We are unable to ascertain within FAR if a US GOV agency can borrow equipment from a state or local government agency. It appears as though this would be considered a "conflict" of interest; however, we are unable to pinpoint any directive in FAR that stipulates that we cannot borrow outside equipment. We are not going to purchase it, lease it, nor will it be used in a special test equipment situation. FAR 42 speaks to us, but we cannot locate any verbiage relative to this particular issue. I thought I saw something that prohibits such "borrowing" activity in the past, but just cannot find the right section. Greatly appreciate any assistance into this matter; please advise if anyone has encountered this situation in the past.
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Upon reviewing relevant portions of the Code of Federal Regulations, the United States Code, Principles of Federal Appropriations Law (also known as the GAO Red Book), DoD Instructions, and other regulations, nothing was found that authorizes or prohibits a U.S. Government agency from borrowing property from a state or local government. Each of the documents reviewed addresses the loaning of U.S. Government property to other organizations (internal and external to the U.S. Government). With respect to your question, the FAR addresses the Federal Government providing property to contractors. There are instances when a museum operated by the Federal Government may borrow exhibits. For instance, the U.S. Department of Interior (DOI) has Department of the Interior Guidance for Incoming Loans of Museum Collections. DOI’s guidance addresses key elements that should be included in any loan agreement such as description and cost of item being borrowed, insurance, and shipping arrangements. The National Museum of the Air Force does not accept long term loans due to the resulting significant administrative burden. If you decide to loan/borrow another agencies equipment we would recommend that you do so on some type of memorandum of agreement (MOA) outlining any specific requirements that may be relevant to each organization and/or specifically to the equipment. For example: who will pay for shipment, identify any special maintenance requirements, loss provisions, date loan will start and end, etc. Also, keep in mind that when borrowing from a state or local government you will need their legislative approval. We also suggest that you seek advise from your local legal counsel. Lastly, to our knowledge this is the first time a situation such as yours has been encountered and shared with DAU.