[Code of Federal Regulations]

[Title 48, Volume 1]

[Revised as of October 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 48CFR7.402]



[Page 120-121]

 

            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.



[[Page 121]]



    (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]