[Code of Federal Regulations]
[Title 48, Volume 1]
[Revised as of October 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 48CFR7.402]

[Page 116]
 
            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM
 
                CHAPTER 1--FEDERAL ACQUISITION REGULATION
 
PART 7_ACQUISITION PLANNING--Table of Contents
 
                 Subpart 7.4_Equipment Lease or Purchase
 
Sec.  7.402  Acquisition methods.

    (a) Purchase method. (1) Generally, the purchase method is 
appropriate if the equipment will be used beyond the point in time when 
cumulative leasing costs exceed the purchase costs.
    (2) Agencies should not rule out the purchase method of equipment 
acquisition in favor of leasing merely because of the possibility that 
future technological advances might make the selected equipment less 
desirable.
    (b) Lease method. (1) The lease method is appropriate if it is to 
the Government's advantage under the circumstances. The lease method may 
also serve as an interim measure when the circumstances--
    (i) Require immediate use of equipment to meet program or system 
goals; but
    (ii) Do not currently support acquisition by purchase.
    (2) If a lease is justified, a lease with option to purchase is 
preferable.
    (3) Generally, a long term lease should be avoided, but may be 
appropriate if an option to purchase or other favorable terms are 
included.
    (4) If a lease with option to purchase is used, the contract shall 
state the purchase price or provide a formula which shows how the 
purchase price will be established at the time of purchase.

[50 FR 35475, Aug. 30, 1985, as amended at 59 FR 67026, Dec. 28, 1994]

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