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Published: 1972

Total Pages: 78

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The primary purpose of the task was to investigate the suitability of rental charges for government-owned industrial plant equipment as a means for improving the productivity of these facilities. While the original scope was limited to industrial plant equipment, mostly machine tools, identical considerations apply to all government-owned facilities. The scope of the study was expanded accordingly. It was found that rent-across-the-board would be an effective means for improving the use and utilization of facilities in contractor-owned plants while reducing government administration, and greatly reducing the pressure on the DoD to furnish facilities. Rent-across-the-board means that rent will be collected for mere possession of facilities, regardless of amount of use and regardless of whether utilized on government or commercial work. To be effective, the rates and terms of rent-across-the-board must be at parity with commercial leasing practice, and must be based upon the fair market value of the facilities. Procedures for estimating fair market value and establishing rental rates are given in the report.