52.207-5 — Option To Purchase Equipment.
Researched by the BidStride Research Team
What This Clause Requires
FAR 52.207-5 — Option To Purchase Equipment.. This clause is part of the Federal Acquisition Regulation and may be included in government contracts as a solicitation provision or contract clause.
Official Regulation Text
52.207-5 Option To Purchase Equipment. As prescribed in 7.404, insert a clause substantially the same as the following: Option To Purchase Equipment (FEB 1995) (a) The Government may purchase the equipment provided on a lease or rental basis under this contract. The Contracting Officer may exercise this option only by providing a unilateral modification to the Contractor. The effective date of the purchase will be specified in the unilateral modification and may be any time during the period of the contract, including any extensions thereto. (b) Except for final payment and transfer of title to the Government, the lease or rental portion of the contract becomes complete and lease or rental charges shall be discontinued on the day immediately preceding the effective date of purchase specified in the unilateral modification required in paragraph (a) of this clause. (c) The purchase conversion cost of the equipment shall be computed as of the effective date specified in the unilateral modification required in paragraph (a) of this clause, on the basis of the purchase price set forth in the contract, minus the total purchase option credits accumulated during the period of lease or rental, calculated by the formula contained elsewhere in this contract. (d) The accumulated purchase option credits available to determine the purchase conversion cost will also include any credits accrued during a period of lease or rental of the equipment under any previous Government contract if the equipment has been on continuous lease or rental. The movement of equipment from one site to another site shall be “continuous rental.” (End of clause) [59 FR 67026, Dec. 28, 1994]
Compliance Checklist
- (b) Except for final payment and transfer of title to the Government, the lease or rental portion of the contract becomes complete and lease or rental charges shall be discontinued on the day immediately preceding the effective date of purchase specified in the unilateral modification required in paragraph (a) of this clause.
- (c) The purchase conversion cost of the equipment shall be computed as of the effective date specified in the unilateral modification required in paragraph (a) of this clause, on the basis of the purchase price set forth in the contract, minus the total purchase option credits accumulated during the period of lease or rental, calculated by the formula contained elsewhere in this contract.
- The movement of equipment from one site to another site shall be “continuous rental.” (End of clause) [59 FR 67026, Dec.
Flow-Down to Subcontractors
No flow-down required
This clause applies only to the prime contract and does not need to be flowed down to subcontractors.
Frequently Asked Questions
FAR 52.207-5 (Option To Purchase Equipment.) is a federal acquisition regulation clause that may be included in government contracts. It falls under the general category.
FAR 52.207-5 is typically required when the contracting officer determines it's applicable to the specific procurement. Check the solicitation's Section I for included clauses.
Whether FAR 52.207-5 flows down depends on the specific clause language and contract type. Review the clause text for flow-down provisions.
This summary is for informational purposes only and reflects the BidStride Research Team's plain-English interpretation of the regulation. It is not legal advice and does not constitute an attorney-client relationship. Always consult the official Federal Acquisition Regulation (FAR) or Defense Federal Acquisition Regulation Supplement (DFARS) text and qualified legal counsel for compliance decisions.