Procurement Services 405: Leases of Equipment

Purpose

To provide departments with guidelines on leases.

Reference

University of Alaska Procurement Manual (not available online)

Definitions

Lease: An agreement for the right to use property for a specified period at a specified cost. Title remains with the lessor.

Policy

Lease Purchase Agreements
A lease to purchase is generally not a preferred method of purchase, and is seldom approved for acquisitions under $100,000. Generally, the financing terms are not favorable to the university. Because of the financing considerations, special approval requirements and other considerations, departments should consult with Procurement Services before planning a lease purchase.

Equipment Leases—General
Equipment leasing is generally reserved for high cost, high technology equipment where the decision to lease is driven by the nature of the equipment, the pace of technological change and other market factors. Equipment leasing is not appropriate simply because of a desire to budget the item from operating expense (lease payments) rather than an outright capital equipment purchase.
 
Effective: 10/25/2005