Release Date: October 17, 2003

An operational lease will be used by all Executive Branch agencies for procurement of desktops, laptops and tablets. Leasing will ensure that equipment refresh is incorporated into an agency's operational budgets.

The operational leasing model will minimize operating budget "spikes" due to equipment refresh requirements.

OSD has published the contract and contract announcement on www.Comm-PASS.com:

  1. Go to www.Comm-PASS.com
  2. On the right side click on Search for Contracts
  3. Enter in Document Number: ITC02
  4. Click search and choose the one active contract.

Guidelines and Procedures for Use by Executive Office Agencies

  • Recommended operational lease length is 3 years. At the termination of the lease, the equipment will be returned to the leasing entity.

  • Agencies should receive a minimum of three quotes.

    Note: Leasing costs can very depending on the residual value of the leased equipment and depending on the leasing rate. Each leasing contractor will estimate the residual value at the conclusion of the lease differently as well as providing different leasing rates. Therefore, different combinations of equipment and leasing contractors need to be evaluated to determine the best overall costs.

    Agencies are recommended to obtain a quote from contractors in which different equipment specifications are listed to identify the optimal overall costs for equipment + lease configuration.

    Example 1: Agency intends to procure 1,000 PCs from contractor A. The cost of each PC is $650 by contractor A. Using a leasing rate of 4%, the total cost of the lease is: $676,000.
    Example 2: Agency intends to procure 1,000 PCs from contractor B. The cost of each PC is $560 by contractor B. Using a leasing rate of 4.5%, the total cost of the lease: $585,200.

    The difference in overall costs is due to the determination by the leasing company that contractor A PCs will have a higher residual value than will the PCs from contractor B and because of the difference in lease rates.

  • Payment schedule (monthly, quarterly or yearly payments) will affect the overall lease amounts. Agencies should select a payment schedule that reflects their ability to pay throughout the term of the lease. There is generally no prepayment clause (i.e., if an agency chooses monthly payments and pays 3 months at one time), however there is no overall benefit either. Any prepayment must follow the Comptroller's regulations regarding that activity. Agencies should ask if there is any prepayment penalty clause.

  • In traditional leasing agreements, agencies do not have the ability to upgrade equipment within the term of the lease. This option can be written into the lease, however the lease amount will be significantly higher than the lease amount without this option.

  • Agencies must require that all lease quotes be submitted on the forms provided in ITC02.

  • Agencies should review with each lease vendor various options (if needed) and the corresponding costs (if applicable). Agencies should not assume that any of the following are included in the lease terms unless explicitly stated:

    • Asset management
    • Shipping of the hardware to the agency
    • Unpacking and distributing equipment to the desktop
    • Documenting, packing, and returning equipment at the termination of the lease.

    Documentation of the equipment at the end of the lease is a significant effort. Agencies should clearly understand the requirements of the leasing agency with respect to documentation.

ITD strongly encourages agencies to contact ITD for assistance and information regarding the leasing process.

All leasing agreements will be reviewed by ITD within 4 business days of submittal and returned to the agency for execution.

ITD Contact:
Lou Angeloni
Chief Financial Officer
(617) 626-4400

Additional information concerning leasing is available from the Comptroller's Fixed Assets Acquisition Policy doc format of    po_fa_acquisition.doc  pdf format of po_fa_acquisition.pdf .

Please note this policy pertains to both TELP and Operational leases. Leasing of desktops, laptops and tablets for Executive Branch Agencies are to be acquired through contract ITC02 as an Operational lease.