[Code of Federal Regulations]
[Title 32, Volume 6, Parts 800 to end]
[Revised as of July 1, 1998]
From the U.S. Government Printing Office via GPO Access
[CITE: 32CFR812.7]

[Page 56]
 
                        TITLE 32-NATIONAL DEFENSE
 
                CHAPTER VII--DEPARTMENT OF THE AIR FORCE
 
PART 812--USER CHARGES--Table of Contents
 
                     Subpart A--General Information
 
Sec. 812.7  Charges for lease or sale of property.

    When Federally owned property or resources are leased or sold, 
assess a rental cost or sales price based on a determination of fair 
market value. Determine fair market value by applying sound business 
management principles in accordance with comparable commercial 
practices. Charges need not be limited to recovery of costs; they may 
produce net revenues to the Government.
    (a) Sale of Material. In the absence of a known market value, 
determine the fair value for sale of material on the basis of an 
aggregate of the:
    (1) Standard price of the item carried in inventory (or at a reduced 
price when so authorized for sale within DOD).
    (2) Accessorial and administrative costs provide in AFR 172-5, 
Reimbursement for Accessorial and Administrative Costs.
    (b) Lease or Rental of Property. Fair market value for lease or 
rental of property is normally determined according to commercial rates 
for similar property in the local geographical area.
    (1) In cases involving lease or rental of military equipment, where 
there is no commercial counterpart, base fair market value on a 
computation of an annual rent made up of the sum of annual depreciation 
and interest on investment. Determine amount of interest on investment 
by applying a 10 percent interest factor to the net book value 
(acquisition cost plus additions less depreciation) of the asset. Add 
the cost of support, including general and administrative expenses, if 
support is furnished.
    (2) In determining the fair market value of property to be leased, 
consider the degree lessee assumes risk of loss or damage to the 
property and holds the Government harmless against claims or liability 
by the lessee or third parties.