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  • Question

    What is the purpose of facilities use contracts? How are they structured? What is the benefit to the Arm? In addition, why does the government commonly use a zero dollar contract for the use of government-owned facilities? Any FAR cites or guidance you can provide would be helpful.


    Answer

    I checked the Federal Management Regulation, but it did not cover real property.  I also looked in the FAR and DFARs and before the FAR 45 Government Property rewrite this particular area was covered.  The FAR no longer addresses facilities use agreements.

    If the real property is being provided as GFP, it would have to be justified IAW with FAR 45.102 and PGI 245.103-70. However, when the place of performance is in real property owned by the Government, it normally isn't provided as GFP. If it's located on a Government installation and the contractor is required to perform the work on an installation, the real property would be considered incidental to the place of performance if the Government is maintaining accountability (see FAR 45.000(b)(5)). Since the real property is considered incidental to the place of performance this why the government commonly uses a zero dollar contract.

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