Leasing equipment vs. purchasing equipment
- Leasing of equipment is generally discouraged if the equipment is required on a continuing basis.
- Purchasing is generally more economical.
- Lease agreements are for a definitive period, generally greater than 12 months.
- Rental agreements are normally for an indefinite period, generally less than 12 months, and can be terminated after giving advance notice, as per the agreement.
Procedure for Rental or Lease of Equipment:
- The department prepares and submits to the Purchasing Department a purchase requisition in the Financial System.
- The purchase requisition must be accompanied by a memorandum which includes:
- A detailed justification for renting or leasing rather than purchasing the equipment
- Any other information available to the Department which would support the request
- All requests to lease or rent equipment with a total cost exceeding $500,000 require approval of the State Division of Purchase and Contract.
- All lease agreements are approved by the Treasurer's Office because the department is making a commitment against future funds.
