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Published: 1991

Total Pages: 53

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Contractors are ordinarily required to furnish all property necessary to perform Government contracts. In some circumstances, however, it is in the best interest of the Government to furnish certain items of property to the contractors. When contractors have Government property in their custody, Government contracting officers must ensure that the property is used to the maximum extent possible in performing Government contracts, give written approval before permitting contractors to use the property for non-Government work, and charge appropriate rental fees when the property is authorized for use on other than a rent-free basis. The Federal Acquisition Regulation (FAR), subpart 45.1, defines plant equipment as personal property of a capital nature for use in manufacturing supplies or performing services, or for any administrative or general plant purpose. Plant equipment includes equipment, machine tools, test equipment, furniture, vehicles, and accessory and auxiliary items, but does not include special tooling or special test equipment. Industrial plant equipment (IPE) is plant equipment with an acquisition cost of $5,000 or more, used for the purpose of cutting, grinding, shaping, forming, or otherwise altering properties of items entailed in manufacturing, maintenance, supply, processing, assembly, or research and development operations. Other plant equipment (OPE) is plant equipment, regardless of dollar value, which is used in, or in conjunction with, the manufacture of components or end items relative to maintenance, supply, Processing, assembly, or research and development operations.