Subpart 7.4 - Equipment Acquisition

Parent topic: Part 7 - Acquisition Planning

7.400 Scope of subpart.

This subpart—

(a)Implements section 555 of the FAA (Federal Aviation Administration) Reauthorization Act of 2018

(Pub. L. 115-254);

(b)Provides guidance when acquiring equipment and more than one method of acquisition is

available for use; and

(c)Applies to both the initial acquisition of equipment and the renewal or extension of existing

equipment leases or rental agreements.

7.401 Acquisition considerations.

(a)

(1)Agencies shall acquire equipment using the method of acquisition most advantageous to the

Government based on a case-by-case analysis of comparative costs and other factors in accordance

with this subpart and agency procedures.

(2)The methods of acquisition to be compared in the analysis shall include, at a minimum—

(i)Purchase;

(ii)Short-term rental or lease;

(iii)Long-term rental or lease;

(iv)Interagency acquisition (see 2.101); and

(v)Agency acquisition agreements, if applicable, with a State or local government.

(b)

(1)The factors to be compared in the analysis shall include, at a minimum:

(i)Estimated length of the period the equipment is to be used and the extent of use within that

period;

(ii)Financial and operating advantages of alternative types and makes of equipment;

(iii)Cumulative rent, lease, or other periodic payments, however described, for the estimated period

of use;
(iv)Net purchase price;

(v)Transportation, installation, and storage costs;

(vi)Maintenance, repair, and other service costs; and

(vii)Potential obsolescence of the equipment because of imminent technological improvements.

(2)The following additional factors should be considered, as appropriate, depending on the type,

cost, complexity, and estimated period of use of the equipment:

(i)Availability of purchase options.

(ii)Cancellation, extension, and early return conditions and fees.

(iii)Ability to swap out or exchange equipment.

(iv)Available warranties.

(v)Insurance, environmental, or licensing requirements.

(vi)Potential for use of the equipment by other agencies after its use by the acquiring agency is

ended.

(vii)Trade-in or salvage value.

(viii)Imputed interest.

(ix)Availability of a servicing capability, especially for highly complex equipment; e.g., can the

equipment be serviced by the Government or other sources if it is purchased?

(c)The analysis in paragraph (a) is not required—

(1)When the President has issued an emergency declaration or a major disaster declaration pursuant

to the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.);

(2)In other emergency situations if the agency head makes a determination that obtaining such

equipment is necessary in order to protect human life or property; or

(3)When otherwise authorized by law.

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 rental or leasing costs exceed the purchase costs.

(2) Agencies should not rule out the purchase method of equipment acquisition in favor of renting or

leasing merely because of the possibility that future technological advances might make the selected

equipment less desirable.
(b) Rent or lease method.

(1) The rent or lease method is appropriate if it is to the Government's advantage under the

circumstances. The rent or lease method may also serve as a short-term 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 rent or lease method is justified, a rental or lease agreement with option to purchase is

preferable.

(3) Generally, a long term rental or lease agreement should be avoided, but may be appropriate if an

option to purchase or other favorable terms are included.

(4) If a rental or lease agreement 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.

7.403 General Services Administration assistance and OMB

guidance.

(a) When requested by an agency, the General Services Administration (GSA) will assist in rent,

lease, or purchase decisions by providing information such as-

(1) Pending price adjustments to Federal Supply Schedule contracts;

(2) Recent or imminent technological developments;

(3) New techniques; and

(4) Industry or market trends.

(b) For additional GSA assistance and guidance, agencies may—

(1)Request information from the GSA FAS National Customer Service Center by phone at

1-800-488-3111 or by email at ncsccustomer.service@gsa.gov; and

(2)See GSA website, Schedule 51 V Hardware Superstore-Equipment Rental,

(https://www.gsa.gov/buying-selling/products-services/industrial-products-services/rental-of-industri

al-equipment).

(c) For additional OMB guidance, see—

(1)Section 13, Special Guidance for Lease-Purchase Analysis, and paragraph 8.c.(2), Lease-Purchase

Analysis, of OMB Circular A-94, Guidelines and Discount Rates for Benefit-Cost Analysis of Federal

Programs,

(https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A94/a094.pdf);

and
(2)Appendix B, Budgetary Treatment of Lease-Purchases and Leases of Capital Assets, of OMB

Circular A-11, Preparation, Submission, and Execution of the Budget,

(https://www.whitehouse.gov/wp-content/uploads/2018/06/app_b.pdf).

7.404 Contract clause.

The contracting officer shall insert a clause substantially the same as the clause in 52.207-5, Option

to Purchase Equipment, in solicitations and contracts involving a rental or lease agreement with

option to purchase.