secretariat Division at one of the addresses shown for Office of Management and Budget This rule is not subject to E.O. 13771, below on or before November 5, 2018 to (OMB) guidance for lease-purchase because this rule is not a significant be considered in the formulation of a analysis, see Special Guidance for regulatory action under E.O. 12866. final rule. Lease-purchase Analysis (Section 13 of VI. Regulatory Flexibility Act ADDRESSES: Submit comments in (OMB) Circular A–94, also see 8.c.(2)); and OMB Circular A–11 Appendix B DoD, GSA, and NASA do not expect response to FAR Case 2017–017 by any this rule to have a significant economic of the following methods: Budgetary Treatment of Lease-Purchases and Leases of Capital Assets. impact on a substantial number of small • Regulations.gov: http:// entities within the meaning of the www.regulations.gov. Submit comments II. Discussion and Analysis Regulatory Flexibility Act codified at 5 via the Federal eRulemaking portal by This rule proposes to amend FAR U.S.C. 601 et seq. However, an Initial entering ‘‘FAR Case 2017–017’’ under subpart 7.4, as follows: Regulatory Flexibility Analysis (IRFA) the heading ‘‘Enter Keyword or ID’’ and • Adding language to the scope of the has been performed and is summarized selecting ‘‘Search.’’ Select the link subpart to clarify that the term ‘‘lease’’, as follows: ‘‘Comment Now’’ that corresponds with as used in the subpart, applies to both ‘‘FAR Case 2017–017.’’ Follow the DoD, GSA, and NASA are proposing to the lease and rental of equipment, and amend the Federal Acquisition Regulation instructions provided on the screen. to identify some general factors that may (FAR) to clarify, in FAR subpart 7.4, that the Please include your name, company vary when leasing or renting equipment. term ‘‘lease’’ includes the ‘‘rental’’ of name (if any), and ‘‘FAR Case 2017– • Adding a GSA website that equipment. This change clarifies that 017’’ on your attached document. provides information that could assist agencies should be evaluating comparative • Mail: General Services the contracting officer in making costs and other factors when considering Administration, Regulatory-Secretariat equipment lease or purchase decisions, whether to lease or rent equipment versus Division (MVCB), ATTN: Lois Mandell, and updating the GSA office to contact purchase equipment. 1800 F Street NW, 2nd Floor, The objective of the rule is to ensure the when an agency requests assistance value of rental agreements are included in Washington, DC 20405. with the lease versus purchase analysis the decision on whether to lease or purchase Instructions: Please submit comments decision. In addition, weblinks have equipment. The legal basis for the FAR is 40 only and cite ‘‘FAR case 2017–017’’ in been added to the rule for OMB U.S.C. 121(c), 10 U.S.C. chapter 137, and 51 all correspondence related to this case. guidance for lease-purchase analysis. U.S.C. 20113. All comments received will be posted Based on Fiscal Year 2016 data from the without change to http:// III. Applicability to Contracts at or Federal Procurement Data System, the www.regulations.gov, including any Below the Simplified Acquisition Government issued approximately 34,925 daltland on DSKBBV9HB2PROD with PROPOSALS personal and/or business confidential Threshold and for Commercial Items, contract actions for the rent/lease or purchase information provided. To confirm Including Commercially Available Off- of equipment. Of the 34,925 contract actions, receipt of your comment(s), please the-Shelf Items approximately 20,100 awards were made to 6,670 unique small business entities. The check www.regulations.gov, This rule amends the FAR to clarify average award to small businesses was approximately two to three days after that although the term ‘‘lease’’ applies to valued at approximately $700,000. submission to verify posting (except both the lease and rental of equipment, This rule does not impose any new allow 30 days for posting of comments there are some differences between reporting, recordkeeping or other compliance submitted by mail). renting and leasing in many industries, requirements. The rule does not duplicate, VerDate Sep<11>2014 16:17 Sep 04, 2018 Jkt 244001 PO 00000 Frm 00021 Fmt 4702 Sfmt 4702 E:\FR\FM\05SEP1.SGM 05SEP1

Federal Register / Vol. 83, No. 172 / Wednesday, September 5, 2018 / Proposed Rules 45073 overlap, or conflict with any other Federal requirements and financial terms (e.g., Endangered Species Act of 1973, as rules. There are no known significant fees or payment terms) differ between a amended (Act). The golden conure is a alternative approaches to the proposed rule lease and a rental agreement. psittacine bird (parrots, parakeets, that would meet the applicable requirement. macaws, cockatoos, and others) endemic The Regulatory Secretariat Division § 7.401 [Amended] to the south Amazon Basin in Brazil. has submitted a copy of the IRFA to the ■ 2. Amend section 7.401 by removing After review of the best available Chief Counsel for Advocacy of the Small from paragraph (a)(3) ‘‘rental payments’’ scientific and commercial information, Business Administration. A copy of the and adding ‘‘lease, or other periodic we find that listing the golden conure as IRFA may be obtained from the payments, however described,’’ in its a threatened species is warranted. Regulatory Secretariat Division. DoD, place. Accordingly, we propose to list it as a GSA and NASA invite comments from ■ 3. Amend section 7.403 by revising threatened species with a rule issued small business concerns and other the section heading and paragraph (b), under section 4(d) of the Act. If we interested parties on the expected and adding paragraph (c) to read as finalize this rule as proposed, it would impact of this rule on small entities. follows: reclassify the golden conure from DoD, GSA, and NASA will also endangered to threatened on the List of § 7.403 General Services Administration consider comments from small entities assistance and OMB Guidance. Endangered and Threatened Wildlife concerning the existing regulations in (List). Additionally, we are proposing to subparts affected by this rule consistent * * * * * update the List to reflect the latest with 5 U.S.C. 610. Interested parties (b) Agencies may request information scientifically accepted taxonomy and must submit such comments separately from the following GSA office: GSA nomenclature for the species as and should cite 5 U.S.C. 610 (FAR Case FAS National Customer Service Center Guaruba guarouba, golden conure. 