Government Contracts FAR Rule Proposes Analysis Requirement for Equipment Acquisitions
Wednesday, September 16, 2020

FAR Rule Proposes Analysis Requirement for Equipment Acquisitions

By Government Contracts Editorial Staff

A proposed rule would amend the Federal Acquisition Regulation to implement section 555 of the FAA Reauthorization Act of 2018 (PL 115-254), which requires agencies to conduct, when acquiring equipment, an analysis of cost and other factors associated with certain acquisition methods. The rule would amend FAR Subpart 7.4 to provide guidance when acquiring equipment and more than one method of acquisition is available for use. Under the proposed changes to FAR 7.401, agencies would be required to conduct a case-by-case analysis of comparative costs. The comparison of acquisition methods in the analysis must include purchases, short-term rentals or leases, long-term rentals or leases, interagency acquisitions, and acquisition agreements with state or local governments. The rule would also add factors to evaluate various acquisition methods, including the estimated length of the period the equipment is to be used and the extent of use within that period; financial and operating advantages of alternative types and makes of equipment; cumulative rent, lease, or other periodic payments; net purchase price; transportation, installation, and storage costs; maintenance, repair, and other service costs; and potential obsolescence due to imminent technological improvements. The proposed changes also include additional factors to consider, as appropriate, depending on the type, cost, complexity, and estimated period of use of the equipment. The proposed changes apply to both the initial acquisition of equipment and the renewal or extension of existing equipment leases or rental agreements. Comments on the proposed rule referencing FAR Case 2019-001 are due October 23, 2020. See ¶70,006.357 for the text of the rule.

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