[Code of Federal Regulations]
[Title 32, Volume 2, Parts 191 to 399]
[Revised as of July 1, 1998]
From the U.S. Government Printing Office via GPO Access
[CITE: 32CFR204.6]

[Page 321-322]
 
                       TITLE 32--NATIONAL DEFENSE
 
                               (CONTINUED)
 
PART 204--USER CHARGES--Table of Contents
 
Sec. 204.6  Charges and fees.

    (a) General. (1) All charges and fees shall be based on total cost 
to the U.S. Government or fair market value, whichever is higher. Total 
cost shall be based on actual cost or replacement cost when property is 
to be replaced and expense data accumulated in accordance with DoD 
7220.9-M.\5\ Estimates from the best available records may be used if 
actual cost or expense data is not available.
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    \5--8\ See footnote 1 to Sec. 204.4(c)(1)(ii).
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    (2) Cost accounting systems shall not be established solely for the 
purpose of determining charges, but the results of existing cost 
accounting systems shall be used. Total cost shall include all direct 
and indirect costs (see Chapter 71, DoD 7220.9-M).
    (3) Charges and fees established in advance must be projected to the 
midpoint of the future period. Projected amounts shall be reviewed 
annually or whenever significant changes in cost or value occur.
    (4) Internal management controls (see DoD Directive 5010.38 \6\ must 
be established to ensure that charges and fees are developed and 
adjusted, using current, accurate, and complete data, to provide 
reimbursement conforming to statutory requirements. Such controls also 
must ensure compliance with cash management and debt collection policies 
(see DoD Directive 7045.13\7\).
    (b) Services--(1) Basic requirements. The maximum charge for a 
special service shall be governed by its total cost or fair market 
value, whichever is higher, and not by the value of the service, to the 
recipient. The cost computation shall include the direct and indirect 
costs to the Government of carrying out the activity. Typically, a 
service may involve the following:

[[Page 322]]

    (i) Civilian salaries or wages, including the full cost of benefits, 
such as leave, retirement,and medical and life insurance.
    (ii) The full cost of military personnel services, including 
retirement, other personnel support, leave, and permanent change of 
station factors.
    (iii) The cost of materials, supplies, travel expenses, 
communications, utilities, equipment and property rental, and 
maintenance of property and equipment.
    (iv) Depreciation expense and interest of investment (currently at a 
10 percent annual rate) (OMB Circular No. A-94) in DoD-owned, fixed 
assets.
    (v) Other operational, administrative, and accessorial (DoD 
Instruction 7510.4 \8\ costs incurred by the activity while estabishing 
standards and regulations and research in support of the service 
performed, for example.
    (2) Fees and rates. Fees and rates shall be based on actual costs. 
The charges for services provided by data processing activities shall be 
determined by using the costs accumulated pursuant to OMB Circular No. 
A-121 and Federal Government accounting Pamphlet No. 4 requirements. 
Fees and rates for recurring services shall be established in advance, 
when feasible. Recurring services include, but are not limited to, 
copying, certifying, and researching records, except when those services 
are excluded or exempted from charges under Sec. 204.4(c) or Sec. 204.9.
    (3) DoD-wide fees and rates. Section 204.10 provides a schedule of 
fees and rates for certain services for use throughout the Department of 
Defense. Recommendations for additions and revisions to the schedule 
will be made to the Comptroller of the Department of Defense.
    (c) Lease or sale of property. Charges for lease or sale of property 
shall be based on a determination of fair market value.
    (1) In cases involving the lease or rental of military equipment, 
when there is no commercial counterpart, fair market value will be based 
on the computation of an annual rent which will be the sum of the annual 
depreciation plus interest on investment. The amount of interest on 
investment is determined by applying the interest rate to the net book 
value; that is, acquisition cost plus additions less depreciation. The 
current interest rate in OMB Circular No. A-94 shall be used. Support, 
if furnished, and applicable general administration expenses will be 
extra. In determining the value, consideration may be given to the 
responsibility of the lessee to assume the risk of loss or damage to the 
property and to hold the Government harmless against claims or 
liabilities by the lessee or third parties.
    (2) In cases involving the sale of property when there is no known 
fair market value, costs shall be based on the total of the standard 
price of the item carried in inventory, or the reduced price when so 
authorized for sale within the Department of Defense and the accessorial 
and administrative costs computed under DoD Instruction 7510.4.
[51 FR 16024, Apr. 23, 1986. Redesignated and amended at 56 FR 64482, 
Dec. 10, 1991; 63 FR 33248, June 18, 1998; 63 FR 36992, July 8, 1998]