2017–017) in correspondence. by phone at 1–800–488–3111 or by DATES: We will accept comments email at ncsccustomer.service@gsa.gov. VII. Paperwork Reduction Act received or postmarked on or before Additional information to assist with November 5, 2018. Comments submitted The proposed rule does not contain deciding whether to purchase or lease electronically using the Federal any information collection requirements equipment is available at https:// eRulemaking Portal (see ADDRESSES, that require the approval of the Office of www.gsa.gov/acquisition/purchasing- below) must be received by 11:59 p.m. Management and Budget under the programs/gsa-schedules/list-of-gsa- Eastern Time on the closing date. We Paperwork Reduction Act (44 U.S.C. schedules/schedule-51-vhardware- must receive requests for public chapter 35). superstore/equipment-rental-and- hearings, in writing, at the address leasing. List of Subjects in 48 CFR Part 7 shown in FOR FURTHER INFORMATION (c) See Special Guidance for Lease- CONTACT by October 22, 2018. Government procurement. purchase Analysis (Section 13 of OMB ADDRESSES: You may submit comments Dated: August 30, 2018. Circular A–94, also see 8.c.(2)) at https://www.whitehouse.gov/sites/ by one of the following methods: William F. Clark, (1) Electronically: Go to the Federal whitehouse.gov/files/omb/circulars/ Director, Office of Government-wide eRulemaking Portal: http:// A94/a094.pdf and OMB Circular A–11 Acquisition Policy, Office of Acquisition www.regulations.gov. In the Search box, Policy, Office of Government-wide Policy. Appendix B Budgetary Treatment of enter FWS–HQ–ES–2015–0019, which Lease-Purchases and Leases of Capital Therefore, DoD, GSA, and NASA are is the docket number for this Assets at https://www.whitehouse.gov/ proposing to amend 48 CFR part 7 as set rulemaking. Then, click on the Search wp-content/uploads/2018/06/app_ forth below: button. On the resulting page, in the b.pdf. Search panel on the left side of the [FR Doc. 2018–19177 Filed 9–4–18; 8:45 am] screen, under the Document Type PART 7—ACQUISITION PLANNING BILLING CODE 6820–EP–P heading, click on the Proposed Rules ■ 1. The authority citation for part 7 link to locate this document. You may continues to read as follows: submit a comment by clicking on Authority: 40 U.S.C. 121(c); 10 U.S.C. DEPARTMENT OF THE INTERIOR ‘‘Comment Now!’’ chapter 137; and 51 U.S.C. 20113. (2) By hard copy: Submit by U.S. mail Fish and Wildlife Service or hand-delivery to: Public Comments ■ 2. Revise section 7.400 to read as Processing, Attn: FWS–HQ–ES–2015– follows: 50 CFR Part 17 0019; U.S. Fish and Wildlife Service, § 7.400 Scope of subpart. [Docket No. FWS–HQ–ES–2015–0019; MS: BPHC, 5275 Leesburg Pike, Falls This subpart provides guidance 4500090024] Church, VA 22041–3803. pertaining to the decision to acquire We request that you send comments equipment by lease or purchase. It RIN 1018–BC78 only by the methods described above. applies to both the initial acquisition of We will post all comments on http:// Endangered and Threatened Wildlife www.regulations.gov. This generally equipment and the renewal or extension and Plants; Reclassifying the Golden means that we will post any personal of existing equipment leases. The term Conure From Endangered to information you provide us (see Public ‘‘lease’’, as used in this subpart, applies Threatened With a Section 4(d) Rule Comments, below, for more to both the lease and rental of daltland on DSKBBV9HB2PROD with PROPOSALS equipment. While there are some AGENCY: Fish and Wildlife Service, information). differences between renting and leasing Interior. FOR FURTHER INFORMATION CONTACT: Don in many industries, there is no standard ACTION: Proposed rule. Morgan, Chief, Branch of Delisting and distinction between both renting and Foreign Species, Ecological Services, leasing that spans across all industries. SUMMARY: We, the U.S. Fish and U.S. Fish and Wildlife Service, MS: ES, Rental agreements are typically for Wildlife Service (Service), announce a 5275 Leesburg Pike, Falls Church, VA shorter periods of time than lease 12-month finding on a petition to delist 22041–3803; telephone, 703–358–2171. agreements. Additionally, maintenance or downlist the golden conure under the If you use a telecommunications device VerDate Sep<11>2014 16:17 Sep 04, 2018 Jkt 244001 PO 00000 Frm 00022 Fmt 4702 Sfmt 4702 E:\FR\FM\05SEP1.SGM 05SEP1


Document Created: 2018-09-05 01:59:31
Document Modified: 2018-09-05 01:59:31
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionProposed Rules
ActionProposed rule.
DatesInterested parties should submit comments to the Regulatory
ContactFor clarification of content, contact Mr. Michael O. Jackson, Procurement Analyst, at 202-208-4949. For information pertaining to status or publication schedules, contact the Regulatory Secretariat Division at 202-501-4755. Please cite ``FAR Case 2017-017.''
FR Citation83 FR 45072 
RIN Number9000-AN63
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