Materials Management

Effective Date: 03/01/2000

Policy Statement 20: Rental and Lease of Equipment


General

All requests for rental and leasing should be forwarded to the Department of Materials Management on a purchase requisition via the POS system marked back-up attached. The back-up information should accompany the requisition. Contracts for the rental or lease of commodities shall be handled under the same Rules applying to the outright purchase of commodities. Under the basic rental or lease agreement there should not be a mandatory option or obligation to purchase from the lessor.

Lease or Rental Requests

The request should be accompanied by a memorandum explaining the intent of the lease arrangement. Since there are many types, the need for leasing or renting rather than purchasing, and a copy of the proposed leasing agreement should be attached. Any other pertinent information should also accompany the request.

Lease Agreements

Lease agreements are for a definite period of time, usually one (1) to three (3) years, and may not be canceled during the term duration of the lease.

Lease Purchase Agreements

Term used only when ownership is uncertain or when it is the intent to delay ownership. This type of contract shall provide for an option or obligation to purchase. Third party financing is not used. Ownership transfers only if and when the option to purchase is exercised, or when the time for the obligation to purchase is reached. The contract may include an option to upgrade the item during the lease period, which may be exercised without rebidding the contract. The same Rules applying to outright purchases shall be applied for lease-purchase contracts. For more information, contact the Director of Materials Management.

Rental Contracts

Rental contracts are similar to lease contract, except that rental contracts may be for a definite or indefinite period and may be terminated by the rentee after giving notice as spelled out in the contract. A comparative analysis of cost and functionality should be completed before entering into such contracts. Contracts for the rental of commodities shall be handled under the same Rules applying to the outright purchase of commodities.