Rule gives agencies more flexibility to rent vehicles

Agencies will have more flexibility when it comes to renting motor vehicles for government business, according to a final rule published Thursday in the Federal Register.

The new policy increases the amount of time agencies can rent a vehicle without having to commit to a yearlong lease. The rule increases the rental time frame from fewer than 60 continuous days to fewer than 120 continuous days and adjusts the definition of a commercial lease to accommodate agencies that need a vehicle for more than 60 days but fewer than 365.

Typically, a commercial lease for a motor vehicle requires a minimum one-year commitment, but agencies often do not need a vehicle for that long, according to the General Services Administration. "As a result, agencies are turning to short-term rentals to meet these motor vehicle needs, but have encountered impediments when those needs meet or exceed 60 continuous days but are less than a year (for which commercial leases are commonly available)," said the notice.

For example, an agency that needs a vehicle for three months now will be able to rent a vehicle for that period of time rather than leasing it for a year. Before the change, the only options would be to commercially lease the vehicle for a minimum of one year or to own a vehicle year-round to meet the 90-day requirement.

"The cost of a three-month rental is far less than the cost of leasing or owning a vehicle year-round," GSA's Office of Asset and Transportation Management in the agency's Office of Governmentwide Policy said in response to questions about the rule change. GSA said the government will benefit from additional savings because rentals require less maintenance and overhead cost.

In June, Sens. Tom Coburn, R-Okla., and Jeanne Shaheen, D-N.H., introduced a bill that would shrink by 20 percent the amount of money the government spends buying and leasing "nonessential" motor vehicles. The proposal, originally offered by the fiscal commission appointed by President Obama, could save $500 million if enacted by 2012, the lawmakers said. The legislation currently is in committee.

Citing numbers from GSA's "Federal Fleet Report" and a Government Accountability Office report, the senators pointed to 662,000 nonmilitary cars, vans, sport utility vehicles, trucks, buses and ambulances owned or leased by federal agencies. Cumulatively, they consume 1 million gallons of fuel daily. The lawmakers said the fleet has grown by 32,000 vehicles since 2006 at a cost of a $1 billion, and that some 63,794 vehicles were purchased in fiscal 2010 alone.